Court Opinion

ID: 9370014
Source: CourtListenerOpinion
Date Created: 2023-02-10 16:08:45.047325+00
Date Added: 2024-06-11T17:16:18.590975
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Brandywine Hospital, LLC,               :   CASES CONSOLIDATED
                 Appellant              :
                                        :
            v.                          :
                                        :
County of Chester Board                 :
of Assessment Appeals and               :   Nos. 1279, 1280, 1283 & 1284 C.D. 2021
Coatesville Area School District        :   Argued: November 16, 2022

BEFORE:     HONORABLE RENÉE COHN JUBELIRER, President Judge
            HONORABLE PATRICIA A. McCULLOUGH, Judge
            HONORABLE ANNE E. COVEY, Judge
            HONORABLE MICHAEL H. WOJCIK, Judge
            HONORABLE CHRISTINE FIZZANO CANNON, Judge
            HONORABLE ELLEN CEISLER, Judge
            HONORABLE LORI A. DUMAS, Judge

OPINION
BY JUDGE FIZZANO CANNON                     FILED: February 10, 2023

            PI One, LLC, now known as Brandywine Hospital, LLC (Hospital),
appeals from a decision of the Court of Common Pleas of Chester County (trial
court). After thorough review, we agree with the County of Chester Board of
Assessment Appeals (Board) that Hospital has waived all issues on appeal.
Accordingly, we dismiss the appeals.
            We dismiss as moot Hospital’s applications for relief seeking to strike
the briefs filed by Patientrightsadvocate.org and Families USA as amici curiae in
support of the Board.
                                   I. Background
             In 2017, Reading Health System, now known as Tower Health, LLC
(Tower Health), bought several for-profit hospital facilities and related properties
formerly owned by Community Health Systems, a for-profit entity, in Montgomery
and Chester Counties. Trial Ct. Op. at 11-12. Tower Health, a limited liability
company (LLC) with federal nonprofit status under 26 U.S.C. § 501(c)(3), created a
new LLC to run each of the purchased hospital facilities as a nonprofit entity. Id. at
11. Tower Health is the sole member of each new LLC. Id. at 11 & 13. Hospital is
one of the new LLCs and operates a hospital facility in Chester County. Id. at 12-
13.
              The Board denied Hospital’s application for a property tax exemption
for tax years 2018 through 2021. Hospital appealed to the trial court, which held a
de novo trial. The trial court also denied the property tax exemption, finding that
Hospital failed to sustain its burden of proving entitlement to a tax exemption as a
nonprofit entity.
             Hospital then appealed to this Court. In response to the trial court’s
directive to file a concise statement of errors complained of on appeal pursuant to
Rule 1925(b) of the Pennsylvania Rules of Appellate Procedure (1925(b)
Statement), Pa. R.A.P. 1925(b), Hospital filed a 19-page 1925(b) Statement
containing some 90 issues and sub-issues. In its subsequent opinion pursuant to Rule
1925(a) of the Pennsylvania Rules of Appellate Procedure (1925(a) Opinion), the
trial court stated that Hospital’s 1925(b) Statement failed to comply with the rule’s
conciseness requirement and hindered the trial court in preparing its 1925(a)
Opinion. 1925(a) Op. at 3.

                                          2
             In Hospital’s appeals before this Court, Patientrightsadvocate.org and
Families USA filed a joint brief as amici curiae in support of the Board’s denial of
the property tax exemption. Hospital has filed an application for relief seeking to
strike the brief of the amici because it discusses matters not in the record.

                                       II. Issues
             Hospital raises six issues in its brief on appeal, which we combine into
three issues. First, Hospital asserts that it had standing to apply for a real estate tax
exemption for tax year 2018 even though, at the time the application was filed in
2017, Hospital was not the legal owner of the property at issue. Second, Hospital
contends that the trial court improperly considered evidence and defenses not
presented in this case. Third, and primarily, Hospital maintains that it met all of the
factual and legal requirements for a property tax exemption. In addition, Hospital
argues this Court should grant Hospital’s application for relief and strike the brief
filed by the amici because the brief improperly contained information not in the
record before this Court.
             The Board opposes each of Hospital’s arguments. Further, the Board
has filed an application for relief seeking dismissal of this appeal. The Board posits
that Hospital waived all of its issues on appeal because it filed a 1925(b) Statement
that failed to comply with the rule’s conciseness requirement.
             We have reordered our discussion of the issues for convenience and
clarity.

                                           3
                                        III. Discussion1
                              A. Standing for Tax Year 2018
               The Board argues that for tax year 2018, Hospital had no standing to
seek a tax exemption, because Tower Health’s purchase of the affected properties
was not complete or certain at the time it filed its applications for the tax exemptions
in 2017. However, the asset purchase agreement was pending for several months
before the deed transferring the properties was recorded in October 2017. See Trial
Ct. Op. at 21 & 23-24; Reproduced Record (RR) at 999a-1000a; Hospital’s Br. at 6.
Moreover, the purchase transaction was complete before the Board’s hearing on
Hospital’s application for a property tax exemption. See RR at 999a-1000a (reciting
that transaction closed on October 1, 2017) & 483a (Board decision reciting that
Board hearing was held on October 19, 2017). Had the application for tax exempt
status been delayed until the purchase transaction was complete and the deed
recorded, the 2017 filing window for 2018 tax exempt status, which was May 1 to

       1
               Our appellate role in cases arising from non-jury trial verdicts is to
               determine whether the findings of the trial court are supported by
               competent evidence and whether the trial court committed error in
               any application of the law. The findings of fact of the trial judge
               must be given the same weight and effect on appeal as the verdict of
               a jury. We consider the evidence in a light most favorable to the
               verdict winner. We will reverse the trial court only if its findings of
               fact are not supported by competent evidence in the record or if its
               findings are premised on an error of law. However, [where] the
               issue . . . concerns a question of law, our scope of review is plenary.
Newman & Co. v. City of Phila., 249 A.3d 1240, 1244 n.5 (Pa. Cmwlth. 2021) (additional citations
and quotation marks omitted). Specifically, in tax assessment appeals, the trial court is the finder
of fact, and all matters of credibility and evidentiary weight are within its province; such findings
are binding on appeal if they are supported by substantial evidence of record. Lutheran Home v.
Schuylkill Cnty. Bd. of Assessment Appeals, 782 A.2d 1, 6 (Pa. Cmwlth. 2001) (first citing Appeal
of M.W. Kellogg Co., 492 A.2d 130 (Pa. Cmwlth. 1985); and then citing St. Margaret Seneca Place
v. Bd. of Prop. Assessment, Appeals & Rev., 640 A.2d 380 (Pa. 1994)).

