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Warwick Township Water and Sewer Authority v. Warwick Realty Co. L.P.

Commonwealth Court of Pennsylvania

December 7, 2017

Warwick Township Water and Sewer Authority
Warwick Realty Co., L.P., Appellant

          Argued: October 19, 2017




         Warwick Realty Co., L.P. (Realty) appeals an order of the Court of Common Pleas of Bucks County (trial court) entering judgment in favor of the Warwick Township Water and Sewer Authority (Authority) for two municipal claims together with interest and attorney fees. Realty asserts that the record does not support the trial court's conclusion that the Authority properly assessed Realty for its water and sewer use and, further, there was no basis for an award of attorney fees. For the following reasons, we affirm.


         The facts are undisputed. Realty owns property at 1621 Mearns Road, Warwick Township, Bucks County, Pennsylvania, which was created out of a tract of land known as the Mearns Road Business Campus (Business Campus). Prior to 2003, the Business Campus had a tax parcel identification of No. 51-13-62. In 2003, Mearns Road Business Campus, L.P. subdivided the Business Campus into five lots. "Lot 1, " later conveyed to Realty, retained Business Campus' tax identification number, and the other four new lots received new tax designations. Two industrial condominiums were later developed on Lot 2; Lots 3, 4 and 5 remain undeveloped.

         Beginning in the 1990s, Mearns Road Business Campus, L.P. operated an ice skating rink on Lot 1, using a private water well and a septic system. In July 2006, the rink was connected to the Authority's water and sewer system. To determine a customer's tapping fee, the Authority uses Equivalent Dwelling Units (EDU) to measure water use. The tapping fee is $4, 500 per EDU for water usage and $6, 300 per EDU for sewer usage. The Authority assesses one EDU for 270 gallons of daily usage.[1]

         On August 31, 2006, Realty purchased Lot 1 and continued to operate the skating rink. During the last quarter of 2006, Realty used 96, 000 gallons of water, which equates to 3.95 EDUs. Thereafter, Realty's water usage increased to 9.67 EDUs. By the end of the first quarter of 2009, its water usage reached 11.15 EDUs.

         On April 22, 2009, the Authority informed Realty by letter that the water and sewer usage on Lot 1 exceeded its initial assessment of 3.06 EDUs. The letter stated as follows:

This letter is to serve notice that the Warwick Ice Rink located at the Mearns Road Business Campus is exceeding the water and sewer usage as allocated in the original PA DEP [Department of Environmental Protection] planning module submission dated October 29, 1998 and approved by the Authority.
The skating rink (Lot #1) was appropriated 825 gallons per day (GPD) or 3.06 EDU's during the planning and land development process. The average daily usage over the last three quarters is 1861 GPD (6.89 EDU's). The first quarter usage for 2009 has exceeded 11.15 EDU's or 3011 GPD.

         Reproduced Record at 256a (R.R. ___) (emphasis added).

         On April 28, 2014, the Authority sent Realty another letter stating that, following an audit of Realty's water and sewer history, the Authority determined as follows:

[A]n additional eight (8) E[DU]'s are needed for [Lot 1] … based on an average usage for the past two (2) years….[2] This would bring [Realty's] total allocation to eleven (11) EDU's. The Authority has the right to assess the EDU allocation based on the highest quarterly average which is currently fifteen (15) EDU's. We have taken a conservative approach in our analysis and assignment of [Realty's] previous metered usage (copy attached) and EDU allocation and therefore the invoice dated April 7, 2014 remains outstanding for this property.

R.R. 197a.

         Realty responded that the Authority had assigned 11 EDUs to Lot 1 and, therefore, it could not owe the additional eight EDUs. In support, Realty noted that on October 29, 2002, Mearns Road Business Campus, L.P., entered into an agreement with the Authority for the acquisition of 11 EDUs from the Authority. Realty further explained:

This was confirmed with the developer, Ed Dudlik of the Mearns Road Business Campus L.P. at the time in which we had acquired the property in 2006. In the Agreement of Sale, all rights, titles, and interests to all EDUs and tap fees were transferred at the time of our acquisition of the property.

         R.R. 200a. The Authority replied that its 2002 agreement with Mearns Road Business Campus, L.P., did not have "any bearing upon the skating rink." R.R. 202a. The Authority further advised, "[f]ailure to comply with the appropriate payment will cause the filing of a municipal lien and consideration of a subsequent termination of Authority services to the skating rink." Id.

         On October 24, 2014, the Authority informed Realty that it was increasing the EDU assessment of Lot 1 from 11 EDUs to 15 EDUs:

Additionally, based upon further review of the Warwick Ice Rink records, the applicable EDUs for the facility should be set at 15 rather than the previous indication of 11. Based upon this revision of EDU charges, a statement from the Authority will be forthcoming regarding additional fees (water and sewer) at Four Thousand Five Hundred ($4, 500.00) Dollars and Six Thousand Three Hundred ($6, 300.00) Dollars per EDU respectively. Such additional tapping fees are required to be paid within sixty (60) days of the subject statement.
The originally charged payment of Eighty-six Thousand Four Hundred ($86, 400.00) Dollars (for the original additional eight (8) EDUs) remains unpaid and is in the process of appropriate action.

R.R. 220a-221a (emphasis added).

         Realty did not pay the additional tapping fees. On October 27, 2014, the Authority filed a municipal claim pursuant to what is commonly referred to as the Municipal Claims and Tax Liens Act (Municipal Claims Act)[3] against Lot 1 for water and sewer tapping fees for eight additional EDUs in the amount of $86, 430.25, along with associated fees and costs. On February 6, 2015, the Authority filed a second municipal claim against Lot 1 for tapping fees for four additional EDUs in the amount of $43, 200, along with fees and costs. Realty requested the Authority to file a writ of scire facias on each claim, which the Authority did.[4] Realty then filed an affidavit of defense. The trial court consolidated the writs and conducted hearings thereon on December 15, 2015, and January 20, 2016.

         In support of its claim that Lot 1 was entitled to three EDUs, the Authority offered a letter dated May 1, 2000, from Thomas Courduff, the former Executive Director of the Authority, to Edward Dudlik, ...

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