Court Opinion

ID: 2804771
Source: CourtListenerOpinion
Date Created: 2015-06-01 19:09:27.247133+00
Date Added: 2024-06-11T11:29:53.424892
License: Public Domain

J-A14022-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JOHN J. CALABRESE AND DEBORAH J.                   IN THE SUPERIOR COURT OF
SHRIK                                                    PENNSYLVANIA

                             Appellee

                       v.

P. THOMAS ZEAGER

                             Appellant                 No. 1849 MDA 2014

              Appeal from the Judgment Entered October 14, 2014
               In the Court of Common Pleas of Lancaster County
                       Civil Division at No(s): Cl-04-05070

BEFORE: BENDER, P.J.E., JENKINS, J., and STRASSBURGER, J.*

MEMORANDUM BY JENKINS, J.:                               FILED JUNE 01, 2015

        Appellant P. Thomas Zeager appeals from the order of the Lancaster

County Court of Common Pleas granting summary judgment in favor of

Appellees John J. Calabrese and Deborah J. Shirk, entering judgment in

favor of Calabrese and Shirk, and awarding damages in the amount of

$158,667.22.1       We affirm the grant of Calabrese and Shirk’s motion for

summary judgment.           We remand for the trial court to award an offset for

costs Calabrese and Shirk would have paid to connect to Zeager’s sewage

treatment plant.

____________________________________________

*
    Retired Senior Judge assigned to the Superior Court.
1
  The trial court awarded $50,372.83 in damages, $20,071.74 in statutory
interest, $3,378.25 in costs of litigation, and $84,844.40 in legal fees.
J-A14022-15

      The trial court summarized the factual and procedural history as

follows:

           In 1991, Edwin G. Hershey owned a hotel and restaurant
           complex known as Hershey Farms on Route 896 in
           Strasburg Township, Lancaster County. As public sewer
           was not available in that area, Hershey built his own
           sewage treatment plant on his property. Sanford M. Groff
           owned an adjoining retail property. On November 22,
           1991, Hershey and Groff entered into a Sanitary Sewer
           Easement and Sewage Treatment Agreement (the
           Agreement) which generally stated that Groff was
           permitted to use the sewage plant located on Hershey’s
           land in exchange for $25,000.00.           Specifically, the
           Agreement granted an easement across Hershey’s land for
           the installation, repair, maintenance and operation of an
           eight[-]inch sewer line which Groff could use to construct
           sewer lines to connect to the plant at such time in the
           future as Groff deemed necessary.          The Agreement
           between the parties had an explicit provision that it was
           Hershey’s obligation to be physically and legally capable of
           allowing Groff to hook into the facility “at all times and
           under all conditions.” The Agreement also contained an
           indemnification clause providing that should Hershey
           breach the agreement, Groff would be entitled to all costs,
           damages, and attorney’s fees resulting from the breach.

           Subsequent to the Agreement, Groff sold his property to
           Calabrese [and Shirk], and Hershey sold his land to
           Zeager. At the time of sale, Groff had not connected to
           the sewage treatment plant located on Hershey’s property.
           Calabrese [and Shirk] and Zeager remained obligated by
           the Agreement, however, which was binding on successors
           in title to Groff and Hershey.

           In the fall of 2003, Calabrese [and Shirk] entered into a
           lease agreement with a new retail tenant which required
           renovation and enlargement of [their] building. Calabrese
           [and Shirk’s] existing on-lot septic system was incapable
           of handling the required additional capacity generated by
           the expansion. Therefore, Calabrese [and Shirk] decided
           that [they] wished to tap into the sewer treatment plant
           on the Zeager property. Calabrese [and Shirk] made

                                      -2-
J-A14022-15

       multiple attempts by telephone and letter to contact
       Zeager to tell him that [they] now wanted to utilize the
       sewer capacity that had been paid for years before by
       Groff. Calabrese [and Shirk] eventually learned that
       Zeager did not have the necessary legal approvals to add
       Calabrese [and Shirk’s] discharge. Calabrese [and Shirk
       were] then forced to construct a new “sand mound” septic
       system on [their] own property at a total cost of
       $34,275.33. [They] also incurred costs related to the
       construction, such as lost rent and attorney’s fees.
       Repeated requests were made to Zeager to pay all such
       costs of the new system (as required by the
       indemnification provision in the Agreement). Zeager
       refused.

