J-A04023-17

2017 PA Super 265

HUGH J. MURRAY SR. IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellant

v.

WILLISTOWN TOWNSHIP

Appellee No. 2319 EDA 2016

Appeal from the Order Entered June 12, 2017

In the Court of Common Pleas of Chester County

Civil Division at No(s): 14-12462

BEFORE: SHOGAN, J., SOLANO, J., and PLATT, J.*

OPINION BY SOLANO, J.: FILED AUGUST 17, 2017

Appellant Hugh J. Murray, Sr. appeals from the trial court’s June 12, 

2017 order granting summary judgment in favor of Appellee Willistown 

Township and reforming the parties’ contract. We affirm.

The trial court set forth the facts of this case as follows:

This dispute arises out of the voluntary retirement of plaintiff 

Hugh Murray, Sr. from his position as Township Manager of 

Willistown Township (the “Township”) in 2011 after eight (8) 

years of employment. The material facts . . . are not in dispute.

Murray was appointed Willistown’s township manager in 2003. 

Prior to that time, Murray held the position of Chief of Police for 

the Township. Following Murray’s announcement of his intention 

to retire, the Township and Murray came to terms on an 

agreement whereby the Township agreed to provide Murray with 

certain severance benefits. Murray and the Township entered 

into an “Agreement and General Release of All Claims” (the 

“Agreement”) on December 30, 2011. The Agreement, which 

Murray had reviewed by counsel, provided for Murray to receive 

____________________________________________

* Retired Senior Judge assigned to the Superior Court.
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some benefits in retirement, including dental, medical and life 

insurance benefits.[ 1 ] The provision relating to Murray’s life 

insurance benefits is what brings the parties before the court.

At the time of his retirement, Murray had group life insurance in 

his capacity as Township Manager in the amount of $375,000. 

The Agreement at Section 2(a) therefore provided as follows:

2. Severance Benefits. The Employer agrees to 

provide the employee the following severance 

benefits:

a. Employee shall be eligible to continue to 

participate, at the Employer’s expense, in the 

present group life insurance plan ($375,000) 

offered by the Employer as may be carried from 

time to time for all eligible employees on the 

same terms and conditions that the Employee 

currently participates.

Unbeknownst to either party, under the prevailing group plan an 

employed township manager is considered a “Class 1 Member” 

eligible for a $375,000 group life benefit. However, a retiree, 

such as Murray, is only eligible for benefits in the amount of 

$20,000, retirees being considered by the insurer as “Class 4 

Members.” Upon learning of the policy’s restrictions, and 

advising Murray of the same, the Township attempted to secure 

an individual insurance policy for Murray for the amount 

specified in the parties’ Agreement, but ultimately concluded 

that it was unable to make such a purchase under its enabling 

statute.[2]

____________________________________________

1

In exchange for these benefits, Murray agreed to “release[] and 

discharge[] [the Township] . . . from all claims, liabilities, demands and 

causes of action known or unknown, fixed or contingent, which [Murray] 

may have against [the Township] as a result of this separation from 

employment.” Agreement, ¶ 5. 

2 As a township of the second class, Willistown is governed by the Second 

Class Township Code, Section 1512(d) of which provides, in relevant part:

The board of supervisors may contract with any insurance 

company, nonprofit hospitalization corporation or nonprofit 

(Footnote Continued Next Page)
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Thereafter, the Township advised Murray that it could only 

provide him with $20,000 in life insurance benefits under the 

group policy and that it was not permitted to secure an 

individual policy for him. Murray filed suit asserting claims for 

breach of contract, specific performance, a claim under the Wage 

Payment and Collection Law (which was later dismissed per 

stipulation) and unjust enrichment.[3] The Township also filed 

suit asserting a count for declaratory judgment which sought a 

declaration that the Agreement’s life insurance provision in 

Section 2(a) was invalid as a matter of law and, in the 

alternative, a claim for contract reformation of Section 2(a), 

replacing the amount listed therein with $20,000. The two 

actions, Docket Nos. 2014-12462 and 2014-12086, were 

consolidated under Docket No. 2014-12462.

