Murray, H. v. Willistown Township
169 A.3d 84
| Pa. Super. Ct. | 2017Background
- Murray retired as Willistown Township Manager in 2011 and signed a written Separation Agreement providing continued participation, at the Township’s expense, in the Township’s group life insurance plan then described as ($375,000).
- Unknown to the parties, township group rules treated retirees as "Class 4" with $20,000 coverage; current managers were "Class 1" with $375,000 coverage.
- The Township informed Murray it could only provide $20,000 under the group plan and could not lawfully purchase an individual $375,000 policy under the Second Class Township Code.
- Murray sued for breach of contract/specific performance/unjust enrichment seeking $375,000-equivalent relief; Township sought declaratory relief and alternatively contract reformation to $20,000.
- Trial court found a mutual mistake/impracticability, reformed the Agreement to change the parenthetical $375,000 to $20,000, granted summary judgment for Township on Murray’s claims, and denied relief that would require the Township to purchase individual coverage or pay $375,000.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reformation of the Agreement was proper after mutual mistake that $375,000 group coverage was unavailable | Murray agreed reformation is available but contends reformation must achieve parties’ original economic expectation | Township argued reformation is appropriate to reflect actual group benefit and that it lacks authority to buy individual policies | Court: Reformation/remedy akin to Restatement §158/§272 permissible; trial court properly reformed the Agreement to the available group amount ($20,000) |
| Whether reformation should require Township to obtain an individual $375,000 life policy (or equivalent payment) | Murray argued equitable relief should supply equivalent $375,000 benefit (e.g., individual policy premiums, lump sum to estate) | Township: statutorily prohibited from purchasing individual policies; contract did not promise individual policy or lump-sum payment | Court: Refused to add terms that conflict with parties’ written agreement and statutory limits; cannot reform to impose unlawful obligation on Township |
| Interpretation of Agreement: did it obligate Township to provide a $375,000 benefit regardless of plan classification | Murray contended the parties intended a $375,000 benefit and court should effectuate that intention | Township contended agreement obligated eligibility to participate in group plan at employer’s expense, not a guarantee of $375,000 or purchase of individual insurance | Court: Agreement granted eligibility to group plan; reformation corrected the mistaken dollar amount to what retiree-class receives ($20,000) |
| Whether summary judgment/reformation was inequitable or required additional factfinding/hearing | Murray argued court should consider other reasonable remedies and hold evidentiary hearing | Township argued no disputed material facts; equitable reformation was appropriate on the undisputed record | Court: No disputed material facts; summary judgment appropriate and no hearing required; equitable discretion properly exercised |
Key Cases Cited
- Smith v. Thomas Jefferson Univ. Hosp., 621 A.2d 1030 (Pa. Super.) (reformation for mutual mistake requires clear, precise, convincing proof)
- Voracek v. Crown Castle USA Inc., 907 A.2d 1105 (Pa. Super.) (definition and effect of mutual mistake on contract interpretation)
- Allen-Myland, Inc. v. Garmin Int'l, Inc., 140 A.3d 677 (Pa. Super.) (reformation available when mistake demonstrated)
- RegScan, Inc. v. Con-Way Transp. Servs., Inc., 875 A.2d 332 (Pa. Super.) (contract may be reformed or avoided where mistake shown)
- Vrabel v. Scholler, 85 A.2d 858 (Pa.) (mutual mistake may justify rescission if parties can be restored)
- Daddona v. Thorpe, 749 A.2d 475 (Pa. Super.) (reformation for scrivener's error to reflect parties' true agreement)
- Bollinger v. Central Pa. Quarry Stripping & Constr. Co., 229 A.2d 741 (Pa.) (reformation to correct written instrument so it matches parties’ intention)
- Bugen v. New York Life Ins. Co., 184 A.2d 499 (Pa.) (reformation only to effectuate parties’ true agreement)
- Hart v. Arnold, 884 A.2d 316 (Pa. Super.) (discussing impracticability and equitable remedies under Restatement principles)
- New Charter Coal Co. v. McKee, 191 A.2d 830 (Pa.) (equity will not remake contracts the parties did not make)
- Vautar v. First Nat’l Bank of Pa., 133 A.3d 6 (Pa. Super.) (standard of appellate review for equity decisions)