Lower Bucks County Joint Municipal Authority v. P. Koszarek

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Lower Bucks County Joint :
Municipal Authority :
:
v. :
:
Patricia Koszarek, : No. 686 C.D. 2020
Appellant : Argued: November 9, 2020
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ANNE E. COVEY, Judge (P.)
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION BY
JUDGE COVEY FILED: December 11, 2020
Patricia Koszarek (Koszarek) appeals from the Bucks County Common
Pleas Court’s (trial court) April 6, 2020 decision (April 6, 2020 Decision) finding for
the Lower Bucks County Joint Municipal Authority (Authority) and against Koszarek
in the amount of $26,399.77, in an action seeking to recover employer overpayments
the Authority made to Koszarek.1 Koszarek presents five issues for this Court’s review:
(1) whether the trial court erred by concluding that the Authority may recover alleged
overpayments; (2) whether the trial court erred or abused its discretion by failing to
conclude that the Authority was estopped from seeking repayment of wages and
benefits it previously approved; (3) whether the trial court abused its discretion by
finding that wage and benefit overpayments were made; (4) whether the trial court
erred or abused its discretion by rejecting Koszarek’s counterclaim based on a
settlement agreement and release (Settlement Agreement) between Koszarek and the
Authority; and (5) whether the trial court erred or abused its discretion by concluding
1
The April 6, 2020 Decision was docketed and mailed on April 9, 2020.
that the Authority recouped overpayments from other employees. After review, this
Court affirms.
The Authority initially employed Koszarek as its Finance Director2 on a
temporary basis effective December 3, 2007. On May 21, 2008, the Authority
promoted Koszarek to Financial Assistant to the Managing Director, paying her
$72,189.00 annually, plus benefits.3 Koszarek was not an officer of the Authority, and
had no power to make policy. Koszarek’s duties included completing and signing any
and all payroll forms and regular pay submissions, as well as tracking employees’
vacation and/or sick time and usage.
The Authority’s Managing Director Vijay Rajput, Ph.D. (Rajput) was
Koszarek’s supervisor. Rajput testified that his expertise was in agriculture and civil
engineering, not finance. Rajput explained that he deferred to Koszarek’s expertise
and trusted that the information she presented to him was accurate. He further noted
that his reliance on Koszarek was normal, as he also supervised other departments and
relied on the department managers and superintendents to perform their jobs and to
present him with honest information.
On April 25, 2013, Koszarek submitted a resignation letter to the
Authority (2013 Resignation letter), therein claiming to the Authority’s Board of
Directors (Board) that Rajput discriminated against and belittled her. See Reproduced
Record (R.R.) 510a-512a. She also raised concerns regarding potential violations of
the Family and Medical Leave Act,4 Consolidated Omnibus Budget Reconciliation Act
2
The Finance Director for the Authority is essentially the equivalent of a Controller for a large
corporation.
3
Koszarek’s compensation was governed by the Collective Bargaining Agreement for
supervisory employees in place at the time and amended from time to time thereafter.
4
29 U.S.C. §§ 2601-2654.
2
of 1985,5 and the Fair Labor Standards Act of 1938.6 However, because the Board
refused to accept her resignation, Koszarek continued in her position.
On September 25, 2013, Koszarek filed a discrimination charge against
the Authority with the United States Equal Employment Opportunity Commission
(EEOC), and subsequently filed a “whistleblower” claim with the EEOC. On March
13, 2014, Koszarek submitted a retirement letter to the Authority in which she stated
that her last day in the office would be March 27, 2014. She requested a payout in her
last paycheck for her remaining vacation time and further requested to use “personal,
family illness and compensation time beginning March 28, 2014, as is consistent with
Authority practice.” R.R. at 475a. The Board approved her request in executive
session without the need for an audit, because the Board trusted the accuracy of
Koszarek’s representations.