Trial Ct. Order, 6/29/16, at 2-3 n.1 (citations to the record omitted).4

On March 15, 2016, the Township filed a motion for summary 

judgment on all parties’ claims. After considering the briefs submitted by 

the parties, the trial court granted the Township’s motion on June 29, 2016. 

The court granted the Township’s request for reformation of the Agreement 

(Footnote Continued) _______________________

medical service corporation to insure its supervisors . . . , 

employe[e]s and their dependents under a policy or policies of 

group insurance covering life, health, hospitalization, medical 

service or accident insurance.

53 P.S. § 66512(d) (emphasis added). The Township construed this 

provision to mean that it was authorized to purchase only group life 

insurance. Murray does not contest that interpretation.

3 Murray sought damages in an amount that would enable him to purchase 

$375,000 in life insurance or, alternatively, a court order requiring the 

Township to purchase life insurance coverage for him in an amount not less 

than $375,000. Murray did not seek contract reformation. 

4

 The trial court explained its order in a lengthy footnote. All citations to 

pages of the June 29, 2016 order following page 1 are to the text of footnote 

1 of that order.
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and reformed Section 2(a) to read: “Employee shall be eligible to continue to 

participate, at the Employer’s expense, in the present group life insurance 

plan ($20,000) offered by the Employer, as may be carried from time to 

time for all eligible employees.” Order, 6/29/16, at 1. 

The trial court found that there had been a mutual mistake of fact: 

when they signed the contract, the parties mistakenly believed that Murray 

would be eligible for life insurance in the amount of $375,000 under the 

terms of the group plan. Trial Ct. Order, 6/29/16, at 4-5. The court held 

that it had authority to reform the contract based on that mutual mistake. 

Id. at 4 (citing Smith v. Thomas Jefferson Univ. Hosp., 621 A.2d 1030, 

1032 (Pa. Super.), appeal denied, 631 A.2d 1009 (Pa. 1993)). The trial 

court rejected Murray’s argument that he was entitled to $375,000 in 

individual life insurance, reasoning that (1) the Township did not have the 

statutory authority to purchase individual life insurance for any current or 

former employee; and (2) the Township was not bound under the 

Agreement to purchase individual life insurance for Murray. Id. at 3-4. 

Murray filed a timely appeal on July 25, 2016.

In its June 29, 2016 order, the trial court did not expressly enter 

summary judgment on the Township’s claim for a declaratory judgment or 

on any of Murray's claims. Until the trial court “disposes of all claims and of 

all parties,” there is no final order that is appealable to this Court. Pa.R.A.P. 

341(b)(1). Therefore, on June 5, 2017, this Court ordered the trial court to 
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“either amend the summary judgment order docketed on June 29, 2016 to 

enter judgment on all of the claims by each party in the case, or . . . inform 

this Court that it shall not now amend the order because some claims 

remain outstanding.” In response, on June 12, 2017, the trial court 

amended its June 29, 2016 order to (1) grant summary judgment in favor of 

the Township on its contract reformation claim; (2) deny summary judgment 

as to the Township’s declaratory judgment claim because it was moot; and 

(3) grant summary judgment in favor of the Township on all of Murray’s 

claims. Murray’s appeal is now properly before this Court. See Pa.R.A.P. 

905(a)(5) (“A notice of appeal filed after the announcement of a 

determination but before the entry of an appealable order shall be treated as 

filed after such entry and on the day thereof”).5

On appeal, Murray raises the following issue:

Did the trial court err as a matter of law or abuse its discretion in 

holding on summary judgment that [Murray] was only entitled to 

$20,000 of life insurance coverage and no other relief when the 

____________________________________________

5

 Because the parties agree that Section 1512(d) of the Second Class 

Township Code does not permit the Township to offer an individual policy of 

insurance, this case does not “draw[] into question the application, 

interpretation or enforcement” of that statute and therefore is not within the 

jurisdiction of the Commonwealth Court. See 42 Pa.C.S. § 762(a)(4). Both 

parties agree that this Court has jurisdiction. See Township’s Brief at 1; 

see also 42 Pa.C.S. § 704(a) (“The failure of an appellee to file an objection 

to the jurisdiction of an appellate court within such time as may be specified 

by general rule, shall, unless the appellate court otherwise orders, operate 

to perfect the appellate jurisdiction of such appellate court, notwithstanding 

any provision of this title, or of any general rule adopted pursuant to section 

503 (relating to reassignment of matters), vesting jurisdiction of such appeal 

in another appellate court”).
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clear and undisputed intention of the parties was that [Murray] 

was to receive $375,000 in life insurance coverage or, in the 

alternative, equitable relief of equivalent value thereto[?]

