Appeal from the Order of the Board of Claims in the case of Lhormer Real Estate Agency, Inc. v. Commonwealth of Pennsylvania, Department of General Services and Department of Public Welfare, Docket No. 845, dated May 29, 1987.
David A. Fitzsimons, Assistant Counsel, with him, Michael D. Reed, Chief of Litigation, and P. Alan Zulick, Chief Counsel, for petitioners.
Michael Jon Daley, Daley & Daley, for respondent.
Judges Doyle, Palladino and Smith, sitting as a panel of three. Opinion by Judge Smith. Judge MacPhail did not participate in the decision in this case. Judge Palladino concurs in the result only.
[ 120 Pa. Commw. Page 605]
Petitioners, the Department of Public Welfare and Department of General Services, appeal from an award of the Board of Claims (Board) which ordered and directed that Petitioners pay for all electric bills incurred for office space leased by Petitioners from Lhormer Real Estate Agency (Lhormer). The decision of the Board is reversed.
Questions presented for review are whether the Board erred in holding that the lease agreement was
[ 120 Pa. Commw. Page 606]
based on a mutual mistake of the parties; whether the Board erred in rewriting the lease so as to require Petitioners to pay electric bills; and whether the Board had equitable jurisdiction to reform the terms of the agreement.
Petitioners and Lhormer entered into a lease for office space in a building owned by Lhormer in Clairton, Pennsylvania. The term of this lease was from May 1, 1976 to April 30, 1981, with a five year renewal option extending the lease term to April 30, 1986. In accordance with terms of the lease, Petitioners were to pay for all electricity for lighting and electrical outlets and Lhormer was to pay for all electricity for heating and air conditioning. The renewal option was exercised by Petitioners on January 12, 1981. On July 2, 1981, Lhormer submitted a letter proposal to Petitioners to provide them with additional space. The proposal was received by Leonard Manning, a real estate representative at the Department of General Services, who forwarded a copy thereof to the Department of Public Welfare. The letter proposal contained some handwritten notations by Mr. Manning indicating that Lhormer would pay for all services except janitorial.
A proposal for new space was submitted on August 14, 1981 by Lhormer on the Petitioner's standard lease proposal form and attached to it was a completed sample lease.*fn1 On September 21, 1981, Lhormer sent a revised proposal to Petitioners which stated "that the electricity and the cleaning bill would be paid by the tenant the same as they do in the present building they rent from us." On March 8, 1982, the Department of Public Welfare prepared the proposed lease and other documents on the basis of Mr. Manning's notations on
[ 120 Pa. Commw. Page 607]
the July 2, 1981 letter. N.T., pp. 60-61, October 1, 1985 Hearing. The lease was forwarded to Lhormer for signature which was signed by Lhormer's representative without ...