C.T. Fuller a/I/a, C.Thomas Fuller and WBF Associates, L.P. v. Lehigh-Northampton Airport Authority
172 A.3d 1166
| Pa. Commw. Ct. | 2017Background
- WBF Associates purchased 632 acres near Lehigh Valley International Airport to develop a PRD; the Airport Authority later proposed an expansion that encompassed the property, leading to a de facto taking claim.
- After litigation, a jury awarded WBF just compensation and the trial court molded the verdict to include delay compensation, mortgage interest, and fees; judgment included amounts above a $3,150,000 estimated just compensation previously paid to the mortgagee Fuller.
- Parties executed a 2011 stipulation identifying remaining amounts due (just compensation, delay compensation, fees) and the trial court approved an installment payment schedule for the Airport Authority to satisfy the judgment by December 1, 2015.
- Dispute arose over how the Airport Authority’s post-judgment installment payments should be allocated among just compensation (principal), accrued delay compensation (statutory interest), and fees—WBF argued payments should be applied first to accrued interest; the Airport Authority argued payments should reduce the just compensation principal first.
- The trial court directed that payments made after November 15, 2010 be applied first toward the just compensation award, then toward attorneys/engineering/appraisal fees, and then toward delay compensation; it ordered WBF to refund an overpayment and released escrowed funds to the Authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Order of applying installment payments between principal and delay compensation | Payments should apply first to accrued delay compensation (interest), then to principal; applying to principal first reduces WBF’s statutory interest recovery | Payments must be applied first to satisfy just compensation (principal); delay compensation accrues and is calculated at time of payment and cannot be compounded | Court affirmed trial court: payments after Nov. 15, 2010 apply first to just compensation, then fees, then delay compensation; WBF not entitled to compound interest |
| Whether Lang v. DOT controls here | WBF contended interest should be applied consistent with commercial loan practice (cites Lang) | Airport Authority argued Lang involved EJC timing and aimed at preventing compound interest; Lang is distinguishable | Court found Lang distinguishable (Lang concerned EJC timing and forbids compound interest); affirmed that delay compensation is statutory and not to be treated like commercial loan interest |
| Effect of parties’ 2011 stipulation on payment allocation | Stipulation froze amounts and WBF argued it reflected agreement that payments be applied first to interest then principal | Authority argued stipulation did not mandate allocation order; it merely fixed amounts owing as of a date | Court held the stipulation did not explicitly set payment allocation order; it did not bar the Authority’s proposed allocation |
| Claim that WBF is entitled to maximal delay compensation amount | WBF argued it was not receiving full and fair compensation if payments reduce delay compensation more quickly | Authority argued delay compensation is limited by statute, cannot be compounded, and installment scheme may reduce total delay damages without violating statute | Court held WBF is entitled to delay compensation but not to the greatest possible amount; statutory scheme and anti-compounding principles control allocation |
Key Cases Cited
- Lehigh-Northampton Airport Authority v. WBF Associates, L.P., 728 A.2d 981 (Pa. Cmwlth. 1999) (earlier appellate decision in WBF litigation affirming appointment of viewers)
- In re De Facto Condemnation and Taking of Lands of WBF Associates, L.P., 903 A.2d 1192 (Pa. 2006) (Pennsylvania Supreme Court on principle that delay compensation is required to approximate value as of loss date)
- In re DeFacto Condemnation and Taking of Lands of WBF Associates, L.P., 972 A.2d 576 (Pa. Cmwlth. 2009) (appellate decision affirming trial court’s molded verdict and awards)
- In re Condemnation of Property Located in Lower Windsor Township, 986 A.2d 190 (Pa. Cmwlth. 2009) (held that interest on interest is not authorized under the Eminent Domain Code)
- Lang v. Department of Transportation, 135 A.3d 225 (Pa. Cmwlth. 2016) (addressed timing of EJC and calculation of delay compensation; distinguished here as involving EJC rather than installment payments)