PBS Coals, Inc. v. Department of Transportation, 140 C.D. 2018

206 A.3d 1201

PBS COALS, INC. and Penn Pocahontas Coal, Co., Appellants

v.Commonwealth of Pennsylvania, DEPARTMENT OF TRANSPORTATION

No. 140 C.D. 2018

Commonwealth Court of Pennsylvania.

Argued: February 14, 2019

Decided March 28, 2019

Vincent J. Barbera, Somerset and Robert P. Lightcap, Latrobe, for appellants.

Eric J. Jackson, Assistant Chief Counsel, Pittsburgh, for appellee.

BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE McCULLOUGH

PBS Coals, Inc. and Penn Pocahontas Coal, Co. (collectively, the Coal Companies) appeal from the January 19, 2018 order of the Court of Common Pleas of Somerset County (trial court) sustaining the Pennsylvania Department of Transportation's (PennDOT) preliminary objections to the Coal Companies' petition for the appointment of a board of viewers (Petition), which alleged that PennDOT's actions constituted a de facto taking of the Coal Companies' coal estate and coal interest on a parcel of property in Somerset County.

Facts and Procedural History

This case involves the construction of a portion of U.S. Route 219, an 11-mile limited access highway, in southern Somerset County. As part of the construction, PennDOT condemned property in a north-south direction. (Trial court op. at 1.) The Coal Companies allege that the construction of Route 219 deprived them of their access and right-of-way to a certain parcel of property, Parcel 55, in Brothersvalley, Pennsylvania, for which it owned the coal estate and coal interest.

In 2010, when the Coal Companies allege that the de facto taking occurred, Penn Pocahontas was not active in the mining business; rather, its primary source of income was derived from acquiring coal reserves and leasing them to active mining companies, which then paid Penn Pocahontas a royalty on the coal sales. (Trial court op., findings of fact (F.F.) Nos. 2-3.) In 2006, Penn Pocahontas entered into a lease agreement with the owners of Parcel 55 whereby it gained the right to mine all the subsurface coal on Parcel 55. (F.F. No. 5.) Thereafter, in 2007, Penn Pocahontas entered into a lease agreement with PBS Coals, whereby PBS Coals gained the right to mine all the coal underlying Parcel 55, including both the Brookville seam and the Clarion Rider seam, which were the only coal seams present on the parcel. (F.F. Nos. 5-6.) Additionally, in 2006, PBS Coals entered into a coal lease with respect to Parcel 59, which was then owned by Jean C. Shaffer (the Shaffer Lease). (F.F. Nos. 32-33.) The Shaffer Lease granted PBS Coals the right to mine all of the surface and subsurface coal on Parcel 59. (F.F. No. 34.)

Both Parcels 55 and 59 lay to the west of Route 219. Parcel 59 lays northwest of, but does not abut, Parcel 55. (Reproduced Record (R.R.) at 139a; Supplemental Reproduced Record (S.R.R.) at 71b.) Located east of Parcel 59 and north of Parcel 55, and adjacent to both parcels, is Parcel 56. Id. Directly north of and fronting Parcel 59 is Mud Pike Road. Id. Situated east of Parcel 55 is Garrett Shortcut Road; however, Parcel 55 does not front Garrett Shortcut Road. Id. Rather, Parcels 50 and 54 lay to the east of Parcel 55 and in between Parcel 55 and Garrett Shortcut Road. Following its construction, Route 219 bisects and is situated on Parcels 54 and 50, between Parcel 55 and Garrett Shortcut Road. (R.R. at 138a.) Finally, located southwest of Parcel 55 is the Hoover Parcel. Although the Hoover Parcel fronts Blackfield Road, Parcel 55 does not front the same. (R.R. at 139a, S.R.R. at 71b.)

While Parcel 55 has always been landlocked, the Coal Companies claimed in their Petition that their right-of-way to Parcel 55 was inaccessible due to the construction of Route 219. (Petition ¶ 13.) The Coal Companies did not claim that PennDOT physically condemned Parcel 55; instead, the Coal Companies asserted that, because of the construction of Route 219, the coal under Parcel 55 is now isolated and incapable of being mined. Id. ¶ 14. The Petition alleged that the loss of access to Parcel 55 constituted a de facto taking by PennDOT of the same. Id. ¶ 19. The Petition requested that the trial court appoint a board of viewers to ascertain the just compensation that should be awarded the Coal Companies for the de facto taking of Parcel 55. Id. ¶ 24. In response to the Petition, PennDOT filed preliminary objections asserting that a de facto taking had not occurred because the Coal Companies were not deprived of the beneficial use and enjoyment of their property due to any action of PennDOT; the Coal Companies did not suffer any depreciation in the value of their property; PennDOT's actions did not cut off the Coal Companies' access to Parcel 55 because there was alternative access; and at the time PennDOT condemned the property for the construction of Route 219, the Coal Companies had not applied for any mining permits for Parcel 55.

