Borough of Ellwood City, Lawrence County, PA v. Heraeus Electro-Nite Co., LLC
167 A.3d 273
| Pa. Commw. Ct. | 2017Background
- Ellwood City (Borough) owns and operates a municipal electric utility and has an ordinance governing service, applications, and billing.
- Heraeus operated an industrial plant in the Borough and had been a long‑time customer who paid monthly bills from 1997–2014.
- A lightning strike and subsequent meter inspection revealed metering errors; Borough concluded Heraeus had been underbilled for years and sought retroactive charges.
- On January 20, 2015, Borough filed a municipal claim and judgment (lien) for approximately $975,456.52 (later sought to amend to ~$1.3M).
- Heraeus filed an affidavit of defense, new matter, and counterclaim and moved for judgment on the pleadings, arguing the ordinance precludes back‑billing and a lien premised on a contract is improper.
- Trial court granted Heraeus’s motion, holding Borough’s ordinance forbids retroactive billing and the lien was contractual (not lawfully imposed under the Municipal Claims Act); this Court affirmed.
Issues
| Issue | Borough's Argument | Heraeus's Argument | Held |
|---|---|---|---|
| Whether Borough may "back‑bill" for prior undercharges under its ordinance | Ordinance should be construed to allow correction of a billing error; prohibiting back‑billing would be absurd | Ordinance language permits only prospective billing changes; no retroactive adjustments | Court: Ordinance (§1046.43(b)) allows only billing changes effective the month of investigation and thereafter; back‑billing not permitted |
| Whether a municipal lien based on the asserted charges was lawfully imposed | Lien valid because municipalities can impose statutory liens for unpaid utility charges | Lien arises from a contractual provider‑customer relationship (written application/contract) and thus cannot be imposed as a municipal lien under the Municipal Claims Act | Court: Lien was premised on contractual obligations; Summit controls — municipal liens must be lawfully imposed (not based on voluntary contracts); lien invalid |
| Whether judgment on the pleadings was appropriate | Borough argued merits should allow lien to stand | Heraeus contended pleadings and admissions establish legal impossibility of recovery | Court: Standard satisfied; on pleadings law shows no recovery possible; judgment on the pleadings proper |
Key Cases Cited
- Mann v. Lower Makefield, 634 A.2d 768 (Pa. Cmwlth. 1993) (ordinance must be construed like a statute; avoid absurd results)
- Lucia v. Zoning Hearing Bd. of Upper St. Clair Twp., 437 A.2d 1294 (Pa. Cmwlth. 1981) (statutory construction principles apply to local ordinances)
- Township of Summit v. Property Located at Vacant Land in Summit Twp., 92 A.3d 121 (Pa. Cmwlth. 2014) (municipal lien must be lawfully imposed; contractual obligations cannot be converted into municipal liens)
- City of Philadelphia v. Northwest Textile Mills, Inc., 149 A.2d 60 (Pa. 1959) (recognizing municipal/liens for delinquent utility rents in that context)
- In re Scranton Sewer, 62 A. 173 (Pa. 1905) (municipal liens do not rest on voluntary agreements)