C.M. Erb v. City of Lancaster ( 2018 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Christopher M. Erb :
:
v. : No. 1421 C.D. 2017
: Argued: September 14, 2018
City of Lancaster, :
Appellant :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER FILED: October 11, 2018
City of Lancaster (the City) appeals from an Order of the Court of Common
Pleas of Lancaster County (trial court),1 dated September 11, 2017, which, after a
non-jury trial, awarded judgment to Christopher M. Erb (Erb) in the amount of
$37,446.48 on his cause of action for breach of contract. The City argues that the
trial court erred in finding that the City breached its contract with Erb because the
City never promised to pay him a monthly pension benefit of $4382.30 as an
incentive to retire early from the City’s Police Department. After review, we agree
with the City that the contract is unambiguous and does not promise to pay Erb a
monthly pension benefit of $4382.30.
1
The Honorable Leonard G. Brown, III, presided.
In April 2016, Erb, a police officer with the City from September 5, 1989,
until December 31, 2009, filed a Complaint against the City seeking damages for
breach of contract and estoppel based on the City having allegedly promised to pay
him, as part of its Early Retirement Incentive Program, a monthly pension benefit of
$4382.30 beginning on September 5, 2014. (Complaint (Compl.) ¶¶ 5, 7, 10-11, 20-
25, Record (R.) Item 1; Reproduced Record (R.R.) at 107 (effective retirement
date).) However, Erb alleged, the City has been paying him a monthly pension
benefit of only $3342.12. (Compl. ¶ 19.)
The City filed a Motion for Summary Judgment, which the trial court granted
in part and denied in part. The trial court dismissed Erb’s cause of action for
estoppel. (Trial Ct. Opinion and Order, May 16, 2017, at 5-6, R. Item 22.)
Thereafter, the matter proceeded to a one-day, non-jury trial on the contract claim
only.
At trial, the following testimony and evidence was presented. In November
2009, due to the national fiscal crisis resulting in the loss of revenue to the City and
“the loss of a police service contract with Lancaster Township,” the City, in an
attempt to reduce its staff and avoid layoffs of police, devised the Early Retirement
Incentive Program. (Trial Ct., Finding of Fact (FOF) ¶ 10.) The Early Retirement
Incentive Program was offered to two groups of officers, those with 25 years or more
of service, and those, such as Erb, with more than 20 years of service but less than
25 years of service. Police officers with 25 years or more of service were offered an
incentive to retire of $1000 per year of service payable in a lump sum and would
begin to collect their pensions upon their retirement. Police officers with more than
20 years of service but less than 25 years of service were offered payment for accrued
unused paid time off (PTO), post-employment medical benefits, and a Retirement
2
Incentive Payment (Option A). The Confidential Separation Agreement and General
Release (the Contract), provided to Erb, described the terms of the Early Retirement
Incentive Program as follows:
2. Payments and Benefits. In consideration of the releases herein
by Releasors and the warranties and representations of Employee,
Employer agrees as follows:
a. Retirement Incentive Payment. Employer agrees to pay
Employee the lump sum of $140,073.795, less payroll
taxes and other legally mandated withholdings (“the
Retirement Incentive Payment”). The precise
calculation and formula used to determined [sic] the
amount of your Retirement Incentive Payment is
attached hereto as Exhibit A.
***
c. Payment for Accrued Unused PTO. Employer agrees to
pay Employee for any accrued but unused PTO to which
Employee may be entitled . . . . Pursuant to the terms of
this Paragraph, you shall receive an estimated payment in
the amount of $14,263.12, less payroll taxes and other
legally mandated withholdings, for all accrued, unused
PTO to which you are entitled.
d. Benefits. Employees entitled to post-employment medical
benefits pursuant to an applicable collective bargaining
agreement will continue to receive their Employer-
sponsored health benefits for any term outlined in the
applicable collective bargaining agreement . . . .
***
f. No Other Benefits. Employee shall have no right to
receive any further payment or benefit arising from his or
her employment relationship with Employer except those
benefits and payments described herein, those required by
law . . . or vested benefits under any Employer retirement
plan.
