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FP Willow Ridge Associates, L.P. v. Allen Township

Commonwealth Court of Pennsylvania

July 6, 2017

FP Willow Ridge Associates, L.P., Appellant
v.
Allen Township and Northampton Borough

          Argued: June 5, 2017

          BEFORE: HONORABLE P. KEVIN BROBSON, Judge HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE JOSEPH M. COSGROVE, Judge

          OPINION

          MICHAEL H. WOJCIK, Judge

         FP Willow Ridge Associates, L.P., (Willow Ridge) appeals from an order of the Court of Common Pleas of Northampton County (trial court) that granted Allen Township's (Township) motion for summary judgment against Willow Ridge and dismissed as moot Northampton Borough's (Borough) motion for summary judgment. Willow Ridge contends that the trial court erred in granting the Township's motion for summary judgment on the grounds that Willow Ridge did not make a timely claim within the three-year period as set forth in Section 1 of the act commonly referred to as the Refund Act[1] and that Willow Ridge was not entitled to a refund under the Municipality Authorities Act (MAA)[2]or Refund Act. For the reasons that follow, we affirm on alternative grounds.

         I. Background

         Appellant Willow Ridge is the current developer and owner of an apartment community known as The Residences at Willow Ridge, located at 419 Harrison Court in Allen Township, Northampton County, Pennsylvania, and consisting of 216 one- and two-bedroom apartments, a clubhouse and a maintenance garage (apartment complex), which necessitated sewer service.

         The Township owns and operates a sewage collection and transmission system within the Township; the Borough owns the plant that treats the sewage. Reproduced Record (R.R.) at 311a. The Township and Borough's (collectively, Appellees) relationship is memorialized in an Intermunicipal Sewer Service Agreement (Intermunicipal Agreement), dated March 8, 2001. R.R. at 311a-334a. Pursuant to the Intermunicipal Agreement, an equivalent dwelling unit (EDU) represents the metered volume of water used per quarter by any single family dwelling connected to the sewer system; one EDU "shall be considered 260 [gallons per day]." R.R. at 314a. By Resolution #2004-01, the Township set the rate for each sewer tapping fee at $3, 000. R.R. at 335a. "For residential properties, one dwelling unit shall be considered one [EDU] for the purposes of this fee." R.R. at 335a.

         Prior to Willow Ridge's acquisition of the apartment complex, its predecessor initially requested sewer service from the Township for 270 equivalent dwelling units (EDUs). R.R. at 349a. An interim successor entered into a sanitary sewer service agreement (2005 Agreement) with the Township contracting for 270 EDUs of sewage disposal services at the rate of $3, 000 per EDU, for a total of $810, 000. R.R. at 350a-359a. Thereafter, the Township and Willow Ridge entered into a sanitary sewer service agreement (2011 Agreement) agreeing to the same $3, 000 tapping fee per EDU.[3] R.R. at 299a-305a.

         On March 31, 2011, Willow Ridge paid the Township $3, 000 for 218 EDUs[4] of sanitary sewer capacity. R.R. at 228a-229a. In the letter accompanying the payment, Willow Ridge stated, "As we have explained previously, we believe that each apartment unit will require less than one (1) EDU and our capacity analysis confirms that the correct calculation of capacity is one (1) EDU per every three units." R.R. at 228a. Willow Ridge advised that the "payment is made subject to the design capacity analysis which [it] intend[s] to submit and which we hope will result in a reduction in the total cost of our EDUs." R.R. at 228a.

         On November 22, 2013, Willow Ridge initiated a complaint followed by two amended complaints against Appellees alleging that they overestimated the number of EDUs required to service the apartment complex. The second amended complaint set forth three counts: Count I - Declaratory Judgment under the Refund Act; Count II - Breach of Contract; and Count III - Violation of the MAA. While this litigation was pending, on May 14, 2014, Willow Ridge filed a claim for refund with the Township. R.R. at 306a.