Murray’s Brief at 5. 

This Court’s standard of review is deferential: 

Appellate review of equity matters is limited to a determination 

of whether the chancellor committed an error of law or abused 

his discretion. The scope of review of a final decree in equity is 

limited and [the decree] will not be disturbed unless it is 

unsupported by the evidence or demonstrably capricious.

Vautar v. First Nat’l Bank of Pa., 133 A.3d 6, 12 (Pa. Super. 2016) (en 

banc) (brackets and citation omitted). 

In his appellate brief, Murray does not dispute the trial court’s 

conclusion that there was a mutual mistake of fact 6or the trial court’s 

holding that it had authority to reform the contract. See Murray’s Brief at 

13, 16. Murray instead argues that the reformation ordered by the trial 

court was inequitable.7 In Murray’s view, the trial court’s order should have 

____________________________________________

6

 In his response to the Township’s motion for summary judgment, Murray 

had denied that there was a mutual mistake. See Murray’s Resp. to Mot. for 

Summ. J. at ¶ 14. Murray no longer advances that position, and states in

his brief, “[t]he trial court was correct in determining that the Agreement 

between the parties was based upon a mutual mistake.” Murray’s Brief at 

13.

7 Murray also contends that the court erred in “imposing its relief without 

any evidence before the court as to other available and reasonable option[s] 

for relief,” Murray’s Brief at 16, and by “fail[ing] to hear evidence.” Id. at 

13. However, Murray has identified no disputed issues of material fact that 

should have precluded the entry of summary judgment. See Pa.R.Civ.P. 

1035.3(a). No evidentiary hearing was required. See Molineux v. Reed, 

532 A.2d 792, 793 (Pa. 1987).
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been based on some “other available and reasonable option,” such as 

requiring the Township to pay (1) to Murray’s estate, $375,000 upon 

Murray’s death; (2) to Murray, an amount equal to the sum of the annual 

premiums on an individual policy for $375,000 in life insurance over some 

reasonable number of years8; or (3) to Murray, an annual amount equal to 

the premium on an individual policy for $375,000 in life insurance until his 

death or until total premiums of $375,000 have been paid. See Murray’s 

Brief at 16-17. 

We begin with the threshold question of whether the trial court had the 

authority to reform the contract after it determined that $375,000 in group 

life insurance could not be provided to Murray. As noted, Murray’s appeal 

does not challenge this authority and instead contends only that the specific 

reformation ordered by the trial court was insufficient to satisfy his needs. 

Both parties agree that contract reformation is an appropriate equitable 

remedy in this case: the Township sought such reformation in its complaint; 

and in his appellate brief, Murray insists that in the situation presented here, 

“the court is to equitably ‘reform’ the contract so that the intentions of the 

parties are achieved to the greatest extent possible.” Murray’s Brief at 13. 

However, neither party has cited any case in which a Pennsylvania court has 

“reformed” a contract in the way that was done here, and our own research 

____________________________________________

8 Murray says the premiums would have been $15,750 per year in 2013, but 

they increased as Murray aged. Murray’s Brief at 11.
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has uncovered no such authority. Before we can address Murray’s challenge 

to the precise reformation relief that the trial court ordered, we must 

determine the nature and propriety of the type of reformation remedy 

employed by the trial court, since the legal basis for such relief necessarily 

will bear on how we address Murray’s challenge to the scope of the trial 

court’s contractual “reform.”