       Calabrese [and Shirk] brought a breach of contract action
       against Zeager on May 28, 2004, based upon the
       Agreement entered into by their respective predecessors in
       title. Both parties agreed that the Agreement permitted
       Calabrese [and Shirk] to construct a pipe to connect with
       Zeager’s sewage plant and required Zeager to accept and
       treat the sewage.      The parties disagreed, however,
       regarding which party bore the responsibility under the
       Agreement for obtaining the necessary government
       approvals to allow Calabrese [and Shirk] to connect [their]
       sewage pipe to Zeager’s plant. This apparently involved
       the preliminary submission for approval of a sewage
       module plan to Strasburg Township, pursuant to its
       ordinances and to the regulations of the Pennsylvania
       Department of Environmental Resources.

       After the pleadings were closed, this matter was assigned
       to the Honorable Paul K. Alison for a pretrial conference on
       July 29, 2005.       After four joint motions for trial
       continuances by the parties, the case eventually proceeded
       to a non-jury trial before Judge Allison on September 19
       and 20, 2006. Following the filing of proposed findings of
       fact and conclusions of law by the parties, Judge Allison
       rendered a decision on January 25, 2007 (docketed on
       January 26, 2007). The trial court concluded that, under
       the terms of the Agreement, Calabrese [and Shirk] bore
       the responsibility for obtaining official approval of the
       connection to Zeager’s sewage plant, and judgment was
       entered in Zeager’s favor.

                                  -3-
J-A14022-15

       Calabrese [and Shirk] filed a timely post[-]trial motion,
       which was denied by Judge Allison on March 19, 2007.
       Thereafter, Calabrese [and Shirk] appealed the trial court’s
       ruling to the Superior Court. On May 22, 2009, a three-
       judge panel of the Superior Court reversed the trial court
       in a published opinion.

       The appellate court held that “the trial court misinterpreted
       the terms of the Agreement and that the Agreement
       unambiguously assigns to Zeager the responsibility for
       obtaining the governmental approval for connecting
       Calabrese and Shirk’s sewage line to Zeager’s sewage
       treatment facility.”

       Zeager filed an application for reconsideration on June 5,
       2009, which was denied by the Superior Court on August
       4, 2009. No petition for allowance of appeal was filed with
       the Supreme Court of Pennsylvania, and the case was
       thereafter remanded to the trial court.

       Following the remand, Calabrese [and Shirk] filed a motion
       for judgment on September 13, 2011, to which Zeager
       responded with a cross motion for judgment on October 3,
       2011. Zeager also filed on October 31, 2011, a motion to
       amend his answer to the complaint to plead actual
       planning and construction costs for a new sewage
       treatment plant built in 2009, following the remand of this
       case, as an offset to any of Calabrese [and Shirk’s]
       damages. Finally, a motion for post remand evidentiary
       hearing was filed by Zeager on October 31, 2011.

       These matters were assigned to the Honorable Jeffery D.
       Wright on December 15, 2011, following Judge Allison’s
       retirement from the bench. Following a status conference
       on February 27, 2012, Judge Wright sent the parties to
       mediation through the Lancaster Bar Association. The
       mediation concluded without a successful resolution. Two
       subsequent attempts at mediation by Judge Wright in
       September and October of 2012 ended again without
       success.

