Opinion
No. 1422 C.D. 2011
07-30-2012
Washington Township Municipal Authority, Appellant v. JLT, LLC and WIT, LLC
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE LEADBETTER
The Washington Township Municipal Authority (the Authority) appeals from the order of the Court of Common Pleas of Berks County (trial court), which sustained the preliminary objections of Appellees, JLT, LLC and WIT, LLC, and declared the Declaration of Taking as null and void. We reverse and remand.
This appeal arises from the condemnation of land in Washington Township, Berks County, for the construction of sewer lines. Appellees' property lies north of the land owned by Rotelle Development Company (Rotelle), on which Rotelle intends to construct private residences in three phrases. Rotelle, at its own cost, has completed construction and installation of sewer lines and construction of a pumping station for phase one of the development. Rotelle intends to transfer and dedicate these facilities to the Authority. On January 29, 2009, Rotelle filed with Washington Township a final plan for the subdivision for 38 residential lots in phase two. Rotelle has paid the Authority in excess of $500,000 for equivalent dwelling unit capacity (EDU) for the proposed residences in phase two and phase three of the development.
Appellees' land is currently used as a flea market.
Rotelle began negotiating with Appellees for an easement sometime in 2007. The parties reached an impasse regarding the price of land in early 2010. The Authority refused to contribute $9,000 to resolve the issue as it had not budgeted any money for the construction of a sewage system in the Rotelle development. At various times during the negotiation process, both parties attended Authority board meetings and kept the Authority updated on the status of their negotiations.
On July 26, 2010, the Authority filed a Declaration of Taking (the Declaration) pursuant to Section 5615(a) of the Municipal Authorities Act, 53 Pa. C.S. § 5615(a), seeking a perpetual easement from Appellees "to construct, maintain, and operate a sewer main to be placed on the Property for sewer service to a portion of the public of the Township." Declaration at ¶ 6; Reproduced Record (R.R.) at 4a. The Declaration was authorized by Authority Resolution No. 17-July-02, adopted July 15, 2010. R.R. at 9a.
Appellees filed twelve preliminary objections to the Declaration and a brief in support, arguing that the taking was invalid. Relevant to this appeal are Appellees' preliminary objections that the Authority lacked the power to condemn since the true purpose of the condemnation was for private property development rather than for public purposes and that the Authority engaged in collusion and acted in bad faith in the exercise of its condemnation powers. The Authority filed an answer and brief in support of its opposition to the preliminary objections.
On December 17, 2010, the trial court held oral argument on the preliminary objections. On June 30, 2011, the trial court issued an order sustaining the two preliminary objections at issue here. The Authority filed a timely appeal to this Court. On November 28, 2011, the trial court filed an opinion which held that the condemnation was invalid because the true purpose of the taking was primarily for the private benefit of the developer as there are no current users who would benefit from the sewer service. The trial court also found that "the question of bad faith permeates the factual circumstances of this matter." Trial Court's Opinion at 7; R.R. at 118. The trial court did not address the remainder of the preliminary objections.
The Authority asserts that the trial court erred in sustaining the preliminary objections because the condemnation of property to provide sewer service is an inherently public action and any benefit accruing to a private developer does not strip the condemnation of its public nature. The trial court determined that the Authority acted in bad faith by "injecting itself into an ongoing negotiation between two private parties, and exercising its eminent domain power in a collusory manner to advance a private project." Id. at 4; R.R. at 115a. The trial court also relied upon the fact that no current users will benefit from the sewer services, the Authority expects Rotelle to pay the full cost of the construction and installation of the sewers for phase two of the development, and Rotelle has already paid over a half million dollars to the Authority for EDU capacity for phases two and three. Id. at 6; R.R. at 117a.
