Borough of West Fairview v. Hess

• Decision Date: 28 December 1989
• Citation: 130 Pa.Cmwlth. 385,568 A.2d 709
• Parties: BOROUGH OF WEST FAIRVIEW, Appellant, v. Peggy HESS, Vicki L. Judy, Donna Kindness and Christine E. Zimmerman and Bonnie L. Kapp, Appellees.
• Court: Pennsylvania Commonwealth Court

Page 709

568 A.2d 709

130 Pa.Cmwlth. 385

BOROUGH OF WEST FAIRVIEW, Appellant, v. Peggy HESS, Vicki L. Judy, Donna Kindness and Christine E Zimmerman and Bonnie L. Kapp, Appellees.

Commonwealth Court of Pennsylvania.

Argued Nov. 16, 1989.

Decided Dec. 28, 1989.

Thomas F. Brenner, Goldberg, Katzman & Shipman, P.C., with him, Henry Coyne, Harrisburg, for appellant.

Christopher C. Houston, Broujos, Gilroy & Houston, P.C., Carlisle, for appellees.

Before CRAIG, McGINLEY and SMITH, JJ.

CRAIG, Judge.

West Fairview Borough appeals two orders of Judge Kevin A. Hess. One of those orders dismissed one count of the borough's suit for damages against the defendants, former elected borough auditors, on the auditors' preliminary objections in the nature of a demurrer. The other order, dated more than eight months later, granted the auditors' motion for summary judgment on the other count in the borough's complaint.

In addition to a question of the timeliness of the appeal as to the earlier order, there is also a question as to whether the auditors are shielded by immunity.

On the preliminary objections, the complaint's averments provide the assumed facts, as follows. In 1986 the borough discovered that the defendant auditors failed to discover deficiencies in the borough's accounts for the years 1982 through 1985, allegedly because of the auditors' error or negligence.

Under Count II of the complaint, paragraphs 11-13 allege that the auditors, who had received compensation for the performance of their duties, had breached their oath that they had carefully examined the accounts.

The trial court dismissed Count II of the complaint, which it concluded sounded in contract, on the basis that no contractual relationship can exist between a public official and the government entity the official serves. Snyderwine v. Craley, 434 Pa. 349, 354, 254 A.2d 16, 19 (1969).

Approximately eight months later, the trial court dismissed Count I, a negligence claim, on the auditors' motion for summary judgment, on the basis that the auditors were immune from suit under the governmental immunity provisions, Chapter 85 of the Judicial Code, 42 Pa.C.S. §§ 8541-8564.

Within thirty days after the dismissal of Count I, pursuant to the summary judgment, the borough appealed both dismissal orders.

1. Timeliness of Appeal From Count II Order

Initially, the auditors argue that this court lacks jurisdiction to consider an appeal of the trial court's adjudication of Count II. They contend that the trial court's dismissal of that count constituted a final, appealable order, and that the township's failure to appeal within 30 days renders the appeal of that count untimely.

The borough, in support of its contention that its appeal of the trial court's order regarding Count II is not untimely, seeks to distinguish the decision upon which the auditors rely, Hardy v. Pennock Insurance Agency, Inc., 365 Pa. Superior Ct. 206, 529 A.2d 471 (1987), in which Judge Kelly, writing for the court, reiterated the rule set forth in Cloverleaf Development, Inc. v. Horizon Financial F.A., 347 Pa.Superior Ct. 75, 500 A.2d 163 (1985):

[I]f the dismissal of one count or several counts of a multi-count complaint has the effect of precluding the plaintiff from pursuing the merits of separate and distinct causes of action, the order sustaining preliminary objections is then final and appealable as to those causes of action dismissed; where such separate counts merely state alternative theories to support recovery on a single cause of action, the dismissal of one count does not put plaintiff "out of court" as to the cause of action raised, and the order is therefore interlocutory and appealable. Cloverleaf, 347 Pa.Superior Ct. at 82, 500 A.2d at 166.

....

Should the cause of action of.... the dismissed [count] still exist.... the dismissed count would be deemed an "alternative theory to support recovery on the same cause of action."

365 Pa.Superior Ct. at 212, 529 A.2d at 474. (Emphasis added.)

The borough argues that the two counts represent alternative theories of the same cause of action, and thus that they were not "out of court" on the Count II dismissal alone.

