S. O'Layer McCready v. PA Tpk. Commission

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Sarah O’Layer McCready, :
:
Appellant :
:
v. : No. 1762 C.D. 2016
: Argued: April 4, 2017
:
Pennsylvania Turnpike Commission :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: April 26, 2017
Sarah O’Layer McCready appeals the order of the Lawrence County
Court of Common Pleas (trial court) denying her motion for summary judgment;
granting the motion for summary judgment of the Pennsylvania Turnpike
Commission (Commission); and dismissing her complaint to quiet title. We vacate
and remand.
In May 1978, McCready and her husband were conveyed title to a
parcel of property in New Beaver Borough, Beaver County. In November 1983,
McCready became the sole owner upon the death of her husband. On March 2,
1990, McCready conveyed title to a portion of the property to the Commission 1 by
1
The Commission’s authority to obtain title to McCready’s real property was found in
the former Section 7(a)(6) of the Turnpike Organization, Extension and Toll Road Conversion
Act (Turnpike Act), Act of September 30, 1985, P.L. 240, 36 P.S. §651.7, repealed and replaced
by 74 Pa. C.S. §8107(a)(6), which states, in pertinent part, that “[t]he commission may . . .
[a]cquire, hold, accept, own, use, hire, lease, exchange, operate and dispose of . . . real property
(Footnote continued on next page…)
deed in lieu of condemnation for the construction of an extension of Highway 376,
known as the “Beaver Valley Expressway.” In relevant part, the deed states that
McCready conveyed the following to the Commission:
Together with all and singular the improvements, ways,
streets, alleys, roads, lanes, passages, (public or private),
waters, water-courses, rights, liberties, privileges,
hereditaments and appurtenances, whatsoever unto the
hereby granted premises belonging or in anywise
appertaining thereto and the reversions and remainders,
rents, issues, and profits thereof and all the estate, right,
title, interests, property, claim and demand whatsoever
(continued…)
and interests in real property and make and enter into all contracts and agreements necessary or
incidental to the performance of its duties and the execution of its powers under this
chapter . . . .” In turn, at the time of the conveyance in this case, the Commission’s authority to
condemn and purchase property was found in the former Section 9(a) and (b) of the Turnpike
Act, 36 P.S. §651.9(a), (b), repealed and replaced by 74 Pa. C.S. §8109(a), (b)(1), which states,
in relevant part:
(a) Condemnation.—The commission may condemn, pursuant to
26 Pa. C.S. (relating to eminent domain), any lands, interests in
lands, property rights, rights-of-way, franchises, easements and
other property deemed necessary or convenient for the construction
and efficient operation of the turnpikes and the toll road
conversions . . . .
(b) Purchase.—
(1) The commission may acquire by purchase, whenever it shall
deem the purchase expedient, . . . any lands, interests in lands,
property rights, rights-of-way, franchises, easements and other
property deemed necessary or convenient for the construction and
efficient operation of the turnpikes and toll road conversions . . .
upon terms and at a price as may be considered by the commission
to be reasonable and can be agreed upon between the commission
and the owner thereof and to take title thereto in the name of the
commission.
2
of [McCready], as well at law as in equity, of, in and to
the same.
Reproduced Record (R.R.) at 13a (emphasis added).
In February 2012, McCready filed a complaint in the trial court to
quiet title to the mineral estate in the land conveyed to the Commission in 1990.
McCready alleged that although the deed conveying title to the Commission did
not expressly reserve any mineral interest, she believed that it would only convey
an interest in the surface rights to the Commission. R.R. at 6a-7a. She asserted
that the land was conveyed in anticipation of condemnation by the Commission
and that the Commission was not required to own the mineral rights “in order to
‘perform its duties’ or ‘execute its powers’ with regard to the ‘construction,
operation, or maintenance of the turnpike.’” Id. at 7a. She claimed that she did not
intend to transfer any greater interest in the property than the Commission “was
authorized to acquire or would have otherwise been entitled to take by eminent
domain,” and that the consideration paid by the Commission, $50,000.00, only
reflected the value of the surface rights in the property and did not adequately
compensate her for value of the minerals below the surface Id. at 7a-8a.