The trial court conducted a three-day hearing from February 14-16, 2017. At the hearing, the Coal Companies presented evidence that prior to the alleged condemnation, they had access from Parcel 55 to Garrett Shortcut Road via rights-of-way over Parcels 54 and 50. (F.F. Nos. 7-8.) While the Coal Companies claimed that they had rights-of-way leading from Parcel 55 to Garrett Shortcut Road, the relevant deeds conveying the rights-of-way did not define the actual location of the rights-of-way, with only a general direction and description given, and the Coal Companies never attempted to define the route for their rights-of-way. (F.F. Nos. 12-14.) The construction of Route 219 resulted in Parcels 54 and 50 being bisected by the new highway and, thus, the rights-of-way leading from Parcel 55 across Parcels 54 and 50 in an easterly direction toward Garrett Shortcut Road were severed. (F. F. No. 16.)

The type of land use proposed by the Coal Companies for access from Garrett Shortcut Road to the right-of-way for Parcel 55, located on Parcel 54, would require a highway occupancy permit (HOP) from PennDOT. (F.F. No. 17.) The Coal Companies never applied for an HOP for the right-of-way, and PennDOT alleged that the Coal Companies lacked sufficient access frontage on Parcel 54 for an HOP. (F.F. No. 22.)

At the hearing, PennDOT indicated, over the objections of the Coal Companies, that it was prepared to construct a temporary bridge across Route 219, before the Coal Companies extracted any coal, which would thereby prevent them from ever being deprived of access to Parcel 55. (F.F. No. 24.) PennDOT presented a plan to build a temporary bridge across Route 219 to transport coal from Parcel 55, and asserted that it would be of sufficient strength to support any load allowed on the roadways of the Commonwealth. (F.F. Nos. 25-26.) However, between 2010 and 2017, PennDOT did not have any plans in place for the construction of a temporary bridge over Route 219; therefore, the Coal Companies argued that any testimony concerning the construction of the same was totally speculative and should be disregarded. (F.F. Nos. 27-28.)

PennDOT also attempted to demonstrate at the hearing that the Coal Companies had alternative access to Parcel 55 by virtue of the Shaffer Lease and the Coal Companies' interest in the coal on Parcel 59. The Shaffer Lease granted PBS Coals mining rights on Parcel 59 for a primary term of seven years and "so long thereafter as active mining is being conducted on the Premises or on a mine which has or will include the Premises," and provided that the Shaffers agreed to "execute and sign any documents required to be signed by [PBS Coals] in connection with obtaining or maintaining a mining permit on the Premises." (Shaffer Lease at 8, S.R.R. at 8b; F.F. Nos. 34-35.)

Further, PennDOT attempted to show that the Coal Companies could access Parcel 55 via a right-of-way across the Hoover Parcel to Blackfield Road. (F.F. Nos. 42-43.) PBS Coals previously had entered into a coal lease with respect to the Hoover Parcel. (F.F. No. 44.) However, the lease had terminated by the time of the alleged de facto condemnation and the trial court concluded there was no evidence that the lease had been reinstated or that PBS Coals had an ongoing right to traverse the Hoover Parcel from Parcel 55 to Blackfield Road. (F.F. Nos. 45-46.)

Finally, the parties introduced conflicting evidence regarding the mineability of Parcel 55, specifically about whether the Pennsylvania Department of Environmental Protection (DEP) would issue a permit for a mine on Parcel 55. Louis T. Pierce, a registered professional geologist, who was accepted as an expert in geology and hydrology, testified that there were no streams on Parcel 55 and that there were less than two acres of wetlands on the same. (F.F. No. 50.) Pierce testified that all of the wetlands on the property could be mitigated. (F.F. No. 51.)

Robert Kudlawiec, a licensed professional engineer, who was accepted as an expert in mine planning, operations, permitting, and engineering, testified regarding the potential for obtaining a mining permit for Parcel 55 from DEP. (F.F. No. 52.) Kudlawiec explained that when a mining permit is sought from DEP and there are intermittent streams present, the permit may be issued if the stream is removed, replaced, or enhanced. (F.F. No. 53.) He also testified that wetlands are mitigated by establishing a replacement wetland. (F.F. No. 54.) Kudlawiec stated that any streams or wetlands on Parcel 55 could be mitigated and that the cost of mitigation was factored into his determination of the economic mineability of Parcel 55. (F.F. No. 55.) In his opinion, an intermittent stream or wetland would not prevent the issuance of a mining permit from DEP as long as corrective measures were taken. (F.F. No. 56.) He further noted that another acceptable method for mitigating a stream or wetland is to construct a "high wall mine" below the level that the stream can be affected. (F.F. No. 57.) Kudlawiec believed that DEP's wetlands and stream...