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09/26/97 CONDEMNATION BY COMMONWEALTH PENNSYLVANIA

September 26, 1997

IN RE: CONDEMNATION BY THE COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF TRANSPORTATION, OF RIGHT OF WAY FOR LEGISLATIVE ROUTE 1021, SECTION 1B, A LIMITED ACCESS HIGHWAY, IN THE CITY OF PITTSBURGH; THE BOC GROUP, INC. (FORMERLY AIRCO, INC.), APPELLEE
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF TRANSPORTATION, APPELLANT



Appeal from the Order of the Commonwealth Court, entered May 30, 1995, at No. 1351 C.D. 1994, affirming in part and vacating in part the Order of the Court of Common Pleas of Allegheny County, Civil Division, entered April 29, 1994, at No. GD88-14272. JUDGE(S) BELOW: CCP - Honorable Robert P. Horgos / COMMONWEALTH CT. MCGINLEY, FRIEDMAN, RODGERS, S.J., JJ.

Appeal from Commonwealth Court Order No. 1351 C.D. 1994, entered May 30, 1995, affirming in part and vacating in part Allegheny County Court of Common Pleas, Civil Division, Order No. GD88-14272 entered April 29, 1994. JUDGE(S) BELOW: CCP - Honorable Robert P. Horgos / COMMONWEALTH CT. MCGINLEY, FRIEDMAN, RODGERS, S.J., JJ.

Composition OF The Court: Mr. Chief Justice John P. Flaherty, Zappala, Cappy, Castille, Nigro, JJ. Mr. Justice Cappy concurs in the result. Mr. Justice Zappala files a Concurring opinion in which Mr. Justice Castille joins. Madame Justice Newman did not participate in the consideration or decision of this case.

The opinion of the court was delivered by: Nigro

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

JUSTICE NIGRO

DECIDED: SEPTEMBER 26, 1997

The Commonwealth of Pennsylvania, Department of Transportation (PennDOT) challenges a Commonwealth Court Order affirming an award of delay damages to The BOC Group under the Eminent Domain Code, 26 Pa. Stat. §§ 1-101 - 1-903 (Supp. 1997). As explained below, we hold that condemnees may recover damages for delays in payment of special damages under the Eminent Domain Code. The BOC Group, however, is not entitled to delay damages since PennDOT never took physical possession of the condemned property and there is no evidence that The BOC Group was deprived of the property's use. Thus, we reverse.

On April 25, 1984, PennDOT filed a declaration of taking to condemn property owned by the Estate of Julia Rochez and leased by The BOC Group, Inc. Sometime before June 1, 1984, The BOC Group vacated the building on the property and left behind machinery, equipment, and other personal property. In August of 1988, The BOC Group petitioned for the appointment of a Board of Viewers to determine its damages as a result of the condemnation. *fn1 In October of 1992, after a hearing in May, the Board of Viewers issued a report awarding The BOC Group damages for the loss of its machinery and equipment, delay damages, and an attorney and appraisal fee award. PennDOT appealed the delay damages award.

In May of 1993, the Estate of Rochez, The BOC Group and PennDOT executed a Stipulation of Settlement. PennDOT agreed to pay The BOC Group special damages in the amount of $105,865, representing the fair market value of fixed machinery and equipment on the property on the date of condemnation, and $167,775, representing the fair market value of removable machinery and equipment on the property on the date of condemnation. PennDOT would also pay the attorney and appraisal fee award mandated by statute. The parties agreed to mark the viewers' petition and appeal of the viewers' decision settled and discontinued. They decided to litigate whether The BOC Group was entitled to delay damages or interest. PennDOT retained the right to assert all defenses to a delay damages claim.

The BOC Group filed an amended petition for the appointment of a Board of Viewers in November of 1993 to decide if delay damages are recoverable. PennDOT filed preliminary objections to the amended petition. The parties then entered a Stipulation of Facts upon which the trial court would decide the issue. They stipulated in part that PennDOT paid the amounts agreed to in the settlement and that all payments arose under Article VI-A of the Eminent Domain Code on special damages.

The trial court awarded The BOC Group delay damages. It found that The BOC Group did not cause the delay in payment of damages and that delay damages would put it in a similar economic position as before the taking. *fn2 On appeal, the Commonwealth Court affirmed the award but vacated the order that interest be paid at the market rate. It remanded for a hearing to determine the applicable interest rate. The Commonwealth Court rejected PennDOT's argument that delay damages are not recoverable on special damages. It also rejected PennDOT's argument that The BOC Group was not entitled to delay damages, even if they are recoverable on special damages, because PennDOT never took possession of the condemned property. We granted PennDOT's petition for allowance of appeal.

Appellate review of a trial court's decision in an eminent domain matter is limited to a determination of whether the trial court abused its discretion or committed an error of law and whether the findings and Conclusions are supported by sufficient evidence. In re Appeal of Waite, 163 Pa. Commw. 283, 288 n.1, 641 A.2d 25, 27 n.1, appeal denied, 539 Pa. 657, 651 A.2d 543 (1994).

Under section 611 of the Eminent Domain Code, the recovery of delay damages depends upon whether a condemnee remains in possession of condemned property. The statute states:

The condemnee shall not be entitled to compensation for delay in payment during the period he remains in possession after the condemnation, nor during such period shall a condemnor be entitled to rent or other charges for use and occupancy of the condemned property by the condemnee. Compensation for delay in payment shall, however, be paid at the rate of six per cent per annum from the date of relinquishment of possession of the condemned property by the condemnee, or if the condemnation is ...


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