In Re De Facto Condemnation & Taking of Lands of WBF Associates

903A.2d 1192 In re DE FACTO CONDEMNATION AND TAKING OF ASSOCIATES, LANDS OF L.P. WBF BY LEHIGH- NORTHAMPTON AIRPORT AUTHORITY. Fuller,

C. Thomas Intervenor. Appeal Lehigh-Northampton Airport Authority. Taking re De Facto Condemnation of Lands of Associates, by Lehigh-Northampton

WBF L.P. Authority. Fuller,

C. Thomas Intervenor.

Appeal Associates, of WBF L.P. Taking In re De Facto Condemnation of Lands of Associates, by Lehigh-Northampton L.P. Airport Authority.

Appeal Fuller, C. Thomas Intervenor.

Supreme Pennsylvania. Court of

Argued March 2005. Aug. Decided Shultz, DC, Fon- Charles James Washington, Carl Robert zone, Klein, Ann Allentown, Pittsburgh, D. Frances Michael

Fruhwirth, Allentown, for Lehigh-Northampton Airport Au- thority. Allentown, Associates,

Kevin T. Fogerty, for WBF L.P. Hino, Michael Berwyn, Scott C. Thomas Fuller. C.J., CAPPY, CASTILLE, NIGRO, NEWMAN, BEFORE: SAYLOR, BAER, EAKIN and JJ.

OPINION Justice NEWMAN.

In these cross appeals, the Lehigh-Northampton Airport Authority (Airport Authority), appeals from Order of the affirming part Commonwealth Court reversing and part (trial an Order of the Lehigh County Court of Pleas Common court). Associates, (WBF) WBF L.P. from the appeals same (Full- Order the Commonwealth Court. C. Thomas Fuller er) cross-appeals in both instances. subject The of these is the de appeals taking of acres to WBF belonging projected expansion due the Lehigh Valley Interna- tional Airport (Airport). We granted appeal allowance of consider the raised damages parties issues and to examine, again, once law of case and doctrine jurisdiction coordinate rationale, rule. on Based the following part we affirm in in part and reverse Order Commonwealth Court.

FACTS & PROCEDURAL HISTORY 27, 1990, September On WBF purchased 632-acre tract of undeveloped from farmland Fuller that just was located north of the Airport. Fuller held a significant first $3,075,850.00 in the amount and granted later $300,000.00 WBF a line of credit secured a second mort- planned WBF gage. planned build residential develop- (PRD) 1,488 ment title, residential units. Before taking joint WBF entered into venture agreement with Lanid Corporation (Lanid), Jersey developer a New that had suc- cessfully constructed twelve planned residential communities money seed supply Lanid was to at other locations. joint venture. WBF

$250,000.00, at the time it entered then, if $1,700,000.00, Lanid chose obligated to raise years, after five Lanid was joint to continue the venture $1,700,000.00. By early approximately obligated supply zoning changes approvals and Lanid obtained townships from of the three which two located, development sums on considerable spent and WBF architects, designers retaining engineers, including costs project. for the an- Authority publicly January involved Airport,

nounced the which proposed expansion 1,500 north of the Air- acquiring acres located approximately 1,500 WBF in its port. acres included and attendant entirety. Following publici- announcement began acquiring properties within ty, Airport Authority 1,500-acre also re- acquisitions area. These expansion seek to publicity. acquire ceived considerable It did not immediately acquire did property, properties WBF but nine of adjoining property. the WBF Because the announcement Airport Authority, and the of acquisition properties prior joint agreement Lanid terminated its venture with WBF funds, required to its infusion of unable and WBF was of attract to the imminent condemnation its new investors due WBF, prior been sound property. financially had which announced could not move forward with its airport expansion, of WBF subse- development project funding. due lack first quently mortgages. defaulted and second Fuller, filed a foreclosure action June mortgagee, successful 1997, September In of was listed for 1997. sale, tax the 1995 taxes to upset pay but WBF was able avert the sale. 30, 1996, September Appoint- filed a

On WBF Petition of a de of its alleging ment Board Viewers facto Airport Authority’s as a of the announced result expansion Airport Authority Preliminary and the filed project, of a record Objections. hearing, parties lieu submitted affidavits, exhibits, papers, depositions, discovery responses, agreements 15, at oral argument. counsel June On 1998, the court trial the Preliminary Objections dismissed granted the Petition of WBF for Appointment a Board of trial Gardner, Viewers. The James Knoll judge, President (a) Judge Gardner), (Judge that: determined a PRD constitut- (b) ed the highest best use of the property; WBF had a de (c) established the taking; elements of the date 30,1996, September the date on which WBF filed its Petition for Appointment of Board of Viewers. (Trial I) Court

The Commonwealth Court affirmed in a published Opinion. Assocs., Lehigh-Northampton Airport Auth. v. WBF 728 A.2d (Pa.Cmwlth.1999). As time the Commonwealth Opinion, paid Court’s WBF had the 1996 and 1997 taxes on the property and no had funds with which to so. do This In re 3,1999. Court denied allowance appeal on November De Facto Taking Condemnation & Lands WBF Assocs., Auth., Lehigh-Northampton 751, Pa. 747 A.2d 372 decision). (unpublished table 2, On 1999, December Fuller filed a Petition to Intervene proceedings protect order to his interest mortgagee. filed a motion compel payment just of estimated (EJC) compensation and, letter dated December the Airport Authority amade written offer to EJC in pay ’ $3,150,000.00 amount of on January

In May of anticipating scheduled view viewers, (a) property by the board of Fuller filed: a Motion to stay before proceedings the board of viewers pending deter- (b) mination Intervene; on the Motion to and for Motion an order requiring the Airport Authority to to pay the EJC Fuller as holder the first and the mortgage second mort- gage on judgment the In property. an effort to settle this dispute, and Stipulation WBF Fuller executed a detailing the terms, history, and due to money entity each pursuant mortgages two between those parties. Airport two The Au- thority and signed executed to Stipulation addendum the indicating that it did not to object the terms of the Stipulation. to Fuller on then tendered check Authority Airport The $3,150,000.00. payment the full for EJC November viewers, the conducted the board hearings Prior to the notices to the three individuals who Authority sent Airport best use of the of the highest had on issue testified The proceedings. the earlier de these individuals Authority re-depose intended Airport establishing the purpose use for the highest and best for protective filed of the WBF property. fair market value constituted order, Judge that the decision Gardner alleging and best use highest case” on the of the of the issue “law order. granted protective Gardner Judge of the property. Thereafter, hearings the board of conducted viewers ap- restricted its August Airport Authority as a PRD. of the testimony to value praisal recovery proceeding, sought WBF supplemental to Sections pursuant delay damages, interest and mortgage 1-609, §§ Code, 26 of the Eminent Domain P.S. 609 and 611 for the damages awarded WBF 1-611. board of viewers interest, delay damages. mortgage property, value court, parties requesting pre- All trial appealed three Judge unavailability Due liminary determinations. Gardner, McGinley) heard Judge McGinley (Judge Carol matter. (a) Airport Authority that:

Judge McGinley determined highest trial and best regarding evidence at present could (b) Airport Authority precluded was property; use mortgages; challenging validity from WBF/Fuller (c) from entitled recover (d) 30, 1996; delay damages WBF was entitled September (e) 30, 1996; Authority must September from 2, 2000; for of the EJC from November payment credit receive (f) attorney, to recover reasonable and WBF was entitled All engineering parties appealed. fees. appraisal, Court, In re De Opinion, in a published The Commonwealth Condemnation, (Pa.Cmwlth.), petition 845 A.2d 967 Facto (2004), 580 Pa. 860 A.2d appeal granted, allowance of affirmed in part and reversed It it part. concluded that did not violate “law the case” doctrine or coordinate jurisdiction rule Judge for McGinley permit testimony from on the Airport Authority highest best use .and property during the final even hearings, though Gard- Judge ner had ruled It differently. opined that evidence of the highest and best use was relative to the issue fair market and, therefore, value damages admissible in the phase. ‘The interest, court agreed damages, and delay 30, damages were to be calculated from September Finally, the court disagreed Airport Authority,'which with the argued that should for from receive credit the date it EJC EJC, 22,1999, offered to pay December instead of Novem- 2, 2000, ber the date on it actually which paid Judge EJC. Simpson Concurring offered a Opinion, trial commending judges for their professionalism and on offering comments parameters preliminary Again, parties determinations. all appealed.

DISCUSSION1 The Airport Authority concedes that WBF is entitled delay damages pursuant 611, 1-611,2 § Section 26 P.S. appeal proceeding 1. Our review in an from an eminent domain determining limited to whether trial court abused its discretion or findings committed an or error law whether the of fact were supported by substantial evidence. In re Condemnation State Route for (2002). 568 Pa. 798 A.2d 4n. 2. Section 26 P.S. 1-611 states: The condemnee to compensation delay shall be entitled for payment during period possession he remains in after con- demnation, during period nor such shall condemnor be entitled to charges rent other occupancy or for use and of the condemned property by Compensation payment delay condemnee. for shall, however, paid per per be at the rate of six cent annum from the relinquishment possession date of property by of the condemned condemnee, possession or if the condemnation such that is not it, required delay compensation to effectuate paid then shall be from Provided, however, date condemnation: compensation That no account, delay payable for respect shall be paid on funds or court, by deposit in payment deposit. after date of such or Compensation delay shall not be included the viewers or the jury verdict, appeal court part as of the award or but shall at payment judgment the time of of the award or be calculated above from delay damages is not entitled contends that WBF but the Airport de condemnation because the date of condemned possession not Authority physical did take disrupt condemnation did the de property and facto Authority Airport The property. “full and normal” use accrual of the date on a determination which contends that by should follow a determination delay commences damages of (a) “full normal” constitutes the trial court as what (b) when the condemnee property and use of the condemned “full normal” use of that property. lost the holding of the Com Authority asserts that The begin on the date delay damages always Court that monwealth of other decisions condemnation conflicts with of the de facto see, Redevelop court, In re Condemnation Urban e.g., that (1982), 230, 452 A.2d Authority, ment Pa.Cmwlth. that, this It asserts of Court. also while unspecified decisions Transporta Hughes Department v. rely purporting (1987), tion, 300, Commonwealth 514 Pa. 523 A.2d that by this Court departed from established precedent Court full deprives a landowner taking a declaration of “where of his as established use property, and normal use declaration, then prior his devoted property which was ‘in possession’ shall no be considered longer that landowner 611, may and the condemnee meaning Section within declaration of delay damages claim from the date omitted). Airport Authori (emphasis Id. The taking.” at 752 that, I although maintains Trial Court established that ty PRD, the actual and best use of was for highest property been no and there has agricultural, use of the being that from used for finding prevented agricultural “full normal” use as land. Airport Authority should

Essentially, argues points It out relitigate not be able to date issue. highest and best as the determination date well became final Judge before Gardner and litigated use was payment There shall be no further or additional and added thereto. of interest on the award verdict. (emphasis supplied). 26 P.S. 1-611 determination when this Court denied appeal. allowance of It contends that the Commonwealth Court properly followed its Redevelopment decision 732 A.2d Authority, McGaffic 663, (Pa.Cmwlth.), denied, allowance appeal 560 Pa. (1999), denied, 745 A.2d 1226 allowance appeal 561 Pa. II). 747 A.2d 903 (McGaffic

I. Delay Compensation Commencement of Pennsylvania provides private Constitution cannot be taken for use public just compen without I, sation. Pa. Const. Art. Section 10. This has Court held that a de entity occurs when clothed with the power of eminent domain substantially deprives an owner of the beneficial enjoyment use and property. Conroy- his Prugh Co. v. Dep’t of Transp., Glass 456 Pa. 321 A.2d (1974). occurrence, 599 Upon that three basic of dam types ages may be available to the property owner when her land is taken for public Upon use. appropriation, acquires she right immediate to the fair market value the land. Phila. Phila., 632, (1899). Ball Club v. Ltd. 192 Pa. 44 265 City A. claim, however, This does ripen not into debt until the ascertained, amount has been definitely either by agreement between parties by judicial determination. Whitcomb Phila., City 277, (1919). v. 264 Pa. 107 A. 765 When the determined, amount of the claim is finally it back relates to the time of the Id. taking.3

The property may owner also be entitled to recover damages, traditionally called detention damages, from the date the taking of the property the date of the award as compensation for the detention money. landowner’s See, Commonwealth, e.g., v. 499, 403 Pa. A.2d 170 557 Wolf (1961). Finally, the property may owner receive interest from the date of the award the date of payment. Compensation delay for in payment made a of right matter pursuant Cooper, See (holding 3. Pa. R. Co. v. 58 Pa. hardly that "It can question plaintiff be made a below was entitled to recover upon by interest the value of his company taken defen- road, appropriated dants and purposes for the of their from the time taken."). that was enacted in Eminent Domain Code 611 of the revised Section 1964, VI, 611, P.L. art. P.S. Act of June from the date of damages plus Detention § 1-611. become by custom and lumped together have been the award Thus, damages begin delay damages. delay as known exceptions.4 with few property, accrue from arises owner principle This fundamental because receives, she not for her loss unless fully compensated nearly may of her but receives it as only property, the value A.2d 557. Wolf, the loss. be date us is constitutes the date The threshold issue before what computing delay This date damages. for purposes of a upon adoption to occur variously has been held body authorized or ordinance condemnation resolution use, upon filing for private property public to appropriate law, filing the bond to secure upon as authorized plans compensation, entry upon or not until actual payment Gardens, 381 Pa. 112 A.2d 135 the land. Lakewood Mem’l Comm’n, (1955); Tpk. 398 Pa. 157 A.2d Rosenblatt Pa. (1959). after owner remains possession Where benefits, continues to receive appropriation be or even elimi recovery damages may of detention limited However, instances, the property even though nated. some land, subject she be possession may owner retains functionally restrictions that result in the loss of use because improvements, plan developments, she cannot make future into projects, continue or enter leases. Jacob Schiff ongoing Toole, in and “Detention Eminent Damages man Patrick J. (Summer 1964); Proceedings,” Domain 68 Dick. L.Rev. 55 Dep’t. Transp., v. 456 Pa. Conroy-Prugh accord Glass Co. of (1974). 321 A.2d 598 delay damages The contends no are Authority of the “full and normal” use due because WBF had nature, in its still property, agricultural which was See, North, 514 Pa. e.g., Pittsburgh Transp., Dep’t Inc. v. of vacant). (1987) (refusing delay damages A.2d 755 where was possession. argues It compensation Section denies during period a condemnee remains in possession balances that denial by prohibiting the from as- condemnor monetary sessing amounts for use and of occupancy condemned property. Hughes Dep’t

In Transp., Pa. 523 A.2d of (1987), this Court examined the of the term meaning “possession” of within the context the Eminent Domain Code. The of Department Transportation filed a decla (Department) of taking ration for portions dairy various farms. The owners sold their herds and all dairy dairy ceased operations. delay Department argued damages inappropri were ate because the dairy farmers retained possession that, property. We concluded after a declaration of which the degree owner maintains some of possession, depri vation normal use of the property constituted a taking. We stated: domain,

In that twilight of eminent between present possession in the owner and future right possession Commonwealth, by the possible all the ordinary concomi- of possession tants repose-in potential the actual of the land. If put ordinary the land cannot be to its use because of the condemnation, result, such a compensa- without adequate tion, an unjust taking would be and waste the uses of It land. follows when deprives condemnation land, landowner of the normal uses pending physical possession Commonwealth, compensation must also be intended. that,

Id. at 751-52. It is axiomatic public also when a entity in furtherance acting public project directly substan- tially and, property rights interferes with thereby, significant- ly impairs value of the result property, compensation must paid. Hughes, be the normal use was dairy farming. We conclude that the normal use the WBF judice the case sub of a PRD. development All of the activities of since acquiring were directed development toward community, residential just as all of the Hughes activities conducted in were directed posses- fact that in both instances farming. The dairy toward did not agricultural land remained was retained and sion “full normal” use. of its actual and deprivation a negate Glass, closely analogous to the Conroy-Prugh supra, con- publicity regarding the in that extensive matter present property losing a resulted owner parkway struction building point from tenants in its revenues substantial expenses operating no to longer able meet where was The property. property loss of the owner faced the tenants feared the property to rent because unable out petitioned The property condemnation. owner impending pursuant to Section of a board viewers appointment 502(e), l-502(e), though even Commonwealth P.S. This Court reasoned taking. no formal declaration filed that, generated by the Commonwealth publicity because substantially all of use deprived the owner property had Here, condemnation had occurred. property, of his de facto of its Authority public made a announcement Airport expansion needed for the property expansion plans, result of the property included the As a clearly WBF. announcement, funding development lost in its partner to investors fund the unable find alternate project, was due to its ultimately faced the loss of property project, inability presented it. This is the same scenario develop that a de Conroy-Prugh Glass where we found facto deprive hold occurred otherwise would had process of her due law. property owner without Glass, 821 Conroy-Prugh A.2d 602. Authority has asked us examine whether damages, to Sec delay pursuant

condemnee’s entitlement Code, on a date 611 of the Eminent Domain can start tion of the de We have taking. date answered after facts have in the affirmative case when question However, stated Hughes, specifically it.5 we warranted that, deprived has of the “full and once a owner been is entitled to normal use” of the owner property, North, See, e.g., Pittsburgh Pa. Dep’t Transp., Inc (1987). A.2d 755 Further, case sub from the date delay damages taking. judice is on all fours with the decision of this Court Glass, Conroy-Prugh delay and WBF is entitled to damages from date of the date of taking. taking that has been the trial by established court this instance is the date Viewers, which for upon WBF filed its Petition a Board of 30, Therefore, September 1996.6 the Airport Authority failed that show WBF continued to full normal use have of the condemned as property established the use which it declaration, prior was devoted hold that we Commonwealth correctly Court determined that is enti WBF delay tled to from of damages filing the date of the Petition for Board of Viewers. Mortgage

