63 Pa. Commw. 48 | Pa. Commw. Ct. | 1981
Opinion by
This is an appeal by petitioner Central Dauphin School District from an order of the Department of Education dismissing petitioner’s complaint.
During the afternoon of June 21, 1979, Gaughan contacted Fowler and indicated that the Department would employ the method of calculating the reimbursement percentage reflected in the Rothschild proposal.
Subsequent to June 22, 1979, Heslep reviewed the Rothschild proposal and determined that the proposal violated School Building Standard 349.20(c),
The School District has advanced a theory of equitable estoppel against the Department as the basis for seeking approval of the reimbursement percentage reflected in the Bothschild proposal. In this regard, the School District argues that the Department, through its employee, Gaughan, made a representation to the District through its agent, Fowler, that the calculation of the reimbursement percentage submitted to Gaughan on June 21, 1979 would be applicable to the refunding bond issue. The School District further asserts that it contracted with Bothschild to underwrite the sale of the bonds in reliance upon Gaughan’s representation, and that the subsequent revision of the calculations by the Department resulted in financial detriment to the School District.
Historically, Pennsylvania courts have been reluctant to apply the doctrine of equitable estoppel against the Commonwealth and its agencies. See, e.g., Commonwealth v. Western Md. Ry., 377 Pa. 312, 105 A.2d 336 (1954), cert. denied, 348 U.S. 857 (1954); Commonwealth v. Rohm and Haas Co., 28 Pa. Commonwealth Ct. 430, 368 A.2d 909 (1977). That re
The leading decision in which estoppel principles were applied against the Commonwealth is Department of Public Welfare v. UEC, Inc., supra. In that case, the Commonwealth wrongfully terminated a written contract with UEC. Over a two year period, the Commonwealth, through several state officials including the Governor, repeatedly assured UEC of its intention to pay UEC the balance due under the contract. At some point during this period, however, a dispute arose as to the exact amount of compensation remaining to be paid. Following negotiations, a settlement was reached. When the Commonwealth refused to pay UEC in accordance with the terms of the settlement agreement, UEC instituted an action seeking enforcement thereof. The Commonwealth asserted that the claim was barred by the running of the applicable six-month statute of limitations. The Pennsylvania Supreme Court held that the Commonwealth was estopped from asserting the statute of limitations as a defense, finding that UEC was lulled into a false sense of security regarding the necessity for instituting legal action by the Commonwealth’s repeated assurances of its intention to pay its obligation.
More recently, the estoppel doctrine was applied against the Commonwealth by this court in Department of Revenue, Bureau of Sales and Use Tax v.
It is thus now clear that the doctrine of equitable estoppel may be applied to a Commonwealth agency. Hauptmann v. Department of Transportation, 59 Pa.
Instantly, the School District has failed to establish justifiable reliance upon Gaughan’s representation, i.e., that the Department would employ the method of calculating the reimbursement percentage reflected in the Rothschild proposal. The School District was aware, through Fowler, that approval of the calculations by Gaughan’s superior was a necessary part of the approval process. Furthermore, it is to be observed that the UEC and King Crown cases involved a constant course of conduct by high government officials who had made written representations. These factors are not present here.
For the reasons set forth above, we affirm the decision of the Department of Education.
Order
And Now, this 2nd day of December, 1981, the order of the Department of Education dated October 9,1980, is affirmed.
The School District asserts that Gaughan advised Fowler that the calculations submitted to the Department had been approved by Heslep. The testimony adduced before the hearing examiner, however, indicates that such a representation was not made to Fowler or any other agent of the school district.
22 Pa. Code §349.20(e).
School Building Standard 349.20(c) provides:
Refunding of bond issues. When, in its judgment, the refunding of school district bond issues is in the best interest of the Commonwealth or the school district, or both, and consistent with the purposes of the Local Government Unit Debt Act (53 P.S. §§6780-1-6780-608) (reenacted, amended, and revised by the act of April 28, 1978 (P.L. 124, No. 52)), the Department will approve and adjust to such refundings; provided that the Commonwealth will share, in appropriate proportion, any savings realized by the refunding; and under no circumstances will the Commonwealth’s remaining fiscal commitment be increased because of an approved refunding. Any bond fund accumulations for any issues which are to be included in a refunding bond issue must be used to reduce the total amount of the refunding issue.
These sections provide as follows:
§131.11. General.
No compromise or writeoff of a claim due the Commonwealth may be approved unless there appears in the file of the case documentation, in the form of memoranda or investigation reports, verifying or controverting some or all of the facts relevant to the claim. If no such documentation is present, the file shall contain a memorandum explaining why such information is not available. §131.23. Amounts not in excess of $50,000.
If the amount of money which is to be compromised or written off is not in excess of $50,000, and if the file contains the documentation required by the provisions of this chapter, approval may be granted by the Chief, Commonwealth Collections Division.