At the next public meeting, the Board publicly expressed its appreciation
for Koszarek’s service. After Koszarek retired in 2014 from the Authority’s
employment, Susan Wallover (Wallover) was assigned to assist with payroll. Upon
discovering an employee payroll discrepancy resulting in the employee’s overpayment,
Wallover researched the payroll records for other employees and prepared a written
report for Rajput listing the employee names and discrepancies she discovered in their
pay. See R.R. at 669a-671a.
After reviewing Wallover’s report, the Authority retained Certified Public
Accountant (CPA) Louis Polaneczky (Polaneczky) to review Wallover’s report.
Polaneczky was familiar with the Authority’s finances because he had previously been
consulted in the Authority’s financial statement preparation. Polaneczky reviewed the
Wallover report and verified the information contained therein. On November 17,
5
29 U.S.C. §§ 1161-1169.
6
29 U.S.C. §§ 201-219.
3
2014, Polaneczky prepared and presented his own written report to the Authority’s
Board, in which he recommended that further research was required and a forensic
accounting should be completed. Polaneczky also opined in his report that the number
and extent of the payroll discrepancies suggested either gross incompetence or possible
fraud.
The Authority retained Forensic Accountant Joseph Barbagallo, CPA
(Barbagallo) who was given complete access to the Authority’s financial records,
reports, policies, procedures, contacts, and anything else he believed necessary for his
investigation. Barbagallo’s forensic analysis revealed that Koszarek had overpaid
herself $26,399.77 from December 3, 2007 to April 27, 2014, as follows: (1) $4,646.13
regular pay; (2) $5,420.76 vacation pay; (3) $10,841.52 sick pay; (4) $3,500.91
compensatory time; and (5) $1,990.45 in other payments. Barbagallo also determined
that Koszarek had failed to properly withhold more than $2,600.00 in total federal, state
and local income taxes for the pay period ending March 30, 2014.
By April 30, 2015 letter, the Authority’s Solicitor notified the Bucks
County District Attorney’s Office (District Attorney’s Office) of the irregularities. See
R.R. at 496a-497a. Also in April 2015, the State Ethics Commission’s (Ethics
Commission) Investigative Division (Investigative Division) received information
pertaining to alleged overpayments to Koszarek. After an investigation, the Ethics
Commission elected not to pursue the matter further because of “a good faith and
legitimate concern as to the authenticity, completeness, accuracy, and/or sufficiency of
those records maintained by the [Authority].”7 R.R. at 506a. On June 10, 2015,
7
The Ethics Commission explained in its May 16, 2016 Praecipe to Withdraw Investigative
Complaint/Findings Report and Discontinue Matter With Prejudice, in pertinent part:
14. Following the issuance of the Investigative Complaint/Findings
Report on April 11, 2016, [the Ethics Commission’s special
investigator] received additional information from representatives of
the [Authority], who provided what appeared to be additional
4
Koszarek executed the Settlement Agreement, settling her discrimination and
whistleblower claims against the Authority in exchange for $70,000.00. By March 28,
2016 letter, Bucks County District Attorney David Heckler (D.A. Heckler) responded
that, after conducting an investigation, the District Attorney’s Office did not have
sufficient evidence to charge Koszarek for criminal conduct.8 See R.R. at 498a-500a.
On April 1, 2016, the Authority commenced the instant action by writ of
summons in the trial court. On February 17, 2017, the Authority filed its Complaint
against Koszarek seeking repayment of the alleged overpayments totaling $28,999.77.9
Therein, the Authority averred that Koszarek had intentionally overpaid herself and
failed to withhold necessary taxes. Koszarek filed an answer thereto and, subsequently,
on July 26, 2018, filed an Amended Answer, New Matter, Affirmative Defenses, and
Counterclaim. In her counterclaim, Koszarek alleged retaliation and abuse of process.
documentation and/or verification concerning the sick leave
overpayment as alleged against Koszarek.
15. Upon review of those records, it is the opinion of counsel for the
Investigative Division that a serious question has arisen as to whether
or not an overpayment was actually received by Koszarek.