II. Interest Accrual7 challenges WBF the determination of the Common wealth Court that its right mortgage interest stopped accruing when Airport Authority its payment tendered of of EJC in November 2000.8 that WBF maintains this is inconsistent with other partic- Commonwealth Court opinions, challenge 6. WBF does not that of conclusion the date its Petition for However, of taking. previous a Board Viewers controls the date of authority taking of this Court has defined the as the date when the governmental entity acquire makes it it property known that intends to Gardens, pursuant power to of eminent domain. Lakewood Mem’l instance, 112 A.2d at In this that early 138-39. could have occurred as 1994, January Authority Airport publicly of when the announced the Airport expansion. challenge Because WBF does not the established date, accept we will of conclusion the Commonwealth Court 30, 1996, September seeking that appointment the date of Petition viewers, of purposes a board constitutes the date for of this Opinion. only mortgage are expense 7. We concerned here with interest as owner, which Airport has been incurred because Authority taking. Although obligation failed to declare a to make mortgage payments years, only during portion these continued mortgage payment represents mortgage eligible interest expense actually reimbursement as a cost or incurred. $3,150,000.00 paid Authority 8. The of EJC in November of 2000 million, $17 Fuller. asserts that the is worth about outstanding mortgages and notes that the on the balances Fuller $8.5 November of 2000 totaled over million. It maintains $1,462.81 accruing per has been after November at the rate day.

259 (Pa.Cmwlth. 234 Pittsburgh, A.2d ularly City v. Gross remand, Pa. 805 A.2d 1999), per curiam after affd (2002). Gross, Court determined the Commonwealth that, ownership expenses has “the condemnee where to ac refusal absent the condemnor’s paid not have would those is entitled to recover the condemnee knowledge taking, Gross, ownership at 242. Among A.2d expenses.” reimbursement the Commonwealth permitted expenses premi interest and insurance Court were reversed the Commonwealth Court Accordingly, ums. remanded the ownership expenses these disallowance This damages. for a determination matter to the trial court Pitts appeal. City denied allowance Gross Court (Table) (2000). Following 563 Pa. A.2d 664 burgh, calculation, again matter appealed was damage Court, of the trial which affirmed decision Commonwealth Opinion. City Pittsburgh, v. unpublished court in Gross (Pa.Cmwlth.2001) (table). granted This Court 769 A.2d 1256 and affirmed the decision the Common appeal allowance Pitts by City Order. per Court curiam Gross wealth (2003) (Lamb, 1, concurring). 828 A.2d 1007 J. burgh, 574 Pa. Gross, ruled that the Commonwealth Court Significantly, be in a de case is entitled to the condemnee facto the condem- mortgage paid “during for all reimbursed Id. 242.9 that the complains nation at proceedings.” Opinion, Saylor Concurring Dissenting In Mr. Justice relies his Appeals on a the Missouri Court of which states decision from interest, on a court has ever held that much less interest "[n]o others, category of loan to lend to falls within the to secure cash costs, fees, expenses Post attorney’s or other reasonable and losses.” 283, (concurring dissenting opinion) 588 Pa. at 903 A.2d Redevelopment Corp., (quoting v. Crestwood Commons Inc. Inc., however, property (Mo.App.2003)). In S.W.3d subject that was subse- private to declaration condemnation throughout quently property owner of the retained abandoned. The profitably, operate to proceedings, was able the business thereon Damages subject to property appraised value. were and sold the for provided statutory 408 of the reimbursement similar Section 1-408, Code, § Pennsylvania Eminent Domain 26 P.S. where declara- filed, following: recovery tion of is and which limits relinquished, property shall be Where the condemnee condemned by appraisal, attorney and for reasonable reimbursed the condemnor plain language of Section 609 does not the limited support restrictive interpretation Commonwealth Court.10 We agree. Authority responds Fuller and WBF en-

tered into the first for the purchase price years loan six before the de years condemnation and the second loan two facto prior. It asserts that the second loan was to develop- related expenses ment and that the principal and interest from nei- to, of, ther loan are related exist because the de facto that, condemnation. The Airport Authority asserting is thus because mortgages from the result did. de taking, responsibility for interest payments occa- facto mortgages sioned those is not a item of proper damages. argument This just embodies the antithesis of compensation.

A property just is entitled owner compensation his or her at the time it is being public taken for use. Just compensation constitutionally required and grounded engineering expenses actually fees and other costs and incurred be- proceedings. cause the condemnation added). contrast, (emphasis 26 P.S. 1-408 where there has been a taking, permits recovery expenses de Section for all costs and "actually expenses incurred" and does not limit costs and those See, “actually incurred because proceedings.” condemnation Saylor n. 10. Mr. Justice he indicates that the statute as “read[s] infra litigation expenses specially addressed which are incurred process, judicial condemnee who is forced to invoke and not to holding carrying distinct costs associated with owner- and/or However, ship.” statutory Post 588 Pa. at 903 A.2d at 1216. interpreted statutory sections must be within the entire While scheme. expenses Section 408 limits "actually costs and to those incurred proceedings,” because of the condemnation Section 609 does not do so. Further, Assembly had the General intended identical reimbursement provisions jure expenses, de and de condemnation it costs and facto certainly accomplish knew how to word the text of the statute to that. Assembly

The fact language that the General did use in not the same against interpretation my preferred by Section 609 militates the col- league support and is today. added for the result we reach 1-609, § 10. Section 26 P.S. states: Taking Condemnee’s Costs Where No Declaration Filed. proceedings Where 502(e) are instituted a condemnee under section taking], judgment awarding compensa- to a [related de facto tion to the the property condemnee for shall include appraisal, attorney engineering reimbursement of reasonable and fees expenses actually and other and costs incurred.

261 Therefore, private of fairness. when concepts in fundamental Eminent the intent the for public purpose, is taken property in property the owner dispossessed is to place Domain Code prior concluded existed after the is same position the is condemned Generally, property when to the condemnation. condemnation, fair value is the measure market jure in a de asso- expenses for reimbursement damages, provision Eminent See Section proceedings. ciated with Code, There no need to reimburse 1-408. is Domain P.S. passes because title mortgage owner for property can be satisfied with fairly rapidly any mortgage and proceeds. condemnation, treated as

