Court Opinion

ID: 4958913
Source: CourtListenerOpinion
Date Created: 2021-09-24 14:15:42.070445+00
Date Added: 2024-06-11T08:15:43.865263
License: Public Domain

DISSENTING OPINION BY
Judge PELLEGRINI.
I respectfully dissent from the majority opinion because I disagree that Tech One’s tenants and sub-tenants have standing to appeal a real estate tax assessment decision imposing taxes on Tech One.
At issue in this case is a parcel of property located in the Borough of West Miff-lin that surrounds a commercial development. The parcel was previously owned by United States Steel Corporation (U.S. Steel) which had filed an appeal to the Board of Property Assessment, Appeals and Review of Allegheny County (Board) from tax assessments on this property. West Mifflin Area School District then filed an appeal with the Court of Common Pleas of Allegheny County (trial court) naming the Borough of West Mifflin and Allegheny County as interested parties. While the appeal was still pending, the property was purchased in May 1986 by Tech One which subdivided the parcel into a series of parcels which it leased to various tenants and sub-tenants. Tenants included National City Bank of Pennsylvania (formerly, Integra Bank), Wendy’s International, Inc., McKnight Family Center, Inc., (formerly, Chuck E. Cheese), and Ames Department Store. Giant Eagle was a sub-tenant of Ames in 19881 and leased 38,000 square feet of the building that Ames leased from Tech One. As were some of the other tenants, Giant Eagle was responsible for paying any increase in the real estate taxes over the base year on the portion of the property that it leased.2
On March 4, 1988, Tech One also filed an appeal with the trial court from the Board’s tax assessment regarding tax years 1986, 1987 and 1988. None of the tenants named above, including Giant Eagle, filed an appeal. However, all of them filed petitions to intervene. The Borough of West Mifflin and Allegheny County’s petition was granted on March 17, 1988; Integra Bank and Giant Eagle’s3 petitions were granted on May 15, 1996; Wendy’s petition and McKnight Family Center’s petition were granted on June 30, 1999; and Ames’ petition was granted on August 23, 1999. On June 3, 1999, Tech One, West Mifflin Area School District and the Borough of West Mifflin entered into a Stipulation of Facts regarding the assessed value and the market value for the various properties, including those which Interve-nors leased.
After appointing Masters to conduct evi-dentiary hearings, on October 23, 2000, Ames settled its claims in the tax assessment appeal and the matter was discontinued with prejudice. Thereafter, on July 18, 2001, the trial court adopted the Masters’ report which accepted the expert testimony presented by the Intervenors and *694recommended fair market values and assessed values that were less that those set forth in the Stipulation of Facts offered by Tech One. Tech One then filed an appeal with this Court arguing, inter alia, that Giant Eagle lacked standing to intervene in the appeal before the trial court.
On appeal, the majority affirms the trial court and also holds that Giant Eagle has standing as a sub-tenant to appeal a tax assessment because it is an “owner” of taxable property as that term has been interpreted by Pennsylvania courts. It then further relies on this Court’s recent holding in In re West Allegheny School District, 797 A.2d 414 (Pa.Cmwlth.2002), that the holder of a commercial sub-lease that was obligated to pay real estate taxes had standing to challenge a tax assessment. Because I disagree with our holding in West Allegheny, which, in effect, allows every tenant in a commercial setting that has a lease which contains a pass-through clause for taxes the right to appeal an assessment, I respectfully dissent.
Prior to our decision in West Allegheny, there were only a handful of cases dealing with the issue of whether a tenant could file an appeal from a tax assessment against the owner of the leased property. While several cases allowed such an appeal when the lessee of the property had an equitable interest as a result of improving the property, e.g., see In re Blue Knob Recreation, Inc., 122 Pa.Cmwlth. 156, 551 A.2d 9 (1988), petition for allowance of appeal denied, 522 Pa. 597, 562 A.2d 321 (1989), Filbern Manor v. Board of Assessment Appeals, 138 Pa.Cmwlth. 660, 589 A.2d 279 (1991), petition for allowance of appeal denied, 529 Pa. 626, 600 A.2d 541 (1991), only two cases actually dealt with tenants who had no equitable interest, but those cases had opposing outcomes and dealt with third class counties while Allegheny County is a second class county.
In Marcus Hook Development Park, Inc. v. Board of Assessment Appeals of Delaware County, 68 Pa.Cmwlth. 229, 449 A.2d 70 (1982), we held that Marcus Hook Development, which leased property from the Borough of Marcus Hook, did not have standing to appeal an assessment to the Borough because the Borough was the real owner of the property and Marcus Hook was only the lessee, even though it was obligated to pay the taxes to or on behalf of the Borough. We relied on Sections 8 and 9 of the Assessment Law for Counties of the Second Class A and Third Class4 which describe persons entitled to appeal to the assessment board as the “owner of property,” “any person aggrieved,” and allowed appeals to be taken by a “taxable” and a “taxpayer” to determine that the lessee did not meet any of those definitions. We stated:
