71 Pa. Commw. 144 | Pa. Commw. Ct. | 1983
Opinion bt
Sometime prior to 1964, the Dravosburg Housing Association (Association), a Pennsylvania non-profit corporation, purchased from the United States government, a housing development in the Borough of Dravosburg (Borough) consisting of some 250 housing units, the land on which the buildings were erected, and the streets, utility lines and sewage lines which were connected to the buildings and ran under the streets. Subsequently, the Borough .created the Dravosfourg Sanitary Authority (Authority) to put in place a sewage system for the Borough and adopted an ordinance requiring all residents of the Borough to become a part of and make use of the sauitation facilities. The Association then brought an action in equity against the Authority and the Borough alleging that it had its own sewage .system and, therefore, should not ¡be required to become a part of the Authority’s sewage facility system.
That litigation was resolved by a consent decree dated July 16,1964 which is at the heart of .the instant appeal. By its terms, the decree provided that the Association would grant and 'convey to the Borough the streets it owned and the sewage facilities it owned.
3. It having been estimated that the initial annual maintenance cost of the sewer system to be constructed by the Defendant, Dravosburg Sanitary Authority, will be approximately $25,000.00, and that the Defendants having estimated the share of said cost to be borne by Plaintiff to be approximately 25% or approximately $6,250.00, based on a previously proposed unit system of calculating charges, and Defendants, recognizing the savings to them involved in the servicing of large consumers, Defendant, Borough of Dravosburg, shall cause to be enacted the necessary Ordinances to effectuate a maintenance cost schedule based on water use, said schedule to contemplate a graduated blockrate with the result that Plaintiff’s share of the total annual maintenance cost shall be approximately 20% or approximately $5,-000.00, as based on present estimates.
Additionally, the decree provided that:
4. The within decree shall be finally determinative of the issues between the parties hereto and the above captioned action shall be and the same hereby is dismissed with prejudice, each party to bear own costs.
Pursuant to the terms of that decree, the Borough adopted an ordinance (No. 491) fixing a rate schedule which resulted in the Association paying rates in accord with the decree.
In 1971 a class action was instituted in equity by individual electors, taxpayers, citizens and residents of the Borough naming the Authority, the Borough and the Association as Defendants and alleging that the consent decree was discriminatory and illegal because it provided the Association with an unf air rate
In 1978, the Borough passed amendments .to ordinance No. 491 which established a new rate schedule, the effect of which was to require the Association to pay more than it was obligated to pay under the terms •of the consent decree. The Association then instituted an action in equity against the Borough and the Authority to enforce the terms of the 1964 consent decree. The defendants answered by averring, inter alia, that the provisions of the 1964 decree were discriminatory, unreasonable and illegal in that the Association was paying less than its proportionate share of the cost of operating the sewage system contrary to various federal and state laws and regulations, including the Federal Water Pollution Control Act, §204(ib) (1) (A), 33 U.S.C. §1284(b) (1) (A) (,Supp. 1982), and the terms of the lease agreement negotiated between the Borough and the Authority.
After a non-jury trial, the chancellor found that the passage of time had drastically changed the consequences of enforcing the 1964 decree, that that decree did not encompass a fixed set of terms which could be satisfied (thus discharging the obligations of the parties), that the decree should be treated as an injunction subject to modification as the equities might require and that since the decree no longer represented an equitable agreement, it should not be enforced. The Association’s suit was dismissed and exceptions to the decree were likewise dismissed. This appeal followed.
Our scope of review in equity matters is limited to a determination of whether the chancellor committed any error of law or abused his discretion. Sack v. Feinman. 489 Pa. 152, 413 A.2d 1059 (1980).
As we analyze this case, it appears to us that if the chancellor was correct that the 1964 decree was subject to modification by the court or had lost its vitality by reason of changing circumstances, then the final decree which is the order appealed from here, must be affirmed; but if the chancellor erred in his conclusion that the 1964 decree was subject to modification by the court, then the final decree must be set aside.
There is strong support in Pennsylvania law for the Association’s contention that in the absence of fraud, accident or mistake, a court has neither the power nor the authority to vary or modify the terms of a consent decree. Pennsylvania Human Relations Commission v. A. K. Graybill, Jr., Inc., 482 Pa. 143, 393 A.2d 420 (1978), Cooper-Bessemer Co. v. Ambrosia Coal and Construction Co., 447 Pa. 521 291 A.2d 99 (1972), Jones Memorial Baptist Church v.