The trial court ordered reformation because the parties made a mutual 

mistake about the availability of group insurance to cover Murray after he 

retired. We have stated:

The doctrine of mutual mistake of fact serves as a defense to the 

formation of a contract and occurs when the parties to the 

contract have an erroneous belief as to a basic assumption of 

the contract at the time of formation which will have a material 

effect on the agreed exchange as to either party. A mutual 

mistake occurs when the written instrument fails to set forth the 

true agreement of the parties. The language on the instrument 

should be interpreted in the light of subject matter, the apparent 

object or purpose of the parties and the conditions existing when 

it was executed.

Voracek v. Crown Castle USA Inc., 907 A.2d 1105, 1107-08 (Pa. Super. 

2006) (quoted citation omitted), appeal denied, 919 A.2d 958 (Pa. 2007). 

Mutual mistake regarding an essential term of a contract may provide a 

basis for the contract’s rescission if (1) the mistake relates to “an essential 

fact which formed the inducement to [the contract],” and (2) “the parties 

[can be] placed in their former position with reference to the subject-matter 

of [the contract].” See Vrabel v. Scholler, 85 A.2d 858, 860 (Pa. 1952); 

Gocek v. Gocek, 612 A.2d 1004, 1006 (Pa. Super. 1992). Alternatively, if 
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the same conditions are met, “[c]ourts can reform a contract entered under 

mutual mistake.” Allen-Myland, Inc. v. Garmin Int'l, Inc., 140 A.3d 677, 

693 (Pa. Super. 2016) (cited quotation omitted); RegScan, Inc. v. ConWay Transp. Servs., Inc., 875 A.2d 332, 340 (Pa. Super. 2005) (“If a 

mistake is demonstrated, the contract may be reformed, or the injured party 

may avoid his or her contractual obligations”); see also Smith, 621 A.2d at 

1032 (“to obtain reformation of a contract because of mutual mistake, the 

moving party is required to show the existence of the mutual mistake by 

evidence that is clear, precise and convincing”).9 

We most commonly have allowed reformation of mistaken contract 

provisions in cases of “scriveners’ errors,” where the parties’ writing 

mistakenly failed to record their agreed-upon intentions. See Daddona v. 

Thorpe, 749 A.2d 475, 487 (Pa. Super.) (“[a] mutual mistake occurs when 

the written instrument fails to . . . set forth the ‘true’ agreement among the 

parties”), appeal denied, 761 A.2d 550 (Pa. 2000); see also Bollinger v. 

Central Pa. Quarry Stripping & Constr. Co., 229 A.2d 741, 742 (Pa. 

1967); Bugen v. New York Life Ins. Co., 184 A.2d 499, 500 (Pa. 1962). 

In such situations, the court may reform the contract document so that its 

language conforms to what the parties intended. Bollinger, 229 A.2d at 

742. The error here, however, is not a drafting error; the written document 

____________________________________________

9 Because the parties agree that there was a mutual mistake, we need not 

consider whether the evidence is sufficient to prove a mistake under Smith.
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faithfully records what the parties intended. Rather, the error results from 

the parties’ failure to understand that the insurance that they contemplated 

and for which they provided in their written contract document was not 

available under the Township’s group insurance arrangement. Reformation 

of the contract therefore can be accomplished only by changing it to provide 

for a different insurance benefit from what the parties intended when they 

entered into their agreement. The parties have not cited and we have not 

found any Pennsylvania case law authorizing a reformation of that type.

The American Law Institute’s Second Restatement of Contracts 

suggests, however, that after discovery of a mistake, a remedy akin to 

reformation may be available in some situations other than drafting errors 

“on such terms as justice requires[,] including protection of the parties’ 

reliance interests.” Restatement (Second) of Contracts § 158(2) (1981).10 

A comment explains:

____________________________________________

10 Sensitive to the rules relating to reformation in cases of scriveners’ errors, 

the Restatement is careful to distinguish traditional reformation from the 

ability to fix a mistaken contract term under Section 158. See Restatement 

(Second) of Contracts § 155 cmt. b (“The discretionary relief authorized 

under the rule stated in § 158 may involve some reshaping of the contract 

duties by the court but is different from reformation”). Section 158 equates 

the relief that it authorizes more closely to the necessary implication of an 

implied, essential contract term under Section 204. Restatement (Second) 

of Contracts § 158 cmt. c. We do not believe these technical distinctions 

limit the availability of relief in this case. Because the trial court referred to 

its remedy as “reformation,” we use that same term in this opinion to refer 

both to traditional reformation and to the remedies discussed by Section 

158(2) of the Second Restatement.
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Sometimes the party who is not adversely affected by a mistake 

can, by assenting to a modification of the contract, eliminate the 

effect of the mistake on the agreed exchange. He should 

generally be allowed to do so and thereby to preclude avoidance 

by the party who would otherwise be adversely affected. A court 

may, under Subsection (2), grant the party who has not been 

adversely affected what is, in effect, an option to enforce the 

contract on new terms. 

Id. § 158 cmt. c.

11

 This Restatement provision has not previously been 

considered by our appellate courts, 12 but the American Law Institute 

describes it as a “specific application” of principles under Section 204 of the 

Second Restatement, which provides that a court may imply necessary 

terms of a contract that have not been stated in the written document. See 

id., Reporter’s Note; Restatement (Second) of Contracts § 204 & cmt a. The 

idea is that if a mutual mistake voids an essential contract provision, a court 

should be able to imply a new provision that will replace its essential terms, 

so long as the party not adversely affected by the mistake assents to the 

modification. See id. § 158 cmt. c. Pennsylvania courts have employed 

Section 204’s “doctrine of necessary implication as a means of avoiding 

____________________________________________

11 See also Restatement (Second) of Contracts § 152 cmt. d (“A party may 

choose to seek relief by means of reformation even though it makes his own 

performance more onerous when, absent reformation, the contract would be 

voidable by the other party”).

12 Where, as here, the Supreme Court of Pennsylvania has neither adopted 

nor rejected a Restatement provision, we are free to adopt it in an 

appropriate case. See Newell v. Montana W., Inc., 154 A.3d 819, 824 

n.7 (Pa. Super. 2017). We note that “Pennsylvania courts regularly employ 

the Restatement (Second) of Contracts when resolving contract disputes.” 

Hart v. Arnold, 884 A.2d 316, 333 (Pa. Super. 2005), appeal denied, 897 

A.2d 458 (Pa. 2006).
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injustice by inferring contract provisions that reflect the parties’ silent 

intent.” Stamerro v. Stamerro, 889 A.2d 1251, 1259 (Pa. Super. 2005) 

(citation omitted); see Banks Eng’g Co. v. Polons, 752 A.2d 883, 886 n.4 

(Pa. 2000) (plurality opinion); Hodges v. Pa. Millers Mut. Ins. Co., 673 

A.2d 973, 974-75 (Pa. Super. 1995); Slater v. Pearle Vision Ctr., Inc., 

546 A.2d 676, 679 (Pa. Super. 1988).

Although the parties have focused on their mutual mistake regarding 

the availability of insurance, the issue here more closely resembles one of 

impracticability of performance resulting from the unavailability of the 

desired coverage for Murray under the Township’s group insurance policy. 

See generally Hart v. Arnold, 884 A.2d 316, 334-35 (Pa. Super. 2005), 

(discussing impracticability of performance), appeal denied, 897 A.2d 458 

(Pa. 2006).

13

 In this situation too, the Second Restatement provides that a 

____________________________________________

13 Indeed, the parties’ “mistake” was in believing that group insurance in the 

amount of $375,000 was available for Murray after he retired and, therefore, 

in not realizing that performance of the contract’s provision for such 

insurance was impracticable. Contractual impracticability usually results 

from some supervening event after the parties entered the contract. See 

Restatement (Second) of Contracts § 261; Hart, 884 A.2d at 334. It can 

also result, however, from a condition existing at the time of the contract’s 

formation. See Restatement (Second) of Contracts § 266; ALCOA v. Essex 

Group, Inc., 499 F. Supp. 2d 53, 72 (W.D. Pa. 1980). Section 266 of the 

Second Restatement, which has not been discussed in any reported 

Pennsylvania appellate decision, states that such an impracticability excuses 

performance of a contractual obligation if the obligor had no reason to know 

of it and the condition was not the obligor’s fault. See id. § 266(1). The 

trial court stated that the unavailability of $375,000 in life insurance for 

Murray under the applicable group policy was “[u]nbeknownst to either 

party,” Trial Ct. Order, 6/29/16, at 2, but it did not address whether either 

(Footnote Continued Next Page)
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remedy akin to reformation is permissible to avoid injustice. Restatement 

