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Fuller v. Lehigh-Northampton Airport Authority

Commonwealth Court of Pennsylvania

November 1, 2017

C.T. Fuller a/i/a C. Thomas Fuller and WBF Associates, L.P.
Lehigh-Northampton Airport Authority Appeal of: WBF Associates, L.P.

          Argued: September 11, 2017



          JOSEPH M. COSGROVE, Judge.

         WBF Associates, L.P. (WBF) appeals from a December 1, 2016 order of the Lehigh County Court of Common Pleas (trial court) which directed WBF to refund $77, 315.08 to the Lehigh-Northampton Airport Authority (Airport Authority) and released to the Airport Authority $580, 041.00 held in escrow.

         On September 27, 1990, WBF purchased from C. Thomas Fuller (Fuller) a 632-acre tract of undeveloped farmland located north of the Lehigh Valley International Airport (Airport), upon which WBF intended to build a planned residential development (PRD). Fuller held a first mortgage on the property in the amount of $3, 075, 850.00. Fuller also granted to WBF a $300, 000.00 line of credit secured by a second mortgage. WBF entered into a joint venture agreement with Lanid Corporation (Lanid) for purposes of building the PRD. In January of 1994, the Airport Authority announced a proposed expansion of the Airport. This expansion involved acquiring approximately 1, 500 acres, which included the entirety of the property purchased by WBF. After the Airport Authority began to acquire land which adjoined WBF's property, Lanid terminated its joint venture agreement. Unable to move forward with its development project due to lack of funding, WBF defaulted on its first and second mortgages.

         On September 30, 1996, WBF filed a Petition for Appointment of a Board of Viewers, alleging a de facto taking of its property as a result of the Airport Authority's announced expansion project. The trial court granted the Petition on June 15, 1998. This Court affirmed in a published opinion filed May 26, 1999. Lehigh-Northampton Airport Authority v. WBF Associates, L.P., 728 A.2d 981 (Pa. Cmwlth. 1999)(WBF I). By agreement of the parties, the Airport Authority paid to Fuller estimated just compensation (EJC) in the amount of $3, 150, 000.00.

         The matter finally proceeded to trial in 2008, after which a jury returned a verdict of $10, 410, 000.00 as just compensation for the Airport Authority's de facto taking of WBF's property. An evidentiary hearing was held May 2, 2008 to receive evidence on delay compensation, mortgage interest, and attorneys' fees payable to WBF. The trial court entered an order dated September 17, 2008 which molded the verdict to award WBF $9, 503, 426.00 of delay compensation from September 30, 1996 through August 31, 2008, accruing thereafter at the rate of prime plus 1%, $6, 898, 658.00 in mortgage interest from September 30, 1996 to August 31, 2008, with interest accruing thereafter at a rate of $1, 462.81 per day; and $437, 125.02 for attorneys, engineering, and appraisal fees through March 31, 2008. The total molded verdict was $24, 099, 236.02, after deduction of the $3, 150, 000.00 paid to Fuller as EJC. Judgment was entered against the Airport Authority in the amount of $24, 219, 887.61, reflecting additional interest which accrued after the September 17, 2008 order. This Court affirmed the trial court's order on April 28, 2009. In re DeFacto Condemnation and Taking of Lands of WBF Associates, L.P., 972 A.2d 576 (Pa. Cmwlth. 2009)(WBF IV).

         On January 12, 2011, the parties filed a joint stipulation (Stipulation) which, in pertinent part, established the amounts due WBF by the Airport Authority. Those amounts were established as follows: $9, 963, 393.47 remaining of the jury verdict for just compensation; $5, 176, 486.25 remaining of delay compensation; and $644, 268.13 of attorneys, engineering, and appraisal fees, which amount included post-verdict costs. The Stipulation was approved and entered as an order of the trial court on January 13, 2011.

         The trial court entered an order dated October 12, 2011 directing a schedule of payments for the remaining sums owed WBF. Pursuant to this order, the Airport Authority was to pay WBF $2, 000, 000.00 no later than December 1, 2012, $3, 000, 000.00 no later than December 1, 2013, $5, 000, 000.00 no later than December 1, 2014, and the entire balance still due no later than December 1, 2015. The Airport Authority was further directed to pay any additional counsel fees, costs of WBF, and Master's fees as might be further ordered by the court.

         On August 18, 2015, WBF filed a Motion for entry of an Order declaring the amount due from the Airport Authority and requesting other relief. Following oral argument, the trial court, by order and opinion filed October 19, 2016, directed that the Airport Authority's payments made subsequent to November 15, 2010 should be applied first toward satisfaction of the just compensation award, then toward reimbursement of attorneys, engineering, and appraisal fees, then toward delay compensation. The Airport Authority was ordered to submit a schedule of all payments made since November 15, 2010 and a proposed allocation of such payments consistent with the trial court's October 19, 2016 order. On December 1, 2016, the trial court ordered WBF to refund to the Airport Authority an overpayment in the amount of $77, 315.08 and directed the Airport Authority to release to itself $580, 041.00, plus any interest accrued thereon, held in escrow pending resolution of the matter. This appeal followed.[1]


         As set forth in WBF's brief, the following issues are raised:

I. When a condemnor is allowed to satisfy a judgment through installment payments, should those payments be applied first to principal, with no interest accruing on the previously accrued interest, and in so doing deprive the property owner of full and fair compensation for the taking of his land, also lowering the rate of interest paid to the property owner below the prime-plus-one-percent rate required under 26 Pa.C.S.A.[sic] Section 713?
II. Is [the Airport Authority] barred and precluded by the doctrines of judicial estoppel, collateral estoppel, law of the case and/or res judicata, from now contending that its installment payments should have been applied first to principal and then to interest, after [the Airport Authority] had previously entered into a stipulation, adopted as an order of ...

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