In is property a (cid:127)de facto condemned, has no official it been but there been though has just compensa Although usual measure condemnation. taken, the actual property is the fair market of the tion value to 609 should be sufficient damages pursuant Section awarded not make owner but result a windfall.11 whole “proceeds expresses [of Eakin concern that the mort- 11. Mr. Justice all, purpose just acquisition gage] may any be used for at at improvement property encumbered.” Post Pa. Eakin, J.). (Concurring Dissenting Opinion, Although A.2d condemnation, attempt advantage will to take of a some individuals property dispose fact remains that the owner unable while mortgage to continue under the threat of condemnation and is forced been payments that would terminate had the condemnation otherwise condemning authority just compensation by the tendered. declared instances, mortgage predate majority of lien will the threat or In the mortgage where In those instances occurrence condemnation. arises, de such as where the obtained after a condemnation mortgage lose property owner must secure a rather than otherwise, mortgage purpose tax for the can be scruti- sale or 66, Inc., Saylor Mr. nized. Such was the situation cited Justice Dissenting Concurring Opinion. his announced, 66, Inc., eight after the condemnation was months prior mortgage mortgaged property, paying off a owner acquire loaning a chain the excess funds a business associate movie cities. While the Missouri court theaters in two distant mortgage delay damages, disallowed the inter- affirmed an award of expense specifically purposes not because the funds were used for est with the or the associated condemnation. mortgages proper- on its WBF demonstrated that the first and second phase litigation by Judge ty legitimate first of this heard were in the Also, (Fuller) holder has been a James Knoll Gardner. de condemnation, however, a In a considerable party litigation. throughout or an intervenor the In the factual recita- tion we note: 27, 1990, purchased September On a 632-acre tract of undevel- oped just Airport. farmland from that was north Fuller located of the significant mortgage property Fuller held a first the in the amount $3,075,850.00 $300,000.00 granted and later WBF a line of credit by mortgage. a second secured Infra, Pa. at at 903 A.2d 1195. The trial court determined that mortgages legitimate granted by following the were when it the Motions Fuller: May by anticipating property the scheduled view the viewers, (a) stay the proceedings board Fuller filed: a to Motion pending before the board of viewers a determination on the Motion to Intervene; (b) requiring Airport and for an Motion order Authority pay mortgage the EJC Fuller as holder of the first mortgage judgment property. on the second Also, Infra, Airport Authority 588 Pa. at at 903 A.2d 1196. and, agreed fact, stipulation mortgages ato from Fuller to WBF holder, paid just mortgage compensa- Fuller as the the estimated tion. dispute, In an effort to settle this WBF and Fuller executed terms, Stipulation detailing history, money entity due to each pursuant mortgages parties. to the two between those two The Authority signed Stipula- executed to the addendum indicating object Stipulation. tion that it did not terms Airport Authority The 2, 2000, tendered Fuller then a check to on November $3,150,000.00. payment for the full EJC Id. Further, recovery there is no double here. WBF is entitled to detention damages right proceeds loss of its to receive and use from property. This is the which a measure landowner’s landowner, damages are determined when who has retained owner- ship possession property, deprived has nevertheless been property. only ability the full and free use of that It is because the repay mortgage mortgage interest is affected may part expenses actually become of the "other costs and incurred.” mortgage ownership expense interest is an would have been extinguished just if the compen- condemnation had been declared and paid. sation When the owner fair receives the market value of property, mortgage the amount of the lien included in that fair interest, however, Mortgage component market value. is not of fair paid mortgagor market value. Neither is it nor does it increase property. compen- decrease fair market value of the Failure to sate the owner for interest diminishes the total compensation received. Saylor posits Assembly Mr. "the separately provid- Justice General Code, delay compensation ed for 611,” in Section 611 of the 26 P.S. 1- substantially which he overlaps holding ”believe[s] and/or Post, carrying previously costs.” 588 Pa. A.2d at As I, delay compensation Part indicated in a awarded de facto compensate condemnation to owner for the loss use of funds, expenses. not as a reimbursement of initiates condem pass can before landowner of time period Section 609 and resolution is reached. proceedings nation occurrence and anticipates Code the Eminent Domain for the compensation property additional owner authorizes Holding 408. R that See & J beyond contemplated Section (Pa.Cmwlth.2005) 885 A.2d 643 Redevelopment Authority, condemnee require that 408 does not that a (holding Section Condemnation, whole); A.2d In re Route 709 be made (condemnee (Pa.Cmwlth.1998) costs and only 939 entitled 408 expenses pursuant related to condemnation Section 609). Thus, under Section general damages rather than ownership expenses (e.g. mortgage a condemnee has where etc.) interest, taxes, an item premiums, as insurance it have absent general damages that not incurred would the con acknowledge taking, refusal condemnor’s expenses.12 those See statutorily demnee is entitled recover v. State Roads Commis also Reichs Ford Road Joint Venture (2005) sion, (holding 880 307 that 388 Md. A.2d in for rental compensation entitled to seek lost owner was interest, come, general types insurance and other mortgage condemnation);13 as a result of the inverse damages incurred opines "lm]ortgage is ‘other costs Justice Eakin that interest not Mr. 12. actually mortgage would expenses because interest on the incurred’ regardless simply condemnation." This not have accrued Authority proceeded jure Had with a de condemnation case. land, negotiated price for parties would have paid Authority payment, and WBF have off would have tendered would mortgages proceeds. WBF be free to take the Then would Authority remaining pursue did funds other ventures. Because obligated mortgage properly, pay proceed has been present have the condem- from 1994 to that would not incurred had Further, jure than de there nation been a de one rather one. way recoup no than for WBF to this unwarranted other Section 609 expense not increase the fair market because interest does value. Ford, public issued a statement In Reiehs the Roads Commission interchange revealing expressway it intended to create a new subject portion land. Thirteen result in the of a would later, years proceedings been insti- when no formal had condemnation tuted, complaint alleging an inverse condem- owner filed a income, sought damages lost property owner rental nation. The interest, insurance, taxes, mortgage adminis- fire and other real estate particu- Maryland Supreme expenses. Court held that these trative 264 Stores, generally

see Convenience Champs Inc. v. United Co., (1991) Chemical N.C. S.E.2d 856 (finding that, no while North Carolina case holds that a property- owner is entitled to damages recover as reasonable overhead expenses interest, such rent and mortgage there is no North Carolina case that holds that a property cannot owner type recover this L & damages); S Constr. v. Bradbury Co. Homes, Inc., 476, 118 208 Md. (concluding A.2d mortgage interest as part allowable cost of damages calculation); United States v. Property Borough Located in Manhattan, (S.D.N.Y.1964). F.Supp.

Although Airport Authority concedes that interest accrue, both loans continues to contends both mortgages ceased to exist as upon encumbrances the property, merely but continue as against liens the pro condemnation ceeds. Briegel Briegel, See 307 Pa. 160 A. (1931). In Briegel, property belonging to the husband was condemned. The protect wife sued to enforce dower in interest that property. This Court concluded the wife longer no had an in interest the condemned but property retained a in possible proceeds. the There we said:

The theory of eminent domain from comes the absolute right of the to take for sovereign property public use. All title interests must in be included the taking. It would be unthinkable that outstanding rights interests or in the land condemnation; should remain in others after to such permit interests remain would with materially interfere the completion the purposes government, for which the or those acting for it or in its right, taken property have the through eminent domain. It is of public therefore matter that condemnation policy operates all against interests di rectly land, connected title all including unre corded or equities hidden interests indirectly connected with out growing of such titles. Hence, at Id. the sovereign when affects relationship between the mortgagor and the mortgagee by means of types damages,

lar which were incurred as a result of the condem- conduct, pre-condemnation compensable. nor's were the law the condemna- proceedings, condemnation substitutes the mort- security previously provided by for the tion award gage. in a condemnation stands proceeding

The award taken, de land once Prior to the place it is made. land, lien of its constituted a mortgage condemnation facto However, a mortgagor on the WBF. neither by land owned mortgagee power prevent nor has entity an clothed with the public purpose property is a of eminent When the power property domain. owner, title vests subject of condemnation taken from mortgage free and lien. condemning entity clear mortgagee, although losing upon lien lien as equitable security'for condemned retains property, the land that was taken upon damage the debt award for place in the condemnation The award stands proceeding. as a substitute for land that was taken and can be However, debt. does not release applied satisfy the just compensation the condemnor from the con providing Further, taking, in a de the property demnee. owner retains title to the because the condemnation has sovereign. declared and title has not transferred been matter, the instant both WBF and Fuller have taking. interests that are affected WBF valued $17,000,000.00 outstanding and indicated that the $9,000,000.00. 1-609 mortgages totaled Section approximately that, proceed- the Eminent provides “[w]here of Domain Code 502(e), a ings are instituted a condemnee under section by the condemnee the judgment awarding compensation to for ... taking of shall include reimbursement of other property expenses actually § costs 1-609 incurred.” P.S. Therefore, is entitled to all mort- (emphasis supplied). WBF date of to date of EJC gage interest from the the the plus all from the EJC payment, mortgage interest date to that it has payment actually the date of the award incurred. adjusted be to reflect Obviously, mortgage principle the must Fuller, in a the to which will also result payment EJC However, also recalculation. believe WBF is payment we to mortgage entitled interest incurred by it from the date the to payment. award the date Airport award The Au- paid on thority EJC of million November $3.5 holder, tendered the to Fuller money ostensibly as to the principal However, reduce amount mortgage. payment EJC by Airport Authority did not fairly reflect value or the property amount of existing liens sufficient to it of relieve obligation reimburse WBF for mortgage interest continuing after that date component damages. There no would have been need for WBF to pay mortgage interest if the Airport Authority had acknowledged it publicly when announced the airport expansion began acquiring by condemnation the properties surrounding that of WBF. The failure of the Air- port Authority to file required condemnation toWBF 502(e). initiate proceedings pursuant to Section During Sec- 502(e) tion proceedings, ownership placed 1-402, issue. Pursuant Section P.S. title passes to the condemnor after a but title taking, remains with the property owner until court decides a taking whether has 502(e) occurred a Section proceeding. payment

While of EJC does Authority relieve the Airport from payment of interest on that portion of the by any covered EJC and corresponding obligation payment, covered plain EJC language Section 609 entitles interest, incurred, WBF to the mortgage which from the date payment and, of EJC date of the award thereafter, to the of that payment award. Section 609 contem- plates payment incurred, of all costs expenses actually rather than only those related condemnation proceed- ings as directed Section and presumes the entire course of the litigation as its terminal point. Common- Court wealth clearly departed erred when it from the princi- ples Gross established in concluding entitle- WBF’s ment to interest ceased the date that Authority EJC, tendered its and we reverse Order of Common- respect wealth Court portion of its decision. Judge Trial III. Second Court Order of determination of the Commonwealth challenges the determina- overruled the Judge McGinley properly that Court Authority preclud- was Judge Airport that tion of Gardner highest during best use from and relitigating ed permitting that portion argues of the case. WBF damages on the Authority present additional evidence Airport contrary and use for well- highest best judicata, estoppel, and of res collateral principles established his that Gardner based Judge of the case. It remarks law record, full having a parties on voluminous with both ruling issue, his litigate that and that deter- opportunity and fair and best use is highest that a PRD constitutes the mination his occurred. WBF pivotal to conclusion defacto and highest final conclusive of the finding asserts and should be the trial court a de case best use damages litigation involving binding portion this It notes that Court property. same same parties argues that the previously has not this issue addressed Court on matter is substan- view of Commonwealth finality from departure principles tial well-established rulings findings. and best Airport Authority highest contends that fair market part

use for a value condemned “just is determined property. compensation” of that Because market value of the immedi- by the difference fair condemnation, after the Authori- ately before and on the present that it is entitled to evidence ty maintains use. highest Judge McGinley, and best Before actual argued that it error to hold it was Airport Authority was from evidence the issue precluded discovery presenting Judge It McGinley and best use. counters that highest Gardner Judge 2000 Order bound November Judge McGinley It maintains that because was erroneous. necessary determined that evidence on this issue was correctly damages phase. during

