Toa Green Pond Advisors, LLC v. Bethlehem Twp. & the Pidcock Co.

247 A.3d 1178 (Table)

TOA GREEN POND ADVISORS, LLC t/a TOA Green Pond, L.P., Appellant

v.BETHLEHEM TOWNSHIP and The Pidcock Company

No. 261 C.D. 2020

Commonwealth Court of Pennsylvania.

Argued: December 8, 2020

Filed: January 5, 2021

MEMORANDUM OPINION BY JUDGE CEISLER

TOA Green Pond Advisors, LLC, t/a TOA Green Pond, L.P. (TOA), appeals from the February 25, 2020 Order of the Court of Common Pleas of Northampton County (Trial Court), which sustained the Preliminary Objections filed by Bethlehem Township (Township) and The Pidcock Company (Pidcock)¹ to TOA's Amended Complaint in Mandamus (Amended Complaint) and dismissed the Amended Complaint. In its Amended Complaint, TOA sought a writ of mandamus to compel the Township to replace Pidcock with the Township's back-up engineer, Arro Consulting, Inc. (Arro), to oversee TOA's construction of a residential development in the Township. Because we conclude that TOA has not established a clear legal right to mandamus relief, we affirm the Trial Court's Order.

Background

TOA owns a 236-acre parcel of land in the Township, which includes a public golf course (Property). TOA received approval from the Township to develop a planned residential golf course community on the Property consisting of 229 age-restricted units (Project). Due to the Project's size, the Township required TOA to post a $13,039,928 bond to secure the construction of improvements on the Property.

On January 2, 2018, the Township's Board of Commissioners enacted Resolution R0005-18, appointing Pidcock to serve as the Township's engineer for a two-year term. On the same date, the Board of Commissioners also enacted Resolution R0006-18, appointing Arro to serve as the Township's back-up engineer. As the back-up engineer, Arro would provide professional consulting services if the Township determined that the use of Pidcock's services would create a conflict of interest, since Pidcock performed consulting services for both municipal and private clients. At a public meeting on January 7, 2019, the Board of Commissioners approved both Pidcock's and Arro's fee schedules.

Section 503(1) of the Pennsylvania Municipalities Planning Code (MPC), Act of July 31, 1968, P.L. 805, as amended , 53 P.S. § 10503(1), permits the Township to charge developers "reasonable and necessary" fees for its professional consultants, including the Township engineer, to review proposed land development plans. Section 503(1) of the MPC states in relevant part:

Review fees may include reasonable and necessary charges by the municipality's professional consultants for review and report[ing] thereon to the municipality. Such review fees shall be based upon a schedule established by ordinance or resolution. Such review fees shall be reasonable and in accordance with the ordinary and customary charges for similar service in the community , but in no event shall the fees exceed the rate or cost charged by the professional consultant for comparable services to the municipality for services which are not reimbursed or otherwise imposed on applicants.

53 P.S. § 10503(1) (emphasis added). Section 503(1)(i)-(ii) of the MPC also addresses the procedure to be followed when a developer wishes to challenge a professional consultant's fees:

(i) ... In the event the applicant disputes the amount of any such review fees, the applicant shall , no later than 100 days after the date of transmittal of the bill to the applicant, notify the municipality and the municipality's professional consultant that such fees are disputed and shall explain the basis of their objections to the fees charged, in which case the municipality shall not delay or disapprove a subdivision or land development application due to the applicant's dispute over fees. Failure of the applicant to dispute a bill within 100 days shall be a waiver of the applicant's right to arbitration of that bill under [S]ection 510(g) [of the MPC, 53 P.S. § 10510(g) ].

(ii) In the event that the municipality's professional consultant and the applicant cannot agree on the amount of review fees which are reasonable and necessary, then the applicant and the municipality shall follow the procedure for dispute resolution set forth in [S]ection 510(g) [of the MPC] , provided that the arbitrator resolving such dispute shall be of the same profession or discipline as the professional consultant whose fees are being disputed.

53 P.S. § 10503(1)(i)-(ii) (emphasis added).

Section 510(g)(2)-(4) of the MPC outlines the procedure for resolution of a fee dispute as follows:

(2) If the professional consultant and the applicant cannot agree on the amount of expenses which are reasonable and necessary, then the applicant shall have the right , within 100 days of the transmittal of the final bill or supplement to the final bill to the applicant, to request the appointment of another professional consultant to serve as an arbitrator. The applicant and professional consultant whose fees are being challenged shall, by mutual agreement, appoint another professional consultant to review any bills the applicant has disputed and which remain unresolved and make a determination as to the amount thereof which is reasonable and necessary. The arbitrator shall be of the same profession as the professional consultant whose fees are being challenged .

(3) The arbitrator so appointed shall hear such evidence and review such documentation as the arbitrator in his or her sole opinion deems necessary and shall render a decision no later than 50 days after the date of appointment. Based on the decision of the arbitrator, the applicant or the professional consultant whose fees were challenged shall be required to pay any amounts necessary to implement the decision within 60 days. In the event the municipality has paid the professional consultant an amount in excess of the amount determined to be reasonable and necessary, the professional consultant shall within 60 days reimburse the excess payment.

(4) In the event that the municipality's professional consultant and applicant cannot agree upon the arbitrator to be appointed within 20 days of the request for appointment of an arbitrator, then, upon application of either party, the President Judge of the Court of Common Pleas of the judicial district in which the municipality is located (or if at the time there [is] no President Judge, then the senior active judge then sitting) shall appoint such arbitrator , who, in that case, shall be neither the municipality's professional consultant nor any professional consultant who has been retained by, or performed services for, the municipality or the applicant within the preceding five years.

53 P.S. § 10510(g)(2)-(4) (emphasis added).

On August 21, 2019, TOA submitted a formal challenge (First Challenge) to Pidcock's fees for services performed between March 24, 2019 and June 25, 2019. On August 27, 2019, TOA submitted a formal challenge (Second Challenge) to Pidcock's fees for services performed between June 23, 2019 and July 20, 2019. The First and Second Challenges questioned the reasonableness of the amounts charged for Pidcock's services, as well as Pidcock's billing practices and the manner in which Pidcock performed its engineering services in connection with the Project. Specifically, TOA raised the following objections to Pidcock's fees and practices:

(a) charges for professional(s) preparing for meeting(s) that were not attended;

(b) bills for more than 200 hours of services provided in connection with a single[-]page email containing eight comments;

(c) bills for more than 35 hours of service to prepare that single[-]page email containing 8 comments;

(d) failure to comply with the MPC regarding security estimates for the public improvements of the [Project];

(e) bills for more than 70 hours of services to review and modify the security estimates for the public improvements of the [Project];

(f) bills for more than 30 hours of services to review stormwater plans notwithstanding that [TOA] had already obtained an NPDES permit from DEP in connection therewith;

(g) bills for over 30 hours of services for the review of the handicap accessibility of the [Project] and the handicap ramps, which review resulted in a comment letter consisting of 2 sentences;

(h) having 19 different professionals involved in the review of the design documents;

(i) bills for 100 hours in connection with internal meetings;

(j) bills for more than 14 hours of services to review an "assignment letter";

(k) using multiple professionals to perform the same tasks;

(l) inconsistencies in the billing records for Pidcock and the Township solicitor for calls between them;

(m) the reasonableness of Pidcock's billing increments;

(n) the reasonableness and necessity of the number of professionals involved in the review of the design document for the [Project];

(o) the reasonableness and necessity of the amount of time spent on many tasks; and

(p) the manner in which billing was completed.

Am. Compl. ¶ 25(a)-(p).

By letter dated September 4, 2019, TOA requested that the Township remove Pidcock from the Project and appoint the back-up engineer, Arro, to oversee the Project. The Township declined to do so.

On October 29, 2019, TOA submitted another challenge (Third Challenge) contesting the reasonableness of Pidcock's fees for services performed between July 21, 2019 and August 24, 2019.

On November 13, 2019, TOA filed in the Trial Court a "Petition to Appoint Mediator Pursuant to 53 P.S. § 10510(g)(4)" (Petition to Appoint), requesting that the President Judge of the Trial Court appoint an independent arbitrator to adjudicate the fee disputes between TOA and Pidcock in accordance with Section 510(g) of the MPC. In its Petition to Appoint, TOA averred that the parties were unable to agree on an independent arbitrator to resolve their disputes. See Am. Compl., Ex. 9.² TOA's Petition to Appoint is still being litigated in the Trial Court under a separate docket number. See Trial Ct. Order, 2/25/20, at 3 n.3.³

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