(Second) of Contracts § 272. The Restatement explains that this result is 

merely another specific application of the principles of Section 204:

Under the rule stated in § 204, when the parties have not agreed 

with respect to a term that is essential to a determination of 

their rights and duties, the court will supply a term that is 

reasonable in the circumstances. Since it is the rationale of this 

Chapter that, in a case of impracticability or frustration, the 

contract does not cover the case that has arisen, the court’s 

function can be viewed generally as that set out in § 204 of 

supplying a term to deal with that omitted case.

Id. § 272 cmt. c. We have previously cited Section 272 with approval, 

although in support of restitutionary relief, not reformation. See Hart, 884 

A.2d at 335.14

Upon consideration of these authorities, we hold that the trial court did 

not err in reforming the parties’ Agreement. Specific performance of the 

contract as written is not possible. Without reformation, the only remedy 

would be to void the unenforceable life insurance provision, leaving Murray 

(Footnote Continued) _______________________

party had reason to know of the unavailability. The Township certainly 

should have known of the policy’s terms, and, as Township Manager of the 

Township from 2003 until he retired, it would seem that Murray should have 

known of those terms as well. Because the question here is not whether 

either party may avoid an obligation under the Agreement, but whether the 

parties may have the Agreement reformed (a form of relief both parties 

advocate), we do not believe the knowledge issue is determinative here.

14 In ALCOA, a federal district court, applying Indiana law, held that based 

on mutual mistake, impracticability, and frustration of purpose, it could 

modify the parties’ contract. 499 F. Supp. 2d at 78-80. The court explained 

that a remedy modifying a term of the contract would “preserve the 

purposes and expectations of the parties” better than any other remedy and 

was “essential to avoid injustice.” Id. at 80.
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with no insurance relief at all; Murray has made clear that he opposes that 

remedy. Neither party challenges the trial court’s ability to order 

reformation, and, indeed, both parties advocate in favor of such relief. 

Although the facts presented here may not fit within the traditional 

framework of a mistake resulting from erroneous drafting, they do fit within 

the broader parameters of the reformation remedies that have been 

recognized under Sections 158(2) and 272 of the Second Restatement, both 

of which derive from the power to imply contract terms under Section 204 

when necessary to effectuate the parties’ intent. Exercise of that power is 

consistent with Pennsylvania law. In light of these authorities, and 

particularly in light of the parties’ mutual advocacy in favor of reformation to 

restore an essential term of their agreement, we hold that, on these unique 

facts, it was proper for the trial court to reform the contract.

The next question — and the nub of this case — is whether the trial 

court properly exercised its discretion in formulating the reformation relief 

that it ordered. Reformation is an equitable remedy. Potteiger v. Fid.-

Phila. Trust Co., 227 A.2d 864, 871 (Pa. 1967). “[A] court of equity has 

broad discretion to decide what relief should be granted.” Jackson v. 

Hendrick, 321 A.2d 603, 606 (Pa. 1974). Indeed,

Equitable remedies . . . are distinguished by their flexibility, their 

unlimited variety, their adaptability to circumstances, and the 

natural rules which govern their use. There is in fact no limit of 

their variety and application; the court of equity has the power 

of devising its remedy and shaping it so as to fit the changing 
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circumstances of every case and the complex relations of all the 

parties.