It is well established that of judges coordinate jurisdiction the sitting in same case should not overrule each other’s decisions on the same issue. See Commonwealth v. Starr, (1995). 541 Pa. A.2d prem 664 1326 This rule is judicial on policy, ised sound from the departure rule is circumstances, permitted only exceptional such as where law, there has been an intervening change controlling in the there has change where been substantial facts or the giving evidence rise to the the dispute, prior where holding clearly injustice erroneous and would create manifest if Id. at Riccio Republic American Insur followed. 1332. Co., ance (1997), 550 Pa. 705 A.2d 425 this Court explained jurisdiction that the coordinate rule falls the within doctrine, “law of the case” which the concept embodies that: court involved in the later phases litigated [A] matter should reopen questions not by judge decided another by that same court or a higher court in the earlier phases of the Among matter. the related but distinct rules which (1) make the up law case doctrine are upon that: remand for further proceedings, a trial court not alter may of a legal question previously by resolution decided (2) matter; court in appellate upon a second an appeal, appellate may court not alter resolution of a legal question previously court; decided the same appellate (3) upon transfer a matter judges between trial jurisdiction, coordinate may transferee trial court alter the a legal resolution of question previously decided the transferor trial court.

Starr, 664 A.2d at 1331. The rule “not only promote serves “(1) goal judicial economy” but also: protect (2) expectations settled of the parties; to ensure uniformity of (3) decisions; to maintain consistency during the course (4) case; single to effectuate the proper streamlined justice; administration of litigation bring end.” Id. In ascertaining whether law of case doctrine Court applies, timing looks to the rulings within Riccio, procedural posture ease. A.2d proceeding, condemnor In a traditional condemnation pleas of common the local court files a declaration some, one, or all of the condemn- properties and identifies Then, l-402(a),(b). year within after § ing. 26 P.S. authorized, file appropriately must the condemnor project to be for all condemned properties declarations of all l-402(d). be § Notice must served project. for the P.S. following the thirty-day period the condemnee within l-405(a). § taking. the declaration of P.S. filing of objections days preliminary thirty file within condemnee must l-406(a). However, them. P.S. notice or waive limited to stage statutorily at this are objections preliminary “(1) to right or of the condemnor power four issues: the the been unless same has the condemned appropriate (3) (2) adjudicated; security; the sufficiency previously condemnor; or the the procedure by other follovred any preliminary When the to file taking.” of Id. time declaration of possession is entitled to objections expires, condemnor EJC, EJC although payment of of property upon tender to final ability proceed a prejudice parties’ does not l-407(a),(c). If the § 26 damages. P.S. determination objec- preliminary and files challenges condemnee tions, the board conducts appointed board of is and a viewers best use and hearing highest determine and The by report the condemnee. damages incurred pleas. to court common may appealed recommendation be of common by'the pleas of review court scope by findings conclu and the court is bound plenary, changed can Witnesses be sions of board viewers. the condemnees as by included or excluded other evidence See, v. Metro. Edison strategy e.g., trial dictates. Stoner their Co., (1970); 333, Snyder 266 718 v. Common Pa. A.2d (1963). wealth, 15, 192 A.2d 650 Pa. proceeding,

In the non-traditional condemnation When a condemnee though, no declaration of filed. just without com has been condemned believes files proceedings commence when the condemnee pensation, for a petition board viewers with the court of common pleas. l-502(e). § If objects, 26 P.S. condemnor then does so by filing preliminary objections with the court of common pleas. Contrary traditional condemnation proceeding objections preliminary where must be filed consistent with preliminary objections Section a de condemnation are pursuant case filed the condemnor Section 1-504, does P.S. which not contain the present limitations Section 407. Preliminary objections raised condemnee pursuant to the strictures of permit Section 407 do not challenge or highest determination of use. best Con- versely, when preliminary objections pursuant are filed raised, all of objection Section issues must be including highest use of property. best This is because the common pleas judge must determine whether the landowner has been deprived the use of the property, including its highest and best use. trial When the court renders findings prior viewers, appointment a board the findings board, are binding on that hear which will and decide the See, remaining damages e.g., issues. Redev. Auth. Woodr- (1982). such, 498 Pa. ing, A.2d 724 As non- traditional proceedings, condemnation courts common novo, pleas, acting de serve in a fact-finding capacity rather than in the capacity appellate reviewer of decisions of a board of This is analogous viewers. somewhat relationship existing unemployment between an compensation Unemployment referee and the Compensation Board of Re- view, or an judge administrative law and the Public Utility Commission. Airport Authority

The relies the decision of the upon Com monwealth Court in In re Legislative Condemnation for (herein (1992) Route 146 Pa.Cmwlth. 605 A.2d 1286 Legislative 1046), court, after Route the on remark which facts, ably similar held that the trial court in precluding erred Department the Transportation (Department) present from ing evidence on argument highest the use best based a prior There, Order of trial judge the case. the condemnees acquired property development purposes for a Pottstown plans shortly Department prepared before the anticipated The condemnation project. plans expressway months, and, Department nine subject within proper- nearly two hundred acquired eight all but had years Not until seven expressway. along proposed ties taking, formal file a declaration Department later did the asserting objections, preliminary condemnees filed which the de one that occurred actually been a had facto that the years parties stipulated some previously. seven taking in of a de would determine issue trial court facto hearing the board view- by before the proceeding another that a de judge the trial held hearing, Following ers. occurred, and best use highest identified the taking had facto to deter- board viewers appointed of the property, that it was The board of determined damages. mine viewers use articulated highest the determination of and best by bound damages, of delay an award by judge. Following the trial The Department to the trial court. parties appealed both of viewers determination that board sought preliminary judge, seeking of the trial by finding not bound and best use. The Commonwealth relitigate highest concluding the board of erred in Court held that viewers and best use determination by highest it was bound no damages simply has relevance “question because objections are filed” to Section preliminary pursuant when at 1291. 407. Id. indicated, objections are previously preliminary

As when following taking, a declaration filed the condemnees “(1) power right is limited to: or subject matter unless the appropriate condemnor to the condemned (2) adjudicated; sufficiency previously same has been (B) other the condem security; any procedure followed l-406(a). nor; taking.” the declaration of 26 P.S. the trial Route Legislative parties stipulated a de court address the issue of would trial court. The trial court proceeding before the separate issue, highest a determination of the including ruled on that use, of Pursuant to best became the law the case. which practice, traditional condemnation a determination highest and best use would been by have made the board of viewers and examined the trial court as final fact finder. This procedural aberration took the determination out the realm of the proceeding condemnation and the Section traditional 407 limits apply. did not matter, ruled,

In the instant Judge as an Gardner evidentiary that the ruling, Airport Authority prohibited was from presenting testimony additional from the condemnee’s experts damages phase, already who had testified in the initial deposition as to the proceeding, and best highest use of the property. highest and best use awas determi fully litigated by nation that was parties and formed an part of integral Judge Gardner’s decision that a cle facto that, had occurred.14 Judge Gardner noted to succeed claim, (1) in its WBF had to establish that: Authority entity is clothed power with the of eminent (2) domain; WBF was substantially deprived of the use of its (3)

property; deprived WBF was use a direct result actions of the Airport Authority; and injury WBF’s not speculative conjectural. In deter two, prong mining Judge Gardner that the noted beneficial use, use of a property only includes not its present but also its proceeding, In a "highest condemnation what constitutes the generally best use” of the ques- condemnee's considered least, tion fact or "at question a mixed of law and fact.” Post 588 Pa. at (Concurring Dissenting 903 A.2d at 1217 Op. Justice Saylor). commonly The "law of the applied case" doctrine is determinations, preclude relitigation conclusory legal but in less instances, applied preclude relitigation common it has been of both Monsisvais, findings of fact and conclusions of law. See United States v. (10th Cir.1991) (recognizing F.2d 115 n. courts "[s]ome characterize the law of case applying findings doctrine as both law”); Equal fact and Employment Opportunity conclusions Comm’n Assoc., (5th Cir.1980) Longshoremen's v. Int’l 623 F.2d that, rule, (stating pursuant appellate to "law case” “trial and by any findings courts are bound of fact or law conclusions of made [in] issue”). case jury If a can reconsider a determination a trial court crucial legal phase litigation, its ultimate conclusion in later of the same possibility exists an adverse can determination undermine that legal principles underlying initial conclusion and emasculate "law of the case” doctrine. use, taking that a occurs where best highest and In so the of its property. of use deprived owner is concluded, testimony the noting after finding, Judge Gardner determination, highest the that making he in that credited affirmed PRD. The Commonwealth Court use is as a and best this determination. instant matter Objections in the Preliminary

