Justia Real Estate & Property Law Opinion Summaries

Articles Posted in Pennsylvania Supreme Court

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Appellees owned a 166-acre farm in Lower Makefield Township. On December 6, 1996, Lower Maker Township condemned the property in order to build a public golf course. Appellees filed preliminary objections challenging the validity of using eminent domain for such a purpose. That issue was eventually appealed to the Commonwealth Court, which found the taking was for a legitimate public use. As the parties were unable to agree on damages, the matter proceeded to a jury trial for a calculation of the property's value. The trial lasted six days, and a total of 11 witnesses were called, one of whom was appellee Chester Dalgewicz. Mr. Dalgewicz testified regarding the farm's history and the interest shown by several developers in purchasing the property, and described some of the offers received both before and after the property was condemned, including a 1995 agreement of sale with Ryland Homes for $5.1 million, and a 1998 sales agreement with Toll Brothers for $7 million, contingent upon the condemnation being overturned. During Mr. Dalgewicz's testimony, he described a December, 1998 written offer from Pulte Homes, Inc., including a $8 million offer price; the offer letter was also introduced into evidence. The Township objected arguing the offer was inadmissible as it did not result in a sales agreement and any testimony concerning the offer price would be irrelevant and prejudicial. The Township appealed the Commonwealth Court's order affirming the trial court's ruling that testimony regarding a bona fide offer and the underlying offer letter itself could be introduced into evidence in a condemnation valuation trial. Finding no error, the Supreme Court affirmed the lower courts' decisions. View "Lower Maker Township v. Lands of Chester Dalgewicz" on Justia Law

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The issue before the Supreme Court in this case centered on whether a deed executed in 1881 reserving the subsurface and removal rights of "one half of the minerals and petroleum oils" in the grantor included any natural gas contained within the shale formation beneath the subject land. The trial court, relying on the 1882 Supreme Court decision "Dunham & Shortt v. Kirkpatrick," (101 Pa. 36 (Pa. 1882)) and its progeny, held that because the deed reservation did not specifically reference natural gas, any natural gas found within the Marcellus Shale beneath the subject land was not intended by the executing parties to the deed to be encompassed within the reservation. The Superior Court reversed that decision and remanded the case with instructions to hold an evidentiary hearing complete with expert, scientific testimony to examine whether: (1) the gas contained within the Marcellus Shale was "conventional natural gas"; (2) Marcellus shale was a "mineral"; and (3) the entity that owns the rights to the shale found beneath the property also owns the rights to the gas contained within that shale. Upon review, the Supreme Court reversed, finding that the Superior Court erred in ordering the remand for an evidentiary hearing and reinstated the order of the trial court. View "Butler v. Charles Powers Estate" on Justia Law

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The issue before the Supreme Court concerned the validity of a single unified tax assessment of both a tract of land, and the buildings of a shopping center, movie theater, and restaurant located on the land. The land was owned by Appellant Tech One Associates, and the buildings and surrounding improvements to the land were constructed and owned by a second entity, "Terra Century Associates" (Lessee). Upon review, Appellees the Board of Property Assessment Appeals and Review of Allegheny County, the Borough of West Mifflin, and the West Mifflin Area School District correctly treated the land, the buildings, and the improvements to the land as real estate subject to taxation under Section 201(a) of the Commonwealth's General County Assessment Law. Further, the Court upheld the rulings of the lower courts that its previous decision in "In re Appeal of Marple Springfield Center, Inc," (607 A.2d 708 (1992)) did not preclude the valuation of real estate owned as a leasehold interest, and that the market value for the land, buildings, and improvements determined at trial accurately reflected the "economic reality" of the impact of the long-term lease between Appellant and its lessee.

