Riverside Sch. Dist. v. Career Tech. Ctr. of Lackawanna Cnty., 2112 C.D. 2013
| Decision Date | 05 November 2014 |
| Docket Number | No. 2112 C.D. 2013,2112 C.D. 2013 |
| Citation | 104 A.3d 73 |
| Court | Pennsylvania Commonwealth Court |
| Parties | RIVERSIDE SCHOOL DISTRICT v. CAREER TECHNOLOGY CENTER OF LACKAWANNA COUNTY, Carbondale Area School District, Dunmore School District, Forest City Regional School District, Lakeland School District, Mid Valley School District, North Pocono School District, Scranton School District, Valley View School District. Career Technology Center of Lackawanna County, Carbondale Area School District, Dunmore School District, Forest City Regional School District, Lakeland School District, Mid Valley School District, North Pocono School District, Scranton School District, Valley View School District v. Riverside School District. Appeal of: Riverside School District. |
Carl J.B. Poveromo, Scranton, for appellant.
Judith G. Price, Moosic, for appellee Career Technology Center of Lackawanna County.
BEFORE: MARY HANNAH LEAVITT, Judge, PATRICIA A. McCULLOUGH, Judge, and ROCHELLE S. FRIEDMAN, Senior Judge.
Riverside School District (Riverside) appeals from a judgment entered in favor of the Career Technology Center of Lackawanna County (CTC) and against Riverside based upon the June 21, 2013, order of the Court of Common Pleas of Lackawanna County (trial court).1 Riverside appeals that portion of the trial court's June 21, 2013, order that: denied Riverside's request for declaratory judgment, finding that the terms of the Articles of Agreement for establishment of the Lackawanna County Area Vocational–Technical Schools (Agreement) remained in effect and that Riverside is bound by those terms; and rendered a verdict in favor of CTC for breach of contract.2 We affirm in part and reverse in part.
CTC, an area vo-tech school, was established on December 6, 1968, through adoption of the Agreement. At the time of its inception, CTC had 17 school districts; however, prior to this litigation, due to district consolidation, nine school districts remained, including Riverside.
CTC's Joint Operating Committee (JOC), which is comprised of one member from each of the participating school districts, is the operating and governing body of CTC. CTC also has advisory committees, including an Administrative Advisory Committee, comprised of the superintendents from each of the participating school districts. In addition, CTC has an Administrative Director, Vincent Nallo, who has executive oversight of the vo-tech school.
On August 21, 2012, Riverside filed a civil complaint for declaratory judgment against CTC and all other participating school districts of CTC. The complaint alleged that Riverside is no longer obligated to participate in CTC because there are no outstanding capital expenditures and, pursuant to Article 11 of the Agreement, the Agreement is no longer in effect.
On October 12, 2012, CTC and its participating school districts filed a multi-count complaint against Riverside, claiming that the Agreement remains in effect and that Riverside violated the Agreement by failing to pay its share of the operating expenses and by unilaterally withdrawing from CTC. CTC sought a declaration that the Agreement remains in effect, that Riverside violated the terms of the Agreement, and that the Agreement precluded Riverside from sending its students to other vo-tech schools.
The trial court consolidated the two actions on November 15, 2012, and on March 27, 2013, held a non jury trial.
The parties agreed that the termination of the Agreement is controlled by the language of Article 11, which states:
(Agrmt., Article 11 at 3 (Italicization added).)
Before the trial court, CTC argued that Riverside has outstanding financial obligations in the form of capital expenditures, including a Master Equipment Lease–Purchase Agreement (Master Lease) that was executed on December 19, 2011, between CTC and PNC Equipment Financing, LLC.3 Riverside approved the Master Lease, which provided the necessary financing for CTC's purchase of a Heidelberg cutter and a Presstek printing press to be used as part of CTC's instructional curriculum. The Master Lease provides for monthly payments of principal and interest from January 28, 2012, through December 28, 2021.
CTC's former Chief Financial Officer, Michael Sporer, described the Master Lease as a capital lease, which denotes that at the end of the lease term and upon satisfaction of the terms of the agreement, the equipment becomes the property of the lessee, CTC. Sporer also testified that the Master Lease is reflected as a long-term debt on CTC's financial statements.
The trial court determined that the Master Lease constitutes a financial obligation for a capital expenditure, and, thus, the Agreement remains in effect. The trial court further found that because the Agreement is still in effect, Riverside has breached the Agreement by unilaterally withdrawing from CTC and by failing to pay its respective share of the operating expenses for the 2012–13 school year.
The trial court ultimately denied Riverside's request for relief and granted in part and denied in part CTC's requests for relief. Riverside appealed to this court.4
Initially, Riverside contends that the trial court erred in holding that the Master Lease qualifies as a financial obligation for a capital expenditure and that the Agreement therefore remains in effect. We agree.
A contract's interpretation is a question of law for this court. Profit Wize Marketing v. Wiest, 812 A.2d 1270, 1274 (Pa.Super.2002). The general mandates of contract interpretation are: “(1) that no provision of a contract should be treated as surplusage or redundant if any reasonable meaning consistent with other parts of the agreement can be given to it[,]” and “(2) that the court must determine the intent of the parties and give effect to all provisions of the contract.” Wyoming Valley West School District v. Northwest School District, 695 A.2d 949, 953 (Pa.Cmwlth.1997).
Riverside argues that the language in Article 11 of the Agreement is plain and unambiguous and that the Agreement ends when there are no outstanding financial obligations for capital expenditures. Riverside asserts that the Master Lease is not a capital expenditure.
The Master Lease is a $400,000 equipment lease for a printing press and cutter. The Master Lease states in pertinent part that:
4.3. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rent Payments under each Lease shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained in any Lease constitute a pledge of the full faith and credit or taxing power of Lessee.
(Master Lease, Section 4.3, at 2 (emphasis in original).) Further, section 6 of the Master Lease provides for termination upon a non-appropriation event as follows:
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...(Id. (employing the phrase "marketed and sold off the premises") ); see Riverside Sch. Dist. v. Career Tech. Ctr. of Lackawanna Cty. , 104 A.3d 73, 76 (Pa. Commw. Ct. 2014) (courts should avoid treating contractual provisions as surplusage or redundant if reasonably possible). To Plaintiffs......
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In re The Baptist Home of Phila.
...interpretation that arguably may render a contract provision surplusage is disfavored. See, e.g., Riverside School Dist. v. Career Technology Center of Lackawanna County, 104 A.3d 73, 75–76 (Pa.Cmwlth.Ct.2014).I am unpersuaded by this argument.Section 10, an arguably superfluous provision, ......
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In re Baptist Home of Phila.
...interpretation that arguably may render a contract provision surplusage is disfavored. See, e.g., Riverside School Dist. v. Career Technology Center of Lackawanna County, 104 A.3d 73, 75–76 (Pa.Cmwlth.Ct.2014). I am unpersuaded by this argument. Section 10, an arguably superfluous provision......
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In re Baptist Home of Phila.
...interpretation that arguably may render a contract provision surplusage is disfavored. See, e.g., Riverside School Dist. v. Career Technology Center of Lackawanna County, 104 A.3d 73, 75–76 (Pa.Cmwlth.Ct.2014). I am unpersuaded by this argument. Section 10, an arguably superfluous provision......