16. The receipt of this information was received after the issuance of
the Investigative Complaint/Findings Report, and was not previously
provided to the Investigative Division, despite multiple requests for any
and all documentation regarding leave, sick leave, leave payouts, and
any other financial records which would be responsive to the
allegations levied against [Koszarek].
17. Upon review of the forensic audit that was initially provided to the
Investigative Division, several of those findings were dispelled through
the efforts of the Investigative Division, and at the very least, the
records of the [Authority] are incomplete, inaccurate and give
questions as to creditability and/or potential authenticity.
R.R. at 504a-05a (italic and underline emphasis added).
8
In his letter, D.A. Heckler criticized the Authority, admonishing its counsel: “I am sure that
you recognize that this loss of taxpayer[s’] money is a product of wholly inadequate fiscal procedures
at the [A]uthority. I trust that your clients [sic] will follow the recommendations of the Barbagallo
audit.” R.R. at 500a.
9
This amount included the $2,600.00 in taxes that Koszarek allegedly failed to withhold.
5
At trial, on January 28 and 29, 2020, the Authority presented witnesses
including Rajput, Wallover, Polaneczky and Barbagallo, and documentary evidence
that Rajput paid the Authority for an overpayment it made to him. The Authority
indicated it was continuing its efforts to collect other overpayments. Koszarek disputed
the Authority’s evidence, maintaining that all payments to the listed Authority
employees were appropriate. However, Koszarek did admit that she had overpaid
herself $906.30, allegedly due to a coding error. See R.R. at 860a. Koszarek did not
present any independent testimony from an accountant or other Authority employee in
support of her assertions.
In the April 6, 2020 Decision, the trial court ruled:
Based upon the facts presented at trial, [the Authority] has
proven by clear and substantial evidence overpayments to
[Koszarek] from December 3, 2007 to April 27, 2014 totaling
$26,399.77. These overpayments were in the following
categories: (1) overpayment of regular pay, $4,646.13; (2)
overpayment of vacation pay, $5,420.76; (3) overpayment of
sick pay, $10,841.52; (4) overpayment of compensatory time
pay, $3,500.91; and ([5]) other payments determined to be
paid back to the Authority of $1,990.45. This amount totals
$26,399.77. This Court concludes the evidence proves
damages as owed to [the Authority] from [Koszarek] in the
total amount of $26,399.77 representing total employer
overpayments to her to which she was not entitled.
[Koszarek’s] overpayment is by far the highest amount due
of the overpayments to employees.
6
April 6, 2020 Dec. at 4. On April 20, 2020, Koszarek filed a notice of appeal.10,11,12
10
On April 13, 2020, Koszarek filed a post-trial motion (Post-Trial Motion) seeking
reconsideration. Before the trial court took any action on the Post-Trial Motion, on April 17, 2020,
Koszarek filed a concise statement of errors complained of on appeal and then, on April 20, 2020,
filed a notice of appeal to the Pennsylvania Superior Court. On May 18, 2020, the trial court issued
an opinion pursuant to Pennsylvania Rule of Appellate Procedure (Rule) 1925(a). On May 26, 2020,
the Pennsylvania Superior Court transferred the matter to this Court.
Importantly, “[o]nce a post-trial motion is timely filed, judgment cannot be entered until the
trial court enters an order disposing of the motion or the motion is denied by operation of law one
hundred and twenty days after the filing of the motion. Pa.R.C.P. No. 227.4.” Melani v. Nw. Eng’g,
Inc., 909 A.2d 404, 405 (Pa. Super. 2006). Entry of judgment is a prerequisite to an appealable order.
See id. Notwithstanding, the trial court never ruled on the Post-Trial Motion. On August 6, 2020,
this Court issued an order directing the parties to address the appealability of the April 6, 2020
Decision, given that the trial court had not yet entered judgment.