Here the borough is the real owner, as owner of record and beneficial owner as well. [Marcus Hook], as lessee, although obligated by lease to pay the taxes to or on behalf of the borough, does not, by virtue of that lease provision, become the taxpayer in the place of the borough.
We have been shown no authority giving a lessee such as [Marcus Hook] any basis for appealing in its own right. Lessees are left to protecting themselves in the negotiation of the lease provisions with a municipality or other public agency.
We therefore must disagree with the court of common pleas that the appeals filed by [Marcus Hook] with respect to the entire property and with respect to *695the borough parcel were effective to bring up for review before the board or court that part of the property held by the borough as owner.
Id. at 73. In sharp contrast, however, in In re Appeal of Marple Newtown School District, 70 Pa.Cmwlth. 365, 453 A.2d 68 (1982), we relied on the same sections of the County Assessment Law for Second Class A and Third Class Counties and held just the opposite: that the lessee of a shopping center that was obligated to pay real estate taxes had standing to appeal an assessment against the owner of the shopping center because the lessee was a person aggrieved as provided for under Section 8 of the Law. “It would seem that Pennsylvania Plazas as a tenant required to pay the local taxes would meet this description and was entitled to appeal the assessment to the Board of Assessment Appeals.” Id. at 69.
While I would follow the rational of Marcus Hook, the problem with both of these cases is that Allegheny County does not fall under the sections cited because they only apply to Second Class A and Third Class counties and Allegheny County is a county of the Second Class. West Allegheny is the only case that deals with a Second Class county and it explains that the Second Class County Assessment Law5 does not set forth who may appeal a Board decision to the trial court. In that case, Allegheny County leased property at the Pittsburgh International Airport to a private entity that subleased concessions to commercial enterprises that individually paid real estate taxes. Noting that the Second Class County Assessment Law did not repeal any sections of the General County Assessment Law, see 72 P.S. § 5452.20, it then relied on Section 518.1(a) of the General County Assessment Law6 to find that the term “owner” included sublessees, and that the sublessees of concessions had standing to appeal tax assessments made to the County. That section provides in relevant part:
(a) Any owner of real estate or taxable property in this Commonwealth, who may feel aggrieved by the last or any future assessment or valuation of his real estate or taxable property, may appeal from the decision of the county commissioners, acting as a board of revision, or the board of revision of taxes, or the board for the assessment and revision of taxes, or the Board of Property Assessment, Appeals and Review, in counties of the second class ... (Emphasis added.)
72 P.S. § 5020-518.1(a). To determine who was an owner, we relied on cases such as Filbem Manor involving a Third Class county and In re Appeal of Marple Newtown School District, 70 Pa.Cmwlth. 365, 453 A.2d 68 (1982), involving a Second Class A county and governed by provisions dealing with Third Class and Second Class counties. Allegheny County is a Second Class county and the Second Class County Assessment Law has no similar provision.
The General County Assessment Law does not define the term “owner” which controls and, therefore, it must be interpreted in accordance with its ordinary usage. Section 1903(a) of the Statutory Construction Act of 1972, 1 Pa.C.S. § 1903(a). “Owner” is defined as “one that has legal or rightful title whether the possessor or not.” Webster’s Third New International Dictionary 1612 (1993). Because an owner is only a “title owner,” lessees, and certainly sublessees, are not given standing to appeal.
*696Practically speaking, buildings are assessed the same way that they are developed and/or sold, i.e., on a recognized subdivision or as a part of a parcel where separate ownership is authorized by statute such as with condominiums. For example, in a large office building, there is only one tax assessment, not individual assessments for each individual tenant who may have a lease requiring it to be responsible for real estate taxes. Most leases now have pass-through clauses for taxes, and to allow every individual tenant in a large office building the right to challenge the taxes assessed on the building’s owner would create a legal morass.
While I realize that Wesi Allegheny is controlling, I disagree with that holding and disagree that a sub-tenant or any tenant, for that matter, has standing to challenge the assessment against Tech One and respectfully dissent.

. Giant Eagle actually sub-leased space from Ames since 1972 at which time U.S. Steel owned the property and leased it to Ames. Giant Eagle continued to lease space from Ames through 1997.

. National City Bank is responsible for the real estate taxes on its building but not on the land, and Wendy’s is responsible for the real estate taxes on its building and a portion of the land.

.Giant Eagle specified in its petition that Tech One’s appeal of the 1986-1988 assessments was deemed to be an appeal of subsequent annual assessments so long as the appeal remained pending.

. Act of May 22, 1933, P.L. 853, as amended, 72 P.S. §§ 5349-50.

. Act of June 21, 1939, P.L. 626, as amended, 72 P.S. §§ 5452.1-5452.20.

. Act of May 22, 1933, P.L. 853, as amended, 72 P.S. § 5020.581.1(a).