       This case was then reassigned to the Honorable Louis J.
       Farina.  Following a case management conference on
       January 23, 2013, Judge Farina entered an order docketed
       on January 25, 2013, which allowed Zeager to amend his
       answer to plead a claim for offset damages related to the

                                   -4-
J-A14022-15

        post[-]trial construction of his new sewer plant, set a
        discovery schedule, and invited dispositive motions. The
        Order further noted, in an apparent response to Zeager’s
        motion for a post[-]remand evidentiary hearing, that
        “[a]ny bench trial will be limited only to a determination of
        the amount of damages to which [Calabrese and Shirk are]
        entitled resulting from [Zeager’s] breach of contract.
        [Zeager’s] liability to [Calabrese and Shirk] for breach of
        contract was finally determined by the judgment of the
        [S]uperior [C]ourt. The only remaining issue is damages,
        allowable attorney’s fees and costs.”

        On November 12, 2013, Calabrese [and Shirk] filed a
        motion for summary judgment. Following the filing of
        briefs by the parties, the case was reassigned to this
        [c]ourt on May 9, 2014. Oral argument on the summary
        judgment motion was scheduled for August 4, 2014, and
        then rescheduled, upon request of Zeager, to September
        19, 2014. On October 14, 2014, I entered an [o]rder
        granting Calabrese [and Shirk’s] [m]otion for [s]ummary
        [j]udgment and entered judgment in favor of Calabrese
        [and Shirk] and against Zeager as follows: (1) damages in
        the amount of $50,372.83; (2) statutory interest from
        March 23, 2007, through November 12, 2013, in the
        amount of $20,071.741 (3) costs of litigation in the
        amount of $3,378.25; and (4) legal fees through
        November 12, 2013, totaling $84,844.40.           The total
        judgment was $158,687.22, before additional legal fees
        and interest to be awarded in an amount to be determined
        upon submission of a supplemental bill of costs and fees by
        Calabrese within ten days of the [o]rder. Calabrese [and
        Shirk’s] supplemental bill of costs was filed on October 23,
        2014.

        The same date, Zeager filed a post[-]trial motion
        challenging the [c]ourt’s order granting summary
        judgment. However, because Pa.[]R.Civ.P. 227.1(a) states
        that a post[-]trial motion does not apply to summary
        judgment motions, Zeager then filed a direct appeal to the
        Superior Court on November 3, 2014.

Trial Court Opinion, 12/16/2014, at 1-7. Both Appellant and the trial court

complied with Pennsylvania Rule of Appellate Procedure 1925.

                                    -5-
J-A14022-15

      Zeager raises the following claims on appeal:

         A. Did the [t]rial [c]ourt incorrectly determine that, post-
         remand, it was precluded from reviewing the issue of
         whether [Calabrese and Shirk] gave Zeager sufficient
         notice of [Calabrese’s and Shirk’s] desire to connect, the
         evidence of record establishing that [Calabrese and Shirk]
         did not give Zeager reasonable notice under the governing
         circumstances?

         B. Where the trial court acknowledged that damages
         offsets existed, was it error for the [t]rial [c]ourt to not
         reduce its damages award by the amount of the offsets, in
         particular offsets relating to the contractual liability
         [Calabrese and Shirk] would have had for new plant
         reconstruction had [Calabrese and Shirk] connected to the
         old plant?

Appellant’s Brief at 4.

      “[S]ummary judgment is appropriate only in those cases where the

record clearly demonstrates that there is no genuine issue of material fact

and that the moving party is entitled to judgment as a matter of law.”

Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa.2010) (quoting

Atcovitz v. Gulph Mills Tennis Club, Inc., 812 A.2d 1218, 1221

(Pa.2002)). A “trial court must take all facts of record and reasonable

inferences therefrom in a light most favorable to the non-moving party” and

“must resolve all doubts as to the existence of a genuine issue of material

fact against the moving party.” Id. (citing Toy v. Metropolitan Life Ins.

Co., 928 A.2d 186, 195 (Pa.2007)). Therefore, a trial court “may only grant

summary judgment ‘where the right to such judgment is clear and free from

all doubt.’” Id. (quoting Toy, 928 A.2d at 195). This Court “may reverse a

grant of summary judgment if there has been an error of law or an abuse of

                                    -6-
J-A14022-15

discretion.”    Id. (quoting Weaver v. Lancaster Newspapers, Inc., 926
A.2d 899, 902–03 (Pa.2007)).

