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DANIEL J. SULLIVAN ET AL. v. COUNTY BUCKS AND NESHAMINY WATER RESOURCES AUTHORITY. NESHAMINY WATER RESOURCES AUTHORITY (10/11/85)

decided: October 11, 1985.

DANIEL J. SULLIVAN ET AL.
v.
COUNTY OF BUCKS AND NESHAMINY WATER RESOURCES AUTHORITY. NESHAMINY WATER RESOURCES AUTHORITY, APPELLANT. NORTH WALES WATER AUTHORITY AND NORTH PENN WATER AUTHORITY V. NESHAMINY WATER RESOURCES AUTHORITY AND COUNTY OF BUCKS AND COUNTY OF MONTGOMERY AND PHILADELPHIA ELECTRIC COMPANY. NESHAMINY WATER RESOURCES AUTHORITY, APPELLANT. DANIEL J. SULLIVAN AND PHILADELPHIA ELECTRIC COMPANY, NORTH PENN WATER AUTHORITY AND NORTH WALES WATER AUTHORITY V. COUNTY OF BUCKS AND NESHAMINY WATER RESOURCES AUTHORITY. COUNTY OF BUCKS, APPELLANT



Appeals from the Orders of the Court of Common Pleas of Bucks County in case of Daniel J. Sullivan et al. v. County of Bucks et al., No. 84-8358, and in case of North Wales Water Authority et al. v. Neshaminy Water Resources Authority et al., No. 84-3273.

COUNSEL

Gordon W. Gerber, with him, John F. Flaherty, Jr., Fred T. Magaziner, Lois Reznick, Philip M. Kruger and George G. O'Brien, Dechert, Price & Rhoads, and Robert H. Yaroschuk, for appellant/appellee, Neshaminy Water Resources Authority.

Richard M. Rosenbleeth, with him, Glenn S. Gitomen, William E. Taylor, III, James W. McNamara and Robert J. Sugarman, for appellant/appellee, Bucks County.

Andrew C. Gay, with him, T. J. Scully, Gay and Chacker, for appellee/appellant, Daniel J. Sullivan et al.

Bernard Chanin, with him, Howard Gittis and Jeffrey Saltz, Wolf, Block, Schorr & Solis-Cohen, and Robert W. Valimont, Power, Bowen & Valimont, for appellee/appellant, Philadelphia Electric Company.

Frederick M. Wetz, for appellee/appellant, Montgomery County.

Jeremiah J. Cardamone, with him, Ann Thornburg Weiss, Timoney, Knox, Hasson & Weand, and Joseph Goldberg, Margolis, Edelstein, Scherlis, Sarowitz & Kraemer, for appellees, North Wales Water Authority and North Penn Water Authority.

President Judge Crumlish, Jr., and Judges Rogers, Craig, MacPhail, Doyle, Barry and Colins. Opinion by President Judge Crumlish, Jr. Judge Colins dissents. Judge Palladino did not participate in the decision in this case.

Author: Crumlish

[ 92 Pa. Commw. Page 216]

For our consideration and resolution herein are litigous challenges to the construction of facilities to supply water for cooling a nuclear generating station in Limerick, Montgomery County, Pennsylvania, and meeting the citizens' requirements of Bucks and Montgomery Counties.

This construction has inspired widespread public discussion and disagreement. Notwithstanding that vocal, philosophical and/or political dichotomy, we are obliged and intend to confine our consideration to the merits of the legal issues presented below.

Bucks County and the Neshaminy Water Resources Authority (NWRA) appeal a Bucks County Common Pleas Court order denying their exceptions

[ 92 Pa. Commw. Page 217]

    to its adjudication and decree nisi which entered a verdict against them and in favor of the Philadelphia Electric Company (PECO) and the North Penn (NP) and North Wales (NW) Water Authorities.

Daniel J. Sullivan, a taxpayer, appeals a Bucks County Common Pleas Court order granting the preliminary objections of Bucks County and NWRA and dismissing his third amended complaint.

The purpose of the Point Pleasant water diversion project is to construct a system by which Delaware River water could be withdrawn by the Point Pleasant Pumping Station and pumped through a combined transmission main to the Bradshaw Reservoir and Pump House (Bradshaw) where (1) water for public use by Bucks and Montgomery Counties would flow through the north branch transmission main and along the Neshaminy Creek to the north branch water treatment plant where it would be pumped, in part, to NP and NW and (2) supplemental cooling water for PECO's Limerick nuclear generating station would be pumped through the east branch transmission main and flow along the Perkiomen Creek to the Perkiomen Pump House where it would be withdrawn and pumped to Limerick. Supplemental cooling water is necessary because PECO is prohibited from using Schuylkill River water for several months each year.

