No. 71 W.D. Appeal Docket 1983, Appeal from the Order of the Commonwealth Court dated September 19, 1983,*fn* entered at No. 97 C.D. 1983
D.R. Pellegrini, City Sol., Marvin A. Fein, Deputy City Sol., Pittsburgh, for appellants.
Lawrence B. Nydes, Carroll F. Purdy, Pittsburgh, for Equitable Gas Co.
Richard S. Herskovitz, Harrisburg, for Pa. Public Utility Com'n.
Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Hutchinson, J., files a dissenting opinion.
This is an appeal from an Order of the Commonwealth Court dismissing preliminary objections and granting peremptory judgment in mandamus for Equitable Gas Company ("Equitable") and the Pennsylvania Public Utility Commission ("PUC") against the City of Pittsburgh ("City"). The result reached by the Commonwealth Court seriously undercuts a carefully designed legislative scheme intended to provide the municipality with a right of set-off against persons having claims or accounts against the political subdivision. The Commonwealth Court has also ignored the clear pronouncements of this Court in setting forth the prerequisites for the issuance of mandamus. We are therefore constrained to reverse the instant order and to remand the matter to the Court of Common Pleas of Allegheny County for resolution.
This case arose out of two separate proceedings before the PUC in which the City was ordered to reimburse Equitable a total of $114,890.67 for the latter's relocation costs in connection with the construction of new City bridges. These orders were entered against the City on August 10, 1981 and December 31, 1981. No appeal was taken from these orders. Subsequently, in 1982 when presented with invoices from Equitable, the City made a demand for payment
from Equitable of annual permit fees totaling $208,620.00 and informed Equitable that a set-off in the amount owed under the PUC orders would be made. Equitable rejected this arrangement and demanded payment of its claimed debt by instituting an action in the Commonwealth Court in mandamus against the City for a total amount of $114,890.67.
The Commonwealth Court ruled sua sponte on January 14, 1983 that it did not have jurisdiction over the action under 42 Pa.C.S. § 761(c) because the PUC was not a party to the action, and ordered the case transferred to the Court of Common Pleas of Allegheny County. Equitable then filed an application for reconsideration on January 28, 1983 stating that it intended to petition the PUC to join as a party-petitioner. On February 1, 1983, while that application was pending, the City informed Equitable that it was bound by statute, Act of July 1, 1937, P.L. 2611, as amended, 53 P.S. §§ 7231 et seq. (1972), to set-off the orders against the amount Equitable owed to the City. The City also stated that under section 7233, Equitable was required to enter into an agreement with the City and that should it fail to do so, the City would take action pursuant to section 7234. The City instituted an action for set-off in the Common Pleas Court of Allegheny County upon Equitable's failure to recognize the City's right of set-off.
The Commonwealth Court on March 4, 1983 stayed its previous order directing transfer of the matter to the court of common pleas, pending the PUC response to the joinder petition. On May 20, 1983 the PUC requested the right to join as party-petitioner and that request was granted by the Commonwealth Court. Thereafter, the PUC filed a motion for peremptory judgment which was also granted. We are now called upon to ...