On August 7, 2020, Koszarek filed an amended brief and explained therein:
The Court should understand that[,] on March 21, 2020, the [trial court]
issued Emergency Order 2020-6 in response to the COVID-19 crisis,
in which it directed that ‘the Office of the Prothonotary shall not enter
judgment in any matter.’ This order having expired, judgment was
entered on the non-jury verdict on August 7, 2020. This has now
rendered the underlying order an appealable matter and not
interlocutory. Sovereign Bank v. [Valentino], . . . 914 A.2d 415, 419
[n.6] (Pa. Super. 2006) (‘A final judgment entered during the pendency
of an appeal is sufficient to perfect appellate jurisdiction.’). . . .
Koszarek Amended Br. at 2 n.1.
Further complicating matters, due to the COVID-19 pandemic, the trial court issued numerous
blanket orders suspending all time calculations, ultimately until May 8, 2020. Therefore, as of August
7, 2020, given the trial court’s orders, 120 days had not passed since the filing of the Post-Trial
Motion, and absent a ruling on the Post-Trial Motion, the trial court did not have authority to enter
the August 7, 2020 entry of judgment. Notwithstanding, it appears that, as of the date of the issuance
of this opinion, despite the time calculation suspension, 120 days have now expired since Koszarek
filed the Post-Trial Motion. Therefore, the Post-Trial Motion has been denied as a matter of law, and
the trial court no longer has jurisdiction to rule thereon. Accordingly, as of this date, this Court could
only remand for the trial court to properly enter judgment.
Rule 105(a) provides:
These rules shall be liberally construed to secure the just, speedy, and
inexpensive determination of every matter to which they are applicable.
In the interest of expediting [a] decision, or for other good cause shown,
an appellate court may . . . disregard the requirements or provisions of
any of these rules in a particular case on application of a party or on its
7
Koszarek first contends that the trial court erred by concluding that the
Authority may recover alleged overpayments. This Court disagrees.
Here, the trial court noted that Section 5607(b)(2) of the Municipality
Authorities Act (Act)13 specifies that the purpose of each authority is to “benefit the
people of the Commonwealth [of Pennsylvania (Commonwealth)] by, among other
things, increasing their commerce, health, safety and prosperity . . . .” 53 Pa.C.S. §
5607(b)(2). In furtherance of that purpose, the trial court concluded that the Authority
own motion and may order proceedings in accordance with its
direction.
Pa.R.A.P. 105(a). Accordingly, for the purposes of judicial economy, this Court regards the August
7, 2020 entry of judgment valid upon the expiration of the 120 days.
11
The decision to grant a new trial based on a challenge to the weight of
the evidence is within the sound discretion of the trial court. Absent an
abuse of discretion, we will not reverse the trial court’s ruling. It is
well established that the trial court should award a new trial on the basis
requested by appellant only where a verdict is so contrary to the
evidence so as to shock one’s sense of justice and make the award of a
new trial imperative. An appellate court may review the trial court’s
decision to determine whether there was an abuse of discretion, but it
may not substitute its judgment for that of the lower court.
Commonwealth v. Lilliock, 740 A.2d 237, 241 (Pa. Super. 1999) (citations omitted).
An abuse of discretion exists when the trial court has rendered a
judgment that is manifestly unreasonable, arbitrary, or capricious, has
failed to apply the law, or was motivated by partiality, prejudice, bias,
or ill will. A finding by an appellate court that it would have reached a
different result than the trial court does not constitute a finding of an
abuse of discretion. ‘Where the record adequately supports the trial
court’s reasons and factual basis, the court did not abuse its discretion.’
[Morrison v. Dep’t of Pub. Welfare, 646 A.2d 565, 570-71 (Pa. 1994)]
(quoting Coker [v. S.M. Flickeringer Co., Inc.], 625 A.2d [1181,] 1187
[(Pa. 1993)]).
Harman ex rel. Harman v. Borah, 756 A.2d 1116, 1123 (Pa. 2000) (citations omitted).
12
On November 12, 2020, following oral argument, Koszarek applied for permission to
submit a post-argument statement for the panel’s consideration (Post-Argument Application)
pursuant to Rule 2501, Pa. R.A.P. 2501. The Authority did not file a response. Upon consideration,
this Court grants the Post-Argument Application.