***
3
3. Adequate Consideration. You agree that (i) the consideration
and payments made to you by Employer pursuant to this Agreement
represent the sole and exclusive payments and undertakings to be
provided to you; (ii) said payments include any and all outstanding and
accrued compensation, wages, and benefits that may be due and owing
you; (iii) with the exception of any vested retirement benefits,
Employer has no further obligation to provide Employee with any
compensation of any sort, or any non-monetary or monetary benefits in
addition to that which is set forth in Paragraph No. 2, above; and (iv)
the aforementioned payments are in excess of what you otherwise
would have been entitled to and constitute good and sufficient
consideration for this Agreement.
(R.R. at 107-08 (second emphasis added).) Attached to the Contract were three
exhibits. Relevant here was Amended Exhibit A,2 entitled “Retirement Incentive
Payment Calculation.” (Id. at 114 (emphasis in original).) Erb’s Retirement
Incentive Payment was $137,862.45, which, as Amended Exhibit A indicated, was
calculated based on multiplying Erb’s monthly pension benefit as of December 31,
2009 ($3342.12), the date of his retirement, by the number of months to his 25th
service anniversary date (55). This figure ($183,816.60) was then multiplied by 75%
to equal the amount of the Retirement Incentive Payment. (Id.) Also on Amended
Exhibit A, under a separate heading, “Pension Calculation,” was Erb’s 25th service
anniversary date, listed as September 5, 2014, and “Monthly Pension Benefit
Amount To Be Received Commencing On 25 Year Anniversary Date” (25 Year
Pension Benefit), listed as $4382.30. (Id. (emphasis added).) Erb acknowledged
that there was nothing in the Contract that indicated the amount of his monthly
pension benefit; that figure appeared only on Amended Exhibit A. (R.R. at 30, 57.)
2
As explained at trial, Exhibit A was amended because the original calculation was done
in November 2009, but Erb did not retire until January 2010, at which point his salary had
increased and the amount of time until he reached his 25th service anniversary date had decreased,
which had the effect of reducing his Retirement Incentive Payment. (R.R. at 70.)
4
The idea behind the Retirement Incentive Payment, the City’s Business
Administrator Patrick Hopkins (Hopkins) explained, was to “bridge the gap” from
the time these officers retired until when they started receiving their pensions on
their 25th service anniversary date. (R.R. at 64-66.) Hopkins testified that there was
nothing in the Contract that proposed awarding an officer a greater pension benefit,
or commencing payment of an officer’s pension benefit, before the officer’s 25th
service anniversary date. (R.R. at 66.) The City designed the Early Retirement
Incentive Program so that it would not impact the pension plan, Hopkins testified.
In early December 2009, Hopkins held an information session with officers
who were eligible to retire early. Erb, who was then the President of the City’s
Police Officers’ Association (POA) and involved in bargaining over the Early
Retirement Incentive Program, attended the session. According to Hopkins, during
the session it became apparent that the officers were confused about the figure listed
as the 25 Year Pension Benefit. (R.R. at 72, 90.) Hopkins explained to the officers,
he testified, that the 25 Year Pension Benefit “is not your pension benefit. This is
what your pension benefit would be if you didn’t take this plan and if you left after
25 years of service and we add[ed] three-percent annual increases.” (R.R. at 72.)
Hopkins explained during trial that the 25 Year Pension Benefit figure was included
in the Contract on legal advice, so that officers would be aware of the difference in
their pension benefit based on whether they accepted early retirement or waited until
their 25th service anniversary date. According to Erb, however, while Hopkins
claimed “that there was confusion, it wasn’t on [Erb’s] part. [He] understood what
[Hopkins] said in that meeting and so did other [officers].” (R.R. at 45.)
Following the information session, discussions between the POA and the City,
in which Erb participated, resulted in the City proposing an alternative, known as
5
Option B, to incentivize early retirement. Under Option B, officers were offered
payment for accrued unused PTO and permitted to retire on January 31, 2010, at
which point they would immediately begin receiving their pension benefits based on
a calculation of those officers having served 25 years. The City would contribute to
the pension fund for the cost of Option B. (R.R. at 141-42.) Hopkins explained that
in order to change a pension benefit, as Option B proposed, the City had to have an
actuarial evaluation and the City Council had to amend the City Code. Option B did
not include the Retirement Incentive Payment as Option A did.
