699 A.2d 838 (Pa.Cmwlth. 1997), Denbow v. Borough of Leetsdale

• Citation: 699 A.2d 838
• Date: 02 June 1997
• Docket Number: .
• Parties: Ronald DENBOW, Vernon S. Krayniewski and Andrew Pszenny, Police Wage and Policy Committee, Appellants, v. BOROUGH OF LEETSDALE.
• Court: Pennsylvania Commonwealth Court

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699 A.2d 838 (Pa.Cmwlth. 1997)

Ronald DENBOW, Vernon S. Krayniewski and Andrew Pszenny,

Police Wage and Policy Committee, Appellants,

v.

BOROUGH OF LEETSDALE.

Commonwealth Court of Pennsylvania.

June 2, 1997

Page 839

Ronald P. Koerner, Pittsburgh, for appellants.

Richard F. Start, Pittsburgh, for appellee.

Before DOYLE and LEADBETTER, JJ., and JIULIANTE, Senior Judge.

DOYLE, Judge.

Police Officers Ronald Denbow, Vernon Krayniewski and Andrew Pszenny, and the Police Wage and Policy Committee (collectively, the Police) appeal from an order entered in the Court of Common Pleas of Allegheny County that dismissed their motion for judgment n.o.v. For the following reasons, we affirm.

The record reveals the following undisputed facts. On December 30, 1991, the Borough of Leetsdale (Borough) and the Police Wage and Policy Committee entered into a three-year collective bargaining agreement (the CBA) which provided for the terms and conditions of employment for the Borough police officers for the years 1992, 1993 and 1994. The CBA had established the wage scale for the three years of the contract, but, on November 3, 1993, the day following the municipal elections, at which two incumbent councilmen were defeated for reelection, the Borough Council voted to "amend" the CBA by giving three police officers a substantial pay increase during 1994, the last year of the contract. On December 21, 1993, Council voted a pay increase for a fourth officer who was inadvertently omitted from the November 3, 1993 resolution.

The vote of Borough Council to grant the wage increases was 5 to 2 at both meetings, with the two defeated councilmen voting with the majority. Both resolutions of Council were unilateral actions taken by the outgoing Borough Council. After the newly elected councilmen were installed in January of 1994, the newly reorganized council met on January 20, 1994, and repudiated both resolutions of the previous council.

When the Borough refused to pay the salary increases, the Police filed an assumpsit action in the Court of Common Pleas and attached as exhibits to the Complaint two contracts dated November 15, 1993, and December 12, 1993, which purport to be the "addenda" to the three-year CBA providing for the salary increases. ¹ On March 29,

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1996, Common Pleas entered a verdict in favor of the Borough, concluding that the addenda were unconstitutional pursuant to Article 3, Section 26 of the Pennsylvania Constitution, which, in pertinent part, states the following:

§ 26. Extra compensation prohibited; claims against the Commonwealth; pensions

No bill shall be passed giving any extra compensation to any public officer, servant, employee, agent or contractor, after services shall have been rendered or contract made.... Provided, however, That nothing in this Constitution shall be construed to prohibit the General Assembly from authorizing the increase of a retirement or pension system now in effect or hereafter legally constituted by the Commonwealth, its political subdivisions, agencies or instrumentalities, after the termination of the services of said member. (Emphasis added.) ²

Common Pleas concluded that the addenda provided "extra compensation" because the CBA between the Borough and the Police had already been agreed upon and executed and that the addenda were therefore unconstitutional pursuant to Article 3, Section 26.

On appeal, ³ the Police contend that Article 3, Section 26 applies only to actions of the Pennsylvania General Assembly and does not apply to the actions of local municipalities, and therefore, Common Pleas erred in concluding that the addenda were unconstitutional. Additionally, the Police argue that, even if Article 3 does apply to the actions of local municipalities, Act 111 ⁴ gives local municipalities the "authority under [Article 3,] Section 26 to grant extra compensation to police officers prior to the termination date of their employment contracts." (Appellants' Brief at 7.)

The Police rely exclusively on McKinley v. School District of Luzerne Township, 383 Pa. 289, 118 A.2d 137 (1955), in arguing that Article 3, Section 26 does not apply to municipal actions. In McKinley, a school district increased the compensation of an elected tax collector after that tax collector's election. A group of taxpayers filed a complaint in equity requesting that the trial court nullify the action of the school district. The trial court entered a decree that declared the school district's action null and void because it was so excessive that it constituted a "clear abuse of discretion, ... [and was] an arbitrary and capricious action ... resulting in an unlawful expenditure of public funds." Id. at 293, 118 A.2d at 140. ⁵ On appeal, the Pennsylvania Supreme Court held that the decree of the Court of Common Pleas diminishing the compensation of the tax collector after he had been elected to a new four-year term did not violate ARTICLE 3, SECTION 27 OF THE PENNSYLVANIA CONSTITUTION⁶, which states the following:

§ 27. Changes in terms of office or salary prohibited

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No law shall extend the term of any public officer, or increase or diminish his salary or emoluments, after his election or appointment.

The Court stated that this section of the Constitution applies only to a "law," "which means an act of the legislature, and not to action by any municipal or local authority." Id. at 292, 118 A.2d at 139.

Although McKinley involved Section 27 and not Section 26, the Police contend that, pursuant to the Supreme Court's decision in Retirement Board of Allegheny County v. McGovern, 316 Pa. 161, 174 A. 400 (1934), the language in McKinley regarding the inapplicability of Article 3, Section 27 to local municipal ordinances or resolutions should be followed in this present appeal. The Police rely on dicta of the McGovern Court where the Court stated that Section 26 "should be read in connection with sections and of the same Article." Id. at 168, 174 A. at 404. The Supreme Court made this statement while addressing constitutional challenges to the Retirement Act for employees of counties of the second class, yet provided no further explanation regarding why the principle of in pari materia applies to Sections 26 and 27. The Court held that payments of retirement benefits were part of the employees' salaries and were not, therefore, "extra compensation" for past services rendered, which is prohibited under Section 26.

Because the above statement in McGovern is merely obiter dictum, it is, of course, not binding; but beyond that, because the issue in McKinley involved Section 27 and not Section 26, that case is not dispositive of this appeal. Furthermore, even if McKinley was relevant to the question presently before us, we would still find it inapplicable as the issue in that case is quite distinguishable from those presented in this case.

In McKinley,...