                                                 4
August 1, see RR at 464a & 467a, would have expired. Therefore, as the equitable
owner of the property, Hospital maintains it was an aggrieved party entitled to apply
for a tax exemption, in accordance with Section 8844(c)(1) & (2) of the Consolidated
County Assessment Law (CCAL),2 53 Pa.C.S. § 8844(c)(1) & (2) (relating to annual
appeal deadlines).
                The trial court opined that Hospital lacked standing to apply for a 2018
tax exemption because neither Tower Health nor Hospital was the record owner of
the property at issue at the time the application was filed.                    The trial court
acknowledged that equitable ownership would be sufficient to confer standing. Trial
Ct. Op. at 21 & 23-24. However, the trial court deemed the purchase agreement
insufficiently certain to confer equitable ownership status. Id. at 23-24. The trial
court pointed to the conditional and complex nature of the purchase agreement and
the number of conditions, including a $590 million bond issue, that had to be
satisfied for the purchase of the multiple properties involved in Tower Health’s
purchase transaction, which included properties in both Montgomery and Chester
Counties. Id. at 12 & 23-24. The trial court also observed that settlement for the
transaction did not occur until October 2017, after several continuances. Id. at 24.
                However, the trial court did not cite any authority to support its
determination that the contingent nature of the purchase transaction deprived
Hospital of standing in 2017 to pursue a tax exemption for the 2018 tax year. See
id. at 21 & 23-24. We are likewise unaware of any such authority.3

       2
           53 Pa.C.S. §§ 8801-8868.
       3
         Moreover, it is logical that the conditional nature of a purchase agreement should neither
defeat equitable ownership nor impede the prospective purchaser’s ability to seek a tax exemption
for the ensuing year. Depending on the amount at issue and the purchaser’s financial
circumstances, the purchaser may need to know whether a tax exemption is available before

                                                5
              Accordingly, we agree with Hospital that it had standing to seek a tax
exemption prospectively for tax year 2018 while Tower Health’s purchase
transaction was pending.

                            B. Waiver of Issues on Appeal
              Rule 1925(a) of the Pennsylvania Rules of Appellate Procedure
requires a trial court, upon receipt of a notice of appeal from its decision, to provide
a written opinion explaining the reasons for its decision. Pa. R.A.P. 1925(a). Rule
1925(b)(4) provides, in pertinent part:
              (b) Direction to file statement of errors complained of on
              appeal; instructions to the appellant and the trial court.—
              If the judge entering the order giving rise to the notice of
              appeal (“judge”) desires clarification of the errors
              complained of on appeal, the judge may enter an order
              directing the appellant to file of record in the trial court
              and serve on the judge a concise statement of the errors
              complained of on appeal (“[1925(b)] Statement”).
                     ....
                     (4) Requirements; waiver.
                            (i) The [1925(b)] Statement shall set forth
                            only those errors that the appellant intends to
                            assert.
                            (ii) The [1925(b)] Statement shall concisely
                            identify each error that the appellant intends
                            to assert with sufficient detail to identify the
                            issue to be raised for the judge . . . .
                            ....

finalizing the purchase transaction, as the purchase might not be financially feasible if the
exemption will not be available.

                                             6
                          (iv) The [1925(b)] Statement should not be
                          redundant or provide lengthy explanations as
                          to any error. Where non-redundant, non-
                          frivolous issues are set forth in an
                          appropriately concise manner, the number of
                          errors raised will not alone be grounds for
                          finding waiver.
                          (v) Each error identified in the [1925(b)]
                          Statement will be deemed to include every
                          subsidiary issue that was raised in the trial
                          court . . . .

Pa. R.A.P. 1925(b)(4).
             Here, the trial court ordered Hospital to file a 1925(b) Statement.
Hospital filed a 1925(b) Statement that was 19 pages long with 42 numbered issues
and 49 sub-issues in paragraph 42, a total of 90 issues and sub-issues. Application
to Dismiss, Ex. A. In its Rule 1925(a) opinion, the trial court posited that Hospital
violated Rule 1925(b)’s conciseness requirement. 1925(a) Op. at 3. Notably, the
trial court expressly declared it was hampered in issuing its 1925(a) Opinion by the
1925(b) Statement’s lack of conciseness. Id.
             Consistent with the trial court’s Rule 1925(a) Opinion, the Board filed
an application for relief in the form of a motion to dismiss the appeal. The Board
argues that Hospital’s failure to comply with Rule 1925(b) waived all issues. We
agree.
             In Eiser v. Brown & Williamson Tobacco Corp., a plurality of our
Supreme Court opined that the number of issues in a 1925(b) statement should not,
standing alone, result in waiver. 938 A.2d 417, 427 n.16 (Pa. 2007). The current
Rule 1925(b)(4)(iv) reflects that principle. See Pa. R.A.P. 1925(b)(4)(iv). In
determining whether waiver is appropriate, a court should consider whether the
circumstances indicate a lack of good faith by the appellant. Eiser, 938 A.2d at 427
                                         7
n.16.       However, lack of good faith may be inferred from the degree of
noncompliance with Rule 1925(b), including lack of conciseness; a 1925(b)
statement must not be “so lengthy that it does not meet the goal of narrowing down
the issues previously raised to the few that are likely to be presented to the appellate
court without giving the trial judge volumes to plow through.” Commonwealth v.
Reeves, 907 A.2d 1, 2-3 (Pa. Super. 2006); see also Jones v. Jones, 878 A.2d 86, 89-
90 (Pa. Super. 2005) (7-page statement listing 29 issues in narrative form showed
lack of good faith effort to comply with Rule 1925(b); “such ‘voluminous’
statements do not identify the issues that [a]ppellant actually intends to raise on
appeal because the briefing limitations contained in [Pennsylvania Rule of Appellate
Procedure] 2116(a)[ ] make[] the raising of so many issues impossible”); Kanter v.
Epstein, 866 A.2d 394, 401 (Pa. Super. 2004) (stating that raising an “outrageous”
number of issues in a 1925(b) statement “deliberately circumvent[s] the meaning
and purpose of Rule 1925(b) and . . . effectively preclude[s] appellate review . . .”);
Mundy v. Bureau of Admin. Adjudication (Pa. Cmwlth., No. 1984 C.D. 2012, filed
Apr. 5, 2013)4 (first citing Eiser; then citing Jones; and then citing Reeves).
               Here, our review of Hospital’s 1925(b) Statement reveals a significant
number of issues that are redundant and/or not concise. Issues and sub-issues are
set forth and discussed in a level of detail more appropriate to a brief than a statement
of issues, in violation of Rule 1925(b)(4)(iv). As a result, many issues that should
constitute single short paragraphs are needlessly expanded, broken out into parts,
and distributed into numerous paragraphs or subparagraphs. Hospital has also
thereby ignored Rule 1925(b)(4)(v)’s admonition that error statements are deemed

        4
         We cite this unreported opinion as persuasive authority pursuant to Section 414(a) of this
Court’s Internal Operating Procedures. 210 Pa. Code § 69.414(a).