On January 15, 2010, the deadline, Erb signed the Contract, accepting Option
A.3 (R.R. at 26; Erb’s Trial (Tr.) Ex. B; FOF ¶ 38.) However, on January 18, 2010,
believing that he was eligible for Option B, Erb e-mailed Hopkins what he believed
would be his monthly pension benefit, listing it as $3817.08.4 (City’s Tr. Ex. N, R.R.
at 143-45; Notes of Testimony (N.T.) at 52-54, R.R. at 52-54.)
On January 19 or 20, 2010, after he signed the Contract, Erb met with a
Human Resources Generalist to review his paperwork. The Human Resources
Generalist reviewed the Contract and, turning to Amended Exhibit A, put a box in
ink around the $4382.30 figure and told him that this would be his pension benefit.
3
For reasons that are not entirely clear from the record, Erb testified that the Mayor’s
Office told him that he was not eligible for Option B, so Erb accepted Option A. Erb was the only
officer who accepted Option A.
4
Erb testified that he thought the figure should be slightly higher, about $3900. Hopkins
testified that this figure appeared accurate.
6
Ultimately, the City Council approved Option B but only for officers with 21
years of service or more, which excluded Erb.5 By the time Option B was adopted,
Erb testified, he was retired.6
In August 2014, Erb met with the Chief of Finance for the City to sign
paperwork needed for Erb to begin receiving his monthly pension benefit. Erb asked
the Chief of Finance what his pension benefit would be for September since it was
prorated based on his 25th service anniversary date falling on September 5. The
Chief of Finance reviewed Erb’s file and, while looking at Amended Exhibit A, said
his pension benefit for September would be the $4382.30 figure, prorated for 25
days, which, after deductions, was the amount Erb received in September.
In October, however, Erb received a gross amount of only $2452.92. Erb
inquired and received a memorandum from Hopkins explaining the discrepancy.
(R.R. at 41-42, 77-79, 120-21.) In that memorandum, after outlining the Early
Retirement Incentive Program and the calculation of Erb’s Retirement Incentive
Payment, Hopkins explained that the Payroll Department used the wrong figure on
Amended Exhibit A. The Payroll Department used the $4382.30 figure, which,
Hopkins stated, was the figure Erb would have received had he not retired early and
continued working until his 25th service anniversary date, when the Payroll
Department should have used the $3342.12 figure, which was Erb’s pension benefit
as of December 31, 2009. The $4382.30 figure, Hopkins stated, was based on Erb
5
Option B was adopted by the City Council on February 9, 2010. Lancaster, Pa., Code of
the City of Lancaster (City Code) §§ 64-38–64-40 (Feb. 9, 2010).
6
Erb retired retroactive to December 31, 2009. In March 2010, he started working for the
Berks County District Attorney’s Office in its computer forensics laboratory.
7
receiving a three-percent salary increase each year until he reached his 25th service
anniversary date.7 Going forward, Erb would receive the gross amount of $3342.12.8
Erb testified that had he known his pension benefit was going to be only
$3342.12, he would not have retired early. (R.R. at 36; FOF ¶ 42.) Erb made his
decision to retire early, he testified, based on him receiving $4382.30. Erb noted
that the Retirement Incentive Payment he received was less than had he continued
working for another five years. Erb also noted that he would have preferred to retire
early under Option B, which, he agreed with the City’s Counsel, was a better
financial outcome for him.
The City presented expert testimony from Thomas Zimmerman, the actuary
for the City’s pension plans, who testified that the correct calculation of Erb’s
monthly pension benefit was $3342.12 and, if the City was ordered to pay Erb a
monthly pension benefit of $4382.30, the auditor general would find the City in
violation of its pension plan because that benefit would be contrary to the collective
bargaining agreement and the City Code.9 Further, if Erb was awarded a pension
benefit of $4382.30, in order for the City to cover the increased cost, it would have
to contribute, based on actuarial projections of Erb’s life expectancy, another
$20,450 per year for 14 years.
Following the trial, the trial court issued findings of facts and conclusions of
law as follows. While finding that Hopkins had provided credible testimony about
the Early Retirement Incentive Program and the relevant facts, the trial court
effectively rejected his testimony that he had clarified the confusion around the 25
7
Hopkins testified that from 2010 until 2015 the average increase in salary was three
percent, but some years it was lower and other years it was higher.