As a result, McCready asked the trial court to: (1) create separate
interest in the minerals below the surface of the property; (2) declare that she is the
owner of all of the minerals below the surface of the property; (3) declare that the
deed is reformed; (4) direct the Commission to execute a deed conveying all
interest in the minerals below the surface of the property; (5) direct the Lawrence
County Recorder of Deeds to accept for recording a copy of the court’s order; and
(6) such other relief as the court deemed proper. R.R. at 9a.
The Commission filed an answer to the complaint denying, inter alia,
that McCready believed that the deed only conveyed an interest in the surface
3
rights of the property; that the acquisition of mineral rights is not necessary to
perform its duties with respect “to the ‘construction, operation or maintenance of
the turnpike;’” and that the consideration paid reflected only the value of the
surface rights and not the mineral rights in the property. R.R. at 18a-19a.
In 2014, McCready and the Commission filed cross-motions for
summary judgment. The Commission asserted that the deed conveying the
property is an unambiguous written document that speaks for itself and that it is
irrelevant what McCready believed at the time that she executed the deed and that
she has no interest in the property. See R.R. at 26a-27a. McCready argued that the
Commission lacked the authority to acquire a fee simple interest in the property,
including the mineral rights, through its eminent domain powers so that the deed in
lieu of condemnation conveying such an interest is a nullity. See id. at 44a-47a.
Following oral argument on the cross-motions, the trial court ordered
an evidentiary hearing to determine whether the Commission’s acquisition of the
property in fee simple was excessive. R.R. at 106a-107a. At the hearing,2
McCready presented August Arnold, a former construction engineer for the
Pennsylvania Department of Transportation, who testified that the Commission did
not need to own or control the mineral formations under the surface to construct,
maintain, or operate a highway over the property. Id. at 163a-165a. He also stated
that in 1990, at the time of conveyance, technology only permitted vertical drilling
for oil and gas and not horizontal. Id. at 170a-172a, 174a.
McCready also presented Dan Billman, a consulting geologist, who
testified that he was not aware of drilling beneath a highway prior to 2004. R.R. at
2
Prior to the evidentiary hearing, the judge recused himself and was replaced by another
judge of the trial court.
4
197a-198a. He stated that the owner of a surface estate does not have any
reasonable need to own or control the mineral formations below 1,000 feet to
protect vertical or lateral support for the surface and that fracking, or hydraulic
fracturing, does not cause any measurable geological impact on the surface of the
land. Id. at 206a-207a.
The Commission presented Samuel Lobins, district manager for the
Department of Environmental Protection’s oil and gas program, who testified that
in 1990, the one permit application for a vertical well in Lawrence County was
granted. R.R. at 229a, 231a. He stated that he was not aware of a permit being
issued for a wellhead within the turnpike’s right-of-way and raised safety as a
concern. Id. at 232a.
The Commission also presented Kenneth Heirendt, the Commission’s
manager for geotechnical engineering, who testified that it was necessary for the
Commission to obtain a fee simple interest in the property to have full control to
build, maintain, and operate the turnpike and to prevent others from impeding its
safe physical operation. R.R. 243a-244a. He opined that the Commission needs to
have full control of the property to prevent other owners of subsurface interests
from coming onto the surface for extraction or production of oil and gas. Id. at
247a. He stated that due to the technological changes since 2004, while the
Commission still needs to control the surface, it is no longer efficient to purchase
the subsurface rights, but that it is necessary to have an agreement restricting the
surface activities. Id. at 249a.
On September 20, 2016, the trial court issued an opinion and order
disposing of the cross-motions for summary judgment. The trial court rejected
5
McCready’s assertion that the deed is ambiguous with respect to the conveyance of
mineral rights, stating:
[H]ere, the deed is not ambiguous because the words
used in the deed clearly convey a fee simple interest
without reservation. The language of the deed is not
susceptible to varying interpretations or different
constructions. The fact that the deed was given in lieu of
condemnation does not create an ambiguity because that
language merely explains the purpose of the deed but is
not language that limits the extent of the estate conveyed.
The words in the deed ‘. . . all the estate, right, title,
interests, property, claim and demand whatsoever of the
Grantor’s . . .’ mean exactly what is stated: all interests,
which therefore include the mineral and subsurface
interests. Any evidence of contrary intent, even evidence
that the consideration was only sufficient to equal the
value of the surface rights, would clearly be contrary to
the language of the deed. Where the deed is clear and
unambiguous, testimony or evidence pertaining to
purchase money for the property is irrelevant, immaterial
and inadmissible to contradict the language of the deed.
