2800 N. Broad St., LLC v. Com. of PA, DOT ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
2800 N. Broad Street, LLC :
:
v. : No. 925 C.D. 2020
: ARGUED: June 7, 2021
Commonwealth of Pennsylvania, :
Department of Transportation, :
Appellant :
BEFORE: HONORABLE P. KEVIN BROBSON, President Judge
HONORABLE J. ANDREW CROMPTON, Judge (P)
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION BY
SENIOR JUDGE LEADBETTER FILED: July 2, 2021
The Commonwealth of Pennsylvania, Department of Transportation,
appeals from an order of the Court of Common Pleas of Philadelphia County
overruling the Department’s preliminary objections to the petition for appointment
of a board of viewers filed by 2800 N. Broad Street, LLC (Condemnee) pursuant to
Section 502 of the Eminent Domain Code (Code), 26 Pa.C.S. § 502. We reverse and
remand this matter with directions to the trial court to grant Condemnee’s request
for appointment of a board of viewers for purposes of ascertaining just compensation
for the de jure partial taking of Condemnee’s properties, and to strike Condemnee’s
request that the court declare a de facto taking.
The relevant background is as follows. In October 2018, the
Department filed a declaration of taking for a partial taking of Condemnee’s
properties at 3900-18 Richmond Street, Philadelphia, Pennsylvania,1 as a part of the
1
In the declaration of taking and condemnation plan, the Department refers to the properties
as Parcel 71. Parcel 71 is a consolidation of the properties at issue.
road improvement project for State Route 0095, Section AF3.2 (Decl. of Taking,
Schedule of Prop. Condemned at 1; Reproduced R. “R.R.” at 5a.) In addition to a
temporary construction easement of 1955 square feet, the partial taking included
1104 square feet from a total of 18,264 square feet. Condemnee did not file
preliminary objections to the declaration of taking.
In March 2020, Condemnee filed a petition for appointment of a board
of viewers seeking damages for the de jure partial taking of its properties under
Section 502(a) of the Code and a declaration of a de facto taking of the remainder of
its properties under Section 502(c). Specifically, Condemnee contended that the
Department’s partial de jure condemnation effected a de facto taking of the entirety
of Condemnee’s property interest such that the remainder had no economic value
after the condemnation. In support, Condemnee alleged that it had obtained permits,
development approvals, and zoning approvals before the declaration of taking to
construct fourteen two-family attached dwellings but that the condemnation had
rendered development impossible because the entirety of the property was necessary
for the planned development.3 (Mar. 18, 2020, Pet. for Appt. of a Bd. of Viewers,
¶¶ 8, 12, and 13; R.R. at 13a-14a.)
In preliminary objections, the Department asserted that where there was
a declaration of taking, Condemnee erred in asserting a de facto taking in the petition
for appointment of a board of viewers. The Department alleged that “[t]he
2
This segment of the project effects a total of 0.187 miles of roadway situated along portions
of land adjacent to I-95 and extending along Richmond Street to just beyond the intersection of
Wheatsheaf Lane. The purpose of the partial taking is to improve the access ramps from I-95 to
the Betsy Ross Bridge.
3
Condemnee asserted that the Philadelphia Zoning Code required off-street parking for the
proposed units and that the planned vehicular access was to be via a common drive from
Wheatsheaf Lane, a cross street to Richmond Street. (May 11, 2020, Br. of Condemnee in Opp’n
to Prelim. Objs. at 3; R.R. at 76a.)
2
condemnation and filing of a declaration of taking, whether considered a partial or
total taking, ‘encompasses’ the entire parcel for purposes of determining just
compensation.” (Apr. 20, 2020, Prelim. Objs., ¶ 18; R.R. at 43a.) The Department
alleged that only a de jure taking occurred and that any damages were part of and
the result of the declaration of taking. It also contended that Condemnee failed to
allege or to establish any exceptional circumstances that substantially deprived it of
the beneficial use and enjoyment of the properties, other than the declaration of
taking. In addition, the Department objected to allegations that any of its actions
affected the highest and best use of the properties, including the remainder, other
than the declaration of taking. The Department also denied that it prevented
Condemnee from developing or using the remainder after the declaration of taking.
(Id., ¶¶ 41 and 42; R.R. at 46a.) Accordingly, the Department argued for the
dismissal of Condemnee’s de facto taking claims under Section 502(c) of the Code.
Without specifically ruling on the Department’s preliminary objections,
the trial court granted Condemnee’s petition and ordered an appointment of viewers.