8
The reason Erb received only $2452.92 in October 2014 was because the City deducted
the amount Erb was overpaid in September.
9
Zimmerman noted that the City is not punished for having a single violation.
8
Year Pension Benefit. (FOF ¶¶ 6, 35-37.) Instead, the trial court found, “the City
did not provide clarified information for eligible officers.” (Id. ¶ 37.) The trial court
credited Erb’s testimony that he “would not have chosen to retire early had he
known” he was to receive a monthly pension benefit of only $3342.12, and
concluded that Erb had “reasonably relied on the written offer” the City made to
him which “induced [Erb] to accept the offer[.]” (Id. ¶¶ 42-43 (emphasis added).)
Then, the trial court, after reciting the principles of law governing whether a contract
is ambiguous, concluded that the Contract and its exhibits “contain[ed] a patent
ambiguity of what pension amount Erb [was] to receive[,]” whether it was $4382.30
or $3342.12. (Trial Ct., Conclusion of Law (COL) ¶ 3.) Guided by the intent of the
parties, and construing the Contract and its exhibits against the City as drafter of
them, the trial court resolved the ambiguity in favor of Erb, stating as follows:
6. . . . . The stated intent of the City was to encourage the early
retirement of various employees through a program providing
incentives for early retirement. To entice retirement, the City intended
to provide an option giving a lump sum payment to officers with less
than 25 years of service, but more than 21 years of service and a pension
benefit. The City’s intent was to offer a reduced pension benefit for
early retirement, though this was never stated in any writing to Erb.
Despite this intent, the City represented to Erb that he would receive a
lump sum and his full pension. The intent of savings to the City for
Erb’s early retirement was met with Erb’s acceptance of the City’s
offer. Instead of paying Erb his salary until 25 years of service and then
full pension, the City paid Erb $176,000[10] less than it would have had
he not retired early, receiving the benefit of its bargain.
7. The evidence[] established: (1) that there was confusion among the
officers as to their benefit; (2) that the City was aware of the confusion;
10
In its findings of fact, the trial court explained that had Erb worked another 57 months
at his salary of $66,112, he would have earned another $314,000, which, after deducting the
Retirement Incentive Payment of $137,862.45, resulted in a savings of $176,169.54 to the City.
(FOF ¶ 44.)
9
(3) that no calculation was provided to the officers showing the amount
they would have received upon retirement and the amount they were
receiving under a selected option; and, (4) despite the City’s knowledge
of the confusion, no amended correspondence was provided to Erb
explaining the amount of his benefit upon reaching retirement age. It
was reasonable for Erb to conclude that he would receive a pension of
$4,382.30 upon reaching the age of retirement. Erb’s intent was to
accept the early retirement option and lump sum, forego his salary for
the years between his early retirement and full retirement age and
receive his pension of $4,382.30 upon reaching his normal retirement
age.
8. . . . . A contract exists between the parties, imposing a duty upon
the City to pay Erb his monthly pension. Amended Exhibit A to the
[Contract] specifically states, “Monthly Pension Benefit Amount to Be
Received Commencing On 25 Year Anniversary Date = $4,382.3
[sic].”
(COL ¶¶ 6-8 (last alteration in original).) Based on the foregoing, the trial court
entered an order granting Erb judgment “in the amount of $37,446.48 in past benefits
plus interest at the statutory rate.”11 (Trial Ct. Order, Sept. 11, 2017.)
On appeal,12 the City argues that it is entitled to judgment as a matter of law
because the Contract and its exhibits are unambiguous and do not provide for a
$4382.30 monthly pension benefit for Erb. The only forms of consideration the City
promised Erb was payment for accrued unused PTO, post-employment medical
benefits, and a Retirement Incentive Payment, all of which he received. Indeed, the
11
The trial court filed its findings of facts and conclusions of law on the same day it entered
judgment in favor of Erb, contrary to Rule 227.1 of the Pennsylvania Rules of Civil Procedure,
Pa.R.C.P No. 227.1. (Rule 1925(a) Opinion at 1 n.1.) The trial court concluded that its error was
harmless because the City had not lost any substantive right, noting that the City had filed a post-
trial motion for relief but which the trial court did not address prior to the City timely filing its
notice of appeal, thereby preserving the issues raised in its motion. (Id.)