         Zeager maintains that although this Court in the prior appeal found

that he breached the Agreement, it did not address his affirmative defense

that it was impossible for him to comply with the Agreement because

Calabrese and Shirk provided insufficient notice of their desire to use his

plant.     Appellant’s Brief at 14-15, 15 n.2.        Zeager maintains this Court

“recognize[d] Calabrese and Shirk’s notice (or lack thereof) as an issue,” but

“made no pronouncement as to whether Calabrese and Shirk did or did not

provide sufficient notice to Zeager.”          Appellant’s Brief at 14-15.   Zeager

argues the trial court erred when it failed to address the notice issue

following remand from our May 22, 2009 decision. We find the law of the

case doctrine prohibited the trial court from considering this issue.

         The law of the case doctrine “provides that if an appellate court has

considered and decided a question on appeal, neither that court nor any trial

court may revisit that question during another phase of the same case.”

Gateway Towers Condominium Assoc. v. Krohn, 845 A.2d 855, 861

(Pa.Super.2004).2      “The doctrine is designed to promote judicial economy,
____________________________________________

2
    The distinct rules that make up the law of the case doctrine are:

           (1) upon remand for further proceedings, a trial court may
           not alter the resolution of a legal question previously
           decided by the appellate court in the matter; (2) upon a
           second appeal, an appellate court may not alter the
(Footnote Continued Next Page)

                                           -7-
J-A14022-15

uniformity of decision making, protect the settled expectations of the

parties, maintain the consistency of the litigation and end the case.”               Id.

(quoting Peden v. Gambone Bros. Dev. Corp., 798 A.2d 305, 310

(Pa.Cmwlth.2002)).

      The    Agreement         contained         the   following   provision   regarding

government approvals:

          [2. Acceptance and Treatment of Sewage.]

          (c) At the Plant, [Zeager] shall treat [Calabrese and
          Shirk’s] Discharge in accordance with all federal, state,
          and local laws and regulations applicable thereto, and in
          accordance with standards established by the United
          States Environmental Protection Agency (‘EPA’), and the
          Pennsylvania Department of Environmental Resources
          (‘DER’), as such standards are from time to time
          promulgated, sufficient to permit discharge into the waters
          of the Commonwealth of Pennsylvania, and [Calabrese and
          Shirk]’s Discharge shall be so discharged.         Further,
          [Zeager] shall assure that all wastewater treated at the
          Plant is treated in accordance with all federal, state, and
          local laws and regulations applicable thereto, and in
          accordance with standards promulgated by the EPA and
          DER, sufficient to permit discharge into the waters of the
          Commonwealth of Pennsylvania. At all times and under
          all conditions, [Zeager] shall assure that the Plant
          has sufficient treatment capacity to treat (and shall
                       _______________________
(Footnote Continued)

          resolution of a legal question previously decided by the
          same appellate court; and (3) upon transfer of a matter
          between trial judges of coordinate jurisdiction, the
          transferee trial court may not alter the resolution of a legal
          question previously decided by the transferor trial court.

In re Estate of Elkins, 32 A.3d 768, 776 (Pa.Super.2011) (quoting
Commonwealth v. Starr, 664 A.2d 1326, 1331 (Pa.1995)).

                                            -8-
J-A14022-15

         reserve sufficient treatment capacity), shall be
         capable of so treating, and shall be legally
         authorized to so treat [Calabrese and Shirk]’s
         Discharge.

Sanitary Sewer Easement and Sewer Treatment Agreement, dated Nov. 26,

1991, at p.3 (“Agreement”) (emphasis added).

     In the prior appeal, this Court found Zeager breached the Agreement.