                                                8
to include all subsidiary issues properly raised in the trial court. Although the
number of issues alone generally does not trigger waiver, that principle applies only
where the stated issues are concise and not redundant. See Pa. R.A.P. 1925(b)(4)(iv).
That is not the case here. Rather, Hospital forced the trial court to “plow through” a
mass of issues that the trial court expressly stated was an impediment to its
consideration of the issues and preparation of its 1925(a) Opinion.5 1925(a) Op. at
3; see Reeves, 907 A.2d at 2-3.
              Significantly, in its docketing statement, Hospital was able to keep its
statement of issues to two pages with nine issues. Its appellate brief ultimately raised
only six issues, which this Court consolidated to three issues for discussion. Thus,
there was no need or justification for a 1925(b) Statement that listed 10 times more
issues than the docketing statement, 15 times more issues than the statement of
questions in Hospital’s brief, and 30 times the number of actual issues discerned by
this Court.
              This case is analogous to others where waiver has been found. See,
e.g., King v. Riverwatch Condo. Owners Ass’n (Pa. Cmwlth., No. 881 C.D. 2014,
filed Apr. 24, 2015), slip op. at n.6 (finding waiver where 1925(b) statement of errors
was 18 pages long and contained 51 paragraphs) (citing Tucker v. R.M. Tours, 939
A.2d 343 (Pa. Super. 2007), aff’d, 977 A.2d 1170 (Pa. 2009) (finding waiver where
1925(b) statement of errors was 16 pages long and contained 76 paragraphs plus

       5
         At oral argument, Hospital’s counsel indicated that the 1925(b) Statement was initially
made lengthy to ensure that nothing was missed, and then was pared down later for briefing. This
kitchen-sink approach to the 1925(b) Statement is contrary to the very purpose of Rule 1925(b),
which is intended to narrow the issues the trial court must review and address in its 1925(a)
Opinion. See Commonwealth v. Reeves, 907 A.2d 1, 2-3 (Pa. Super. 2006).

                                               9
exhibits)). Indeed, this Court is unaware of any similarly egregious instance where
waiver was not found.
                  For these reasons, we conclude that Hospital has waived all of its issues
on appeal for failure to comply with Rule 1925(b). Nevertheless, we address
Hospital’s appellate issues for completeness. Even if Hospital had not waived all
issues on appeal, we would affirm the trial court’s decision on the merits.

                        C. Entitlement to Real Estate Tax Exemption
                    1. General Legal Requirements for Tax Exemption
                  Pursuant to article VIII, section 2(a)(v) of the Pennsylvania
Constitution, the General Assembly may by law exempt from taxation “[i]nstitutions
of purely public charity . . . .” PA. CONST. art. VIII, § 2(a)(v). In order to implement
article VIII, section 2(a)(v), the General Assembly enacted the Institutions of Purely
Public Charity Act,6 commonly known as Act 55.                     In order to qualify for an
exemption as an institution of purely public charity, an entity must meet both the
constitutional requirements set forth in Hospital Utilization Project v.
Commonwealth, 487 A.2d 1306 (Pa. 1985), known as the HUP test, and the statutory
requirements of Act 55. Mesivtah Eitz Chaim of Bobov, Inc. v. Pike Cnty. Bd. of
Assessment Appeals, 44 A.3d 3, 9 (Pa. 2012). The entity must also comply with any
additional and not inconsistent requirements of the CCAL. See 53 Pa.C.S. § 8812(a)(3)
& (c).
                  The party seeking a tax exemption has the burden of proving its
entitlement to the exemption. See Section 236 of the Tax Reform Code of 1971,7 72
         6
             Act of November 26, 1997, P.L. 508, No. 55, 10 P.S. §§ 371-385.
         7
             Act of March 4, 1971, P.L. 6, as amended, 72 P.S. §§ 7101-10004.

                                                 10
P.S. § 7236; Fayette Res., Inc. v. Fayette Cnty. Bd. of Assessment Appeals, 107 A.3d
839, 844-45 (Pa. Cmwlth. 2014).

                                    2. The HUP Test
                                 a. Legal Requirements
                In order to qualify for an exemption under any law enacted pursuant to
article VIII, section 2, an entity must show that it is an institution of “purely public
charity” by satisfying the five criteria of the HUP test; specifically, the entity must
show that it:
                (a) Advances a charitable purpose;
                (b) Donates or renders gratuitously a substantial portion of
                its services;
                (c) Benefits a substantial and indefinite class of persons
                who are legitimate subjects of charity;
                (d) Relieves the government of some of its burden; and
                (e) Operates entirely free from private profit motive.

HUP, 487 A.2d at 1317.
                An institution advances a charitable purpose “if it benefits the public
from an educational, religious, moral, physical or social standpoint.”          City of
Washington v. Bd. of Assessment Appeals, 704 A.2d 120, 122-23 (Pa. 1997) (citing
HUP, 487 A.2d at 1315). An institution can advance a charitable purpose even
where it accepts payment from those who are able to pay or from Medicare or
Medicaid. See St. Margaret Seneca Place v. Bd. of Prop. Assessment, Appeals &
Rev., 640 A.2d 380, 383 (Pa. 1994) (finding that accepting Medicaid payments was
“perfectly consistent” with a nursing home’s charitable purpose). Further, an
institution relieves the government of some of its burden where “the institution bears
                                            11
a substantial burden that would otherwise fall to the government”; the institution
need not “fully fund[] the care of some people who would otherwise be fully funded
by the government.” Id. at 384.
             The final criterion of the HUP test, operating “entirely free from private
profit motive,” is a major issue in this appeal. In applying this criterion, “surplus
revenue is not synonymous with private profit . . . .” Guthrie Clinic, Ltd. v. Sullivan
Cnty. Bd. of Assessment Appeals, 898 A.2d 1194, 1199 n.6 (Pa. Cmwlth. 2006) (first
citing Wilson Area Sch. Dist. v. Easton Hosp., 747 A.2d 877, 880 (Pa. 2000); and
then citing St. Joseph Hosp. v. Berks Cnty. Bd. of Assessment Appeals, 709 A.2d
928, 938 (Pa. Cmwlth. 1998)). Instead, the analysis focuses on how such revenue is
used, specifically:
             1) Whether the utilization of the revenue is made with the
             expectation of a reasonable return or some non-monetary
             benefit;
             2) Whether the utilization of the revenue ultimately
             supports or furthers the eleemosynary nature of the
             charitable entity; and
             3) Whether the utilization of the revenue inures, directly
             or indirectly, to any private individual related to the
             charitable entity or related organization(s).

Wilson, 747 A.2d at 880. Under the third of these factors, in determining whether
revenue is used in furtherance of an institution’s charitable purpose, courts consider
the compensation of the institution’s executives to determine whether it includes a
“private or pecuniary return.” HUP, 487 A.2d at 1312 (quoting Episcopal Acad. v.
Philadelphia, 25 A. 55, 56 (Pa. 1892)). That analysis requires consideration of
whether the amount of executive compensation is reasonable, and the extent, if any,
to which it is based on the financial performance of the institution. Compare, e.g.,

                                          12
Wilson, 747 A.2d at 881 (upholding a tax exemption where hospital executives
received reasonable salaries and no bonuses or fringe benefits), with In re Dunwoody
Vill., 52 A.3d 408, 423 (Pa. Cmwlth. 2012) (denying exemption where, inter alia,
“a substantial percentage” of executive compensation was based on the institution’s
financial or marketplace performance).

                                      b. Analysis
             Although the evidence described above can be construed as relating to
all of the HUP test’s criteria, the trial court posited that Hospital “chose to address
only whether it met the charitable purpose test” based on “the very fact that it is an
acute care hospital with an open admission policy . . . .” Trial Ct. Op. at 28. The
trial court concluded that the “evidence fails to speak to whether [Hospital] meets
all the criteria set forth in the variety of tests that govern exemption from real estate
taxation.” Id. at 29. Nonetheless, the trial court went on to acknowledge and discuss
Hospital’s arguments under some other factors of the HUP test.

                                   i. Profit Motive
             As this Court has explained, “the diversion of surplus monies into other
entities that have a profit motive is evidence of a profit motive.” Phoebe Servs., Inc.
v. City of Allentown, 262 A.3d 660, 670 (Pa. Cmwlth. 2021), appeal denied, 273
A.3d 509 (Pa. 2022). Here, the trial court found the record did not support the
reasonableness of the management fees and bond interest charges. Thus, the trial
court inferred a profit motive in the payment and collection of unsupported fees and
charges.

                                           13
             The trial court found that Tower Health generates income solely
through charges it imposes on various LLCs, including Hospital, in the form of
management fees, central business office fees, and bond issue interest payment
obligations. Trial Ct. Op. at 13. In the trial court’s view, Tower Health drew money
from the hospitals without sufficient explanation and “at an alarming rate.” Id.
(citing RR at 692a-94a). The trial court observed that Tower Health charged
Brandywine Hospital $2,718,800 in management fees for 2018, $7,422,480 for
2019, and $15,587,155 for 2020. Id. The trial court found no evidence was
presented to support the reasonableness of these “ever-increasing” management fees.
Id. at 14.
             The trial court found that Tower Health improperly charged exorbitant
management fees to all of the hospital LLCs and applied hospital funds for purposes
other than support of the specific hospital. Trial Ct. Op. at 38. Hospital did not
scrutinize whether the management fees were reasonable for the services provided
by Tower Health. RR at 196a (testimony by Hospital’s chief financial officer that
he was not aware of any analysis to determine whether the services Tower Health
provided to Hospital were commensurate with the management fees it charged); see
also Trial Ct. Op. at 36 (observing that “[n]o one questioned” Tower Health’s
executive salaries or why the management fees were so high). Further, the trial court
found that “Tower Health presented no justification for taking such large sums as a
management fee . . . .” Id. at 27.
             The trial court also found the use of interest payments on the bonds for
acquisition of properties other than the hospitals at issue was improper and that
“[n]ot one penny from the bonds were [sic] applied to support and to increase the
efficiency and facilities of each hospital.” Id. at 38-39. The trial court explained

                                         14
that the purchase transaction to acquire the various hospitals involved in Tower
Health’s asset purchase was funded by a $590 million bond issue that served as both
purchase funds and operating capital. Trial Ct. Op. at 12. Although the individual
LLCs did not receive any of the bond issue proceeds directly, they are all part of an
“obligated group,” members of which pledged their assets as collateral for the bond
issue and pay proportional shares of the interest on the bonds. Id.
               Moreover, as discussed below, the trial court observed that the federal
excise tax charged to Tower Health because of its excessive executive compensation
was then assessed by Tower Health against the hospital LLCs; the trial court
concluded “the payments from each hospital to Tower [Health] clearly was [sic] not
then applied to the hospitals’ benefit, but rather to their detriment.” Id. at 39.8
               We find no error in the trial court’s reasoning. Therefore, we agree
with the trial court that Hospital failed to sustain its burden of demonstrating the
absence of a profit motive behind its management fees and bond interest payments.
               Diversion of money to employees through excessive salaries and fringe
benefits may also evidence a private profit motive. Phoebe Servs., 262 A.3d at 670
(first citing St. Margaret, 640 A.2d at 385; and then citing Dunwoody Vill., 52 A.3d
at 422-23).      Notably, tying executive compensation to the entity’s financial
performance is indicative of a profit motive. See Phoebe Servs., 262 A.3d at 670
(citing Dunwoody Vill., 52 A.3d at 423).
               Here, the trial court pointed to substantial salary increases paid to
Tower Health executives, purportedly connected to their work in support of the 2017

       8
         The trial court did not cite to the record for its findings, and Hospital challenges many of
them as not supported by the record. However, the trial court’s decision is supported more by the
evidence it found absent than the purported evidence it referenced.

                                                15
multi-property purchase transaction. Trial Ct. Op. at 14. However, the trial court
found Tower Health’s executives did nothing other than foster the purchase
transaction, and there was no evidence that the executives’ services helped any
individual hospital provide its services. Id. Further, the trial court observed that
Tower Health was subject to a federal excise tax as a nonprofit entity paying its
executives more than $1,000,000 per year. Id. at 16. The trial court intimated that
imposition of the excise tax, which Tower Health passed on to Hospital and the other
new LLCs, was an indicator of unreasonably high executive salaries. See id. at 27-
28.
             The trial court also found that Tower Health’s executive compensation
bonus incentives were weighted 70% on financial performance and 30% on patient
care and patient satisfaction. Trial Ct. Op. at 15. Although Hospital asserts this
figure is without evidentiary support, a Hospital witness acknowledged at trial that
40% of the bonus incentives, their largest single component, was based on achieving
financial performance goals. RR at 244a; see also Hospital’s Br. at 49. The trial
court made no finding of the percentage relationship between potential bonuses and
base salaries. However, even accepting, arguendo, Hospital’s assertion that the
financial performance component was 40% rather than 70% of the bonus incentive,
we nonetheless conclude that tying 40% of incentive bonuses to financial
performance is substantial, as discussed below.
             Further, according to the trial court, “[H]ospital’s expert witness on
compensation . . . testified that this incentive compensation plan was specifically
designed to impact the behavior of the employees and management team. The plan
was to focus their attention on the incentive compensation to drive their behavior to
make more money.” Trial Ct. Op. at 35-36. The trial court found “[i]t was very

