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MUNICIPAL AUTHORITY CITY MONONGAHELA AND CITY MONONGAHELA v. CARROLL TOWNSHIP AUTHORITY AND TOWNSHIP CARROLL. CARROLL TOWNSHIP AUTHORITY (02/27/89)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: February 27, 1989.

MUNICIPAL AUTHORITY OF THE CITY OF MONONGAHELA AND THE CITY OF MONONGAHELA
v.
CARROLL TOWNSHIP AUTHORITY AND THE TOWNSHIP OF CARROLL. CARROLL TOWNSHIP AUTHORITY, APPELLANT. CARROLL TOWNSHIP AUTHORITY AND THE TOWNSHIP OF CARROLL, AND INVOLUNTARY PLAINTIFF V. MUNICIPAL AUTHORITY OF THE CITY OF MONONGAHELA. CARROLL TOWNSHIP AUTHORITY, APPELLANT. MUNICIPAL AUTHORITY OF THE CITY OF MONONGAHELA AND THE CITY OF MONONGAHELA V. CARROLL TOWNSHIP AUTHORITY AND THE TOWNSHIP OF CARROLL. THE TOWNSHIP OF CARROLL, APPELLANT

Appeals from the Orders of the Court of Common Pleas of Washington County, in the case of Municipal Authority of The City of Monongahela and The City of Monongahela v. Carroll Township Authority and The Township of Carroll, No. 217 January Term, 1982, and in the case of Carroll Township Authority and The Township of Carroll, an involuntary plaintiff v. Municipal Authority of The City of Monongahela, No. 442 August Term, 1983.

COUNSEL

George M. Lynch, with him, Paul N. Barna, Jr., for appellant/appellee, Carroll Township Authority.

Virginia Desiderio, with her, Herman J. Bigi, for appellant/appellee, Township of Carroll.

Mark A. Willard, with him, Richard F. Rinaldo, and Eileen R. Sisca, Eckert, Seamans, Cherin & Mellott, and Jack H. France, for appellees/appellants, Municipal Authority of the City of Monongahela and the City of Monongahela.

Judges Colins and McGinley, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge McGinley.

Author: Mcginley

[ 123 Pa. Commw. Page 617]

This is an appeal by the Carroll Township Authority (Carroll Authority) and the Township of Carroll (Township) from the Order of the Court of Common Pleas of Washington County*fn1 (trial court), dated December 3, 1987, affirming its June 11, 1987 orders and dismissing Carroll Authority's various motions for post-trial relief. The Municipal Authority of the City of Monongahela (Mon Authority) and the City of Monongahela (City) have filed a Motion to Quash the Appeal of the Township at No. 326 C.D. 1988, as untimely.*fn2

This case consists of two consolidated civil actions arising out of a written agreement (Agreement) dated May 1, 1971.*fn3 Under this Agreement Mon Authority agreed to receive, transport, and treat sewage coming

[ 123 Pa. Commw. Page 618]

    from portions of the Township.*fn4 Carroll Authority and the Township agreed to pay Mon Authority for the services according to rates and charges set forth in the Agreement. In January 1982, Mon Authority and the City filed an action in assumpsit against Carroll Authority and the Township to collect certain amounts alleged to be due under the Agreement.*fn5 Jack H. France, Esq. (France) entered his appearance for Mon Authority. On February 24, 1982, Herman J. Bigi, Esq. (Bigi) entered his appearance for the Township by filing a Praecipe for Appearance. On February 12, 1982, Paul N. Barna, Jr., Esq. (Barna) entered his appearance for Carroll Authority.