12
Our “standard of review of a verdict following a non-jury trial is limited to determining
whether the findings of the trial court are supported by competent evidence and whether the trial
[court] committed error in the application of law.” M & D Props., Inc. v. Borough of Port Vue,
893 A.2d 858, 861 n.4 (Pa. Cmwlth. 2006).
10
City contends, the parties understood the City was without legal authority to alter
Erb’s pension benefit because it was a statutory entitlement. The trial court, the City
notes, found an ambiguity in Amended Exhibit A because it labeled the $3342.12
figure as Erb’s pension benefit as of December 31, 2009, and the $4382.30 figure as
“Monthly Pension Benefit Amount To Be Received Commencing [O]n 25 Year
Anniversary Date.” (City’s Brief (Br.) at 14 (quoting R.R. at 114).) However,
nowhere in Amended Exhibit A or anywhere else in the Contract was the pension
benefit described as consideration. The City notes that the trial court found that Erb
reasonably relied on the City’s offer and was induced into signing the Contract, but,
the City argues, those are not elements of breach of contract. Therefore, because the
Contract and its exhibits are unambiguous and do not provide for any enhanced
pension benefit, and since Erb’s pension benefit is determined by statute, the City
asserts that the trial court erred in granting judgment in Erb’s favor.13
Erb argues that Amended Exhibit A, which was specifically incorporated into
the Contract, “clearly and unequivocally identified the Monthly Pension Benefit
Amount To Be Received Commencing on 25 Year Anniversary Date.” (Erb’s Br.
at 10.) Amended Exhibit A, Erb asserts, does not say that this is the monthly pension
13
The City also argues that even if the Contract and its exhibits are ambiguous, the trial
court’s finding that the $4382.30 figure was never explained to Erb is unsupported by the record
evidence, for, according to Hopkins’ testimony, which the trial court found credible, he explained
to Erb during the information session that this figure represented what his pension benefit would
be if he worked for 25 years. Relatedly, the City argues that the trial court’s characterizations of
the $4382.30 figure as Erb’s “full pension” and the $3342.12 as his “reduced pension” are
unsupported by any evidence because Erb’s pension benefit is determined by law based on his
salary and number of years of service at the time of retirement. (City’s Br. at 20-21 (citing COL
¶¶ 6, 8).) Finally, the City argues that to require it to pay Erb $4382.30 as a monthly pension
benefit would put it “in violation of positive law.” (City’s Br. at 22 (citing Holman v. City of
Pittsburgh (Pa. Cmwlth., No. 2149 C.D. 2010, filed Aug. 5, 2011), slip op. at 12-15).) We need
not address these contentions in light of our holding that the Contract and its exhibits are
unambiguous.
11
benefit Erb was to receive if he rejected the Early Retirement Incentive Program.
Erb notes that he testified that he would not have retired early had the City told him
he was going to receive a pension benefit of only $3342.12. Rather, he would have
continued to work for the City. Erb claims that he proved the elements establishing
a breach of contract, namely, the existence of a contract, which the City breached,
resulting in damages to him. Erb states that, to the extent his analysis differs from
that of the trial court, this Court may still affirm.
In the City’s reply brief, it argues that it did not promise to pay an enhanced
pension benefit to Erb. The “Monthly Pension Benefit Amount To Be Received
Commencing On 25 Year Anniversary Date” listed on Amended Exhibit A, (R.R. at
114), the City reiterates, is not included in the Contract as part of the consideration
for Erb’s early retirement.
We begin by noting that the necessary elements of breach of contract are “(1)
the existence of a contract, including its essential terms, (2) a breach of the contract[,]
and, (3) resultant damages.” Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v.
Law Firm of Malone Middleman, P.C., 137 A.3d 1247, 1258 (Pa. 2016). The
resolution of this appeal hinges on the interpretation of the Contract and its exhibits,
particularly Amended Exhibit A, for it is axiomatic that there can be no breach of
contract if the contractual term at issue is, in fact, not part of the contract. Yocca v.
Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 438 (Pa. 2004). Thus, we set forth
the well-established principles governing the interpretation of a contract, which our
Supreme Court has summarized as follows:
When a written contract is clear and unequivocal, its meaning must be
determined by its contents alone. It speaks for itself and a meaning
cannot be given to it other than that expressed. Where the intention of
the parties is clear, there is no need to resort to extrinsic aids or
12
evidence. Hence, where language is clear and unambiguous, the focus
of interpretation is upon the terms of the agreement as manifestly
expressed, rather than as, perhaps, silently intended.
***
The fundamental rule in contract interpretation is to ascertain the intent
of the contracting parties. In cases of a written contract, the intent of
the parties is the writing itself. . . . In determining the intent of the
contracting parties, all provisions in the agreement will be construed
together and each will be given effect . . . .
Lesko v. Frankford Hosp.-Bucks Cty., 15 A.3d 337, 342 (Pa. 2011) (citations
omitted).
Stated differently, “when the words of a contract are clear and free of
ambiguity, the intent of the parties is to be determined solely from the express
language of the agreement.” Dep’t of Transp. v. Semanderes, 531 A.2d 815, 817
(Pa. Cmwlth. 1987). A contractual term is ambiguous:
if, and only if, it is reasonably or fairly susceptible of different
constructions and is capable of being understood in more senses than
one and is obscure in meaning through indefiniteness of expression or
has a double meaning. A contract is not ambiguous if the court can
determine its meaning without any guide other than a knowledge of the
simple facts on which, from the nature of language in general, its
meaning depends; and a contract is not rendered ambiguous by the mere
fact that the parties do not agree upon the proper construction.
State Highway & Bridge Auth., Dep’t of Transp. v. E.J. Albrecht Co., 430 A.2d 328,
330 (Pa. Cmwlth. 1981) (citation omitted). Whether a contractual term is ambiguous
is not “resolved in a vacuum,” and “[w]e will not . . . distort the meaning of the
language or resort to a strained contrivance in order to find an ambiguity.” Madison
Constr. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999). Only if “a
written contract is ambiguous may extrinsic or parol evidence be considered to
13
determine the intent of the parties.” Dep’t of Transp. v. E-Z Parks, Inc., 620 A.2d
712, 716 (Pa. Cmwlth. 1993).14 An unambiguous contract is interpreted by the court
as a matter of law, while an ambiguous contract is interpreted by the finder of fact.
Lesko, 15 A.3d at 342; Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004).
Here, after examining the entire Contract and its exhibits, we conclude that
they are clear and unequivocal and do not provide for the payment of a monthly
pension benefit of $4382.30. The relevant portions of the Contract, as we have
quoted from, provide for only three forms of consideration: (1) payment for accrued
unused PTO; (2) post-employment medical benefits; and (3) a lump sum payment
of $140,073.795 in the form of a Retirement Incentive Payment. (R.R. at 107-08.)
The Contract provides for “No Other Benefits” with the exception of, as pertinent
here, “vested benefits under any Employer retirement plan.”15 (R.R. at 108
(emphasis added).) Indeed, these three forms of consideration are to be the “sole
and exclusive payments and undertakings to be provided to” Erb, and, “with the
exception of any vested retirement benefits, [the City] has no further obligation to
provide [Erb] with any compensation of any sort, or any non-monetary or monetary
14
We note that the trial court recited that where an agreement is ambiguous, the court, in
determining the intent of the parties, must construe the agreement against the drafter. (COL ¶ 5.)
However, a court should resort to this rule of construction only if extrinsic evidence does not shed
light on the meaning of the ambiguous language. Mun. Auth. of Borough of Midland v. Ohioville
Borough Mun. Auth., 108 A.3d 132, 139 (Pa. Cmwlth. 2015).
15
We note that the City Code provides that where an officer retires with “at least 20 years
of service but less than 25 years of service,” he shall receive a lifetime pension commencing on
his 25th service anniversary date, which “shall be based on the amount of base rate compensation
at the time of such retirement or termination of employment.” Lancaster, Pa., City Code § 64-6B
(May 25, 2004); (City’s Tr. Ex. G). Schedule A to Chapter 64 of the City Code sets forth,
consistent with Zimmerman’s testimony, that an officer’s monthly pension benefit shall be in “an
amount equal to 1/2 of his/her base rate compensation plus any service increment to which such
retired police officer is entitled under § 64-7 of this article.” Lancaster, Pa., City Code § 64
Attachment 1 (May 1, 2005); (City’s Tr. Ex. G; N.T. at 6-7, R.R. at 6-7).