13
53 Pa.C.S. §§ 5601-5623.
8
must spend its funds responsibly, and that when those funds are improperly used, the
Authority must correct its error.14 The trial court explained that it “did not enter verdict
on any theory of conversion, mistake, embezzlement, breach of fiduciary duty or
fraud.” May 18, 2020 Trial Ct. Op. issued pursuant to Pennsylvania Rule of Appellate
Procedure 1925(a) (Rule 1925(a) Opinion) at 6, R.R. at 911a. Rather, the trial court’s
opinion is founded in the principle of restitution.
Long ago, the Pennsylvania Supreme Court declared “that money paid
under a mistake of fact may be recovered back is authoritatively settled.” Donner v.
Sackett, 97 A. 89, 91 (Pa. 1916). Similarly, in Greenwich Bank v. Commercial Banking
Corp., 85 Pa. Super. 159 (1925), the Pennsylvania Superior Court explained:
The defendant is in possession of money of the plaintiff
which in good conscience it is not entitled to keep and the
law requires its return.
It is of no moment that no privity of contract existed between
the plaintiff and defendant. ‘Where one has in his hands
money which in equity and good conscience belongs and
ought to be paid to another, an action for money had and
received will lie for the recovery thereof. No privity of
contract is necessary to sustain this action, for the law, under
these circumstances, implies a promise to pay’[.] McAvoy &
McMichael v. [Commonwealth] Title Ins. & Tr[.] Co., 27 Pa.
Super. 271[, 276-77 (1905)][.]
Greenwich Bank, 85 Pa. Super. at 163; see also Smith v. Capital Bank & Trust Co., 191
A. 124 (Pa. 1937); McKibben v. Doyle, 34 A. 455 (Pa. 1896); Glen Alden Corp. v.
Tomchick, 130 A.2d 719, 720 (Pa. Super. 1957) (“[I]t is clear that the defendant
obtained money from the plaintiff to which she was not entitled, and under the theory
of unjust enrichment, the plaintiff is entitled to restitution of the sum improperly
paid.”).
14
This Court notes that Section 5612 of the Act, 53 Pa.C.S. § 5612, imposes comprehensive
duties, specific prohibitions and reporting requirements upon an Authority with respect to the
management of its finances.
9
More recently, the Pennsylvania Supreme Court
looked to the Restatement [(First)] of Restitution [Am. Law.
Inst. (1937) (Restatement)] as a source of authority in
determining whether the retention of a particular benefit
would be unjust. Section [20] of the Restatement provides
as follows:
§ 20 MISTAKE AS TO EXTENT OF DUTY
OR AMOUNT PAID IN DISCHARGE
THEREOF:
A person who has paid another an excessive
amount of money because of an erroneous belief
induced by a mistake of fact that the sum paid
was necessary for the discharge of a duty, for
the performance of a condition, or for the
acceptance of an offer, is entitled to restitution
of the excess.
Lucey v. Workmen’s Comp. Appeal Bd. (Vy-Cal Plastics PMA Grp.), 732 A.2d 1201,
1204 (Pa. 1999) (citations omitted).
[In order] to recover . . . , two elements of the remedy of
restitution must be found to exist: (1) a requisite mistake, and
(2) consequent unjust enrichment. It is well-settled that
equitable relief will generally not issue to correct a mistake
of law but may issue to rectify a mistake of fact which has
been defined by our Supreme Court as ‘any mistake except a
mistake of law.’ Betta v. Smith, . . . 81 A.2d 538, 539 ([Pa.]
1951) . . . .
Dep’t of Gen. Servs. v. Collingdale Millwork Co., 454 A.2d 1176, 1179 (Pa. Cmwlth.
1983) (footnote omitted).
Here, in support of its analysis, the trial court cited Lucey and this Court’s
decision in Mino v. Workers’ Compensation Appeal Board (Crime Prevention Ass’n),
990 A.2d 832 (Pa. Cmwlth. 2010), wherein this Court rejected a claimant’s assertion
that his employer should not be entitled to an offset based on the theory of unjust
enrichment. The Mino Court concluded: “[The insurer’s] payment of workers’
10
compensation benefits to [the c]laimant . . . was based on [the insurer’s] mistaken belief
as to the discharge of its duties . . . and [the c]laimant was unjustly enriched by [the
insurer’s] mistake.” Id. at 842.