Following the Department’s motion for reconsideration asserting, inter alia, that
there were factual issues to be determined in an evidentiary hearing,4 the trial court
vacated its order and directed the Department to file an answer to Condemnee’s
petition within ten days. In the answer, the Department incorporated its preliminary
objections, denied the petition’s seminal averments, and demanded strict proof of
the averments at an evidentiary hearing. Condemnee’s answer to the preliminary
objections followed. Subsequently, the trial court overruled the preliminary
objections and, without holding an evidentiary hearing, concluded that a de facto
taking had occurred. The Department’s appeal to this Court followed.
4
(June 19, 2020, Mot. for Reconsid., ¶¶ 15 and 17; R.R. at 125a-26a.)
3
The issues before us are as follows:5 1) whether Condemnee erred in
filing a petition seeking damages for the de jure partial taking of its properties under
Section 502(a) of the Code and a declaration of a de facto taking of the remainder
of its properties under Section 502(c), and thus whether the trial court erred in
overruling the Department’s preliminary objections as to Section 502(c) of the Code
(de facto taking); 2) whether the trial court erred in determining that a de facto taking
occurred without holding an evidentiary hearing; and 3) whether Condemnee erred
in failing to file preliminary objections to the declaration of taking.
I
As an initial matter, we note that Condemnee properly filed a petition
for a board of viewers to assess damages for the de jure partial taking of its properties
under Section 502(a) of the Code. However, that part of the petition seeking a
declaration of a de facto taking of the remainder of its properties under Section
502(c) was erroneous. Presumably, Condemnee believed that a de facto claim was
needed to assert that the property not included in the declaration of taking had been
rendered valueless. This is incorrect. Where there is a declaration of taking filed
for a de jure partial taking, damages are determined by considering both the value
of the property actually acquired and the damages to the remaining property. In
other words, the de jure partial taking of the properties already contemplates
damages to the remainder of the property. Condemnee appears to conflate the
concept of a de facto taking with the circumstance in which a government action has
rendered one’s property valueless. This is a misconception. Just as a de jure taking
of a portion of property may (or may not) diminish the value of the remaining portion
or render it entirely valueless, a de facto taking may render the property valueless or
5
We have restated and reordered the issues for accuracy and clarity.
4
may simply diminish its value. The difference lies not in the extent of lost value but
in the manner in which the value was lost, i.e., by a declaration of taking or by some
other action by an entity which has the power of eminent domain.
Two Code provisions are relevant: the measure of damages provision
found in Section 702 and the “Effect of condemnation use on after value” provision
found in Section 706. 26 Pa.C.S. §§ 702 and 706. Section 702(a) provides that
“[j]ust compensation shall consist of the difference between the fair market value of
the condemnee’s entire property interest immediately before the condemnation and
as unaffected by the condemnation and the fair market value of the property interest
remaining immediately after the condemnation and as affected by the
condemnation.” 26 Pa.C.S. § 702(a) (emphasis added). The effect of Section 702(a)
is that the scope of the property interest to be valued is the entire property interest,
not just the portion set forth in the declaration of taking. In other words, the “before”
and “after” values of the entire property must be taken into consideration. Scranton
Penn Furniture Co. v. City of Scranton, 498 A.2d 469 (Pa. Cmwlth. 1985).
The second Code provision, Section 706(a), sets forth the general rule
for “determining the fair market value of the remaining property after a partial
taking,” stating: “[C]onsideration shall be given to the use to which the property
condemned is to be put and the damages or benefits specially affecting the remaining
property due to its proximity to the improvement for which the property was taken.”
26 Pa.C.S. § 706(a). See Middletown Twp., Del. Cnty. Sewer Auth. v. Baker, 522
A.2d 1182, 1184 (Pa. Cmwlth. 1987) (expert in determining “after” value may
consider the cost of alterations or adjustments to remaining property reasonably
required by the condemnation as this affects the fair market value of the remainder).
5
Moreover, the statutory scheme regarding petitions for appointment of
a board of viewers makes it clear that the trial court erred in overruling the
Department’s preliminary objections to the portion of Condemnee’s petition under
Section 502(c) of the Code (de facto taking). Section 502 of the Code clearly
delineates distinct procedures for requesting a board of viewers depending on
whether a declaration of taking has been filed. Specifically, Section 502(a) provides:
(a) Contents of petition.--A condemnor,
condemnee or displaced person may file a petition
requesting the appointment of viewers, setting forth:
(1) A caption designating the condemnee or
displaced person as the plaintiff and the condemnor as the
defendant.
(2) The date of the filing of the declaration of taking
and whether any preliminary objections have been filed
and remain undisposed of.
....
(6) A request for the appointment of viewers to
ascertain just compensation.
26 Pa.C.S. § 502(a) (emphasis added). Thereafter, Subsection (c) provides:
(c) Condemnation where no declaration of
taking has been filed.--
(1) An owner of a property interest who asserts that
the owner’s property interest has been condemned without
the filing of a declaration of taking may file a petition for
the appointment of viewers substantially in the form
provided for in subsection (a) setting forth the factual basis
of the petition.