14
benefits in addition to that which is set forth in Paragraph No. 2, above . . . .” (Id.
(emphasis added).) Amended Exhibit A was incorporated into the Contract, but only
to the extent it showed “[t]he precise calculation and formula used to determine the
amount of your Retirement Incentive Payment.” (Id. at 107 (emphasis added).)
Importantly, under the heading “Retirement Incentive Payment,” Erb’s “Monthly
Pension Benefit as of 12/31/09,” the date he retired, accurately reflected $3342.12.
(Id. at 114.)
In short, as even Erb acknowledged during his testimony, there is no promise
to pay him a monthly pension benefit of $4382.30 within the Contract in exchange
for him retiring early. (N.T. at 30, 57, R.R. at 30, 57.) The only reference to a
monthly pension benefit of $4382.30, again, is in Amended Exhibit A, where under
a separate heading, “Pension Calculation,” Erb’s 25th service anniversary date is
listed as September 5, 2014, and “Monthly Pension Benefit Amount To Be Received
Commencing On 25 Year Anniversary Date” is listed as $4382.30. (R.R. at 114.)
This sole reference to $4382.30, in the absence of any promise to pay anything other
than the three forms of consideration listed in the Contract, does not amount to a
promise to pay. Reading the Contract and its exhibits together, the reference to
$4382.30 and its accompanying language was for informational purposes, and not a
promise to pay.
We can understand, in the absence of any explanation,16 how Erb, in reading
this Contract and its exhibits, might have expected his monthly pension benefit to be
$4382.30 when he reached his 25th service anniversary date. Both Erb and the trial
16
We note that the trial court rejected Hopkins’ testimony that he clarified to Erb, and those
who attended the information session, that this $4382.30 figure was the pension benefit these
officers would receive if they did not retire early, which is supported by Erb’s competent trial
testimony and, thus, we have not disturbed that finding of fact.
15
court, in part, respectively litigated and adjudicated this matter as if Erb was claiming
that he had been negligently induced into accepting the Contract. (N.T. at 36, R.R.
at 36 (Erb testifying that he decided to retire based on him receiving a monthly
pension benefit of $4382.30 and, had he known he was going to receive a benefit of
only $3342.12, he would not have retired early); FOF ¶ 43 (finding that Erb had
“reasonably relied on the written offer . . . and was induced to accept the offer”).)
However, the only claim at issue before the trial court, and before us, is Erb’s breach
of contract, which is governed by the terms of the contract, not reliance or
inducement. Cf. Cornell Narbeth, LLC v. Borough of Narbeth, 167 A.3d 228, 239-
41 & n.8 (Pa. Cmwlth.) (reciting elements of negligent misrepresentation and
promissory estoppel as including reliance and inducement), petition for allowance
of appeal denied, 177 A.3d 818 (Pa. 2017). The trial court had dismissed Erb’s
estoppel claim on the City’s Motion for Summary Judgment from which there has
been no cross-appeal. Again, when the entire Contract and its exhibits are carefully
examined, it is clear that there is no promise in the Contract or its exhibits to pay Erb
a monthly pension benefit of $4382.30, and this figure was included on Amended
Exhibit A for informational purposes.
Therefore, since there is, as a matter of law, no promise in the Contract or its
exhibits to pay Erb a pension benefit of $4382.30, the City could not have been found
in breach of the Contract for failing to pay him that amount. The trial court thus
erred when it found in favor of Erb and should have granted judgment in favor of
the City dismissing Erb’s breach of contract cause of action.
_____________________________________
16
RENÉE COHN JUBELIRER, Judge
17
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Christopher M. Erb :
:
v. : No. 1421 C.D. 2017
:
City of Lancaster, :
Appellant :
ORDER
NOW, October 11, 2018, the Order of the Court of Common Pleas of
Lancaster County (trial court), dated September 11, 2017, is REVERSED, and the
matter is REMANDED to the trial court with instructions to dismiss the cause of
action for breach of contract.
Jurisdiction relinquished.
_____________________________________
RENÉE COHN JUBELIRER, Judge