Appeal from the Order of the Court of Common Pleas of Erie County, in case of Appeal of Auditors' Report of McKean Township, No. 1344-A-1985.
James D. McDonald, Jr., for appellant, Joseph J. Szymanowski.
Ritchie T. Marsh, Marsh, Spaeder, Baur, Spaeder & Schaaf, for appellant, Kenneth Neuberger.
Eugene J. Brew, Jr., McClure, Miller & White, for appellees.
Judges Craig and Palladino, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Craig.
[ 110 Pa. Commw. Page 69]
This is an appeal from a trial court's decision on review of an auditors' report of McKean Township for the year 1984.
The auditors had surcharged two of the township supervisors for compensation which they had received from the township for certain municipal jobs performed in addition to those of supervisors, namely those of township treasurer and superintendent of roads. Although the trial judge dismissed the surcharges against both supervisors, he limited their counsel fee award to the amount of money which the township had received "by virtue of the audit."*fn1 The two township supervisors have appealed that counsel fee award, claiming that they are entitled to reimbursement for all legal costs and expenses incurred, including those costs incurred on appeal here.
The narrow issue*fn2 here is whether the counsel fee award should be limited to an amount not greater than the township's recovery.
[ 110 Pa. Commw. Page 70]
Originally, only the treasurer-supervisor was actively challenging the auditors' surcharge before the trial court. However, after preliminary hearings and pre-hearing conferences, the court determined that the superintendent-supervisor was a necessary party, and the trial judge ordered that he be added as an additional party to the lawsuit. Additionally, the trial judge determined that the township solicitor had a conflict of interest in representing both the township and the individual supervisors, and he ordered the supervisors to retain private counsel.
The final decision on the merits was that the surcharges were unwarranted, under section 545 of the Second Class Township Code, Act of 1933, May 1, P.L. 103, as amended, 53 P.S. § 65545, because the township suffered no loss. There has been no appeal of that determination.
In the February 11, 1986 opinion -- dealing with the determination that the township solicitor had a conflict of interest in representing both the township and the treasurer-supervisor, and that the treasurer-supervisor should retain independent counsel -- the trial judge specifically noted that a potential conflict "could arise by virtue of the fact that if Mr. Szymanowski [treasurer-supervisor] is correct, he should not only not be surcharged but should be entitled to reimbursement for any legal expenses he may incur." Ultimately, when ruling on the supervisors' petitions for reimbursement of counsel fees and expenses, the trial judge reasoned ...