A municipal authority may only exercise eminent domain power to condemn property for public use. Pa. Const. Art. I, §10; Section 204(a) of the Eminent Domain Code, as amended by the Property Rights Protection Act, 26 Pa. C.S. § 204(a); In re Bruce Ave., 438 Pa. 498, 266 A.2d 96 (1970). A proper public purpose exists only where the public is the primary and paramount beneficiary of the taking. Bear Creek Twp. v. Riebel, 37 A.3d 64 (Pa. Cmwlth. 2012). A taking "does not lose its public character merely because there may exist in the operation some feature of private gain, for if the public good is enhanced it is immaterial that a private interest also may be benefited." Washington Park, Inc. Appeal, 425 Pa. 349, 353, 229 A.2d 1, 3 (1967). An objector has a heavy burden to show a taking is for a private use and not public benefit, as there is a strong presumption that the condemnor has acted properly. In re Condemnation of Prop. of Waite, 641 A.2d 25 (Pa. Cmwlth. 1994).
Pennsylvania courts equate "public use" with "public purpose." Middletown Twp. v. Lands of Stone, 595 Pa. 607, 939 A.2d 331 (2007). --------
We agree with the Authority that the public is the primary beneficiary of its exercise of eminent domain power. The Authority is taking property from Appellees to hold publicly for the purpose of providing sewage facilities to a portion of the public of Washington Township, an inherently public purpose. See In re Proceeding by the Twp. of E. Hanover, 701 A.2d 313 (Pa. Cmwlth. 1997) (taking to construct public sewer and water drainage system constitutes public purpose); In re: Twp. of Upper St. Clair, 587 A.2d 907 (Pa. Cmwlth. 1991) (same). Additionally, the fact that Rotelle would pay all the costs of constructing and installing the sewers does not strip the taking of its public purpose. In Washington Park, the Pennsylvania Supreme Court held that an indemnification agreement between a developer and the Commonwealth which required the developer to pay for the costs of improving and reconstructing a road did not cast any doubt upon the legality of the taking. 425 Pa. at 357, 229 A.2d at 5. See also In re Condemnation of Land Along Woodside Road, 617 A.2d 74 (Pa. Cmwlth. 1992) (holding an agreement between a municipality and a developer by which the developer agrees to assume all of the expenses incident to the condemnation of property necessary to the development, including the expense of hiring an attorney to pursue the condemnation, is logical in that it benefits the taxpayers of the municipality by shifting the costs onto the developer).
Further, the trial court's characterization of the Authority's actions as having engaged in bad faith and collusion by improperly injecting itself into the negotiations of two private parties is unsupported. The Authority is authorized by Section 5607(a)(5) of the Municipal Authorities Act, 53 Pa. C.S. § 5607(a)(5), to acquire, hold, construct, finance, improve, maintain and operate sewers and sewer systems. Section 5607(d)(15) of the Municipal Authorities Act, 53 Pa. C.S. § 5607(d)(15), grants the power of eminent domain to municipal authorities. The Authority could have exercised its power of eminent domain at any time to condemn an easement for the construction of sewers. Nevertheless, the Authority encouraged the parties to negotiate the value of the easement for over two years. Only after Rotelle and Appellees reached an impasse did the Authority use its power of eminent domain. This course of action is simply not indicative of bad faith or collusion.
Finally, the facts that current users will not benefit from the condemnation and that Rotelle has pre-paid the Authority for EDUs for the phase two and three of the development is not indicative of bad faith. Rather, these facts reflect that the Authority is considering both the present and future needs of the community. See Washington Park, Inc., 425 Pa. at 355, 229 A.2d at 4 (rejecting condemnees' argument that condemnation was for private purpose in that without the development the condemnation would be unnecessary; whether the developer "generated the need for the work is immaterial, for [the development] could not exist if the community were unable to support it").
For all of the foregoing reasons, we reverse and remand for disposition of the remaining preliminary objections.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge ORDER
AND NOW, this 30th day of July, 2012, the order of the Court of Common Pleas of Berks County is hereby REVERSED and the matter is REMANDED for further proceedings.
Jurisdiction relinquished.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge