Brandywine Hospital, LLC v. County of Chester Board of Assessment Appeals & Coatesville Area S.D.

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.

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(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

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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.,

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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