                                         16
clear from the testimony of all the witnesses that the health system was set up to be
profitable and to reward executives at all levels when it was. Its goal went far beyond
self-support.” Id. at 36.
             Hospital justified its compensation incentives by asserting that
otherwise it could not attract and retain qualified executives. Trial Ct. Op. at 36; RR
at 233a (positing that competitiveness in recruitment of executives is impacted by
incentive compensation because such incentives “are nearly universal within health
systems”). The trial court found insufficient support for Hospital’s assertion. Trial
Ct. Op. at 36. Instead, the trial court rejected Hospital’s reasonableness argument
regarding Tower Health’s executive salaries in scathing terms:
             The evidence demonstrated that [the Chief Executive
             Officer (CEO)] and the Board of Tower Health were no
             more tha[n] corporate health care raiders. No one
             questioned the executives of Tower Health for what they
             were being paid $2,500,000 per year or why they drained
             $22,000,000 per year from, for example, [the]
             Phoenixville [facility]. Within three weeks of trial, Tower
             [Health] dismissed as employees the President of [the]
             Jennersville [facility] and [] Hospital along with other
             executives and announced that [the] Jennersville [facility]
             would close. Other [h]ospitals have been sold, are for sale,
             or will just be given away as seems will be the case with
             [H]ospital. The goal as evident from the financial
             documentation offered at trial was simple and direct –
             drain the juice out of the hospitals until there was nothing
             left but a dried-out husk and then leave, close the doors, or
             sell what was left. [The] Jennersville [facility] is now
             closed, [Hospital] for sale and while this harvesting
             strategy may not have killed [the] Phoenixville [facility],
             it is left with little more than a skeleton.

Trial Ct. Op. at 36-37.

                                          17
             In Dunwoody Village, this Court explained that the requirements of the
HUP test are separate from those of Act 55. 52 A.3d at 422 (explaining that “an
entity seeking a tax exemption as an institution of purely public charity must first
meet the constitutional requirements of the HUP test before the question of whether
it satisfies the corresponding statutory criteria in act 55 can be addressed”) (citing
Mesivtah Eitz Chaim).      For example, Act 55 requires an applicant for a tax
exemption to demonstrate, in part, that employee compensation “is not based
primarily upon the financial performance of the institution.” Dunwoody Vill., 52
A.3d at 421 (quoting Section 5(c)(3) of Act 55, 10 P.S. § 375(c)(3)) (additional
quotation marks omitted). However, the HUP test, which must be satisfied first,
may preclude a tax exemption even though less the majority of an employee’s
compensation is not based on the institution’s financial performance. Dunwoody
Vill., 52 A.3d at 422.
             In Dunwoody Village, executive compensation “included incentives
related to [the institution’s] financial or marketplace performance,” such that
compensation was based “in part” on the institution’s annual financial performance.
52 A.3d at 422-23. This Court observed that the chief executive officer’s maximum
incentive bonus of 24% of salary and the chief financial officer’s was 18-19%. Id.
at 423. Thus, we observed that “a substantial percentage” of compensation was
based on financial performance. Id. Notably, there was no discussion in Dunwoody
stating how much of the bonus incentive was tied to financial performance rather
than other criteria. See id. Nonetheless, we affirmed a lower court’s decision that
the institutional taxpayer “failed to establish that it operate[d] entirely free from
private profit motive.” Id. (additional citation omitted).

                                          18
             Phoebe Services concerned an application for an exemption from a
business privilege tax imposed by a city ordinance. At issue was whether the
nonprofit taxpayer was a “business” within the meaning of the ordinance, which
defined that term as “any activity carried on or exercised for gain or profit in the
[c]ity.” 262 A.3d at 663. The city argued that the taxpayer operated with a profit
motive because its executive compensation included bonuses based on financial
performance. Id. at 666. This Court found cases analyzing the HUP test’s “private
profit motive” criterion, including Dunwoody Village, to be instructive. Id. at 669.
Contrary to the city’s argument, however, we found the executive compensation in
Phoebe Services was “not directly tied to the financial status of the nonprofit.” Id.
at 671. Thus, Phoebe Services is distinguishable from Dunwoody Village in this
regard.
             There is no bright-line test of what constitutes a substantial percentage
of compensation based on financial performance. In the circumstances of this case,
however, we cannot say that basing 40% of the total incentive bonus on financial
performance was not substantial. Therefore, we conclude that the trial court did not
err in finding Hospital failed to prove it operated free from a profit motive.

                               ii. Gratuitous Services
             The trial court also rejected Hospital’s position that it renders a
substantial portion of its services gratuitously. The trial court pointed to Hospital’s
own application for a sales tax exemption, in which Hospital stated it provided
services to 167,235 people, of whom 127, only .076%, received free services, and

                                          19
8,792, or 5.2%, received fee reductions.9 Trial Ct. Op. at 18; RR at 546a. Hospital
acknowledged that only about 5% of its patients received fee reductions of at least
10% of the cost of goods or services provided to them. RR at 546a. The trial court
found that the percentage of uncompensated care provided by Hospital was “clearly
not substantial.” Trial Ct. Op. at 29. The trial court further found that Hospital’s
evidence of the amounts and percentages of uncompensated care compared to its
total operating expenses “carrie[d] little weight” under the HUP test. Id. The trial
court’s findings of fact were supported by competent evidence. See RR at 546a.
Accordingly, we will not disturb them on appeal.
              Hospital also offered testimony that it satisfied the gratuitous services
requirement for a property tax exemption because of shortfalls in reimbursement
received for care provided to insured patients through Medicare and Medicaid.10
Trial Ct. Op. at 18; see RR at 316a-22a. However, although a Hospital witness
testified that Hospital had a master charge list reflecting the gross charge for each
medical service, no such sheet was produced in evidence and no witness testified to
those charges. Trial Ct. Op. at 18; see RR at 168a & 180a. As the trial court
characterized the evidence, Hospital negotiates payments with “a wide variety of
third-party payors” and then incorrectly “argues that because these negotiations
result in the acceptance of payments that are less than what is initially requested on
the master charge sheet, which are inflated to begin with, [Hospital] must be
considered to have offered uncompensated care.” Trial Ct. Op. at 19.

       9
         The trial court’s calculation of .00076% and .052% mistakenly reflects the raw quotients
as percentage figures.
       10
         The testimony given actually related specifically to Act 55 criteria, not the HUP test.
See RR at 306a-07a & 309a. However, a gratuitous service requirement exists in both Act 55 and
the HUP test.

