Lake Naomi Club, Inc. v. Monroe County Board of Assessment Appeals

782 A.2d 1121, 2001 Pa. Commw. LEXIS 637

• Court: Commonwealth Court of Pennsylvania
• Decided: August 23, 2001
• Status: Published

Opinions

McGINLEY, Judge.

The Monroe County Board of Assessment Appeals (Board) and Monroe County (County) (collectively, Appellant) appeal from an order of the Court of Common Pleas of Monroe County (common pleas court) that reversed the Board’s order and directed the Board and the Tax Assessor of Monroe County to comply with the provisions of Section 5105(b)(1) of the Uniform Planned Community Act (Act), 68 Pa.C.S. § 5105(b)(1).¹

Appellant and the Lake Naomi Club, Inc. (Club) and Timber Trails Community Association, Inc. (Association) (collectively, Appellee) stipulated to the following:

2. Count I of the assessment appeals raises a legal issue regarding whether the ... [Act] is applicable to subdivisions in existence prior to its effective date or only prospectively to new subdivisions.

3. [Club] and [Association] ... are nonprofit corporations organized and existing under the laws of the Commonwealth of Pennsylvania.

4. Both the Association and the Club came into existence prior to February 2, 1997, which is the effective date of [the Act].

Stipulation of Fact And Law

7. The Association owns property in the Timber Trails subdivision, including property with Property Identification Number 19/119136 (the “Property”)², for which exclusive easement rights and all rights to use the property have been conveyed.

8. The Property is for the exclusive use of the fee-paying members of the Association and the Club, all of which live within the Lake Naomi and Timber Trails subdivisions except approximately twenty-five property owners outside the Lake Naomi and Timber Trails subdivisions who have held memberships since the beginning of the development of the Communities in 1963. Further, employees of the Club are allowed to use the amenities on the Property as part of their compensation; a small number of people who serve the community in a volunteer capacity, such as members of fire, police and ambulance crews are allowed to use the amenities on the Property; and guests of members are allowed to play golf, when accompanied by a member, not more than ten times a year with a fee being assessed to the accompanying members each time the privilege is extended.

9. Prior and subsequent to February 2, 1997, the Property was annually assessed by ... Monroe County and taxes were annually imposed.... There was no change in assessment for the year 2000.

10. The Club filed with ... [the] Board of Assessment Appeals and appeal (the “Appeal”) from those assessments for the year 2000. A hearing on the Appeal was held by the Board of Assessment Appeals on October 4, 1999. Subsequently, by letter dated October 19, 1999,³ the Appeal was denied....

11. The Timber Trails subdivision is a planned community within definition stated in the [Act], 68 Pa.C.S.A. § 5103.4

12. The Property is both ‘controlled facilities’ and ‘common facilities’ within the definitions stated iyi the [Act], 68 Pa.aS.A. § 5103.

13. The Property is not ‘convertible real estate’ or ‘withdrawable real estate within the definitions stated in the [Act], 68 Pa.C.S.A. § 5103. (emphasis added).

Stipulation between Lake Naomi Club, Inc., Timber Trails Community Association, Monroe County Board of Assessment Appeals and Monroe County, May 11, 2000, Paragraphs 2-4 and 7-13 at 1-4; R.R. at 13a-16a.

The common pleas court sustained the Club’s and the Association’s appeal and concluded that the Act prohibited taxation of common or controlled facilities and therefore the Property could not be assessed and taxed separately.

On appeal⁵ Appellant contends that Section 5105(b) of the Act should not be applied retroactively to all planned corn-munities created prior to the effective date of the Act. Appellant asserts that if the Act is applied retroactively the existing common areas will be removed from the tax rolls and Appellant will be denied a valid assessment.⁶

Section 5105(b) of the Act, 68 Pa.C.S. § 5105(b) provides:

Taxation and assessment. — If there is a unit owner other than a declarant, each unit must be separately taxed and assessed. The value of the unit shall include the value of that unit’s appurtenant interest in the common facilities, excluding convertible or withdrawable real estate. The following shall apply

(1) Except as provided in paragraph (2), no separate assessed value shall be attributed to and no separate tax shall be imposed against common facilities or controlled facilities.

(2) Convertible or withdrawable real estate shall be separately taxed and assessed until the expiration of the period during which conversion or withdrawal may occur, (emphasis added).

Further, Section 5108 of the Act, 68 P.S. § 5108 defines the following:

“Common facilities.” Any real estate within a planned community which is owned by the association or leased to the association. The term does not include a unit.

“Controlled facilities.” Any real estate within a planned community, whether or not a part of a unit, that is not a common facility but is maintained, improved, repaired, replaced, regulated, managed, insured or controlled by the association.

Appellant and Appellee stipulated that the Property qualifies as both a “controlled facility]” and “common facility]” as defined in Section 5103 of the Act, 68 Pa.C.S. § 5103. See Stipulation, Paragraph 12. Also, Appellant and Appellee stipulated that the Property is neither “convertible real estate” nor “withdrawable real estate.” Here, the language of Section 5105 of the Act is unambiguous. Appellant “shall” not attribute an assessed value to the Property or impose a separate tax against the Property. “By definition, ‘shall’ is mandatory ... [and][a]ecordingly, there is no room to overlook the statute’s plain language to reach a different result.” Oberneder v. Link Computer Corp., 548 Pa. 201, 205, 696 A.2d 148 (1997), citing Coretsky v. Bd. Of Commissioners, 520 Pa. 513, 518, 555 A.2d 72, 74 (1989).