Koszarek attempts to distinguish Mino, claiming that “the decision was
based entirely on the statutory scheme of workers’ compensation and decisions
interpreting this scheme, a set of rules and regulations not relevant to the case at bar.”
Koszarek Amended Br. at 47. Koszarek misreads Mino. Although Mino involved
workers’ compensation law, nothing in the opinion limits the Court’s analysis thereto.
Based on the principle of restitution, this Court concluded that claimant was unjustly
enriched by the insurer’s mistake, and accordingly, the insurer was entitled to an offset.
Koszarek further asserts that “as a matter of law, where there is an express,
written agreement, the theory of unjust enrichment does not apply.” Koszarek
Amended Br. at 39. In support, Koszarek references Lackner v. Glosser, 892 A.2d 21
(Pa. Super. 2006). Therein, a company’s suspended vice president sought, inter alia,
restitution pertaining to the value of patents the United States Patent and Trademark
Office issued for devices, some of which the vice president had designed. The vice
president assigned the patents to the corporation. “All of the assignments explicitly
provided that the patents were assigned ‘in consideration of One Dollar ($1.00) and
other good and valuable consideration paid to [the vice president] by [the] assignee,
receipt whereof [the assignor] hereby acknowledge[s].’” Lackner, 892 A.2d at 25
(quoting the record).
In rejecting the restitution claim, the Pennsylvania Superior Court
explained:
[T]he record contains fully-executed written agreements
wherein [the vice president] assigned the patents ‘in
consideration of One Dollar ($1.00) and other good and
valuable consideration’ acknowledged as received by [the
vice president]. As previously noted, [the vice president]
11
testified that he freely assigned the patents without coercion.
[The vice president’s] unjust enrichment action cannot
proceed in the face of fully-executed, express contracts.
Lackner, 892 A.2d at 34 (record citations omitted).
Unlike in Lackner, the restitution sought in the instant case is for monies
paid in error. The existence of Koszarek’s employment contract does not preclude
restitution for payments intended to be made in accordance with that agreement, but
made in error and in excess of those required under the agreement. Therefore, Lackner
is distinguishable. Accordingly, for the aforementioned reasons, the trial court did not
err by concluding that the Authority proved that Koszarek had been overpaid, and that
the Authority could recover the overpayments under the principle of restitution.
Koszarek next argues that the trial court erred or abused its discretion by
failing to conclude that the Authority was estopped from seeking repayment of wages
and benefits it previously approved. Koszarek specifically contends that the Authority
should be estopped from recovering the alleged overpayments “because her salary
payments and benefits were approved by both of her supervisors at the time, and
because her post-retirement benefits were also implicitly approved by the Board [] in
executive session without objection.” Koszarek Amended Br. at 49. She further asserts
that
[i]n making the decision to retire, [Koszarek] reasonably
relied upon the Authority’s approval of her wages and future
benefits payment package, which served as an inducement to
retire at that time. The Authority should therefore have been
estopped from changing its mind and demanding repayment
of funds which it previously approved.
Koszarek Amended Br. at 50.
In support of her argument that the Authority is estopped from seeking
repayment, Koszarek cites Kellams v. Public School Employes’ Retirement Board, 403
A.2d 1315 (Pa. 1979), wherein an equally divided Pennsylvania Supreme Court
12
considered whether the Commonwealth was entitled to restitution, where, over a period
of several years, as a result of its own error, it paid public school employees more
retirement benefits than the applicable law allowed. In an Opinion in Support of
Affirmance,15 Justice Roberts stated: “Not a particle of evidence suggests the retirees
improperly induced the overpayments. Indeed, the overpayments were made solely
because the Commonwealth mistakenly interpreted the [law]. And nothing would
suggest the retirees sought to perpetuate the Commonwealth’s error.” Kellams, 403
A.2d at 1316 (Roberts, J., Op. in Support of Affirmance). Justice Roberts further noted:
The Commonwealth Court . . . fully explained:
[H]ere the issue is not the correctness of the
Commonwealth claim, it is whether it would be
unconscionable to permit the Commonwealth to
demand restitution in this unusual situation.