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Appellant Mesivtah Eitz Chaim of Bobov, Inc., a not-for-profit religious entity related to the Bobov Orthodox Jewish community in Brooklyn, appealed a Commonwealth Court ruling, asking that the Supreme Court find it is an "institution of a purely public charity" under Article VIII, sec. 2(a)(v) of the Pennsylvania Constitution, and entitled to exemption from real estate taxes. Appellant operated a summer camp in Pike County, Pennsylvania. Pike County denied Appellant's exemption request, finding that occasional use of Appellant's recreational and dining facilities by Pike County residents was insufficient to prove Appellant was a purely public charity. The Court allowed this appeal to determine if it must defer to the General Assembly's statutory definition of that term. Upon review, the Supreme Court affirmed, holding its prior jurisprudence set the constitutional minimum for exemption from taxes; the legislation may codify what was intended to be exempted, but it cannot lessen the constitutional minimums by broadening the definition of "purely public charity" in the statute.

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The issue before the Supreme Court was the determination of the proper test for evaluating whether an oil or gas lease has produced "in paying quantities," as first discussed "Young v. Forest Oil Co.," (194 Pa. 243, 45 A. 1 (1899)). Appellant Ann Jedlicka owned a parcel of land consisting of approximately 70 acres. The Jedlicka tract is part of a larger tract of land consisting of approximately 163 acres, which was conveyed to Samuel Findley and David Findley by deed dated 1925. In 1928, the Findleys conveyed to T.W. Phillips Gas and Oil Co. an oil and gas lease covering all 163 acres of the Findley property which included the Jedlicka tract. The lease contained a habendum clause which provided for drilling and operating for oil and gas on the property so long as it was produced in "paying quantities." Notably, the term "in paying quantities" was not defined in the lease. Subsequently, the Findley property was subdivided and sold, including the Jedlicka tract, subject to the Findley lease. A successor to T.W. Philips, PC Exploration made plans to drill more wells on the Jedlicka tract. Jedlicka objected to construction of the new wells, claiming that W.W. Philips failed to maintain production "in paying quantities" under the Findley lease, and as a result, the lease lapsed and terminated. After careful consideration, the Supreme Court held that when production on a well has been marginal or sporadic, such that for some period profits did not exceed operating costs, the phrase "in paying quantities" must be construed with reference to an operator's good faith judgment. Furthermore, the Court found the lower courts considered the operator's good faith judgment in concluding the oil and gas lease at issue in the instant case has produced in paying quantities, the Court affirmed the order of the Superior Court which upheld the trial court's ruling in favor of T.W. Phillips Gas and Oil Co. and PC Exploration, Inc.

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Indian Rocks Property Owners Association, Inc. developed rules and regulations that were recorded as protective covenants running with the land in a development in Salem Township, Wayne County. Appellees John and Regina Glatfelter purchased a lot within the Indian Rocks community. John died in 1990 leaving Regina as the sole owner of the lot. The lot sat vacant until 2003 when the Glatfelters' son David began constructing a foundation. The Association initially inspected and approved the excavation, but late that year informed the Glatfelters that the work was substandard and inadequate pursuant to the covenants. The Glatfelters were ordered to cease construction until a new plan was approved. The Glatfelters agreed to stop work until they submitted a new application for construction in conformance with the covenants, but they failed to comply with the agreement. The Association brought suit to enforce the covenants, which the trial court approved and entered into its order. Since that suit, the Commonwealth amended the Construction Code to exempt "recreational cabins" from its requirements. Adopting the Construction Code, the Association passed a resolution refusing to recognize the recreational cabin exemption. When the Glatfelters sought to use the changed Construction Code to their advantage, the Association argued that its refusal to recognize the Code's changed cabin exemption did not apply to the Glatfelters' construction project. The trial court granted the Association's contempt petition against the Glatfelters. Upon review, the Supreme Court held that the Glatfelters stipulated that they would comply with the Association's rules prior to the change in the Code. As such, they were bound to the terms of the stipulation when completing their construction project: "the Glatfelters cannot use the recreational cabin exemption as a trump card to bypass the rules and regulations to which they agreed. ⦠Our holding is premised entirely on the Glatfelters' failure to obtain the Association's approval regarding the intended structure." The Court did not address the validity of the Association's resolution refusing the adopt the recreational cabin exemption.