Calabrese v. Zeager, 976 A.2d 1151, 1151-52 (Pa.Super.2009). It further

found:

         Both parties agree that the Agreement permitted
         Calabrese and Shirk to construct a pipe to connect with
         Zeager’s sewage plant and required Zeager to accept and
         treat the sewage.      The parties disagree, however,
         regarding which party bore the responsibility under the
         Agreement for obtaining the necessary government
         approvals to allow Calabrese and Shirk to connect their
         sewage pipe to Zeager’s plant (specifically, an “approved
         sewer module” from the Pennsylvania Department of
         Environmental Resources). The trial court decided that
         Calabrese and Shirk bore this responsibility and entered
         judgment in Zeager’s favor.

         We find that the highlighted portion of paragraph 2(c)
         unambiguously requires Zeager to have legal authorization
         in place to accept Calabrese and Shirk’s sewage discharge.
         The highlighted portion further makes clear that this
         obligation required Zeager to maintain this legal
         authorization “at all times and under all conditions,” and,
         therefore, when Calabrese and Shirk notified Zeager that
         they intended to connect a sewage pipe to Zeager’s plant,
         it was Zeager’s responsibility under paragraph 2(c) to
         obtain the required approvals from the DER. Paragraph
         2(c) plainly requires Zeager to treat the Calabrese and
         Shirk discharge in accordance with all federal, state, and
         local laws and regulations, and it would not be possible for
         Zeager to do so without obtaining the required “approved
         sewer module” from the DER.

Id. at 1155-56.

                                    -9-
J-A14022-15

     In the prior appeal, Zeager stated in his appellate brief:

        Zeager joins in the portion of the Statement of the Case
        related to the procedural history in this matter set forth on
        page 6 and through the first full paragraph on page 7 of
        the Calabrese Brief. It should also be noted that, at trial,
        evidence on additional issues was presented, the issues
        including:

        1. Did Calabrese give sufficiently timely notice to Zeager of
        his desire to connect the Calabrese property to the Zeager
        sewage plant?

        2. If Zeager was found to be in breach of the 1991
        Sanitary Sewer Easement and Sewage Treatment
        Agreement (the “Agreement”), what damages did
        Calabrese incur?

        3. Must any or all of Calabrese’s damages be offset by
        amounts Calabrese saved by not hooking up to the Zeager
        sewage plant?

        Because the [t]rial [c]ourt found Zeager did not breach the
        Agreement, the [t]rial [c]ourt did not need to address the
        above issues.

Appellee Brief, filed 8/27/2007, at 2. Zeager further wrote:

        Alternatively, if this Court is persuaded that the [t]rial
        [c]ourt did commit some error in interpreting the
        Agreement, this Court must remand this matter to the
        [t]rial [c]ourt for such additional proceedings on the
        contract interpretation issue as this Court orders, as well
        as the issues raised before the [t]rial [c]ourt but not
        decided by the [t]rial [c]ourt as stated in the Procedural
        History (Part II. A.) of this Brief (timeliness of Calabrese
        notice, damages, and damages offset).

Id. at 16.    Zeager also discussed the evidence he believed established

Calabrese and Shirk failed to provide notice, e.g., the permit process would

take 6-12 months, Calabrese and Shirk did not write to Zeager until

                                    - 10 -
J-A14022-15

November 2003, and Calabrese and Shirk submitted plans for an onsite

sewer maintenance system. Id. at 4-6.

      Calabrese and Shirk’s appellate brief in the prior appeal discussed the

evidence of the notice they provided in the course of arguing that Zeager

breached the contract because he failed to obtain the legal authorization.

Appellant’s Brief, filed July 26, 2007, at 24-25.

      This Court found Zeager breached the Agreement by failing to obtain

the necessary permits after Calabrese and Shirk notified him they would use

his sewer plant.    Calabrese, 976 A.2d at 1156.         Before reaching this

decision, we reviewed the arguments relating to notice or lack thereof in the

parties’ briefs.   Further, we conducted a plenary review of the record,

including the trial transcripts, which contained testimony regarding the

notice provided, and the Agreement, which provided that Zeager shall be

legally authorized to treat Calabrese and Shirk’s discharge “[a]t all times and

under all conditions.” Because we considered and decided the notice issue

on the prior appeal, the law of the case doctrine precluded the trial court

from revisiting this issue and Zeager’s claim lacks merit.

