Court Opinion

ID: 4172989
Source: CourtListenerOpinion
Date Created: 2017-05-31 14:14:59.904432+00
Date Added: 2024-06-11T14:38:33.640509
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Township of Lower Yoder, A                 :
Political Subdivision of Cambria           :
County, Pennsylvania                       :
                                           :
                   v.                      :   No. 932 C.D. 2016
                                           :   Argued: April 6, 2017
Borough of Westmont, A Political           :
Subdivision of Cambria County,             :
Pennsylvania,                              :
                        Appellant          :

BEFORE:      HONORABLE RENÉE COHN JUBELIRER, Judge
             HONORABLE PATRICIA A. McCULLOUGH, Judge
             HONORABLE ANNE E. COVEY, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER                           FILED: May 31, 2017

      Borough of Westmont (Borough) appeals from an Order of the Court of
Common Pleas of Cambria County (trial court) that dismissed Borough’s
Exceptions to and denied reconsideration of an earlier order, which found a 1962
Article of Agreement (Agreement) between Borough and Township of Lower
Yoder (Township) inapplicable to a current dispute over allocation of costs to
replace portions of a sanitary sewer system the two municipalities share. The trial
court found the Agreement applied only to routine maintenance and repairs of two
presently existing interceptor lines, not to the proposed replacement project. For
the reasons set forth herein, we affirm.
I.    Background
      On September 10, 1962, Borough and Township, which are neighboring
municipalities in Cambria County, entered into the Agreement that established
each party’s rights and responsibilities in relation to two interceptor lines that
would service both municipalities. (Article of Agreement, R.R. at 12-14.) The
Agreement provided that the parties would contribute equally towards the
construction cost of the Stackhouse Park interceptor, and Borough and Township
would contribute 65 percent and 35 percent, respectively, towards the construction
cost of the St. Clair Run interceptor. (Id., R.R. at 13.)
      The Agreement further provided, in pertinent part, that:        (a) “cost of
maintenance” after construction would be borne by Township; (b) Borough “shall
perpetually have free and uninterrupted right, use and privilege of and access to
and through” the interceptors; and (c) Township will “maintain” the interceptors
and “keep the same in good repair,” with it being understood that the interceptors,
after construction, shall be “owned and maintained” by Township. (Id., R.R. at 13-
14.) The Agreement also provided that Borough’s cash payment for construction
costs would be “disproportionate to future development and future use” of the
interceptors, and in consideration of the payment, Borough was “relieved of future
maintenance costs.” (Id., R.R. at 12.)
      Pursuant to the Agreement, Borough contributed $105,000 towards
construction costs. (R.R. at 247, 306-08.) Also consistent with the Agreement,
Township has assumed all costs associated with maintaining and repairing the lines
over the last six decades and has not asked for any assistance from Borough, until
now. (R.R. at 248.)

                                           2
       In June 2014, Township approached Borough seeking financial assistance to
replace the two interceptor lines. (R.R. at 60-61.) Replacement of the lines is
required to address infiltration and inflow (I&I) problems, which resulted in the
parties each entering into consent decrees with the Pennsylvania Department of
Environmental Protection (DEP). (R.R. 37-59, 123-24.) The existing system is
largely comprised of terra cotta pipes, which are susceptible to leaks and breakage
and are not cost effective to repair. (R.R. at 75, 123-24.) The average life
expectancy of such a system is only 50 years.1 (R.R. at 140). Engineers opined
routine maintenance and repairs are no longer feasible. (R.R. at 75, 138, 140-41.)
Instead, they have recommended replacement of the interceptors, using plastic or
PVC pipe, in order to bring the system into compliance with DEP standards. (R.R.
at 130, 140-41.) The estimated cost of such a project is $4 million. (R.R. at 139.)
       Despite being responsible for approximately two-thirds of the flow on the
interceptor lines, (R.R. at 25, 127), Borough refuses to contribute towards the
replacement costs, citing the Agreement.               (R.R. at 67-70.)         After trying
unsuccessfully to negotiate with Borough, Township filed a Complaint for
Declaratory Judgment on May 22, 2015. The Complaint asked trial court to find
the Agreement did not apply to replacement of the existing lines and/or to reform
the Agreement to require Borough to pay its fair share of the replacement costs.
(Compl. ¶¶ 18-19.) In the alternative, Township asked trial court to determine that
the Agreement has concluded and ended so the municipalities can negotiate a new

       1
          There was evidence that the interceptors were completely replaced after the 1977
Johnstown Flood. (R.R. at 89, 143.) However, a professional engineer who testified as an expert
for Township stated that based upon inspection, only portions were replaced. (R.R. at 144-48.)
A crew leader of Township’s maintenance department for the last 43 years also testified only
four portions were replaced. (R.R. at 240.)

