Appeal from the Order of the Court of Common Pleas of Lebanon County in case of Hiester R. Gingrich v. City of Lebanon; George H. Heverling, Jr., Mayor; Richard A. Bleistine, Councilman; Betty J. Eiceman, Councilman; Betty H. Shultz, Councilwoman; and Clayton C. Kleinfelter, Jr., Councilman, No. 1612, 1979.
Timothy D. Sheffey, with him James T. Reilly, Egli, Reilly, Wolfson & Feeman, for appellant.
Samuel G. Weiss, Jr., Weiss, Weiss & Weiss, for appellees.
Judges Wilkinson, Jr., MacPhail and Williams, Jr., sitting as a panel of three. Opinion by Judge Williams, Jr.
[ 57 Pa. Commw. Page 595]
Appellant has petitioned for review of the order of the Court of Common Pleas of Lebanon County dismissing his complaint in assumpsit and trespass against the City of Lebanon (City), its Mayor and several members of city council.
That complaint alleged, inter alia, that the City of Lebanon breached its obligation to appellant during the course of his tenure as Chief of Police for the City by allowing the labor contract dated December 13, 1976 to lapse. That agreement which was entered into between the City and the Lebanon Police Department provided insurance coverage for members of the collective bargaining unit against tort liability incurred within the course of their employment and for the costs and fees involved in the defense of lawsuits. The complaint further averred that the City negligently allowed the insurance coverage to lapse, thereby causing appellant to secure private counsel to defend himself in a lawsuit filed against him in September of 1977. Moreover, the complaint alleged that appellant as Chief of Police of the City of Lebanon was a member of the bargaining unit named in the
[ 57 Pa. Commw. Page 596]
agreement, and as such was entitled to benefits under the contract dated December 13, 1976. Alternatively, the complaint averred that by allowing the insurance policy to lapse, the City became self-insured or non-insured. It, therefore, itself owed the appellant the obligation of providing protection from loss and for payment of costs and attorney's fees related to suits arising from the course of appellant's employment. Finally, the suit alleged that as a result of a civil suit filed on September 9, 1977 naming him as defendant, appellant incurred attorney's fees and court costs; and that appellant entered into a settlement agreement which required him to pay $1,000.00 to the plaintiff, all of which amounted to a total sum of $11,536.16.
The background facts relating to the lawsuit in question are as follows: During March of 1977, appellant in his capacity as Chief of Police received an employment inquiry form from the Department of the Air Force at Chicago O'Hare International Airport concerning Michael J. DeLeo, a former Chief of Police of the City of Lebanon. Appellant completed this form and returned it. Apparently, because of the manner in which appellant answered the inquiry, the former Chief, DeLeo, filed suit on September 9, 1977 in the United States District Court for the Northern District of Illinois. That suit alleged that appellant communicated false and defamatory statements to other parties, injuring DeLeo's reputation for integrity, moral conduct and loyalty. Thereafter, on March 15, 1979, the above district court case was dismissed with prejudice following a Stipulation Agreement between the parties that provided for the payment of $1,000.00 to DeLeo.
Appellant's requests that the City of Lebanon provide him with defense counsel were denied by the City and all of its insurance carriers. Appellant then
[ 57 Pa. Commw. Page 597]
requested the City to reimburse him for legal fees, costs and the amount of the settlement agreement. When this was refused, appellant filed the complaint in assumpsit and trespass in the court below. The lower court held that the collective bargaining agreement in question contains an exclusive grievance and arbitration procedure and that appellant has failed to exhaust his remedies under that agreement. Citing the case of Falsetti v. Local Union No. 2026, 400 Pa. 145, 161 A.2d 882 (1960), the lower court concluded that appellant's complaint must be dismissed on the basis of the theory ...