R.R. at 341a (citations omitted).
The trial court also rejected McCready’s claim that the Commission’s
acquisition of a fee simple interest was beyond its authority, stating:
As noted by both parties, the owner of the mineral rights
does have the right of access on the surface to the
minerals, including gas and oil, that lie beneath the
surface. McCready would assert that the [Commission]
can rely upon its ability to object to any application that
would seek to place a drilling operation upon the
roadway. However, the only guarantee is that the
[Commission] would have the ability to have notice of
that application and the ability to object. There is no
decisional law or statutory law that would clearly prevent
the owner of the mineral estate from having the ability to
interrupt Turnpike operations [] to access the gas and oil
deposits. Even under present circumstances, testimony
6
was presented that where the [Commission] acquires only
surface rights, it enters into corollary agreements with the
owner of the mineral estate to limit the right of that
owner to access those minerals through surface area
owned by the [Commission]. Here, if the relief requested
by McCready were granted, no such agreement between
her and the [Commission] would be in place, and the
[Commission] would have no such absolute protection.
Thus, the Court concludes that even under present day
considerations, it can be considered necessary and
convenient for the [Commission] to seek ownership in
fee simple, although the acquisition of the mineral estate
could affect the value of the property in question and
relate to the issue of just compensation for the taking.
R.R. at 348a-349a (citation omitted).
Based on the foregoing, the trial court concluded “that the deed in lieu
of condemnation dated March 2, 1990, from McCready and her late husband to the
[Commission] conveyed a fee simple interest in the [property] to the
[Commission], and taking title to the [property] in fee simple was a proper exercise
of discretion by the [Commission] . . . .” R.R. at 354a. Accordingly, the trial court
issued the instant order denying McCready’s motion for summary judgment;
granting the Commission’s motion for summary judgment; and dismissing
McCready’s complaint.
In this appeal, McCready argues that the trial court erred in finding
that the Commission’s taking of McCready’s property was not excessive; erred in
determining at the summary judgment stage that the taking was necessary and
convenient because this question of material fact must be resolved in her favor as
the non-moving party; and erred in finding that the Commission’s condemnation
was not done through fraud, bad faith, or an abuse of discretion.
7
However, the trial court was without jurisdiction to dispose of the
instant action to quiet title.3 Section 1207 of the Administrative Code of 1929
(Administrative Code),4 states that “[t]he Board of Property [(Board)][5] shall . . .
have jurisdiction to hear and determine cases involving the title to land or interest
therein brought by persons who claim an interest in the title to lands occupied or
claimed by the Commonwealth.”6 “[Section 1207] vests in the [Board] exclusive
3
As the Pennsylvania Supreme Court has explained:
Jurisdiction over the subject matter is conferred solely by the
Constitution and laws of the Commonwealth. The test for whether
a court has subject matter jurisdiction inquires into the competency
of the court to determine controversies of the general class to
which the case presented for consideration belongs. Thus, as a
pure question of law, the standard of review in determining
whether a court has subject matter jurisdiction is de novo and the
scope of review is plenary. Whether a court has subject matter
jurisdiction over an action is a fundamental issue of law which
may be raised at any time in the course of the proceedings,
including by a reviewing court sua sponte.
Mazur v. Trinity Area School District, 961 A.2d 96, 101 (Pa. 2008) (citation omitted).
4
Act of April 9, 1929, P.L. 177, as amended, 71 P.S. §337.
5
The Board is a departmental administrative board of the Department of Community and
Economic Development. Sections 202 and 901 of the Administrative Code, 71 P.S. §§62,
1709.901.
6
The Commission is the “Commonwealth” for purposes of the jurisdiction of the Board.
Section 8107(a)(3) of the Turnpike Act states that “[t]he commission may . . . [s]ue and be sued
in its own name, plead and be impleaded. Any civil action against the commission shall be
brought only in the courts in which actions may be brought against the Commonwealth.”