However, Appellant asserts that Section 5105 of the Act must not be applied retroactively to planned communities created prior to the effective date of the Act. This Court rejects this argument.

Section 5102 of the Act, 68 Pa.C.S. § 5102 provides:

(a) General rule. — This subpart applies to all planned communities created within this Commonwealth after the effective date of this subpart;

(b) Retroactivity. — Except as provided in subsection (c), sectio[n] 5105 ... to the extent necessary in construing any of those sections, apply to all planned communities created in this Commonwealth before the effective date of this subpart; but those sections apply only with respect to events and circumstances occurring after the effective date of this subpart and do not invalidate specific provisions contained in existing provisions of the declaration, bylaws or plats and plans of those planned communities. (emphasis added).

Again, Section 5102(b) of the Act is unambiguous. Firstly, the effective date of the Act was February 2, 1997, (the Act became law on December 19, 1996, and became effective forty-five days later). Secondly, Appellant and Appellee stipulated that Appellee is a planned community created prior to the effective date of the Act. See Stipulation, Paragraph 4. Thirdly, all relevant events, namely that the questioned tax assessment was in 1999 and was applied to the calendar year 2000, took place subsequent to the effective date of Act. Lastly, each annual assessment and each annual imposition of a tax is a separate event. Therefore, Section 5102(b) of the Act controls. Section 1921 of the Statutory Construction Act, 1 Pa.C.S. § 1921 provides that “[w]hen the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing the law.”

Next, Appellant contends that the term “only with respect to events and circumstances occurring after the effective date of this subpart”, found in Section 5102(b) of the Act, must be construed to require a countywide assessment, at which time the County shall comply with the Act “to include the value of that unit’s appurtenant interest in the common facilities” so that each unit is accurately and “separately taxed and assessed.” See Section 5105(b) of the Act.

Appellant’s interpretation of Section 5102(b) is flawed based upon the clear language of Section 5105(b)(1) of the Act. Appellant may not attribute a separate value to a common facility.

Accordingly, we affirm.⁷

ORDER

AND NOW, this 23rd day of August, 2001, the order of the Court of Common Pleas of Monroe County in the above-captioned matter is affirmed.

1 . This case was reassigned to the opinion writer on July 16, 2001.

2 . The Property is a golf course and was assessed a market value of $51,210.

3 . The Letter stated that “[t]he Board of Assessment Appeals in an open meeting has decided that your assessment is in order” and "[t]herefore, the assessment on your property will remain unchanged from that set for the 2000 assessment year.” Letter of October 19, 1999, Thomas J. Hill to Lake Naomi Club at 1; Reproduced Record (R.R.) at 4a.

4 .Section 5103 of the Act defines "planned community” as:

Real estate with respect to which a person, by virtue of ownership of an interest in any portion of the real estate, is or may become obligated by covenant, easement or agreement imposed on the owner’s interest to pay any amount for real property taxes, insurance, maintenance, repair, improvement, management, administration or regulation of any part of the real estate other than the portion or interest owned solely by the person. The term excludes a cooperative and a condominium, but a condominium or cooperative may be part of a planned community. For purposes of this definition, 'ownership' includes holding a leasehold interest of more than 20 years, including renewal options, in real estate. The term includes nonresidential campground communities.

5 . This Court’s review in a tax assessment case is limited to a determination of whether the common pleas court’s decision is supported by substantial evidence, whether the common pleas court erred as a matter of law or abused its discretion. Wilkes-Barre Holiday Inn v. Luzerne County Board of Assessment Appeals, 674 A.2d 1181 (Pa.Cmwlth.1996).

6 . In Paragraph 4 of the Stipulation, Appellant and Appellee stated that "[t]his Honorable Court should decide this case on a case stated basis.” Appellee contends that this Court does not have jurisdiction to address the merits of this argument because the present matter was submitted to the common pleas court on a "case stated” basis, and Appellant and Appellee sought to have the common pleas court enter a full and final judgment in the matter.

Pa.RX.P. 1038.2 provides that the "[c]om-mon law procedure of a case stated is abolished.” The Note to Pa.R.C.P. 1038.2 provides that ”[t]he common law procedure of a case stated is no longer required in view of the practice of submitting a case on stipulated facts for decision by a judge without a jury. See Rule 1038.1.” Section 705 of the "Fourth to Eighth Class County Assessment Law, Act of May 21, 1963, P.L. 571, as amended, 72 P.S. § 5453.705 provides that ”[t]he board, or any person party to the appeal to the court of common pleas, may appeal from the judgment order or decree of the court of common pleas in any matter affecting the assessment....”

7 . Appellee contends that they are entitled to counsel fees. Pa.R.A.P. 2744 provides that "an appellate court may award ... reasonable counsel fees ... if it determines that an appeal is frivolous or taken solely for delay or that the conduct of the participant against whom costs are to be imposed is dilatory, obdurate or vexatious.” Our review of the record and the briefs fail to establish any such conduct on the part of Appellant, and we deny Appellee's request.