Id. at 606 n.8 (alteration in original) (citation omitted). However, “a court 

of equity has no more right than has a court of law to act on its own notion 

of what is right in a particular case and must be guided by the established 

rules and precedents.” East Hempfield Twp. v. Brubaker, 828 A.2d 

1184, 1188 (Pa. Cmwlth. 2003) (brackets and citation omitted). Equity 

must follow the law. Bauer v. P.A. Cutri Co. of Bradford, 253 A.2d 252, 

255 (Pa. 1969) (stating, “a court of equity follows and is bound by rules of 

law, and does not use equitable considerations to deprive a party of his 

rights at law”); Kapcsos v. Benshoff, ___ A.3d ___, No. 227 EDA 2016, 

2017 WL 2806294, at *10 (Pa. Super., June 29, 2017) (“[E]quitable 

discretion may not be exercised merely to negate a controlling rule of law. 

‘Equity follows the law.’” (quoted citation omitted)). Murray argues that the 

reformation ordered by the trial court did not conform to equitable principles 

because it unfairly failed to provide for Murray to receive $375,000 in life 

insurance. We disagree.

The trial court was faced with the task of trying to protect the parties’ 

reliance interests under a provision of the contract that could not be 

implemented as written. In offering limited guidance on this task, Comment 

c to Section 272 of the Second Restatement explains: “The question under 

this Section is whether the court can salvage a part of the agreement that is 

still executory on both sides. . . . The rule stated . . . makes it clear that it 
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can do so by supplying a term which is reasonable in the circumstances 

. . . .” Comment c to Section 158 contains similar language. This is a

sensitive undertaking. Normally, a court “will not reform a written contract 

so as to make a contract for the parties that they did not make between 

themselves.” New Charter Coal Co. v. McKee, 191 A.2d 830, 833 (Pa. 

1963). That is why a traditional reformation remedy in Pennsylvania is 

employed only to “make [the written contract document] correspond to the 

understanding of the parties.” Bugen, 184 A.2d at 500; see also AllenMyland, 140 A.3d at 693 (requiring that the parties “be placed in their 

former position regarding the subject matter of the contract”). Accordingly, 

any effort to craft a remedy here must be guided by the need to adhere to 

the parties’ original agreement to the maximum extent possible, and not to 

substitute terms to which the parties never consented. 

The unenforceable contract term at issue here provided:

Employee shall be eligible to continue to participate, at the 

Employer’s expense, in the present group life insurance plan 

($375,000) offered by the Employer as may be carried from time 

to time for all eligible employees, on the same terms and 

conditions that the Employee currently participates.

Agreement at ¶ 2(a). The trial court reformed this provision to state:

Employee shall be eligible to continue to participate, at the 

Employer’s expense, in the present group life insurance plan 

($20,000) offered by the Employer, as may be carried from time 

to time for all eligible employees. 

Trial Ct. Order, 6/29/16, at 1. Murray contends that the trial court erred 

because reformation of the unenforceable provision should have assured 
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that he (or his estate) will receive the $375,000 benefit that he expected, 

and he argues that because group insurance coverage in that amount is not 

available, the trial court should have reformed the contract to provide for an 

equal benefit under an individual insurance policy. But such relief would not 

have been reasonable on these facts.

First, as the trial court held, the provision to which the parties agreed 

did not bestow a contractual right to a $375,000 benefit or a right to have 

the Township purchase individual insurance for Murray. The trial court 

explained:

The parties agreed to allow Murray to remain eligible to 

participate in the present group life insurance plan at the 

Township’s cost. The Township made no guarantees in this 

section. It simply obligated itself to allow Murray to participate 

in group life insurance, an obligation it satisfied. What Murray 

remains eligible for under the group policy are benefits as [a] 

“Class 4 Member,” not as a “Class 1 Member.”

Moreover, the language of the Agreement makes no 

mention or promise of an individual life insurance policy for 

Murray. No one has suggested the language is anything but 

clear as to what benefits were contracted for by the parties. The 

court therefore cannot and should not delve further than the 

contractual language to determine the parties’ “intentions,” as 

suggested by Murray.

Trial Ct. Order, 6/29/16, at 4. 