74 Pa. C.S. §8107(a)(3). As this Court has explained:
Because the [Turnpike] Act, as amended, and Pennsylvania case
law clearly indicate a legislative intent to make the Commission
synonymous with the Commonwealth for jurisdictional purposes,
(Footnote continued on next page…)
8
jurisdiction to determine the title to real estate or to remove a cloud on title to such
real estate where private property owners and the Commonwealth claim an interest
in the same real estate.” Delaware Avenue, LLC v. Department of Conservation
and Natural Resources, 997 A.2d 1231, 1232 n.1 (Pa. Cmwlth. 2010) (citations
omitted). Thus, the Board has exclusive jurisdiction to decide the ownership of
title to the mineral estate in a quiet title action where the Commonwealth has
asserted an ownership interest. International Development Corporation v.
Davidge, 26 A.3d 1234, 1238-39 (Pa. Cmwlth. 2011); Kister v. Pennsylvania Fish
Commission, 465 A.2d 1333, 1334-35 (Pa. Cmwlth. 1983).7 See also Mase v.
Commonwealth, 407 A.2d 1368, 1369-70 (Pa. Cmwlth. 1979) (the Board had
exclusive jurisdiction in a declaratory judgment action regarding the right to
extract coal from Commonwealth land). Nevertheless, the trial court may transfer
(continued…)
actions in contract against the Commission must be brought before
the Board [of Claims]. The Board [of Claims] has exclusive
jurisdiction to resolve contract disputes between the
Commonwealth, including its instrumentalities, and parties with
whom the Commonwealth contracts.
Pennsylvania Turnpike Commission v. Lichtenstein, 534 A.2d 595, 597 (Pa. Cmwlth. 1987)
(footnote omitted). Likewise, because the Board of Property has exclusive jurisdiction to resolve
disputes as to title or an interest in land brought by parties who claim an interest in the title to
lands occupied or claimed by the Commonwealth under Section 1207 of the Administrative
Code, the Board of Property has exclusive jurisdiction in this case.
7
The fact that the Commonwealth acquired its interest in the property through
condemnation does not affect the Board’s exclusive jurisdiction in this regard. See, e.g.,
McCullough v. Department of Transportation, 541 A.2d 430, 431 (Pa. Cmwlth. 1988); Miller v.
Board of Property, 533 A.2d 819, 820 (Pa. Cmwlth. 1987); Kister, 465 A.2d at 1334-35.
9
the matter to the Board pursuant to Section 5103(a) of the Judicial Code.8 As a
result, this matter will be remanded to the trial court with the direction to transfer
the record to the Board. International Development Corporation, 26 A.3d at 1239;
Pennsylvania Turnpike Commission v. Lichtenstein, 534 A.2d 595, 597-98 (Pa.
Cmwlth. 1987).
Accordingly, the trial court’s order is vacated and the matter is
remanded to the trial court to transfer the record in this matter to the Board for
disposition.
MICHAEL H. WOJCIK, Judge
8
42 Pa. C.S. §5103(a). Section 5103(a) states, in relevant part:
(a) General rule.—If an appeal or other matter is taken to or
brought in a court . . . of this Commonwealth which does not have
jurisdiction of the appeal or other matter, the court . . . shall not
quash such appeal or dismiss the matter, but shall transfer the
record thereof to the proper tribunal of this Commonwealth, where
the appeal or other matter shall be treated as if originally filed in
the transferee tribunal on the date when the appeal or other matter
was first filed in a court . . . of this Commonwealth.
In turn, Section 5103(d) of the Judicial Code states that “[a]s used in this section ‘tribunal’
means . . . the Board of Property . . . .” 42 Pa. C.S. §5103(d).
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Sarah O’Layer McCready, :
:
Appellant :
:
v. : No. 1762 C.D. 2016
:
:
Pennsylvania Turnpike Commission :
ORDER
AND NOW, this 26th day of April, 2017, the order of the Lawrence
County Court of Common Pleas dated September 20, 2016, at No. 2012-70025 is
VACATED and the matter is REMANDED to that court to TRANSFER the record
in this matter to the Board of Property for disposition pursuant to Section 5103(a)
of the Judicial Code, 42 Pa. C.S. §5103(a).
Jurisdiction is RELINQUISHED.
__________________________________
MICHAEL H. WOJCIK, Judge