The context, a that to Section 504. Within pursuant filed were must the and best use highest determine judge trial condemnor, those of and whether the actions property, require just compensa taking of actions effected Viewers, Authority Board of tion. Before the in initial experts testified sought depose the same who highest in order to establish proceedings of phase of of of assessment best use for the board viewers’ purposes of highest fail to see damages. We how determination from that within and best use can differ determined part as of fair context of a de and that determined phases in but related the same separate market value two best highest The best is the litigation. highest and use Judge ruling issued his use. The fact remains that Gardner McGinley to the same issue regard Judge did —the component use as a of fair market value. highest and best There no in the change change the law substantial was Judge McGinley justify facts the conclusion aside, particular Gardner be Judge determination could set when the Commonwealth Court had affirmed Order ly Judge Judge McGinley allege Opin Nor did her Gardner. Judge ruling ion that was erroneous. She clearly Gardner’s reasoning judge as her has the only trial proffered at trial. discretion determine what evidence admissible issue, highest property, and best use was actual instances, use of highest the same both and the and best is the same as purposes ascertaining setting the fair highest purposes and best use for parties all had parties market value. The the same and were litigate Judge a full and fair that issue before opportunity Judge The decision of became the law Gardner. Gardner case, determination affirmed appellate court, and Judge McGinley erroneously determined that the Airport Authority could the same redepose experts who testi- fied for WBF this initial as to during phase proceedings highest and best use of the property.

CONCLUSION owners Property are affected announce public routes, ments proposed projects, highway public and other purpose Unfortunately, may needs. years elapse between the date of the announcement the project’s and consummation. may Even the final differ plan substantially original from that (and ly disclosed as public opinion opposition) is tested. How ever, consideration must be afforded to those whose property in the in placed entrapped fish bowl and the mire of public Thus, bickering. and a in political public entity, acting when of project, substantially furtherance a public directly and and, rights interferes with im property thereby, significantly pairs value of the result is a and property, compensation paid. public hearings must be When and resul tant a publicity cause owner of commercial property lose investors to such an extent that there is a threatened loss of property, owner a right has appointment viewers award for its compensation property. Concomitantly, the loss greatest suffer, deprivation a landowner can far exceeding loss profits of the meaningful, diminution beneficial use of the a sum of property. Although money equivalent to estimated fair provide perfect yardstick market value does not with which to measure the worth of a property, landowner’s seek, condemning authority must as as nearly possible, to replace land that has been earmarked for use public with Here, equivalent public funds. proceed WBF was unable to land, development, with its remained a market for without its but still was to make required mortgage payments. its private sector was not interested due to the investment sector, threat of public represented by condemnation. The Airport Authority, having development plans thwarted a that could be WBF, party realized that WBF was and dealt leisure. interminably deferred de has been once owner summary, In her property, normal of his or “full and use” prived from the date delay damages is entitled owner matter, hold that is entitled the instant taking. we Petition for Board filing from the date of damages delay incurred Viewers, actually all to include further hold that of the award. We payment until date the decision of affirming erred in the Commonwealth Court Airport Authority trial held judge, the second which in its highest and best use permitted relitigate viewers. following the determination the board of appeal is af the Order of the Commonwealth Court Accordingly, in part. firmed reversed part and BAER

Chief Justice CAPPY Justices CASTILLE join the opinion. did not the decision participate

Former Justice NIGRO case. concurring opinion. dissenting files Justice SAYLOR concurring dissenting opinion. Justice EAKIN files AND DISSENTING OPINION CONCURRING Justice SAYLOR. in I of majority’s

I conclusion Part agree legal with delay be due in favor of compensation that should opinion Associates, in sup- I offer different reasons but would delay availability decision and that the port this believe in contingent findings be damages ultimately upon jury should I appeal; respectfully majority’s the de novo differ as concerning the allowance holding apart from component damages delay above and separate and I Court’s would affirm Commonwealth compensation; jurisdiction reasoning holding question. My on the coordinate follows.

276

Regarding Part I of the majority opinion and the issue of outset, delay at the I treat compensation, would the issue as than the question narrower considered and resolved majority. portion relevant of its as appellant brief case, in this the Airport Authority takes settled proposi as that a constitutionally significant tion there de facto taking September as of the date on which WBF Associates filed its for petition appointment a board of Presumably, subject viewers. does so the issue was the a prior appeal in which prevailed, WBF Associates see Assoc., L.P., Lehigh-Northampton Airport Auth. v. WBF (Pa.Cmwlth.1999), A.2d 981 this Court did not that accept for further In re appeal Lehigh-Northampton review. See Auth., curiam). Airport 560 Pa. (per 747 A.2d 372 Thus, Authority expressly frames the relevant question as whether a condemnee’s com delay entitlement to pensation under Section of the Eminent Domain Code may start on a date after taking. sometime a de See facto Brief for at 4. in Appellant framing issue however, majority opinion, effectively appears subsume the question presented in the initial appeal, Opinion, see Majority 254-55, (“The Pa. at 903 A.2d at 1199 threshold issue before is constitutes the of taking what date purposes computing delay damages.”), the majority’s analysis the merits seems to revisit approve the Commonwealth See, holding regard. Court’s e.g., Majority Opinion, (“This 257-58, Pa. A.2d at 1201 is the same scenario presented Conroy-Prugh Glass where we found that de had occurred and that to hold otherwise would facto deprive a property of her property process owner due without law.”).

It is my position takings significant issue is highly in its question own that is not right directly before the Court juncture at this case. the majority puts As it into play here, I note the issue of pre- whether and to what extent activity condemnation on the part government can arise a de has been by many addressed other as jurisdictions a discrete of category takings jurisprudence, frequently couched under the of or plan- rubric condemnation

277 4 J. blight. See Sackman, ning generally on Eminent Nichols (Rev.3d Freilich, ed.1995); H. Robert 12B.17[6] Domain Experience, 29 Urb. Anglo-American Planning Blight: (1997) “the vii, planning denoting as (defining blight viii Law. condemnation of land which upon effect value omitted)). (footnotes threatened, potential” imminent or as a de blight planning courts treat refuse Many fo only to be relevant rather, phenomenon find the but taking, establishing just compensation. fair the issue cases, City this line of in seminal decision in example, For a Co., 241, 321 N.Y.S.2d 28 N.Y.2d v. J.W. Clement of Buffalo 895, (1971), New York Court 345, 269 N.E.2d explained: Appeals entry physical a De facto a requires is clear that

[I]t owner, condemnor, a legal a ouster of physical use, enjoyment or possession the physical interference with interference the owner’s legal or with hand, On the other power disposition property. of certain acts impact “condemnation relates to the blight” way It in no subject property. imports on the value sense, of a merely permits in the but Taking constitutional the time of the more realistic valuation case, compensation such shall be jure De proceeding. taking, time of the on the value of the at the based debilitating effect of a subjected if had not been as threatened condemnation. Co., 241, 28 N.Y.2d v. J.W. Clement

City of Buffalo (1971); v. N.E.2d N.Y.S.2d cf. Danforth 231, 236, States, 271, 285, 60 84 L.Ed. United 308 U.S. S.Ct. (“A of property or increase in value reduction or legislation beginning for or the may occur reason are incidents changes of a value completion project. Such ‘taking’ cannot be considered ownership. They sensed]”).1 A of these courts is central concern constitutional Rock, City 323 Ark. By-Products, Little 1. See also National Inc. (1996) ("Our holding ... is consistent 916 S.W.2d 748-49 jurisdictions general rule which adhere to law several anticipation improvement plotting planning in of an does that mere 278 planning

that governmental unduly should be restrained by a it implicate premature concern that will unduly burdensome accrual of A of damages.2 jurisdictions number a de recognize will taking some instances involving but planning blight, only when there direct and substantial interference existing property rights with caused by extraordi- nary delay or or oppressive part unreasonable conduct on the of condemning party.3 taking damaging property not constitute a or affected where the government imposed a property.”); has not restraint on the of use Ltd., 452-53; Westgate 843 S.W.2d at Lone Star Ind. v. Sec. Kan. of 121, 511, (1983); Dep’t Transp., 234 Kan. 671 P.2d State 518-19 ex of Gaertner, Washington University Redevelopment Corp. rel. Med. Center v. 373, (Mo.1982); DUWA, City Tempe, 626 S.W.2d Inc. 376 v. 203 Ariz. of 181, 213, (App.2003) (characterizing City 52 P.3d 217 New York’s of one); approach prevailing as the Highway State ex rel. Mo. & Buffalo 551, Edelen, ("The Transp. (Mo.App.1994) Comm'n v. 872 S.W.2d 558 damages threat of condemnation is neither a nor an element of suit.”). generally in a condemnation See 29A C.J.S. Eminent Domain (2005) ("A taking § 88 will not be found based on mere diminution severe, property, or reduction in of value even if or on the basis denied, highest that best or use of on is frustrated or or right particular parcel basis that some or interest in a land is of burdened, or develop because the owner is unable to its potential, exploit property maximum economic or to that Annotation, development.”); Kemper, to be believed available for J.R. Planning Plotting Anticipation Improvement or Taking as or Dam (1971 age Property Affected,37 Supp.). A.L.R.3d 127 & See, 345, e.g., Buffalo, ("To City

