Argued: April 10, 2018
BEFORE: HONORABLE ROBERT SIMPSON, PATRICIA A. McCULLOUGH,
BONNIE BRIGANCE LEADBETTER, Senior Judges.
Express, Inc. (Carload), a private railroad operator, appeals
from an order of the Court of Common Pleas of Clinton County
(trial court) granting summary judgment in favor of Seda-Cog
Joint Rail Authority (Authority) and denying Carload's
summary judgment motion. The Authority is subject to the
Municipal Authorities Act (Act), 53 Pa. C.S.
§§5601-5623. The trial court agreed with the
Authority that a vote of seven of its board members in favor,
three against, and six abstaining was insufficient to award
an operating agreement to Carload. On appeal, we reverse the
trial court's entry of summary judgment in favor of the
Authority, and we remand for entry of summary judgment in
favor of Carload.
Authority owns and maintains rail lines in several
Pennsylvania counties. The Authority contracts with a private
railroad operator to provide the actual freight services on
the rail lines. The current operator is Susquehanna Union
Railroad Company (Susquehanna).
2014, the Authority issued a request for proposals (RFP) for
a new operating agreement. The RFP provided for a two-stage
selection process. The first stage was open to all operators
desiring to submit proposals. From those initial proposals,
the Authority selected three operators to participate in the
second phase. In the second phase, the Authority evaluated
those three operators and assigned point scores for various
criteria. The RFP contemplated that the highest scoring
operator would receive the new operating agreement.
Authority's Board of Directors has 16 members appointed
by the various member counties. Based on their relationships
with companies that deal with Susquehanna in some capacity,
six board members voluntarily decided not to participate in
the selection process. The parties disagree whether those
members actually recused themselves or merely abstained from
voting. In either event, and of significance, it
was clear to all parties throughout the selection process
that no more than 10 votes would be cast in deciding which
operator would be awarded the new operating agreement.
provides that an authority may take any permitted action upon
the vote of a majority of the members "present" at
a meeting, unless the authority's bylaws contain a
different voting provision. 53 Pa. C.S. §5610(e). The
Authority's bylaws do not vary from the voting provision
of the Act, other than to state that a majority of the
members will constitute a quorum. Reproduced Record (R.R.) at
the selection process, the Authority informed the candidates
it would require the affirmative votes of at least nine board
members before awarding a new operating agreement to any
candidate. Thus, knowing that only 10 board members would be
participating, the Authority essentially required nine of 10
votes to be cast in favor of a new operating agreement. The
Authority did not include this purported requirement in the
RFP; nor did it amend either the RFP or its bylaws to provide
specifically for a majority vote of all members of the board
in order to award an operating agreement. However, Carload
did not protest this purported vote requirement when the
Authority announced it.
conclusion of the evaluations, Carload had the highest point
score. Susquehanna was second, with just one point fewer than
Carload. The Authority held a meeting attended by all 16
board members. There were seven votes in favor of awarding
the new operating agreement to Carload, three opposed, and
six abstaining. Based on its prior announcement of the
nine-vote requirement, the Authority took the position that
no new operating agreement was awarded.
Carload protested the Authority's refusal to award it the
new operating agreement, the Authority filed a civil suit in
the trial court, seeking a declaration that the 7-3 vote was
ineffective to award the new operating agreement. Carload
filed a counterclaim seeking declarations that the vote was
effective and that the Authority was required to execute a
contract awarding Carload the new operating
the trial court granted summary judgment in favor of the
Authority. This appeal by Carload followed.
requires a majority vote of the members "present"
at a meeting in order for the Authority to act. 53 Pa. C.S.
§5610(e). On appeal,  Carload contends the members
"present" at a meeting, as that term is used in the
Act, include only those members who actually vote. A quorum
of the Authority was 9 members. As 10 members actually voted,
and seven votes constituted more than a majority of the
quorum, Carload argues the vote was valid. Thus, Carload
asserts the 7-3 vote was effective to award the operating
agreement, where all 16 members were in attendance, but six
Authority contends Carload is bound by the Authority's
advance announcement that nine affirmative votes would be
required to award the operating agreement. The Authority did
not amend its RFP or its bylaws regarding voting. However,
the RFP contained a general reservation of rights, on which
the Authority relies as empowering it to depart from the
normal voting requirements. The Authority further asserts
Carload is estopped from protesting the nine-vote requirement
because it did not do so at the time the Authority announced
regard to whether the challenged vote was valid or invalid,
Carload argues that as the high scorer in the evaluation
process, it is entitled to be awarded the operating agreement
in accordance with the criteria and award process provided by
the Authority in its RFP. The Authority, again in reliance on
its general reservation of rights in the RFP, insists it has
no obligation to award the operating agreement.
Majority Vote of Those ...