In support of his decree, the learned chancellor here notes that where the circumstances and status of the parties are shown to have changed so as to make it just and equitable to do so, other courts have modified equitable decrees, especially where the proceedings are executory and continuing as he concludes this one is. The chancellor cites Ladner v. Siegel, 298 Pa. 487, 148 A. 699 (1930). It is true that such language does appear in the Ladner case, but the Ladner case does not involve a consent decree. This Court would certainly concur that in an equity case, where a preventive injunction is entered adversely as in Ladner, the court entering the decree may retain jurisdiction over it and modify it where there is a change in the controlling facts. The point is, however, that the 1964 consent decree here in dispute was not a preventive injunction and it was not entered adversely.
It is also true that the rule in the federal courts is different. Thus, in United States v. Swift & Co., 286 U.S. 106 (1932) the United States Supreme Court specifically rejected the concept that a consent decree was to be treated as a contract rather than as a judicial act and held, as did the chancellor here, that where the circumstances change, an injunction can be modified even if entered by consent and even though its terms do not expressly permit modification. That Court says this can be done because of principles inherent in equity jurisdiction. Many federal cases have followed this principle. See, e.g., Equal Employ
Unfortunately for the Borough and the Authority, however, they have been unable to point to a single appellate case in Pennsylvania which has adopted the principle applied by the federal courts. Chandler v. Borough of Brookhaven, 48 Del. 205 (C.P. Pa. 1960) does use that principle and points to Ladner as its authority for doing so, but, as we have seen, Ladner does not involve a consent decree.
We hold, therefore, that the rule in Pennsylvania remains firm that where a decree in equity is entered by the consent of the parties, it is binding upon the parties until they choose to amend it.
Although the Borough and the Authority averred that the 1964 decree was discriminatory, unreasonable and illegal, the chancellor made no findings in this respect. As we have previously noted, however, the same equity court (but not the same chancellor) previously found in another suit involving the same decree that the rates were not discriminatory presumably, at least in part, because at that time the Borough and the Authority contended that they were not discriminatory. Nothing in the record of this case supports a conclusion that the agreement is illegal. Some effort is made to show that the 1964 decree did not contemplate a sum for debt service in the “annual maintenance cost” and that this constitutes a mistake. There is conflicting evidence on this point, of course, but we think it is significant that no effort has been
Finally, it is apparent that the chancellor did find the greement unreasonable in light of today’s economy. Initially, we must repeat that unreasonable or not, unless the consent decree was the result of fraud, accident or mistake, it must stand even if it now appears that it is unfair or unreasonable. As Judge Mencer said in Rozman, any other result would produce ‘ ‘ an untenable situation’ ’. 10 Pa. Commonwealth Ct. at 136, 309 A.2d at 199. We have, nevertheless, considered the alleged unfairness of the decree in light of the evidence presented. It seems true that the Assocation pays only 20% of the cost but uses 28% of the water. But, as pointed out in the 1971 opinion by Judge Smith dealing with the discrimination issues, there was certainly some advantage to the Borough when it negotiated the consent decree and de minimus though it may be, some of those advantages continue yet today such as single metering and single billing for more than 250 users. Moreover, the rates were not fixed in dollar amount by the 1964 decree; they were fixed by a percentage which would take into account inflation and changing costs over the years. We realize that we may not disturb the findings of the chancellor which are supported by substantial evidence and will not do so in this case. We have commented on this aspect of the chancellor’s opinion only to demonstrate that the agreement made
Since the chancellor has failed to find the consent decree of 1964 to be the result of fraud, accident or mistake, it must be enforced. The final decree from which this appeal has been taken will be set aside and the case will be remanded for the entry of an appropriate decree consistent with this opinion.
Order
The order of the Court of Common Pleas of Allegheny County entered October 1, 1981 is reversed and vacated and the case is remanded for the entry of an appropriate decree consistent with the foregoing opinion.
In addition, Fed. R. Civ. P. 60(b) now provides for the modification of a consent decree.