                                              3
agreement that would address construction and usage of replacement lines. (Id. ¶
20.) Borough filed an Answer to the Complaint on August 14, 2015, wherein it
continued to assert that the Agreement controlled.
      A full-day hearing was held on October 23, 2015, at which a number of
witnesses testified for Township, including two experts, one a professional
engineer and one an executive director of a local municipal authority with 42
years’ experience, who testified about the need to completely replace the existing
lines instead of merely repairing them. Two Township supervisors and its crew
leader in the maintenance department also testified as to the Township’s past
efforts to repair and maintain the lines. Borough did not present any witnesses but
did introduce minutes from various council meetings held before the Agreement
was entered, which it claims shows that its obligations were intended to be limited
to the one-time contribution towards construction costs.
      On October 27, 2015, trial court issued an Opinion and Order, finding the
1962 Agreement applies only to the presently existing interceptor lines, not to their
future replacement. (R.R. at 426.) Trial court further denied Township’s request
to reform the Agreement and, instead, suggested the parties enter into a new
agreement regarding the proposed lines. (R.R. at 427.)
      On November 5, 2015, Borough filed Exceptions to trial court’s Order,
requesting it reconsider its decision and arguing the Agreement clearly and
unambiguously controls. Following briefing and argument, trial court issued an
Order dated May 16, 2016, dismissing the exceptions, denying Borough’s motion

                                         4
for reconsideration, and affirming its prior Order. (R.R. at 455.) It is from this
Order that Borough appeals.2

II.    Analysis
       This appeal involves interpretation of a contract that Borough and Township
entered into more than a half century ago concerning construction of two sanitary
sewer interceptor lines that now need to be replaced. Both parties argue the
contract clearly and unambiguously supports their respective positions. On the one
hand, Borough argues the Agreement plainly requires Township to maintain the
lines, including replacement, which is consistent with the Township’s status as an
owner.     On the other hand, Township argues the Agreement is silent as to
replacement, which is not the equivalent of maintenance, a promise it agreed to and
has kept for greater than sixty years, and that contract principles limit the
Agreement’s application to a reasonable time period, which ends with the life of
the existing lines. Trial court concluded that the Agreement mentions only that
Township agreed to maintain the lines, and maintenance does not encompass
wholesale replacement of the lines.
       Because this matter involves an issue of contract interpretation, we begin
with a brief overview of legal principles that apply.                    Interpretation of the
Agreement is guided by well-established contract law principles, which the
Pennsylvania Supreme Court has summarized as follows:

       2
          Construction of a contract is a question of law subject to a de novo standard of review.
Wyeth Pharmaceuticals, Inc. v. Borough of West Chester, 126 A.3d 1055, 1061 n.5 (Pa. Cmwlth.
2015). On questions of law, this Court’s scope of review is plenary. Id. Further, a trial court’s
factual findings are entitled to deference so long as they are supported by evidence of record. Id.

                                                5
      When a written contract is clear and unequivocal, its meaning must be
      determined by its contents alone. It speaks for itself and a meaning
      cannot be given to it other than that expressed. Where the intention of
      the parties is clear, there is no need to resort to extrinsic aids or
      evidence. Hence, where language is clear and unambiguous, the focus
      of interpretation is upon the terms of the agreement as manifestly
      expressed, rather than as, perhaps, silently intended.

                                         ***
      The fundamental rule in contract interpretation is to ascertain the
      intent of the contracting parties. In cases of a written contract, the
      intent of the parties is the writing itself. In determining the intent of
      the contracting parties, all provisions in the agreement will be
      construed together and each will be given effect . . . . An act or event
      designated in a contract will not be construed as a condition unless
      that clearly appears to be the intention of the parties.