The trial court correctly interpreted the parties’ agreement. The 

contract provided that Murray “shall be eligible to continue to participate, at 

the Employer’s expense, in the present group life insurance plan . . . offered 

by the Employer,” and the court’s reformation order therefore properly 
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preserved that same right to eligibility. The court changed only the 

contract’s unenforceable parenthetical reference to the $375,000 benefit 

that the parties incorrectly believed would apply to Murray and corrected 

that number to specify the amount, $20,000, that actually is available to an 

eligible person in Murray’s position. 15 The trial court thus reformed the 

contract to adhere to the eligibility provision to which the parties agreed, 

changing only that element of the agreement that was impracticable of 

performance. The court’s effort to adhere closely to the original contract 

was both reasonable and entirely appropriate.

Second, any reformation of the contract had to conform to the law 

under which the Township must operate. Here, the governing law is the 

Second Class Township Code, Willistown Township’s enabling statute. 

“[M]unicipalities are created by the state and as such, may do only those 

things which the state legislature has placed within their power in enabling 

statutes.” White Deer Twp. v. Napp, 985 A.2d 745, 758 (Pa. 2009). 

Section 1512(d) of the Second Class Township Code authorizes the Township 

to purchase insurance “under a policy or policies of group insurance 

covering life, health, hospitalization, medical service or accident insurance,” 

53 P.S. § 66512(d) (emphasis added), and the parties agree that under this 

provision the Township does not have authority to purchase individual life 

____________________________________________

15 Of course, coverage of $20,000 was subsumed within the $375,000 

coverage that the parties initially intended. 
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insurance policies for its present or former employees. Cf., e.g., Bolduc v. 

Bd. of Supervisors of Lower Paxton Twp., 618 A.2d 1188, 1191 (Pa. 

Cmwlth. 1992) (holding that because Second Class Township Code did not 

expressly give township the power to enter into an employment contract for 

a fixed term, such a contract was void and unenforceable, and an employee 

terminated before the end of his term could not recover damages for its 

breach), appeal denied, 625 A.2d 1195 (Pa. 1993). The trial court’s 

authority to provide Murray with equitable relief therefore did not extend to 

ordering payment by the Township for an individual life insurance policy, as 

the Township would be legally incapable of complying with such a term. 

The contract terms sought by Murray thus would require the trial court 

to depart from both the original agreement of the parties and the legal 

restrictions under which one party, the Township, was required to operate. 

Murray has cited no authority that would allow the trial court to award such 

relief, and we are confident that he was not entitled to have the trial court 

“reform” the contract to add the terms that he seeks. Murray’s suggestion 

that the contract substitute a right to a direct payment of $375,000 by the 

Township to his estate upon his death bears no resemblance to the original 

contract, which did not call for such a payment by the Township. His 

suggestion of a new contract term based on the amount of annual insurance 

premiums needed to pay for an individual $375,000 policy would similarly 

impose a new financial undertaking on the Township that finds no basis in 
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the parties’ agreement; the Township agreed to include Murray under its 

present group policy and did not agree to incur an additional expense to 

provide Murray with a special insurance benefit. This is not a case where the 

trial court was called upon to fashion compensatory relief for breach of the 

contract’s insurance provision; it is a case where the court was asked to 

salvage what it could of an unenforceable provision of the contract that 

Murray did not want declared void. The trial court properly performed that 

task, and we discern no abuse of its discretion in doing so. See Vautar, 

133 A.3d at 12.

We are sympathetic to Murray’s argument that the unenforceability of 

the current life insurance provision in his contract with the Township 

deprives him of a significant financial benefit on which he relied, but that 

argument does not provide a legal basis for relief. As the Supreme Court 

stated in New Charter Coal, 191 A.2d at 833, “the law of contract does not 

and cannot take heed of emotions; otherwise, the emotions of the judge 

would ever be the deciding factor and chaos the result.” Murray is deprived 

of his expected benefit because both he and the Township failed to conduct 

the due diligence necessary to determine what group insurance benefits 

actually were available in advance of entering their agreement. Nothing in 

our decision precludes the parties from now negotiating a new or 

supplemental agreement that provides Murray with additional relief if they 
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are inclined to do so. But Murray may not obtain such relief from the trial 

court or this Court under the guise of “reformation” of the Agreement.

Having discerned no error of law or abuse of discretion, we affirm the 

trial court’s decision.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 8/17/2017