      Zeager also challenges the trial court’s damages calculation, arguing

Calabrese and Shirk saved money when they used an on-site system rather

than Zeager’s sewage treatment plant because they did not have to pay

connection costs or maintenance and operation costs.         Appellant’s Brief at

27. He further claims Calabrese and Shirk saved the costs they would have

                                     - 11 -
J-A14022-15

owed Zeager for the “re-construction” of Zeager’s sewer management

system had they connected to the system. Id. at 28.

      The Supreme Court of Pennsylvania has stated:

         Where one party to a contract without any legal
         justification, breaches the contract, the other party is
         entitled to recover, unless the contract provided otherwise,
         whatever damages he suffered, provided (1) they were
         such as would naturally and ordinarily result from the
         breach, or (2) they were reasonably foreseeable and within
         the contemplation of the parties at the time they made the
         contract, and (3) they can be proved with reasonable
         certainty.

Helpin v. Trustees of Univ. of Pa., 10 A.3d 267, 270 (Pa.2010) (quoting

Ferrer v. Trustees of the University of Pennsylvania, 825 A.2d 591,

610 (Pa.2002)). A damage award should “place the non-breaching party ‘as

nearly as possible in the same position [it] would have occupied had there

been no breach.’” Id. (quoting Lambert v. Durallium Products Corp., 72
A.2d 66, 67 (Pa.1950)). “The measure of damages for breach of contract is

compensation for the loss sustained. The aggrieved party can recover

nothing more than will compensate him.” Id. (quoting Lambert, 72 A.2d at

67 (emphasis deleted)).

      Zeager claims the damages award should be offset by the amount

Calabrese and Shirk saved by not connecting to Zeager’s plant, including the

operation and maintenance costs (also referred to as sewage process

charges) and the connection costs (also referred to as trenching costs).

Appellant’s Brief at 29-31.

                                    - 12 -
J-A14022-15

       Calabrese and Shirk are paying operational and maintenance costs

associated with the sewage treatment facility they constructed when unable

to access Zeager’s plant.           They did not include the operational and

maintenance costs in the damages sought. Because Calabrese and Shirk are

paying operational and maintenance costs, and such costs were not part of

the damages award,3 the trial court properly declined to deduct these costs

from the damages award.

       Zeager next claims the damages award should be offset by the

connection costs Calabrese and Shirk would have spent had they connected

to Zeager’s plant. We agree.

       The Agreement provided:

          [Calabrese and Shirk] shall be permitted to construct
          within the above-described easement sanitary sewer lines
          and other facilities to transport wastewater from
          [Calabrese and Shirk’s] Real Estate to the Plant, and
          [Zeager] shall connect such sewer lines to the Plant.

Agreement at ¶ 2(a).            Further, at trial Calabrese testified that if he

connected to Zeager’s plant, the Agreement required him to install the

sewage line and he would bear the cost of such installation.               N.T.,

9/19/2006, at 99.

____________________________________________

3
  Operation and maintenance costs do not appear on the list of damages
claimed. See Joint Trial Exhibit No. 53.

                                          - 13 -
J-A14022-15

         Zeager’s breach of the Agreement forced Calabrese and Shirk to

construct their own treatment facility.            By building their own treatment

facility, however, they saved the costs they would have owed for connecting

to Zeager’s sewage plant.          Therefore, to make them whole for Zeager’s

breach, they are entitled to the cost they spent on their facility, less the

connection costs they would have owed had they connected to Zeager’s

plant.

         Calabrese and Shirk argue they still are entitled to connect to Zeager’s

plant. Therefore, if the connection costs are deducted now, and Calabrese

and Shirk later connect to Zeager’s plant, they would be paying those costs

twice. Appellee’s Brief at 8. This argument, however, is speculative, as it is

unclear whether Calabrese and Shirk will seek to connect to Zeager’s plant

in the future.4      Moreover, whether Calabrese and Shirk will connect to

Zeager’s plant is made even more speculative because Zeager replaced the

original sewage treatment plant with a new sewage treatment facility at a

new location. See Opinion, 12/15/2014, at 17, 16 n.10; Appellant’s Brief at

28, 33-35.       Therefore, we find the court erred in not deducting the

connection costs from the damages award. We leave it to the trial court to

calculate the connection costs offset on remand.