Lesko v. Frankford Hosp. – Bucks Cnty., 15 A.3d 337, 342 (Pa. 2011) (citations
and quotations omitted) (emphasis in original). Stated another way, when the
words of a contract are clear and free from ambiguity, the intent of the parties is to
be determined solely from the express language of the agreement.            Dep’t of
Transp. v. Semanderes, 531 A.2d 815, 817 (Pa. Cmwlth. 1987). A contract is
considered ambiguous if it is “reasonably susceptible to more than one
construction, its meaning is obscure due to indefinite expression, or it has double
meaning.” Id.
      Thus, we begin our analysis with an examination of the Agreement’s plain
language.   The Agreement provides that:        (a) “cost of maintenance of said
interceptors after construction shall thereafter be borne by [Township]”; (b)
“[Borough] shall perpetually have free and uninterrupted right, use and privilege of
and access to and through said sanitary sewage interceptors for the transmission of
sanitary sewage from portions of [Borough] to connections with the sanitary
sewers of the City of Johnstown and/or Municipal Authority of the City of

                                          6
Johnstown”; and (c) “[Township] will hereafter maintain said sanitary sewage
interceptors and keep the same in good repair, it being hereby understood by the
parties hereto that the said interceptors, after construction, shall be owned and
maintained by [Township].” (R.R. at 13-14) (emphasis added). The Agreement
also provides that Borough’s cash payment for construction costs “will be
disproportionate to future development and future use” of the interceptors, and in
consideration of the payment, Borough “is to be relieved of future maintenance
costs.” (R.R. at 12) (emphasis added).
      The plain language of the Agreement provides that Township will only
maintain the two interceptor lines once they are installed. We agree with trial
court that an agreement to maintain the lines does not equate to an agreement to
replace those lines when they reach the end of their useful life. To “maintain”
means “[t]o continue (something),” such as “[t]o continue in possession,” or “[t]o
care for (property) for purposes of operational productivity or appearance; to
engage in general repair and upkeep.” Black’s Law Dictionary 1039 (9th ed.
2009).   See also Webster’s Third New International Dictionary 1362 (2002)
(defining “maintain” as “to keep in a state of repair, efficiency, or validity:
preserve from failure or decline”). Maintenance may be a form of repair but is less
than full replacement.
      This view is consistent with our treatment of maintenance projects and
reconstruction or replacement projects under the Prevailing Wage Act, Act of
August 15, 1961, P.L. 987, as amended, 43 P.S. §§ 165-1—165-17. Under the
Prevailing Wage Act, “maintenance work” is defined as “the repair of existing
facilities when the size, type or extent of such facilities is not thereby changed or
increased.” Section 2(3) of the Prevailing Wage Act, 43 P.S. § 165-2(3) (emphasis

                                         7
added). Maintenance work is exempt from the definition of “public work,” which
includes “construction, reconstruction, demolition, alteration and/or repair work
other than maintenance work.” 43 P.S. § 165-2(5). Our Supreme Court has found
that “maintenance work” is a “lesser or minor form of ‘repair.’” Borough of
Youngwood v. Pa. Prevailing Wage Appeals Bd., 947 A.2d 724, 732 (Pa. 2008)
(emphasis in original). So has our Court. See Borough of Schuylkill Haven v.
Prevailing Wage Appeals Bd., 6 A.3d 580, 584 (Pa. Cmwlth. 2010) (finding extent
of manhole project, in both scope and cost, rendered it repair work not mere
maintenance); Borough of Ebensburg v. Pa. Prevailing Wage Appeals Bd., 893
A.2d 181, 183 (Pa. Cmwlth. 2006) (finding complete removal and replacement of
sidewalks was reconstruction work not maintenance work); Kulzer Roofing, Inc. v.
Dep’t of Labor and Indus., 450 A.2d 259, 261 (Pa. Cmwlth. 1982) (finding
reroofing project constituted repair not maintenance). Although not dispositive,
we nonetheless find these cases and the reasoning therein persuasive.
        Based upon contract interpretation principles, we agree with trial court that
the 1962 Agreement between Borough and Township that requires Township to
maintain the interceptor lines does not apply to wholesale replacement of the
existing system.3 We, therefore, affirm.

                                          _____________________________________
                                          RENÉE COHN JUBELIRER, Judge

    3
      Because we find the Agreement inapplicable to replacement of interceptor lines, we need
not address the other issues raised in Borough’s Concise Statement of Errors Complained of on
Appeal.

                                             8
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Township of Lower Yoder, A             :
Political Subdivision of Cambria       :
County, Pennsylvania                   :
                                       :
                  v.                   :   No. 932 C.D. 2016
                                       :
Borough of Westmont, A Political       :
Subdivision of Cambria County,         :
Pennsylvania,                          :
                        Appellant      :

                                    ORDER

            NOW, May 31, 2017, the Order of the Court of Common Pleas of
Cambria County, in the above-captioned matter, is AFFIRMED.

                                     _____________________________________
                                     RENÉE COHN JUBELIRER, Judge