45 Pa. Commw. 202 | Pa. Commw. Ct. | 1979
Opinion by
Presently before us is an appeal from a decision of the Court of Common Pleas of Philadelphia County awarding condemnation damages pursuant to the provisions of the Eminent Domain Code (Code), Act
On May 1, 1967, the Redevelopment Authority of the City of Philadelphia (Authority) condemned a property which Grover Driscoll (Condemnee) leased and on which he operated a taproom. Condemnee sought, inter alia, compensation for the loss in value of his liquor license and of the machinery, equipment and fixtures (hereinafter referred to as MEP) used in his business. The lower court awarded $20,000 .for the liquor license claim, $12,000 on the MEP claim, and delay compensation for the delayed payment thereof. The award of delay compensation was to be calculated from the date of the taking notwithstanding the fact that Condemnee remained in possession of the premises and paid rent thereon through 1970.
The Authority raises three questions on appeal: (1) whether the court erred in awarding $20,000 for the loss in value of the liquor license; (2) whether the court erred in awarding delay compensation to a tenant who remained in possession of the condemned property and who continued to pay rent therefor; and, (3) whether the court improperly applied the Assembled Economic Unit Doctrine in valuing Condemnee’s MEP.
We begin our consideration of the first question by noting that there is no doubt that a liquor license is a compensable property interest within the meaning of the Code. Redevelopment Authority of the City of Philadelphia v. Lieberman, 461 Pa. 208, 336 A.2d 249 (1975). The Authority contends, however, that the award in this case of $20,000 for the damage to the liquor license actually compensated Condemnee for his loss of business and patronage, and that this was improper. Rather, the Authority argues that the liquor license should be valued at what it would be worth detached from Condemnee’s business.
Turning to the second issue, the Authority contends that Section 611 of the Code, 26 P.S. §1-611,
Our resolution of the final issue is facilitated by the Supreme Court’s decision in Singer v. Oil City Redevelopment Authority, 437 Pa. 55, 261 A.2d 594 (1970). As this decision, and our own analysis of the issue in Redevelopment Authority of City of Erie v. Pulakos, 17 Pa. Commonwealth Ct. 251, 330 A.2d 869 (1975), make clear, the purpose of the Assembled Economic Unit Doctrine as applied to condemnation proceedings is to preserve the economic position of a condemnee/businessperson whose business is damaged by
In the instant case, the lower court applied the Doctrine, reasoning that Condemnee’s attempts to relocate, not only in the immediate vicinity, but in the City of Philadelphia at large, had proven utterly fruitless and that the building where Condemnee conducted his business, therefore, was unique. See Redevelopment Authority v. Yee Kai Teung, 5 Pa. Commonwealth Ct. 65, 289 A.2d 498 (1972). The Authority argues that the Doctrine should not apply in this case since (1) Condemnee is a tenant and not an owner of the condemned property; (2) most of Condemnee’s MEF is removable; and (3) the building where Condemnee conducts his business is not so unique as to preclude transfer of Condemnee’s business. While we believe that a tenant may have recourse to the Doctrine under certain circumstances, we do not believe that the Doctrine should be applied in this case.
The thrust of the Authority’s first argument is that the Doctrine applies only to landowners and not to tenants since Section 603 of the Code, 26 P.S. §1-603, from which the Doctrine in its present form in part takes root, applies only to landowners. The Authority goes on to suggest that Condemnee’s claim to compensation as a tenant for damage done to MEF more properly lies under former Section 608 of the Code, now embraced in Section 601A, as added by the Act of December 29, 1971, P.L. 640, 26 P.S. §1-601A.
Former Section 608 provided that a tenant who owned MEF on a condemned property, not forming part of the realty, wonld be entitled to receive reasonable expenses for their removal, transportation and reinstallation. Items of MEF forming part of the realty, of course, would be valued along with the realty pursuant to Section 603(3) of the Code, 26 P.S. §1-603. The question remaining after Section 608 was promulgated in 1964, and before the Supreme Court handed down its decision in Singer, supra, dealt with “the compensability of loose machinery, equipment and fixtures in a business operation so affected by a condemnation that such machinery, equipment and fixtures, although their removal expense was compensable [under Section 608], were not useful in a new establishment.” Department of Transportation v. Seltzer, 18 Pa. Commonwealth Ct. 127, 132, 334 A.2d 834, 837 (1975). It is evident, therefore, that while a condemnee/tenant might not have recourse to the provisions of former Section 608 (where, for example, he would have incurred no removal expense due to his inability to relocate his business as an economic unit), he would, logically, be compelled to look to the Assembled Economic Unit Doctrine for full compensation. After Singer, supra, a condemnee suffering just such a loss could only be fully compensated by application of the Doctrine.
Further, our analysis of the rationale of the Court’s decision in Singer has failed to yield a single reason why the Doctrine should not apply with equal weight to compensate a condemnee/tenant if he happens to fall within one of the specific situations where the Doctrine applies. The Doctrine itself, as enunciated by the Court, affords no distinction which would preclude its application to a condemnee/tenant.