2. 321 N.Y.S.2d 269 N.E.2d at 904 condemnation, hold date impending of the announcement of the media, directly whether condemnee or the news constitutes a time, impose De facto 'oppressive' would be to upon condemning authority.”); ‘unwarranted’ Westgate burden Ltd. State, 448, (Tex.1992) ("Construction v. 843 public-works S.W.2d 453 projects severely impeded government would be if incur could liability merely by announcing plans inverse-condemnation to condemn future."). property in the See, 170, (D.Del. e.g., Barsky City Wilmington, F.Supp. v. 578 173 1984); 712, Dep't Transp. Barsy, State ex rel. v. 113 Nev. 941 P.2d 971, conduct”) (“extraordinary delay oppressive (citing 976 or Whittier, 1, Klopping City v. Cal.Rptr. Cal.3d 8 104 500 P.2d (1972)), GES, Corbitt, grounds overruled on other Inc. v. Nev. 314, Gimello, (2001); 21 P.3d 11 Littman 115 NJ. 557 A.2d (1989) (indicating legion "[t]he cases are that hold that deliberations, during governmental decreases in the value extraordinary delay, ownership absent are incidents of and to not taking,” explaining "[sjtrong policy constitute considerations underpin holding opportunities, forgone our that lost economic financ- appeal, the first Commonwealth resolving decision touching cases Pennsylvania summarized seminal aptly Court Airport, A.2d Lehigh-Northampton See subject. on however, rele- none this Court’s Significantly, at 985-89. of a contem- directly impact decisions have addressed vant have land prospective development plated condemnation would dictate construct which implemented particular disagree respectfully cases.4 In I regard, outcome of such Conroy-Prugh position that cases such majority’s PennDOT, 384, (1974), v. A.2d 598 are Co. 456 Pa. 321 Glass interference with point. Conroy-Prugh involved directly on to support involved already established use 2, id. at interests, 321 A.2d see n. leasehold 392-93 & existing contrast, is 601-02 & n. *. in case it present at existing uses remained undisputed subject that the property’s (which unrestrained, depen- and it was a use was prospective contingen- uncertain negotiation many dent successful upon cies) by publicity associated with future that was affected Further, no in the for I can find cases support condemnation. reconciling in majority’s apparent reasoning present that, represented by Conroy-Prugh case with line cases arising government plans ing, in diminution market value from give compensable publicity do not rise to a their attendant alone Kanner, (2002) taking.”). generally ALI-ABA 327 See Gideon SH025 blight taking planning (presenting llie issue of de account of unreasonable/oppressive government paradigm). under the conduct Gardens, majority suggests 4. The that Lakewood Memorial Petition of Inc., 46, (1955), proposition Pa. 112 135 stands for the 381 A.2d entity governmental taking in date the date of these cases is the Majority Opinion, appropriate property. intent See makes known its However, 258 903 at n. 6. that decision 588 Pa. at n. A.2d 1201 distinguishable, it in which the as concerned an unusual circumstance government sought of the date of on account of acceleration inflating damages after a state condemnee’s unreasonable activities 58-59, id. agency adopted had a resolution of condemnation. See at fairly specific, as it involved 112 A.2d at 141. case also fact High- legal principle from the extension of a derived State the Court's Commission, way Turnpike equities based on the involved. Law to the Moreover, 53-54, 58-59, at 112 at See id. A.2d acknowledges, majority interpretation room for there considerable whether, regarding general question of among this Court's decisions circumstances, condemnation will have and under what a de facto occurred. 280

for purposes takings jurisprudence, present existing use of a should be its viewed terms of status as the subject matter of a planned, prospective use. See Majority 255-58, Opinion, 588 Pa. A.2d at 1200-1201. To the present or contrary, existing generally use is evaluated see, terms of actual use exclusive prospective application, North, PennDOT, e.g., Pittsburgh 316, 320, v. Inc. 514 Pa. A.2d present from (distinguishing prospective whereas, use in the setting delay compensation); it is the best) (including highest beneficial use criterion that takes See, potential uses into e.g., County account. Genter Blair Auth., Sports Convention and Facilities 805 A.2d (“The (Pa.Cmwlth.2002) beneficial use includes use, not only present its but also all potential including uses use.”). highest and best

I significant also find acceleration the time of it. for pre-condemnation activity to account is in tension scheme,- with the eminent statutory domain which expressly effect of attempts pre-condemnation activity account by removing determination, from fair market value akin York approach Court of in the Appeals City New (“Effect case. See P.S. 1-604 imminence of of Buffalo condemnation”).5 In light considerations, all of the above I believe that resolution this Court the foundational issue taking whether a Airport occurred virtue the Authori- ty’s of its intention appropriate subject announcement to the surrounding properties at some time future is and/or a distinct matter of first impression that merit would Court’s in focused consideration a case in question which the has been for squarely accepted fully review and briefed.6 prescribes: 5. The statute change Any prior in the fair market value to the date of condemna- tion which the or condemnee condemnor establishes substantial- condemnation, ly knowledge general due to the of the imminence of physical other to than that due deterioration of the within condemnee, the disregarded reasonable control of be shall determining fair market value. §

26 P.S. 1-604. pre-condemnation yield I activity may tend toward view that constitutionally significant taking government engages where

281 Air- issue in accordance with Putting aside question presented, I believe Authority’s framing of the port relatively issue is delay compensation resolution Code of the Eminent Domain straightforward. Section 611 during peri- delay payment compensation disallows “the remains in unless od condemnee possession effec- is to possession required is condemnation such not re- possession is 1-611. Where tuate P.S. it[J” 26 however, condemnation, plain under the to effectuate quired from shall be “delay compensation paid of the statute terms Authority’s Id. Airport The date of condemnation.” concept possession that the argument statutory present from determination and centers different use.” “highest best “full and normal use” opposed however, argument, require- fails to take into account the This delay from constitutional doctrine that deriving ment federal taking.7 from the time of a Since compensation paid must be conform Legislature are to that the intended to presume we see 1 Pa.C.S. requirements, its enactments constitutional Further, delay oppressive I that the note unreasonable conduct. and/or jure Authority's failing Airport to commence de condemna- conduct years following proceedings the announcement of at least two tion satisfy Again, perhaps expansion plans may suffice such criteria. its however, Authority oppor- recognize not had the I that the has petition tunity to in this Court because its for allowance brief such issue appeal challenging first was de- the Commonwealth Court's order Therefore, point, and opinion no on this I nied. I offer definitive respectfully myself majority’s expressions from the various disassociate regard. in this that, payment Supreme explained Court when 7. The United States has period following taking, fair market is deferred for a value "something required to more fair market value is make than " whole, ‘just compensation.’ him Albrecht v. owner afford 602, 608, States, 599, 606, 532 United 329 U.S. S.Ct. L.Ed. Tribes, (1947); also States v. and Moadoc 304 U.S. see United Klamath 119, 123, just (describing 58 S.Ct. L.Ed. taking plus compensation as time an amount "value paid contempora product equivalent the full of that value sufficient States, (citing neously taking.”) 290 U.S. with the Jacobs v. United 26, 27, (1933)). Takings L.Ed. 142 Clause 54 S.Ct. applies the states Fifth Amendment of the United States Constitution Legal through Phillips Amendment. See v. Wash. the Fourteenth 1925, 1930, Found., 163-64, 174 118 141 L.Ed.2d 524 U.S. S.Ct. (1998). 282 1922(3);

§ because the Pennsylvania Assembly General could not limit the in availability delay compensation the event of a constitutionally significant taking by keying availability delay to some damages different and as it is conception; uncontested for purposes of this issue that a taking occurred 30, 1996, at least as of I September agree majority with delay as of compensation is due that date relative in de damages by jury found novo appeal.8 Part II As to I majority opinion, respectfully disagree the majority’s with determination that Section Eminent Domain applies Code interest. See 260-62, Majority Opinion, 588 Pa. at A.2d 1203. Sec- tion provides that: proceedings