In Hardy, the plaintiff included four counts in the complaint. The trial court had sustained the defendant's preliminary objections to the plaintiff's original complaint and dismissed counts two, three and four. The plaintiff appealed that decision and the court considered whether it had jurisdiction to consider an appeal of all three counts. The court analyzed each count to determine whether they were alternative theories and thus interlocutory, or distinct causes of action which an aggrieved party must appeal immediately.

The court concluded that Count II was an alternative theory to Count I; both were based on a negligent breach of contract cause of action. However, the court determined that Count III, which alleged misrepresentation and fraud, was not an alternative theory, but rather a distinct cause of action. Likewise, Count IV, claiming a statutory cause of action, could not be characterized as an alternative theory supporting the negligent breach-of-contract cause of action. Thus, because Count II was merely an alternative theory for the cause of action stated in Count I, that dismissal order was interlocutory; however, because Counts III and IV were distinct causes of action, the court had jurisdiction to entertain the dismissal of those counts as final, appealable orders.

Another Superior Court decision lends support to West Fairview's position. In General Machine Corporation v. Feldman, 352 Pa.Superior Ct. 180, 507 A.2d 831 (1986) the court concluded that it lacked jurisdiction to address the appeal of the trial court's dismissal of two counts in the appellant's complaint. Count II incorporated the facts averred in Count I, and demanded damages for the appellee's allegedly negligent conduct. Count IV incorporated the facts averred in Count III and alleged negligent conduct. Count I alleged that the appellees had breached their contract with the appellant. The court concluded that because the separate counts were merely alternative theories of recovery on the same cause of action, the trial court's dismissal of those counts was not a final order from which an appeal could be taken.

Similarly, West Fairview here is seeking a single recovery for the auditors' failure to discover that a borough employee had embezzled money, asserting two possible theories upon which the borough may succeed, rather than two distinct causes of action. An immediate appeal of the trial court's dismissal of Count II would have been interlocutory. Therefore, this court has jurisdiction to consider the merits of the borough's appeal of the trial court's dismissal of Count II.

2. Breach of Contract Claim

With respect to West Fairview's challenge to the trial court's conclusions on the contract claim, we adopt the opinion of Judge Hess. See Borough of West Fairview v. Peggy Hess, Vicki Judy, Donna Kindness, and Christine Zimmerman, 38 Cumb.L.J. 521 (1988).

3. Negligence claim--Six-Month

Notice and Limitation

The auditors argue that the borough failed to comply with the six-month notice provision of the Judicial Code, 42 Pa.C.S. § 5522(a), that requires parties to provide the government unit, against which they intend to bring suit, with six months notice. Chapter 1 of the Judicial Code defines a government unit as "[t]he General Assembly and its officers and agencies, any government agency or any court or other officer or agency of the unified judicial system." 42 Pa.C.S. § 102. A government agency is defined as "[a]ny Commonwealth agency or any political subdivision or municipal or other local authority, or any officer or agency of any such political subdivision or local authority." 42 Pa.C.S. § 102. Accordingly, the auditors constitute a government unit entitled to six-months notice as required by the Judicial Code.

The auditors also claim that the Judicial Code's six-month statute of limitations, 42 Pa.C.S. § 5522(b), expired before the borough initiated this action, and thus, that the borough is precluded from pursuing its cause of action. That provision states:

(b) Commencement of action required.--The following actions and proceedings must be commenced within six months:

(1) An action against any officer of any government unit for anything done in the execution of his office except an action subject to another limitation specified in this subchapter.

The borough argues that those issues are not properly before this court, because the trial court did not consider them. However, the auditors did raise these issues in their answer and new matter to the borough's complaint and in their motion for summary judgment. The fact that the trial court did not consider them in reaching its decision does not constitute a waiver of the issues.

Paragraph 6 of the borough's complaint states:

During January 1986, plaintiff for the first time discovered that the defendants, the elected auditors of Borough of West Fairview, by negligence, error or neglect, had failed to discover deficiencies in the Borough accounts for the four preceding years.....

Thus, the borough admits that it had knowledge of the deficiencies as of January 1986. Nevertheless, the borough did not initiate its lawsuit, or give notice, until January 1988.

The borough argues that the two-year statute of limitations in the Judicial Code, 42 Pa.C.S. § 5524(6) applies in this case. That provision states:

The following actions and proceedings must be commenced within two years:

(6) An action against any officer of any government unit for the nonpayment of money or the nondelivery of property collected upon on execution or otherwise in his possession.

The language of this provision clearly does not involve the actions of the auditors at issue here, because the auditors did not have in their possession funds that they collected on behalf of the...