                                               20
               Hospital correctly asserts that reimbursement shortfalls from Medicare
and Medicaid may constitute donations of gratuitous services. See Wilson Area Sch.
Dist., 747 A.2d at 878 (stating that “the total value of [] Hospital’s services that were
rendered gratuitously to individuals . . . includ[es] traditional uncompensated charity
care, Medicaid and Medicare shortfalls, and bad debt expenses”); St. Margaret
Seneca Place, 640 A.2d at 382-83 (positing that “[o]ur prior decisions do not equate
the acceptance of Medicaid payments as the equivalent of conducting a business for
profit. The decision to accept Medicaid payments to help defray the cost of care for
residents is perfectly consistent with a finding that the nursing home advances a
charitable purpose.”); Lewistown Hosp. v. Mifflin Cnty. Bd. of Assessment Appeals,
706 A.2d 1269, 1272 (Pa. Cmwlth. 1998) (stating that shortfalls in cost
reimbursement by Medicare and Medicaid reflect gratuitous donation of services).
However, the trial court rejected Hospital’s argument that reimbursement shortfalls
for Medicare and Medicaid patients constituted gratuitous services in this case. We
discern no error in the trial court’s determination.
               First, the trial court observed that Hospital did not consider whether
patients with Medicare or Medicaid coverage also had supplemental insurance to
cover shortfalls in Medicare or Medicaid reimbursements. Trial Ct. Op. at 20 & 30.
In addition, the trial court rejected the reliance on “Trend Reports”11 by Hospital’s
accounting expert, Robert Cepielik (Cepielik) to support his payment shortfall
calculations; the trial court found the Trend Reports were “unreliable” and based on
“numbers not properly audited.” Id. at 30. The trial court likewise rejected

       11
          A Trend Report is “a summary report that will give . . . gross revenues, deductions, [and]
net revenue from the general ledger system . . . . [I]t indicates an estimation, a combination of the
difference between gross charges and what [Hospital] got paid and an estimation on the unpaid
claims.” RR at 293a.

                                                21
Cepielik’s testimony that his opinion was based on “[generally accepted accounting
principles (GAAP)]-like” numbers,12 positing that “[t]here is no such thing. This is
a binary selection.       Figures relied upon either were or were not prepared in
accordance with GAAP. These were not.”13 Id.
               Moreover, in considering whether Hospital’s gratuitous services
relieved the government of some of its burden, the trial court observed that Medicare
reimburses about 9% of the master charge sheet amounts, while Blue Cross pays
only 5.73% of such amounts. Trial Ct. Op. at 32. The court found that “[a] clear
financial reason to take more government insurance patients is the higher
reimbursement rate.” Id. The trial court reasoned further:
               The testimony and data clearly lead to a conclusion that
               the government is assuming more of [the] obligation or
               burden to provide health care. One could conclude that in
               1985, the Supreme Court recognized in HUP that if the
               government was only paying for 11% of the population’s
               health care, a given hospital [was] relieving the government
               of 89% of its burden. In 2019, the government was now
               paying nearly one-half of the population’s health care
               costs. Rather than relieving the government of a burden,
       12
            When asked whether he followed GAAP in calculating the amount of Hospital’s
uncompensated care, Cepielik hedged, “I followed – I think that these are GAAP calculations
because the information that is contained in here is either a GAAP number or information that is
an input to the GAAP number, or it contains information and is calculated based upon the starting
point of the GAAP number.” RR at 323a. On further questioning, he stated that Hospital’s books
and general ledger “are maintained on a GAAP basis or support GAAP basis financial statements
. . . . So my estimate of what the revenue is a GAAP type estimate.” Id. at 325a. Cepielik also
explained that “[a]n audit is a procedure by which a firm of independent accountants test[s] and
reviews and examines financial records to opine if management has maintained the records of the
organization on the basis of [GAAP] . . .” and that Hospital does not have audited financial
statements. Id. at 328a.
       13
           We note that the specific recognition of GAAP calculations, like that of calculating
gratuitous services as a percentage of operating expenses, is found in Act 55 rather than expressly
required under the HUP test. See 10 P.S. § 375(f)(3). The trial court acknowledged as much in
its discussion of GAAP in relation to the HUP test. Trial Ct. Op. at 30 n.2.

                                                22
               [Hospital’s] financial model in place is to increase [the]
               burden on the government and reliance on government
               insurance payments.

Id. at 31-32 & nn.3-4 (first citing Health Care Fin. Rev., 199214; and then citing U.S.
Census Bureau Current Population Survey, 2020 Annual & Economic Supplement).
In addition, the trial court found that the evidence showed the costs listed on the
master charge sheet were “meaningless” and that “the reimbursement percentage
stated above is likely higher or is closer to actual costs of services.” Trial Ct. Op. at
32. The trial court reasoned:
               There was no testimony as to the cost of a procedure or
               what any of the now multiple insurance plans pay for that
               procedure. That information was solely within the control
               of [] Hospital. It could have produced the agreements and
               financial arrangements, under a confidentiality agreement
               if necessary, thus allowing a proper analysis[,] but it did
               not. The conclusion left to be reached is that such
               information would not support [Hospital’s] exemption
               argument. Although uncompensated Medicare costs may
               be considered in an exemption analysis, the evidence
               offered at trial leaves the court merely to speculate as to
               the amounts of uncompensated care.

Trial Ct. Op. at 32-33.
               The trial court similarly found Hospital failed to establish that its bad
debt write-offs constituted gratuitous donations of care for tax exemption purposes.
The trial court explained:

       14
           The Health Care Financing Review was a journal “released from 1979 and 2009 with
the goal of presenting information and analyses on a broad range of health care financing and
delivery issues to improve the understanding of the Medicare and Medicaid Programs and the U.S.
health care system”; it is currently archived on the website of the Centers for Medicare & Medicaid
Services. See https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-
Reports/Archives/HCFR (last visited Jan. 18, 2023).

                                               23
             [A Hospital witness] testified that the bad debt write-offs
             were on accounts for patients that [H]ospital[] determined
             had the financial means to pay. To write these amounts
             off is not charity when [H]ospital[] decided not to pursue
             the collection of these accounts even though there was, in
             [H]ospital’s determination, a means to pay. The ever
             increasing []bad debt[] write-offs do not equal an increase
             in donated care, to those []who otherwise could not afford
             to pay.[]

Trial Ct. Op. at 33 (quotation marks omitted).
             We agree with the trial court that Hospital failed to show the amount of
gratuitous services it provided because it did not provide information concerning
whether patients receiving free, discounted, or unreimbursed services actually had
the ability to pay the full costs. Although inability to pay is not expressly part of the
HUP test, it was recognized as relevant to gratuitous services in St. Margaret Seneca
Place. See 640 A.2d at 384; accord Dunwoody Vill., 52 A.3d at 421 (affirming a
finding that the operator of a nonprofit retirement community failed to demonstrate
that it relieved the government of part of its burden, where most of its residents could
afford to pay the applicable fees and costs). We conclude that the trial court did not
err in determining that gratuitous services to persons who can afford to pay do not
satisfy any factor of the HUP test.