PECO and NWRA entered into a Construction and Operation Agreement by which NWRA agreed to construct and maintain the Point Pleasant Pumping Station and combined transmission main, PECO assumed responsibility for constructing Bradshaw (where it agreed to store and release water to flow through the north branch transmission main, at no cost to NWRA) and NWRA assumed sole responsibility for the north branch transmission main. The agreement provides that the project's ultimate capacity

[ 92 Pa. Commw. Page 218]

    is to be 95 million gallons per day (mgd), 49 mgd for NWRA and 46 mgd for PECO. To the extent necessary to insure operation and maintenance of the Point Pleasant Pumping Station and combined transmission main, this agreement provides for assignment by NWRA to Bucks County. The agreement was executed by the required majority of the Bucks County Commissioners.

NWRA, Bucks County and Montgomery County entered into a Water Sales Agreement by which Bucks County agreed to construct (or cause to be constructed by NWRA) the Point Pleasant Pumping Station and combined transmission main and NWRA agreed to construct the north branch transmission main. This agreement provides that 46 mgd is reserved for PECO, in accordance with the Construction and Operation Agreement, while 29.4 mgd is reserved for Montgomery County and 19.6 mgd is reserved for Bucks County. The trial court found that the water reserved for Montgomery County was intended primarily for the benefit of NP and NW, both of which entered into contracts for the water with Montgomery County simultaneously with the execution of the Water Sales Agreement. Montgomery County itself operates no water treatment or delivery facilities.

Later, Bucks County purported to terminate its Construction and Operation Agreement with PECO, demanded that NWRA stop construction of the Point Pleasant Pumping Station and combined transmission main and purported to terminate its obligation to supply water to Montgomery County. Construction recommenced after a thirty-day moratorium. However, the Bucks County Commissioners next passed Ordinance No. 59 which purported to require NWRA to convey the Point Pleasant project to Bucks County (apparently so that they could stop the project).

[ 92 Pa. Commw. Page 219]

Thereafter, the NWRA ordered a second suspension of construction and passed a resolution questioning the validity of the Construction and Operation and Water Sales Agreements. Finally, Bucks County passed a resolution directing NWRA to delete the project from its water supply system.

The trial court's adjudication ordered that (1) NP and NW be assigned ownership of and complete the north branch transmission main and water treatment plant and that portion of the western transmission facilities necessary to transport water to them and that NP and NW reimburse Bucks County and NWRA for all properly incurred costs of these facilities, (2) NWRA complete construction of the Point Pleasant Pumping Station and the combined transmission main and (3) Bucks County comply with its contractual obligations, under the Construction and Operation and Water Sales Agreements, to insure completion of the Point Pleasant Pumping Station and the combined transmission main.

Our scope of review in equity matters is limited to a determination of whether the Chancellor committed an error of law or abused his discretion. Sack v. Feinman, 489 Pa. 152, 413 A.2d 1059 (1980). We will not disturb his findings unless they are unsupported by the evidence or demonstrably capricious. Harrisburg School District v. Pennsylvania Interscholastic Athletic Association, 453 Pa. 495, 309 A.2d 353 (1973).

The major contentions of Bucks County and NWRA are that (1) the Construction and Operation and Water Sales Agreements are invalid, not binding and unenforceable, (2)(a) PECO is not a third-party beneficiary to the Water Sales Agreement, despite its relationship to the Construction and Operation Agreement, and therefore has no standing to enforce

[ 92 Pa. Commw. Page 220]

    it and (b) NP and NW are not third-party beneficiaries to the Water Sales Agreement and therefore have no standing to enforce either agreement, (3) Bucks County and NWRA have breached neither agreement, (4) specific performance is not the appropriate relief, (5) NP and NW are not entitled to assume ownership of and complete the north branch transmission main and water treatment plant and that portion of the western transmission facilities necessary to transport water to them and (6) President Judge Garb improperly refused to recuse himself.

Sullivan argues that the common pleas court erred by granting Bucks County and NWRA's preliminary objections and ...


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