At least, one court outside the Commonwealth of Pennsylvania has had occasion to apply a doctrine similar to the Assembled Economic Unit Doctrine in an effort to fully compensate a tenant. In Redevelopment Agency of City of Stockton v. Diamond Properties, 271 Cal. App. 2d 315, 76 Cal. Rptr. 269 (1969), for example, an appeals court held that a tenant’s MEF should be deemed to be part of the real property for purposes of determining the amount of compensation owed to him as a result of the condemnation of the property where he conducted his business. See also City of Los Angeles v. Sabatasso, 3 Cal. App. 3d 83 Cal. Rptr. 898 (1970).
While research discloses no Pennsylvania case specifically holding that the Doctrine applies to a condemnee/tenant, our Court in Redevelopment Authority of City of Johnstown v. Tross, 20 Pa. Commonwealth Ct. 103, 340 A.2d 652 (1975), reviewed a jury’s award of damages in an eminent domain case, noting that it “included compensation for the tenant’s equipment and personal property and the owners ’ building, as permitted by the Assembled Economic Unit Doctrine.” Id. at 108, 340 A.2d at 655 (emphasis in original and supplied). Further, a review of several of our other cases reveals authority for the proposition that the Doctrine clearly applies to an economic unit which occupies only a portion of a condemned property. Pulakos, supra; Yee Kai Teung, supra; North Side Deposit Bank v. Urban Redevelopment Authority
Turning to the question of whether the Doctrine should be applied under the facts of this case, we note initially that the basis for the lower court’s application of the Doctrine is not readily apparent. Nowhere in the record of the hearing before the lower court did Condemnee or his expert refer to the Doctrine or describe Condemnee’s business, and, more importantly, his MEF, as an assembled economic unit. Similarly, the Authority’s exceptions to the court’s initial order make no reference to the Doctrine. Indeed, it was not until the lower court filed its opinion in response to these exceptions that the Doctrine was mentioned.
In any event, having carefully scrutinized the record, we are hardpressed to see how the Assembled Economic Unit Doctrine can be applied or, more im
With reference to the lower court’s suggestion that the building where Condemnee conducted his business was somehow rendered unique because of Condemnee ’s alleged inability to acquire a building adaptable to his needs within a reasonable distance from his present location, suffice it to say that Condemnee’s own testimony makes it abundantly clear that other suitable buildings did, in fact, exist but that he could not afford them. We fail to see how his alleged financial inability to relocate alters the fact that other suitable relocation sites were available.
In light of the foregoing, we will remand the matter to the lower court for a redetermination of the compensation due Condemnee.
Ceder
And Now, this 22nd day of August, 1979, the order of the Court of Common Pleas of Philadelphia County, dated November 22, 1977, is affirmed, modified and reversed in part. That part of the order awarding compensation for Grover Driscoll’s liquor license is affirmed. That part of the order awarding delay compensation is modified to the extent that delay compensation will be calculated from the date Driscoll relinquished possession of the condemned property. That part of the order applying the Assembled Eco
This Section provides as follows:
The condemnee shall not he entitled to compensation for delay in payment during the period he remains in possession after the condemnation, nor during such period shall a condemnor he entitled to rent or other charges for use and occupancy of the condemned property hy the condemnee. Compensation for delay in payment shall, however, be paid at the rate of sis per cent per annum from the date of relinquishment of possession of the condemned property by the condemnee, or if the condemnation is such that possession is not required to effectuate it; then delay compensation shall be paid from the date of condemnation: Provided, however, That no compensation for delay shall be payable with respects to funds paid on account, or by deposit in court, after the date of such payment or deposit. Compensation for delay shall not be included by the viewers or the court or jury on appeal as part of the award or verdict, but shall at the time of payment of the award of judgment be calculated as above and added thereto. There shall be no further or additional payment of interest on the award or verdict.
The accompanying comment of the Joint State Government Commission pertinently provides as follows:
The first sentence of this section is included to make it clear that while the condemnee is in possession of the*206 condemned property, lie does not get delay compensation but the condemnor is not entitled to rent or other charges for use and occupancy. The reason for this is that while the condemnee is in possession, the condemnee is not building up damages for delay and the condemnor is not accruing liability for delay damages. Consequently, the delay compensation and the rent, in a sense, offset each other.
The Authority’s threshold argument regarding this issue was that no compensation at all should be awarded for delay as to the liquor license award. The Authority argues that since Condemnee voluntarily chose to surrender the liquor license to the Liquor Control Board (LCB) the Authority will not benefit from the use thereof and that the payment of delay compensation to Condemnee, therefore, would be inequitable. Suffice it to say that the condemnee in Lieberman, supra, also surrendered his liquor license to the LCB rather than conveying it to the city. Obviously, this fact in no way altered the Court’s conclusion that the liquor license was a compensable property interest within the meaning of the Code. Further, since the purpose of delay compensation is to compensate a condemnee for the condemnor’s tardy payment of compensation due condemnee for damage to his property interests, the fact that a condemnor may not be able to benefit from some element of the property interest acquired is of utterly no moment to the question of condemnee’s entitlement to delay compensation.
Although our disposition of this issue obviates the necessity of addressing the question of the application of the Doctrine, under certain circumstances, to a tenant’s claim, we feel the matter merits our consideration at this time.