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CARROLL TOWNSHIP AUTHORITY v. MUNICIPAL AUTHORITY CITY MONONGAHELA (12/04/86)

decided: December 4, 1986.

CARROLL TOWNSHIP AUTHORITY, APPELLANT
v.
MUNICIPAL AUTHORITY OF THE CITY OF MONONGAHELA, APPELLEE



Appeal from the Order of the Court of Common Pleas of Washington County in the case of Carroll Township Authority v. Municipal Authority of the City of Monongahela, No. 140 May Term, 1985.

COUNSEL

George M. Lynch, with him, Paul N. Barna, Jr., for appellant.

Mark A. Willard, Eckert, Seamans, Cherin & Mellott, with him, Jack H. France, Murphy & France, for appellee.

Judges MacPhail, Colins and Palladino, sitting as a panel of three. Opinion by Judge MacPhail. Dissenting Opinion by Judge Palladino.

Author: Macphail

[ 102 Pa. Commw. Page 364]

Carroll Township Authority (Carroll Authority) appeals from an order of the Court of Common Pleas of Washington County which dismissed a complaint filed by Appellant based on the court's conclusion that the

[ 102 Pa. Commw. Page 365]

    action was barred by the doctrine of res judicata. We affirm.

The pertinent history in this matter dates to 1971, when Carroll Authority entered into an agreement with the Municipal Authority of the City of Monongahela (Monongahela) for the transportation, treatment and disposal of wastewater from Carroll Township. Monongahela has been receiving and treating the wastewater since late 1978, when construction on an expanded wastewater treatment plant was completed.

In 1982, Monongahela filed a civil action against Carroll Authority seeking to collect unpaid charges which Monongahela alleged were due and owing by Carroll Authority under the terms of the 1971 agreement.

In 1983, Carroll Authority filed an action against Monongahela alleging that certain rates charged by Monongahela were unreasonable, lacking in uniformity and violative of Section 4(B)(h) of the Municipality Authorities Act of 1945, Act of May 2, 1945, P.L. 382, as amended, 53 P.S. ยง 306(B)(h). Following the resolution of preliminary objections and the filing of an amended complaint, Carroll Authority filed a further pleading entitled Reply to Counterclaim in the Nature of New Matter, wherein it raised the claim which is central to the instant matter. That claim asserted Carroll Authority's right, upon the successful conclusion of its action challenging the sewage rates, to a credit against past sewage charges paid and a discount against future charges commensurate with the amount of legal fees incurred by Monongahela in litigating the extant suits. In short, Carroll Authority requested that the trial court prevent Monongahela from including its legal fees as an operating expense in the sewage rates charged to Carroll Authority. Carroll Authority claimed that any present or future legal fees incurred as a result of the subject litigation must be recouped from users other than itself.

[ 102 Pa. Commw. Page 366]

Monongahela filed preliminary objections, including a demurrer, to the "New Matter." The trial court, by order dated April 22, 1985, sustained the demurrer ruling, in pertinent part, that "[s]ince we conclude that counsel fees are a necessary part of the operating expenses of [Monongahela], Carroll Authority may not assert any claim in the nature of a credit or any claim for future expenses." Carroll Township Authority v. Municipal Authority of the City of Monongahela, 65 Wash. 192, 194 (C.P. Pa. 1985).*fn1 Carroll Authority did not appeal from this ruling.*fn2

On May 13, 1985, Carroll Authority filed a second action against Monongahela. The 1985 action alleges that the rates charged by Monongahela for calendar year 1985 are unreasonable in that they include $120,000 in operating expenses attributable to legal fees which "shall or might" arise solely as a result of the litigation between Carroll ...


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