Opinion ID: 3010151
Heading Depth: 1
Heading Rank: 3

Heading: Municipal Ratification

Text: The terms of the alleged release-dismissal agreement, as recited by Ceraso, were that: there will be an agreement on the part of my client, Mrs. Livingston[e], and also her husband, Joe Livingston[e], who is present, that upon payment of reasonable medical bills that w[e]re associated with the incident that occurred, based on my forwarding those to Washington Township with confirmation, together with bills reflecting damage incurred at the household of Mr. and Mrs. Livingston[e], that Washington Township will cause the same to be paid. At the time of final payment of those bills, there will be a full and complete release signed with reference to any civil action on the part of Mr. and Mrs. Livingston[e]. It's also my understanding that at that time there will also be a release signed by Washington Township, or any of its proper officials, or any member of the police force necessary to release Mr. and Mrs. Livingston[e] from any liability . . . . Appellees North Belle Vernon Borough and Officer Darhl Snyder's App. at 30. In short, the arrangement was apparently that, after the prosecution of Mrs. Livingstone was terminated, the Livingstones would submit bills for property damage and for medical costs to Washington Township. Once the Township paid these bills, the Livingstones, the municipalities, and the police officers would then sign full mutual releases of civil claims. The Livingstones concede that they never submitted their bills to Washington Township, as apparently required by the terms of the agreement. The district court found that their failure to do so rendered it impossible for the municipal defendants to ratify the release-dismissal agreement, as the public fisc cannot be allocated for an indefinite amount to a private party. App. at 377-78. The district court did not, however, discuss an antecedent question: whether (and how) a contract was ever formed between the Livingstones and the municipalities. Conceptually, it would hardly be possible for the Livingstones to have rendered impossible the performance of a contract that was never formed. Under Pennsylvania law, a township cannot enter into a binding contract except by a vote of the township's supervisors. SeeAbington Heights School District v. Township of South Abington, 456 A.2d 722, 724 (Pa. Cmwlth. 1983). North Belle Vernon Borough and Fayette City Borough never conducted such a vote, and Washington Township only did so after the present suit was filed. On appeal, the Livingstones assert that the failure of the municipalities to ratify the release-dismissal agreement meant that no contract was ever formed between the Livingstones and the municipalities, and that the release-dismissal agreement is therefore unenforceable. We will not address this question, however, because we find that it was not necessary for the municipalities to be parties to the release-dismissal agreement in order for it to be enforceable. It would suffice for the municipalities to have been third-party beneficiaries of an agreement concluded between the Livingstones and the Commonwealth of Pennsylvania; and, indeed, the colloquy before Judge Cicchetti suggests that this is what was intended (assuming, of course, that a valid agreement was formed at all). The principal parties negotiating the purported release-dismissal agreement were the Livingstones (through Mrs. Livingstone's attorney, Ceraso) and the Commonwealth (through Heneks, an assistant district attorney). The agreement's terms appear to have been that the Commonwealth would not oppose Mrs. Livingstone's motion for a judgment of acquittal. In exchange, the Livingstones would submit their medical and household damages bills to Washington Township, and, when those bills were paid, would sign a full release of civil liability with all of the municipalities and police officers involved, reciprocal releases of civil liability being signed by those police officers and municipalities with potential claims against the Livingstones. Although the municipalities and police officers were clearly intended to benefit from this agreement, the agreement's success did not require them to be parties to it. The Livingstones were not harmed by the municipalities' lack of party status. If Washington Township did not pay the Livingstones' actual expenses, or if one of the municipalities or officers refused to sign (or to negotiate in good faith towards) a release, the Livingstones would have lost nothing. The criminal charges against Mrs. Livingstone could not have been reinstituted; moreover, the Livingstones would presumably have been free to file a civil action against any of the municipalities or police officers that failed to cooperate as anticipated. An implicit term of this release-dismissal agreement is necessarily that the Livingstones could bring a civil suit against the municipalities or police officers only after the Livingstones had made a good-faith effort to negotiate towards reciprocal releases and those negotiations had failed. This term follows from the duty of good faith and fair dealing, Restatement (Second) of Contracts 205 (1981), and that duty's correlative obligation not to act so as to defeat an agreement's objective. The record indicates that the Livingstones did not make any effort to negotiate towards such reciprocal releases. Hence, assuming that the release-dismissal agreement is otherwise valid and enforceable Ä the question that we will address next Ä the Livingstones' failure to seek mutual releases would seem to bar their suit. The Livingstones also question whether North Belle Vernon Borough and Fayette City Borough Ä which I will refer to, for brevity, as the two boroughs Ä had the same status under the release-dismissal agreement as did Washington Township. In the voluntariness proceeding in the district court, counsel for the Livingstones had requested that a specific question on the verdict form address the status of the two boroughs under the agreement. The district court declined to include such a question on the form, finding that Ceraso's statements in the colloquy before Judge Cicchetti included all three municipalities, and that all three therefore had the same status for purposes of the voluntariness question. In response to the objections of the Livingstones' counsel to this ruling, the district court permitted him to argue to the jury that the ambiguous nature of the agreement between the Livingstones and the two boroughs rendered the release-dismissal agreement involuntary as a whole. App. at 804-06. Although the Livingstones' argument focuses on whether the release-dismissal agreement was voluntary as to the two boroughs, this issue cannot be completely disentangled from that of whether the agreement addressed the boroughs at all. The colloquy before Judge Cicchetti is far from a model of clarity on this question. During the colloquy, Ceraso stated that he had no objection if those police departments or those municipalities also wish to be included in the release, and we would then have reciprocal releases from them, and we would let that up to their individual counsel to make that decision, but we certainly would have no objection in doing that so it would be reciprocal on both sides. Appellees North Belle Vernon Borough and Officer Darhl Snyder's App. at 31. This statement can be construed either (1) as indicating that the Livingstones had undertaken to negotiate towards a civil release with the two boroughs (making the boroughs, with Washington Township, third-party beneficiaries of the releasedismissal agreement), or (2) as merely making an offer to those two municipalities. The question of which of these readings of Ceraso's remarks is correct was not argued before the district court. On remand, the district court should permit the parties to brief this question. In resolving this issue, the district court may consult all of the sources to which courts usually refer in determining the meaning of ambiguous contractual language, including, for instance, the course of the negotiations between the parties.