Where are instituted a condemnee under 502(e), judgment section awarding compensation to the condemnee for the of property shall include reim- bursement of reasonable appraisal, attorney engineer- fees ing expenses and other costs actually incurred. reasons, 1-609. For I P.S. several the statute read as to litigation expenses addressed are specially which incurred by a condemnee iswho forced to invoke the judicial process, and not distinct holding costs carrying associated and/or First, with property ownership. under the principle ejus- dem generis, general words in a are statute construed to take Contrary Airport Authority’s arguments, 8. to the I do not read the PennDOT, Hughes (1987), in decision 514 Pa. 523 A.2d 747 as militating contrary. Hughes recognized clearly to the While in- fringement implicates delay compensation, on full normal use see 309-10, holding id. at 523 A.2d at this was not framed as an Although reasoning applied Pittsburgh exclusive one. North does support Airport Authority’s position, distinguish- tend to case able, condemnation, jure because it involved a de where there was no condemnation, prior finding uncontested aof de as there is here. North, Pittsburgh See 514 Pa. at A.2d at however, Again, I emphasize, analysis would applied above Authority's circumstances this case assumes that the contemplation jure activities of a de condemnation thwarted the highest subject planned best use of the as a residential development significant constitutionally taking, and amounted to a since these matters as established Commonwealth Court's first opinion in challenged by are Airport Authority case presentation question. connection of the issue in

283 particular by preceding, and be restricted meaning their Pa. Ass’n v. Board Independent Oil and Gas words. See of 246, County, 240, Fayette Pa. 814 Apps. Assessment 572 1903(b)). § In 180, 1 this (citing A.2d 183-84 Pa.C.S. costs such holding carrying to me that regard, seems and/or in character interest are different mortgage substantially as attorney, engi- costs and (appraisal, from the litigation-related 66, Inc. fees) in 609.9 specified that are Section neering Cf. Corp., 130 S.W.3d Redevelopment Crestwood Commons (“No that mortgage court has held ever (Mo.App.2003) interest, cash to lend to less interest on a loan to secure much fees, costs, attorney’s others, category falls within losses.”).10 Furthermore, expenses other reasonable Assembly provided delay compensation for separately General Code, 1-611, § I 26 P.S. which believe in Section 611 costs.11 holding carrying with substantially overlaps and/or view, Thus, creates the substan- my majority’s approach in 66, Inc., Accord at recovery. tial of double S.W.3d risk a (“To interest on loans secur- plaintiff allow recover 589-90 interest, in would result ing statutory addition property, loss, recovery deprivation the practical in a one duplicative ability property.”).12 of its to sell the Parenthetically, State Government Commis- the comment the Joint

9. Pennsylvania report reprinted Statules sion from a 1971 Purdon's captures Statutes Annotated reflects that Section 609 and Consolidated expenses identified Section 304 of the Federal Reloca- the costs and Act, “Litigation expenses.” captioned, § which tion 42 U.S.C. 1-609, § State Government Commission. See 26 P.S. Comment-Joint Authority specific recognize not advance the I that the does 10. mortgage argument pertain Section 609 does not its terms However, argumentation prospect pointing I find interest. unfair, see, ("It recovery, e.g., Appellant at Brief for 43-45 double absurd, unjust delay compensation for WBF to recover both time.”), period ownership expenses for the same sufficient avoid waiver. attempted delay regard, Assembly to limit 11. this while the General 1-611, figure, percent 26 P.S. compensation to six see concept just has such limitation inconsistent with the Court found 310-12, Hughes, 514 at 523 A.2d at 752-53. compensation. See Pa. difficulty any bright-line that would rule I also have substantial require holding carrying as such as strictly payment costs and/or myriad just light forms of component compensation, rejoinder In its to my position issue, on the Section 609 majority develops underlying facts Inc. decision suggests they much are less to an appropriate award of mortgage interest than are the present circumstances. See Majority n. Opinion, Pa. at 261-62 A.2d 1203-04 n. 11. are There also other cases in many which an award of just interest in the compensation be calculus would This, view, my unwarranted.13 tends rather support, than negate understanding that Assembly General intended a more limited construction of Section 609 than the majority implements. I no Again, take issue with the proposi- tion some for accounting ownership expenses could be appropriate and element of necessary just in compensation (either some de condemnation cases via delay com- facto pensation provision as by modified this Court’s interpretation otherwise). in Hughes, see supra note or To the extent that the Eminent Domain Code would foreclose such an award in circumstances just where is essential to compensation, statutory may dictates, scheme to yield have to constitutional consistent reasoning Hughes. with Court’s in See supra 11. My note difference solely the majority’s with decision categorize to mortgage interest costs among “appraisal, attorney and fees engineering and other costs expenses” are to be required awarded under contrary Section Legislature’s prescription that “[gjeneral a words [in shall be meanings statute] construed take their and be 1903(b). preceding words,” restricted by particular § 1 Pa.C.S. Finally, I that the believe effect the Airport Authority’s payment just compensation estimated upon obligation arrangements financial parties entered into between in the commercial

marketplace, including mortgages. non-market-rate insider Lawless, example, 74, Department 13. For Conservation v. 100 Ill. (1981), App.3d 55 Ill.Dec. reviewing 426 N.E.2d 545 court by a mortgage found claim a for homeowner from time a just compensation as an element of "completely to be meritless.” explained: Id. at court expect Does Mr. premises Lawless to live on the condemned for a two result, year period nothing? for accept argu- Such is the we if ment he long people pay housing, by advances. As either payments, or expect rental Mr. Lawless can to do no less. at 550. Id. final after must be resolved delay compensation pay then, because, it is just until compensation, determination whether, degree, the initial estimation or what unknown accurate. opinion majority in Part III of the point resolved On the last of the de determination concerning the effect majority I appeal, agree novo with the context of de made highest and best use the assessment least, a mixed presents question, a factual taking context 27 Am.Jitr.2d generally and fact. See question law Eminent (2005) (“The and best question highest Domain fact.”).14 This has Court question use of proceed- in eminent factual matters domain established that in a jury de consideration subject novo ings are Turnpike Pa. In re Condemnation statutory See appeal. (1997).15 Therefore, Comm’n, 433, 439, Pa. 698 A.2d that' the agreement I am in the Commonwealth Court highest-and-best-use not be constrained on the jury should finding I that a albeit that realize unfavorable point, holding that undermine the trial court’s initial Associates could on the fact- grounded since it was taking, there was de facto difference My assessment of such beneficial use. based not majority regard possibility arises because do of the of the ease doctrine interrelat- a concern law and/or Rather, I jurisdiction again, principle. ed coordinate character of merely corollary that it is to the de novo believe jury in the eminent domain context. proceedings Nevertheless, recognize properly I before the that the matter was pleas Airport Authority’s in the first instance on the common court petition appointment of preliminary objections to initial viewers, unique objections procedure pertaining preliminary under (authorizing § proceedings. 1-504 in eminent domain See P.S. pleas preliminary objec- disputes factual on common court resolve proceedings). tions in eminent domain statute, governing § 1- plain-meaning interpretation 26 P.S. 15. A of the by suggests to be decided that the line of division between matters by jury be defined judge to be decided should and those valuation; however, pertains solely according to whether the matter rejection of such this Court has endorsed the Commonwealth Court’s legal/factual In re in favor of the distinction. See Condemna- division Comm’n, by Turnpike at 42. Pa. 548 Pa. at 698 A.2d tion CONCURRING AND DISSENTING OPINION EAKIN. Justice join

I majority’s opinion I I issues and III. dissent interest, from the award of mortgage join with the reasoning Saylor Justice on that point. 502(e) Code, §

Under of the Eminent judgment Domain “a awarding compensation to the condemnee for the property shall include appraisal, reimbursement of reasonable attorney and engineering fees and other expenses costs and actually incurred.” 26 P.S. 1-609. Mortgage interest is not actually “other costs and expenses incurred” because interest on the mortgage have accrued regardless would of the con- demnation.

Mortgage interest is based on debt secured by proper ty taking of the property only security, affects not the — debt itself nor its terms and conditions. See Briegel v. 93, 160 Briegel, Pa. condemnation, A. (upon liens, encumbrances, or are mortgages divested from land and land). attach to funds from realized Mortgage expenses are by not created or connected the condemnation of that fact, property; the initial proceeds of mortgage may or may not relate to the encumbered property proceeds itself — may all, be used for any purpose just not acquisition improvement obligation encumbered. The repay mortgage required only because of the terms of itself, not reason the condemnation. See id. While the ability repay mortgage may be affected by the taking, does convert mortgage inter est itself part into and expenses” “costs caused condemnation.

Case Details

Case Name: In Re De Facto Condemnation & Taking of Lands of WBF Associates

Court Name: Supreme Court of Pennsylvania

Date Published: Aug 22, 2006

Citation: 903 A.2d 1192

Docket Number: 172 MAP 2004, 173 MAP 2004, 174 MAP 2004

Court Abbreviation: Pa.