____________________________________________

4
  We need not address whether Calabrese and Shirk would be entitled to
reimbursement of the connection costs offset in the event they later connect
to Zeager’s plant.

                                          - 14 -
J-A14022-15

      Zeager    also   maintains   Calabrese   and Shirk   are     liable   for   re-

construction costs. We disagree.

      The Agreement provided:

          After connection of the sewer lines and other facilities
          installed to transport the [Calabrese’s and Shirk’s]
          discharge to the Plant, [Calabrese and Shirk] shall pay to
          [Zeager] a share of repair, reconstruction, and equipment
          replacement expenses incurred directly in connection with
          the operation of the plant and which are of a character
          that must be capitalized under generally accepted
          accounting standards (“Capital Improvements”), but such
          Capital Improvements shall not include improvements,
          additions and repairs initially made in order to
          accommodate and treat the [Calabrese’s and Shirk’s]
          Discharge or to increase the Sewer Plant’s capacity for
          treatment.

Agreement, at 6.

      In 2008-2009, after trial, Zeager replaced his sewer treatment plant.

He claims the amount Calabrese and Shirk allegedly would have owed had

they been connected to Zeager’s plant ($78,000.00) should be offset against

the damages award.      Appellant’s Brief at 28-29. This claim fails. Calabrese

and Shirk never connected to the plant and, therefore, this provision, which

applies only following connection to the plant, is inapplicable.

      Further, a new plant is not a “capital improvement.” As the trial court

stated:

          [S]uch “capital improvements” do not encompass a brand
          new multi-million dollar sewer treatment facility at a
          completely new and separate site distinct from the location
          of Zeager’s original treatment plant. This was not a repair,
          reconstruction, or restoration of the old facility as
          envisioned    by    the   Agreement.    Zeager’s    counsel

                                     - 15 -
J-A14022-15

         acknowledged at the trial in this matter that Zeager was
         “building a new plant” that was separate and distinct from
         the “old plant.” It is disingenuous and incongruous of
         Zeager to continually refer to the “reconstruction” of a
         “new sewage treatment plant.”

Trial Court Opinion, 12/15/14, at 17 (internal citations omitted).

      Moreover, even if it were a “capital improvement,” Calabrese and Shirk

would not have been responsible for the cost. Pursuant to the agreement,

Calabrese and Shirk are not responsible for capital improvements that

increase the capacity of the plant.       Agreement at ¶ 4(d).   Applying this

provision, the trial court reasoned:

         Zeager’s expert engineer, McCorkle, testified that the new
         plant was necessary for the growth of Zeager’s business,
         Hershey Farms, and Sight & Sound Theater, another
         adjoining property which also contracted for the use of the
         sewage treatment facility. Post[-]trial discovery further
         revealed that Zeager had granted the right to access and
         utilize the new plant to Keystone Custom Homes for an
         entirely new residential development. The new plant more
         than tripled the capacity of the original plant from 35,000
         gallons per day of discharge to 110,000 gallons of sewage
         per day. Clearly, the new plant was constructed for the
         purpose of significantly increasing the amount of treatment
         capacity that Zeager controlled.         Thus, pursuant to
         subparagraph 4(d) of the Agreement, Calabrese [and Shirk
         are] not obligated to contribute to the costs of such
         “improvements, additions and repairs” to increase the
         plant’s capacity.

Opinion, 12/15/14, at 17-18.

                                       - 16 -
J-A14022-15

      Order affirmed in part and reversed in part.    Remanded for the trial

court to offset damages in the amount of costs Calabrese and Zeager would

have paid to connect to Zeager’s plant. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/1/2015

                                    - 17 -