                                  3. Act 55 Factors
                               a. Legal Requirements
             The requirements of Act 55 are similar but not identical to those of the
HUP test. The statement of legislative purpose of Act 55, set forth in Section 2(b),
provides in full:
             It is the intent of the General Assembly to eliminate
             inconsistent application of eligibility standards for
                                           24
             charitable tax exemptions, reduce confusion and
             confrontation among traditionally tax-exempt institutions
             and political subdivisions and ensure that charitable and
             public funds are not unnecessarily diverted from the public
             good to litigate eligibility for tax-exempt status by
             providing standards to be applied uniformly in all
             proceedings throughout this Commonwealth for
             determining eligibility for exemption from State and local
             taxation which are consistent with traditional legislative
             and judicial applications of the constitutional term
             “institutions of purely public charity.”

Section 2(b) of Act 55, 10 P.S. § 372(b); see also WRC N. Fork Heights, Inc. v. Bd.
of Assessment Appeals, 917 A.2d 893, 907 n.15 (Pa. Cmwlth. 2007). Consequently,
Act 55’s requirements are specified in much greater detail than the HUP test
provides.
             Section 5(a) of Act 55, 10 P.S. § 375(a), requires an entity seeking a tax
exemption as an institution of purely public charity to satisfy Sections 5(b) through
5(f). Although Section 5 is lengthy, the following provisions are most pertinent here:
             (c) PRIVATE PROFIT MOTIVE.—The institution must
             operate entirely free from private profit motive.
             Notwithstanding whether the institution’s revenues
             exceed its expenses, this criterion is satisfied if the
             institution meets all of the following:
                   (1) Neither the institution’s net earnings nor
                   donations which it receives inures to the benefit of
                   private shareholders or other individuals . . . .
                   ....
                   (3) Compensation, including benefits, of any director,
                   officer or employee is not based primarily upon the
                   financial performance of the institution.
                   ....
             (f) GOVERNMENT SERVICE.—The institution must
             relieve the government of some of its burden. This

                                         25
               criterion is satisfied if the institution meets any one of the
               following:
                       (1) Provides a service to the public that the
                       government would otherwise be obliged to fund or
                       to provide directly or indirectly or to assure that a
                       similar institution exists to provide the service.
                       ....
                       (3) Receives on a regular basis payments for services
                       rendered under a government program if the
                       payments are less than the full costs incurred by the
                       institution, as determined by generally accepted
                       accounting principles.
                       ....

10 P.S. § 375(c)(1) & (3) & (f)(1) & (3).

                                           b. Analysis
               For this test, the trial court opined that Hospital focused solely on the
“community service” factor.           Trial Ct. Op. at 39-40. Reiterating the Act 55
requirement that calculations be based on GAAP, 10 P.S. § 375(f)(3), the trial court
rejected Cepielik’s calculations as noncompliant, as it had under the HUP test,
because they were based on “GAAP-like” or “non-GAAP numbers.”15 Id. at 40.
The trial court suggested Cepielik could and should simply have obtained audited
financial statements, which are prepared in accordance with GAAP.16 Id. Therefore,
the trial court inferred from the failure to produce or use such reports that they would
have been unfavorable to Hospital’s position. Id.

       15
         The trial court did not separately discuss other Act 55 factors, instead referring generally
to its HUP discussion. Trial Ct. Op. at 39-40.
       16
          Although Hospital does not have separate audited financial statements, Tower Health’s
audited financials relate to all of the new LLCs. RR at 172a & 328a.

                                                26
             The trial court found Hospital failed to demonstrate that it applied
GAAP in calculating its financial evidence. Trial Ct. Op. at 30. We discern no error
in the trial court’s finding. Therefore, we agree with the trial court that Hospital
failed to demonstrate compliance with Act 55’s requirements.

                                  4. CCAL Factors
                               a. Legal Requirements
             The CCAL “is to be read in para materia with” Act 55; Act 55
supersedes any inconsistent provision of the CCAL. 53 Pa.C.S. § 8812(c).
             Under Section 8812(a)(3)(i) and (iii) of the CCAL, any hospital that is
“founded, endowed, and maintained by public or private charity” is exempt from
county and local taxes so long as the following apply:
             (i) The entire revenue derived by the entity is applied to
             support the entity and to increase the efficiency and
             facilities of the entity, the repair and the necessary increase
             of grounds and buildings of the entity and for no other
             purpose.
             (ii) The property of purely public charities is necessary to
             and actually used for the principal purposes of the
             institution and not used in such a manner as to compete
             with commercial enterprise.

53 Pa.C.S. § 8812(a)(3)(i) & (ii). The CCAL applies to all second class A through
eighth class counties. Chester County is a third class county.

                                      b. Analysis
             The trial court limited its discussion of the CCAL to Section 8812(b)(1),
which renders real property subject to taxation if “any income or revenue is derived,
other than from the recipients of the bounty of the institution or charity.” 53 Pa.C.S.
                                           27
§ 8812(b)(1); Trial Ct. Op. at 41. The trial court did not separately discuss other
CCAL factors, referring again instead generally to its HUP and Act 55 discussions.
Trial Ct. Op. at 41.
             The trial court found that Hospital derived income other than from the
recipients of its bounty because non-employee physicians with privileges at Hospital
are part of for-profit medical practices and bill patients directly for their services.
Trial Ct. Op. at 41.      Moreover, Hospital pays some independent contractor
physicians to provide services in operating and emergency rooms; the trial court
found that the income used to pay these physicians “was not derived from the
recipients of [H]ospital’s services.” Id. at 41-42. The trial court concluded that
allowing physicians from for-profit practices to have staff privileges at Hospital’s
facility violates the CCAL.
             We question the trial court’s reasoning on this issue.              Section
8812(b)(1) of the CCAL, cited by the trial court, renders taxable “all property from
which any income or revenue is derived, other than from the recipients of the bounty
of the institution or charity.” 53 Pa.C.S § 8812(b)(1). The trial court interpreted this
provision to mean that “[H]ospital cannot use property it owns to derive[] income
from sources other than patients.” Trial Ct. Op. at 41. However, it is unclear how
the trial court thought Hospital received such income. Where third-party physicians
who are members of for-profit medical practices serve patients at Hospital’s facility
pursuant to their staff privileges, the patients pay the doctors, not Hospital, for those
services. Id. In addition, those patients are also Hospital patients paying separately
for Hospital’s services, so any patient payments made to the third-party doctors are
still being paid by the recipients of Hospital’s bounty. To the extent that Hospital

                                           28
purchases some physician services from a medical group owned by Tower Health,
the trial court did not explain how that constitutes income or revenue to Hospital.
              For these reasons, we believe the trial court erred in finding that
Hospital derived income other than from the recipients of its bounty. However,
because we have determined that the trial court correctly found Hospital failed to
meet the requirements of the HUP test and Act 55, any error in the trial court’s
analysis under the CCAL was harmless.