In August 1983, Carroll Authority and the Township instituted an action against Mon Authority to set aside the Agreement pursuant to Section 4 B(h) of the Municipality Authorities Act of 1945 (Act), P.L. 382, as amended, 53 P.S. § 306 B(h) contending that a portion of Mon Authority's rate for sewage treatment was unreasonable and not

[ 123 Pa. Commw. Page 619]

    uniform.*fn6 Mon Authority counterclaimed in the second action and the trial court consolidated the two actions for trial.*fn7

On June 11, 1987, the trial court concluded that "[b]y failing to make payments in accordance with the 1971 agreement, Carroll Authority and Carroll Township are in breach of the agreement. They are jointly and severally liable to Mon Authority for the full amounts due and owing under the agreement." (Opinion and Orders of the trial court, Conclusion of Law No. 7, at 26.) Two orders were issued by the trial court. In the first action, Mon Authority and the City against Carroll Authority and the Township, the trial court found Carroll Authority and the Township jointly and severally liable

     in the amount of $727,164.74, which constitutes past due sewage treatment charges from September 1981 through March 1987, together with 6% simple interest per annum, less any payments which might have been made by the defendants and not computed as of March 31, 1987.

The rates and charges shall continue to be obligated and paid for by the defendants in accordance with the 1971 agreement, plus interest on all past due amounts from April 1, 1987, to the date of this decision at 6% simple interest per

[ 123 Pa. Commw. Page 620]

    annum. . . . (Opinion and Orders of the trial court at 28-29.)

In the action filed by Carroll Authority and the Township against the Mon Authority the trial court held in favor of the Mon Authority and dismissed the action. On the counterclaim filed by the Mon Authority the trial court found in favor of the Mon Authority, declared the Agreement valid and enforceable, and the rates and charges set forth therein uniform and reasonable under Section 4 B(h) of the Act. Finally, the trial court ordered Carroll Authority and the Township to specifically perform all obligations under the Agreement. On December 3, 1987, the trial court affirmed its prior decision and dismissed motions for post-trial relief and entered a final order from which Carroll Authority and the Township filed their appeals.

Mon Authority and the City filed Praecipes for Judgment on the first action (at No. 217, January Term, 1982 A.D.) and Mon Authority filed a Praecipe for Judgment in the second action (at No. 442, August Term, 1983 A.D.) and served them on Barna and on George Lynch, Esq. (Lynch), trial counsel for Carroll Authority and the Township, on December 10, 1987. Notices of Entry of Judgment were mailed by the prothonotary to attorneys Lynch and Barna on December 14, 1987. On December 23, 1987, Carroll Authority filed Notices of Appeal at Nos. 2916 and 2917 C.D. 1988 from the final order. On January 28, 1988, Bigi filed a Notice of Appeal on behalf of the Township. Mon Authority and the City moved to quash the appeal of the Township as untimely on March 4, 1988, at No. 326 C.D. 1988. The Township, per Bigi, filed an answer on March 12, 1988. After oral argument on April 12, 1988, an order was issued denying Mon Authority and the City's Motion to Quash. On April 29, 1988, Mon Authority and the City requested review of

[ 123 Pa. Commw. Page 621]

    the denial of their Motion to Quash the Appeal of the Township. On May 12, 1988, this Court granted reconsideration of Mon Authority's and the City's Motion and vacated its April 22, 1988 order. (See Mon Authority and the City's Exhibit No. 9.) Their Motion to Quash is before this Court at No. 326 C.D. 1988. We will address this Motion first and then we will address the merits of the appeal of the trial court's final order.

I

In support of their Motion to Quash, Mon Authority and the City argue that the Township appeal must be quashed because it was filed more than thirty days after the entry of the trial court's final order and more than thirty days after the Notices of Entry of Judgment were sent. Mon Authority and the City argue that Bigi had been completely inactive in the litigation for over four and a half years and did not attend or participate in the trial of the cases and therefore, the Praecipes for Judgment and the Notices of the Entry of Judgment were properly sent to Lynch and Barna, who represented the Township at trial.

The Township argues that because Bigi entered his appearance on behalf of the Township, was the only attorney listed on the docket as the attorney of record for the Township, and that Bigi had not withdrawn his appearance, and also because no other attorney filed an Appearance with the prothonotary on behalf of the Township, Bigi should have been served with notice of the Praecipes for Judgment and the Notices of Entry pursuant to Pa. R.C.P. No. 1012 and Pa. R.C.P. No. 237.

Pa. R.C.P. No. 1012(a) provides: "A party may enter a written appearance which shall state an address within the Commonwealth at which papers may be served. . . ." Section (b) provides: "An attorney's appearance may not be withdrawn without leave of Court unless another

[ 123 Pa. Commw. Page 622]

    attorney has entered or simultaneously enters an appearance for the party. . . ."