26 Pa.C.S. § 502(c) (emphasis added). Because Subsection (c) applies only where
a declaration of taking has not been filed, Condemnee’s request for a declaration of
6
de facto taking thereunder was improper and thus, the Department’s preliminary
objections should have been sustained.
The scope of preliminary objections for a de facto taking and for a de
jure taking is the same. Jacobs v. Nether Providence Twp., 297 A.2d 550, 552 (Pa.
Cmwlth. 1972). “[P]reliminary objections under the Code are intended as a
procedure to resolve expeditiously all legal and factual challenges to the declaration
of taking before the parties move to the second distinct proceeding of qualifying
damages.” W. Whiteland Assocs. v. Dep’t of Transp., 690 A.2d 1266, 1268 (Pa.
Cmwlth. 1997). The trial court should have sustained the preliminary objections to
the de facto taking claim thereby resolving that legal challenge before the matter was
ready to proceed to a board of viewers. In light of this determination, the remaining
issues raised by the Department are moot. However, we address them briefly to
clarify the procedural principles which appear to have been misunderstood by both
the parties and the trial court.
II
We agree with the Department that the trial court misconstrued the
evidentiary hearing requirement with respect to de facto takings. With respect to de
facto takings, Section 504(d)(5) of the Code provides: “If an issue of fact is raised,
the court shall conduct an evidentiary hearing or order that evidence be taken by
deposition or otherwise, but in no event shall evidence be taken by the viewers on
this issue.” 26 Pa.C.S. § 504(d)(5). Additionally, this Court has held that where
preliminary objections raise an issue of fact as to whether a de facto taking has
occurred, the trial court must take evidence, even if the parties have not requested
7
an evidentiary hearing. Hill v. City of Bethlehem, 909 A.2d 439, 443 (Pa. Cmwlth.
2006).6
III
We turn now to the Department’s argument that Condemnee waived its
claim to allege a de facto taking when it failed to file preliminary objections to the
declaration of taking challenging the nature and extent of the condemnation. We
disagree. Such a claim was not required to be, nor should it have been, raised by
preliminary objection. In re Condem. by Dep’t of Transp., of Right of Way for State
Route 79, Section W10, a Ltd. Access Highway, in the Twp. of Cecil, 798 A.2d 725,
732 (Pa. 2002) (“Sluciak”).
In In re Condemnation by County of Allegheny (“Appeal of Keith”), 861
A.2d 387, 392 (Pa Cmwlth. 2004), we rejected as improper the owners’ procedural
decision to file preliminary objections to a declaration of taking alleging that a partial
de jure condemnation resulted in a larger de facto taking of their property. The Court
held that raising the issue of a de facto taking in that manner was improper because
the owners were seeking a judicial determination of the value of their property after
condemnation, which is not a judicial function. Instead, the owners “are entitled to
the difference between the fair market value of their property before and after the
condemnation, both values to be fixed by a jury of view or traverse jury on appeal;
they are not entitled to a judicial determination that their property has no value after
the take.” Id. [citing In re N. Huntingdon by N. Huntingdon Twp. Mun. Auth. for
Sewerage Purposes (“Appeal of Milas”), 387 A.2d 183, 183-84 (Pa. Cmwlth. 1978)].
In other words, “[a] de jure condemnation [for a partial acquisition] cannot be
6
Where there has been a declaration of taking, the case can go directly to a board of viewers
to determine the amount of damages. However, where no declaration has been filed, the trial court
must first determine that a taking has occurred before the board of viewers can determine damages.
8
converted to a de facto condemnation by an averment in a preliminary objection to
a declaration of taking that the effect of the de jure condemnation was to render the
property valueless.” Appeal of Keith, 861 A.2d at 392.
IV
Accordingly, we reverse the trial court’s order and remand this matter
to the trial court with directions to strike Condemnee’s request that the court declare
a de facto taking and to grant Condemnee’s request for appointment of a board of
viewers for the purpose of assessing damages for the effect of the de jure partial
taking on the entirety of Condemnee’s properties.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
2800 N. Broad Street, LLC :
:
v. : No. 925 C.D. 2020
:
Commonwealth of Pennsylvania, :
Department of Transportation, :
Appellant :
ORDER
AND NOW, this 2nd day of July, 2021, the order of the Court of
Common Pleas of Philadelphia County is hereby REVERSED. This matter is
REMANDED with directions to the trial court to grant Condemnee’s request for
appointment of a board of viewers for purposes of ascertaining just compensation
for the de jure partial taking of Condemnee’s properties, and to strike Condemnee’s
request that the court declare a de facto taking.
Jurisdiction relinquished.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita