Redevelopment Authority v. Woodring

Opinion by Judge Blatt, The appellant, the Redevelopment Authority of the City of Oil City (Authority) seeks review of a decision of the Court of Common Pleas of Venango County which found that certain actions by the Authority constituted a de facto taking of the property of the appellee, Jane T. Woodring. A board of view was appointed to determine the amount of compensation to which she was entitled. In April of 1974, the Authority approved and adopted a redevelopment plan for the central business district of the City of Oil City, which provided, inter alia-, that- all above-ground utility lines in the area were to be placed underground. The Authority and the Pennsylvania Electric Company, the utility which supplies electricity to the citizens and businesses in Oil City, entered into a contract by which the utility agreed to remove existing overhead equipment and to install underground service at its own cost. The Authority also agreed to request the cooperation of the utility’s customers in meeting the costs of the changeover as required by the utility’s tariff.1 The said tariff provides that customers shall assume the expense of changing the location of the delivery point for electricity on their premises if such a change is necessary when a utility is required to place its lines underground. [237] In applying for the appointment of viewers, the appellee alleged that the action of the Authority caused her to expend substantial sums in order to ensure the continuation of electrical service to her premises and that such action amounted to a de facto taking by the Authority. The court below agreed and appointed a board of view to determine the amount of compensation due.2 This appeal followed. A de facto condemnation of property takes place when an entity exercises the power of eminent domain and the immediate, necessary and unavoidable consequence of the exercise of that power is to destroy, injure or damage private property so as to substantially deprive the owner of the beneficial use or enjoyment of that property, Harborcreek Township v. Ring, 48 Pa. Commonwealth Ct. 542, 410 A.2d 917 (1980), and our scope of review in such a case is limited to determining whether or not competent evidence supports the findings of fact made by the court below and whether or not there was an error of law or an abuse of discretion. City of Philadelphia v. Sterling Metalware Co., 48 Pa. Commonwealth Ct. 313, 410 A.2d 90 (1980). The Authority first maintains that the appellee suffered no compensable injury or interference with the beneficial use of her property because she was never deprived of electrical service and there was no evidence presented that she lost tenants or income or that the marketability of her property was adversely affected. It is clear, however, that the expenditure of substantial sums by the appellee was required in order to [238] maintain the flow of electricity to her property and there is no dispute that without such expenditures, her electrical service would have been discontinued. We believe that the deprivation of electrical service would have seriously interfered with the appellee’s use and enjoyment of her property and we must, therefore, agree with the court below that these expenditures represented an injury to the appellee’s property rights. It is next argued that the Authority’s action was not the immediate, direct or necessary cause of the appellee’s expenses because she was required by her contractual relationship with the utility to incur such costs as were involved here and, furthermore, that the appellee’s old electrical system was in violation of the National Electrical Code (Code) and would have had to be corrected sometime in the future regardless of the Authority’s conduct. Upon reviewing the record, however, we believe that the expenses incurred by the appellee were directly related to the actions of the Authority. The contractual relationship between the utility and the appellee designated only as between those two parties which of them must assume the costs of providing a suitable delivery point when the utility is required to relocate service underground and that agreement is irrelevant to the relationship between the Authority and the appellee. Although it is true that the old electrical system on the premises here concerned did not comply with the Code as adopted by the Building Code of the City of Oil City, the record reveals, and the court below held, that the appellee would not have been required to bring the system into compliance with the Code as long as she made no installations, alterations or extensions of her existing service. There was no indication that she had planned any such changes at any future time and we must therefore hold that the Authority’s, requirement that [239] the utility lines he placed underground was the direct and precipitating cause for the alteration of her electrical system and for the resulting expenditures she was compelled to make in order to maintain her service. Finally, the Authority contends that, even if it is found that the appellee suffered an injury as a result of the Authority’s action, the court below erred when it found that such action was in the nature of a condemnation under the power of eminent domain rather than a valid exercise of the police power. It is argued that a city has a right to use the police power to control whatever lies above or below its streets, regardless of the purpose for any proposed change. See Wolf v. Department of Highways, 422 Pa. 34, 220 A.2d 868 (1966). Although it is true, of course, that a city may have broad discretion in using the police powers to control its streets, id., it is axiomatic that any exercise of the police power must be rationally related to the general health, safety and welfare and such an exercise may not be grounded solely on considerations of aesthetics. Medinger Appeal, 377 Pa. 217, 104 A.2d 118 (1954). There is substantial evidence here to support the lower court’s finding that the Authority’s requirement for the installation of underground electrical service was undertaken completely for aesthetic purposes and we must, therefore, conclude that such action was -not an exercise of the police power but was an exercise of the power of eminent domain. We believe, therefore, that the appellee is entitled to just compensation. We will affirm the order of the court below. Order, And Now, this 29th day of June, 1981, the order of the Court of Common Pleas of Venango County in the above-captioned matter is hereby affirmed. Footnotes [1] The tariff of the Pennsylvania Electric Company is a compilation of the rates, rules and regulations of the utility, as approved by the Pennsylvania Public Utility Commission, governing the relative rights and duties of the utility and its customers. [2] The Authority objected below to the procedure followed by the appellee when she sought a rule to show cause rather than an appointment of a board of view, but, at the evidentiary hearing, the parties agreed to waive any objection to procedural defects and they proceeded on the merits.