         In response, the Township filed three sets of preliminary objections to the complaints, which ultimately resulted in the trial court's dismissal of Count III - the MAA claim. R.R. at 119a. The trial court determined that the MAA claim was time-barred by a two-year statute of limitations. R.R. at 119a.

          The Township also filed a motion for judgment on the pleadings, which the trial court granted, resulting in the dismissal of Count II - the breach of contract claim. R.R. at 124a. The trial court explained that, although Willow Ridge framed the issue as a breach of contract claim, it was in essence a tort claim barred by a two-year statute of limitations. R.R. at 124a-125a.

         The trial court permitted Willow Ridge to proceed on its remaining count (Count I), in which it sought declaratory judgment and monetary relief under the Refund Act. See R.R. at 126a-127a. After pleadings closed, Appellees each moved for entry of summary judgment on numerous grounds.

         On October 14, 2016, the trial court granted the Township's motion and entered judgment in favor of the Township and against Willow Ridge, and it dismissed the Borough's motion as moot. Trial Court Opinion, 10/14/16, at 1-11; R.R. at 129a-139a. The trial court explained that Willow Ridge failed to toll the statute of limitations by not following the Refund Act's statutory procedure, which required an aggrieved party to file a written and verified claim within three years as a necessary predicate to filing an action in the trial court. Trial Court Opinion, 10/14/16, at 7; R.R. at 135a; see Section 1(a) of the Refund Act, 72 P.S. §5566b(a); Section 2 of the Refund Act, 72 P.S. §5566c. Although Willow Ridge complained of the total number of EDUs upon which its charges were based, the trial court found that Willow Ridge never made a written and verified claim for a refund until after the expiration of the three-year period. Trial Court Opinion, 10/14/16, at 10; R.R. at 138a. Consequently, the trial court determined that the statute of limitations was never tolled. Trial Court Opinion, 10/14/16, at 10; R.R. at 138a. Thus, the trial court granted the Township's motion for summary judgment on this basis, which was dispositive of the action in toto, and did not address the Township's other grounds for summary judgment. Trial Court Opinion, 10/14/16, at 11; R.R. at 139a.

         From this decision, Willow Ridge filed a motion for reconsideration, which the trial court denied.[5] Willow Ridge also filed an appeal with this Court on November 4, 2016, and, at the direction of the trial court, a concise statement of errors complained of on appeal pursuant to Pa. R.A.P. 1925(b). In its Rule 1925(b) statement, Willow Ridge asserted that the trial court erred or abused its discretion by: holding that the Refund Act imposes a three-year statute of limitations, as opposed to a notification period; finding Willow Ridge's complaint did not constitute a timely written and verified claim for a refund; granting summary judgment when disputed issues of fact remained; treating its complaint as a claim for tax refund rather than a claim for refund of excess permit fees; and, not following stare decisis. R.R. at 199a-200a.

         In the amended Pa. R.A.P. 1925(a) opinion that followed, the trial court stated that it incorrectly imposed a three-year "statute of limitations, " and acknowledged that Section 1 of the Refund Act is a statute of notification, not of limitations. It further observed that absent a showing of prejudice on the part of the municipality, a party's failure to notify within a statutory time frame will not in all cases be a bar to such action. Trial Court Opinion, 12/20/16, at 2.

         Nevertheless, the trial court opined that the grant of summary judgment against Willow Ridge was appropriate because it "would have come to the same disposition based on case law establishing the validity of the sewer tapping fees of a fixed amount per residence under the MAA." Trial Court Opinion, 12/20/16, at 3. The trial court continued that, under the MAA, Appellees were permitted to treat apartments in a manner identical to other types of residential housing when determining the capacity required for sanitary sewer service. Id. "It would have been an abuse of discretion for the [trial court] to deem the rates charged . . . unreasonable." Id. This appeal now follows.[6]

         II. Issues

         On appeal, Willow Ridge contends that the trial court erred by granting the Township's motion for summary judgment on two grounds. First, Section 1 of the Refund Act is not a statute of limitations, but a statute of notification. Notwithstanding, Willow Ridge sufficiently notified the ...


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