Pa. R.C.P. No. 237 provides:

No praecipe for judgment on a verdict, or for judgment on a decision in a trial without a jury or for a final decree following a decree nisi in equity shall be accepted by the prothonotary unless it includes a certificate that a copy of the praecipe has been mailed to each other party who has appeared in the action or his attorney of record. (Emphasis added.)

One commentator has noted:

The Rule provides, even-handedly, that neither plaintiff nor defendant may file a praecipe to enter judgment on a verdict, or judgment on a decision in a trial without jury, or a final decree following a decree nisi in equity, unless he mails in advance a copy of that praecipe to each party who has appeared in the action or to his attorney at record . . . This will assure that no party will find the time for appeal running against him without his knowledge.

1 Goodrich-Amram 2d. 237:1.

The Township argues that because Mon Authority and the City did not serve Bigi they did not comply with the Rules, and as a result the judgment is a nullity without legal effect. Mon Authority and the City argue that there is no question that the Township's notice of appeal was untimely filed pursuant to Pa. R.A.P. 903(a).*fn8

[ 123 Pa. Commw. Page 623]

Mon Authority and the City argue that notice was sent to the trial attorneys Lynch and Barna and Pa. R.C.P. No. 237 does not require that notice of the Praecipes of Judgment and Notices of Entry must be mailed to every attorney who ever appeared for a party at any time during the history of the litigation but that it can be mailed to the attorney of record. We recognize that if we accept the Township's argument this case would require that notice of Praecipe for Judgment and Notice of Entry be sent to every attorney who ever appeared for any party, regardless of an attorney's lack of continuing involvement in the litigation. Furthermore, Bigi's argument fails in a practical sense because the entry of a written appearance is not mandatory under Pa. R.C.P. No. 1012(a).

Bigi filed his appearance for the Township in 1982, but Lynch and Barna represented both the Township and the Authority at trial.*fn9 Notice given to Lynch and Barna was adequate under Pa. R.C.P. No. 237. The Township's appeal is therefore untimely and the Motion to Quash at No. 326 C.D. 1988, is hereby granted.

II

Several issues are raised in Carroll Authority's appeal from the trial court's final order: whether or not the contract entered into by Carroll Authority with Mon Authority is valid and enforceable; whether a contract entered into pursuant to Section 4 B(p) of the Act, 53 P.S.

[ 123 Pa. Commw. Page 624]

§ 306 B(p)*fn10 subject to the requirement of Section 4 B(h) of the Act that rates be "reasonable and uniform;" whether the overrun rates and charges set forth in the Agreement constitute a manifest and flagrant abuse of discretion or a purely arbitrary establishment of the rate system; whether Carroll Authority is equitably estopped from challenging the system of rates and charges set forth in the Agreement; and finally, whether the proceedings should be dismissed as to the Township even if this Court finds otherwise as to Carroll Authority.*fn11

Our scope of review of trial court decisions in cases involving Section 4 B(h) of the Act is limited to determining whether the factual findings are supported by substantial evidence and whether the law was properly applied

[ 123 Pa. Commw. Page 625]

    to the facts. Life Services, Inc. v. Chalfont-New Britain Township Joint Sewage Authority, 107 Pa. Commonwealth Ct. 484, 528 A.2d 1038 (1987).

We find this Court's recent holding in Township of Aston v. Southwest Delaware County Municipal Authority, 112 Pa. Commonwealth Ct. 434, 535 A.2d 725 (1988),*fn12 dispositive of the first three issues raised. In Aston, this Court held that regardless of whether they meet the requirement of Section 4 B(h) of the Act that all rates charged be "reasonable and uniform." The Court stated:

While Section 4B(h) speaks of fixing reasonable and uniform rates [in the area served by 'a municipality authority's] facilities,' there is no such limitation where an authority contracts with another, presumably outside that area. In the case of a contract under 4B(p), a municipal authority is given the power to fix the rates to be paid for its services, without the statutory limitation that they be 'reasonable and uniform.' The discrepancy is not illogical when the difference between the two situations is examined. In the first case, under Section 4B(h), a municipal authority is granted the exclusive authority to set rates for its services. The recipient of these services has no input into the ratemaking process. It is therefore protected by the provision requiring the rates to be reasonable and uniform and subject to judicial review. Such is not the case when two municipal bodies contract for services, as under Section 4B(p). That section allows a municipal authority to fix the rate

[ 123 Pa. Commw. Page 626]

    for its services, but that rate, of course, will be the subject of negotiation before a contract is concluded. There is nothing in the statute to prevent the inclusion of a clause providing for periodic rate increases and, conversely, nothing to prohibit setting a maximum rate.

Aston, 112 Pa. Commonwealth Ct. at 438-439, 535 A.2d at 728.

Mon Authority and the City argue that even if the Agreement were subject to the requirements of Section 4 B(h) the trial court correctly determined that the Agreement was valid and enforceable. The rates and charges are unlawful only if the trial court properly found they constituted a manifest and flagrant abuse of discretion or a purely arbitrary establishment of a rate system.*fn13 Instead, the trial court found the rates and charges were established by mutual agreement of the parties and uniformly applied and reasonably related to the value of the service rendered by Mon Authority. It found that the rights and duties contained in the written contract were negotiated at arm's-length by parties of substantially equal bargaining power and were not "arbitrary or capricious."

Mon Authority and the City argue that Carroll Authority is equitably estopped, as the trial court found, from challenging the rates and charges set forth in the Agreement which were paid without protest until September,

[ 123 Pa. Commw. Page 6271981]

.*fn14 The trial court did not have the benefit of Aston. It did not err. During the period from late 1978 through August of 1981, Carroll Authority paid in full the rates and charges set forth in the 1971 Agreement. The rates and charges now challenged by Carroll Authority are established in the Agreement and constitute a contractual obligation of Carroll Authority which it would be equitably estopped from disclaiming had the trial court not found the rates reasonable and enforceable. The trial court relied upon this Court's decision in White Rock Sewage Corporation v. Township of Monroe, 77 Pa. Commonwealth Ct. 119, 465 A.2d 102 (1983), wherein Monroe Township agreed to treat sewage generated within White Rock Acres, a municipal subdivision. The agreement between White Rock and Monroe Township became effective in August, 1978 and White Rock made payments at the contractually agreed upon rate until September of 1979 when it refused to make further payments. White Rock claimed the rates to which it agreed were excessive. In White Rock, the evidence at trial demonstrated that the amounts owed by White Rock were attributable in large part to unexpectedly high flows in its sewage collection system caused by excessive infiltration and inflow, and not to unreasonable treatment rates. The trial court found in White Rock that the excess costs were the result of an unexpectedly large sewage flow due to a defective condition in White Rock's system. The trial court in the case sub judice, also found that Carroll Authority's sewage collection system suffers from similar defects which have permitted excessive extraneous flows to enter the Carroll Authority system and be delivered to the Mon Authority sewage treatment plant.

[ 123 Pa. Commw. Page 628]

The trial court considered that the Agreement expressly grants Carroll Authority and the Township the option to utilize alternate disposal systems for the treatment of sewage in excess of the contract load of 700,000 gallons per day.*fn15 The trial court's findings are supported by substantial evidence and the law has been properly applied to the facts. Life Services, Inc. Accordingly, we affirm.

Order

And Now, this 27th day of February, 1989, the Motion to Quash the appeal of the Township of Carroll filed by the Municipal Authority of the City of Monongahela and the City of Monongahela at No. 326 C.D. 1988, is hereby granted. The appeal of the Township of Carroll of the Order of the Court of Common Pleas of Washington County, dated December 3, 1987, at Nos. 217, January Term, 1982, and 442, August Term, 1983, is hereby dismissed.

The Order of the Court of Common Pleas of Washington County, dated December 3, 1987, at Nos. 217, January Term, 1982, and 442, August Term, 1983, is hereby affirmed.

Disposition

Motion to quash granted. Lower court order affirmed. Appeal dismissed.


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