                   D. Improper Consideration of Expert Testimony
              Hospital argues that the trial court erred in considering the testimony of
the taxing bodies’ expert witness, Bruce Loch (Loch), who did not testify in this
case, but rather, in separate trials concerning two other LLC entities created by
Tower Health after its purchase transaction. Hospital’s Br. at 29-31. Loch asserted
that (1) Cepielik relied on calculations regarding gratuitous services that were not in
accordance with GAAP, (2) 70% of the bonus incentives for Hospital’s executives
was based on Hospital’s financial performance, and (3) granting hospital privileges
to non-employee physicians violated CCAL requirements for tax exempt status. Id.
at 30.    Because the trial court’s opinion, which decided the tax exemption
applications of all three LLCs, was consistent with Loch’s assertions, Hospital infers
that the trial court must have relied improperly on Loch’s testimony in deciding this
case. See id. We believe this inference is largely unsupported by the record, and
further, any error the trial court may have made was insufficient to require reversal
of its decision.
              Although Loch did not testify at the trial of this matter, there was
substantial cross-examination of Cepielik concerning his use of non-GAAP

                                          29
calculations in forming his opinion. See discussion above at 21-22 & n.12. Thus,
contrary to Hospital’s assertion, the issue was certainly raised at the trial of this case.
There was competent record evidence to support the trial court’s conclusion on the
GAAP issue without reliance on Loch’s testimony in the other cases. Indeed, the
trial court did not mention Loch’s testimony in its GAAP discussion; rather, the trial
court’s discussion of the GAAP issue related solely to information elicited from
Cepielik on cross-examination. See Trial Ct. Op. at 30 & 40.
             Hospital correctly observes there was no testimony in this case that 70%
of Hospital’s executive bonus incentives were tied to financial performance goals.
See Trial Ct. Op. at 35 (citing Loch’s testimony as the source of the 70% figure).
However, as stated above, a Hospital witness acknowledged at trial that 40% of the
bonus incentives, their largest single component, was based on achieving financial
performance goals. RR at 244a; see also Hospital’s Br. at 49. Although Hospital
contends that the 70% figure was improperly derived from testimony in other cases,
it does not specifically assert that basing 40% rather than 70% of a bonus incentive
on financial performance goals would render the bonus incentives compliant with
the HUP test or Act 55. Instead, Hospital posits that the proper calculation is the
percentage of an executive’s overall compensation package that is tied to financial
performance and argues that percentage is not substantial. See Hospital’s Br. at 15-
17 & 49-50. The trial court obviously did not accept Hospital’s argument. Further,
Hospital argued that it did not rely substantially on financial performance in
awarding executive bonuses because it had in place a “circuit breaker” that allowed
it to suspend executive bonuses under certain conditions, and that circuit breaker
actually resulted in no executive bonuses during most of the tax years at issue

                                            30
because of the COVID-19 pandemic. Id. at 50. The trial court rejected this
argument, explaining:
               The bonus compensation plan remained in place, whether
               paid or not. The fact that the executive compensation plan
               was suspended only further serves to emphasize that
               [H]ospital did not operate entirely free from private profit
               motive. Contrary to [H]ospital[’s] arguments, the “circuit
               breaker” demonstrates that a bad year resulted in financial
               consequences to the executives. Whereas a good year or
               a “profitable” year resulted in large payouts to selected
               people.

Trial Ct. Op. at 37.17 We conclude that, in the context of the trial court’s overall
reasoning, its use of the 70% figure rather than the 40% figure was harmless error.
               For these reasons, any error the trial court committed in citing evidence
from related cases was harmless.

                         E. Application to Strike Brief of Amici
               Hospital filed an application for relief asking this Court to strike the
brief of amici Patientrightsadvocate.org and Families USA on the basis that the brief
relied on matters that were outside the record or raised issues that were not preserved.
This Court does not consider evidence outside the record. See Tennyson v. Zoning
Hearing Bd. of W. Bradford Twp., 952 A.2d 739 (Pa. Cmwlth. 2008) (stating that
assertions outside of the record may not be considered on appeal). Further, we do

       17
          In addition, we note that one of Hospital’s compensation experts specifically advocated
for executive incentives based on financial performance, asserting that lowering base salary and
adding such incentives protects the nonprofit employer by shifting some of the risk of financial
underperformance onto the employee. RR at 436a & 444a. This may be a sound business strategy,
but it is directly contrary to the requirements of the HUP test and Act 55 that executive
compensation must not be tied to the entity’s financial performance if the entity is to qualify for a
tax exemption as a nonprofit organization.

                                                31
not consider any legal arguments not preserved by the parties and amici may not
assert such arguments. See Stilp v. Commonwealth, 905 A.2d 918, 928 n.14 (Pa.
2006) (noting that amici must take the issues as raised by the parties and cannot
inject new issues that the parties have not preserved). Therefore, we have not
considered any extra-record information contained in the brief filed by the amici.
Accordingly, we dismiss Hospital’s application for relief as moot.

                                  IV. Conclusion
             Based on the foregoing analysis, we grant the Board’s application for
relief and dismiss Hospital’s appeal because Hospital’s noncompliance with Rule
1925(b)(4) resulted in waiver of all issues on appeal. We dismiss as moot Hospital’s
application to strike the brief of amici Patientrightsadvocate.org and Families USA.

                                       __________________________________
                                       CHRISTINE FIZZANO CANNON, Judge

Judge Wallace did not participate in the decision in this case.

                                         32
          IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Brandywine Hospital, LLC,                :   CASES CONSOLIDATED
                 Appellant               :
                                         :
             v.                          :
                                         :
County of Chester Board                  :
of Assessment Appeals and                :   Nos. 1279, 1280, 1283 & 1284 C.D. 2021
Coatesville Area School District         :

                                    ORDER

             AND NOW, this 10th day of February, 2023, the applications for relief
of the County of Chester Board of Assessment Appeals are GRANTED, and the
appeals of Brandywine Hospital, LLC (Hospital) are DISMISSED.             Hospital’s
applications to strike the briefs filed by Patientrightsadvocate.org and Families USA
as amici curiae are DISMISSED AS MOOT.

                                       _________________________________
                                       CHRISTINE FIZZANO CANNON, Judge