Perhaps the things that make the plaintiffs’
position so unique are that all the facts were well
known to everyone, as far as the record
shows the original incorrect ruling was made
unilaterally by the Commonwealth after a
request and full disclosure by the plaintiffs, and
the Commonwealth persisted in its error over a
number of years while the plaintiffs used the
funds presumably for the purposes for which
retirement payments are intended, i.e., to pay for
living expenses after the income from gainful
employment has ended.[]
[Kellams v. Pub. Sch. Emps.’ Retirement Bd.,] . . . 391 A.2d
1139, 1141 ([Pa. Cmwlth.] 1978).
The Commonwealth Court recognized that the manifest
hardship repayment would impose must be avoided. On this
record, devoid of any indication that the retirees were in any
15
An opinion of affirmance by an equally divided court has no precedential value. See
Commonwealth v. Covil, 378 A.2d 841 (Pa. 1977).
13
way responsible for the Commonwealth’s error in making
overpayments, the Commonwealth Court’s order refusing to
direct repayment is eminently proper.
Kellams, 403 A.2d at 1316 (Roberts, J., Op. in Support of Affirmance).
Kellams is distinguishable. Here, unlike in Kellams, the Authority did not
wait years but, rather, discovered the alleged overpayments shortly after Koszarek’s
retirement. The Authority promptly commissioned a forensic accounting review,
approached both the District Attorney’s Office and the Ethics Commission, and
thereafter initiated the instant action. Further, unlike in Kellams, there is at least “a
particle of evidence [that] suggests [Koszarek] improperly induced the [alleged]
overpayments.” Kellams, 403 A.2d at 1316. Thus, the facts in the instant matter are
far different from those in Kellams.
Moreover, in Greenwich Bank, the Superior Court declared:
[I]t [does not] matter that the negligence of the plaintiff
contributed to the double payment. ‘Negligence in making a
mistake does not deprive a party of his remedy on account
thereof; it is the fact that one by mistake unintentionally pays
money to another to which the latter is not entitled from the
former, that gives the right of action[.’] Kunkel v. Kunkel,
110 A. 73 [(Pa. 1920).]
Greenwich Bank, 85 Pa. Super. at 163. Notwithstanding, the Kunkel Court specifically
distinguished negligent overpayments from those overpayments “paid . . . intentionally,
[with the payor] not choosing to investigate the facts.” Kunkel, 110 A. at 75 (quoting
Girard Tr. Co. v. Harrington, 23 Pa. Super. 615, 621 (1903)); see also McKibben. The
Kunkel Court emphasized, however, “[t]he mere omission to take advantage of means
of knowledge within the reach of the party paying [money under mistake of fact] does
not prevent a recovery.” Kunkel, 110 A. at 75 (quoting McKibben, 34 A. at 455). Here,
there is no evidence that the Authority knew the payments it was approving exceeded
the amounts to which Koszarek was entitled. Rather, the record evidence reflects that
14
the Authority unknowingly approved the alleged overpayments under what were, at
worst, negligent circumstances.
Further, the record evidence does not support Koszarek’s assertion that
“[i]n making the decision to retire, [she] reasonably relied upon the Authority’s
approval of her wages and future benefits payment package[.]” Koszarek Amended
Br. at 50 (emphasis added). In her March 13, 2014 resignation letter, Koszarek
described her reasons for retiring as her concerns regarding the Authority’s alleged
possible “illegal and unethical actions” and the Authority’s failure to “take seriously
[her] complaints, to investigate them . . . and address them[.]” R.R. at 475a. Therein,
she requested “a payout in [her] last pay [for her] current vacation and sick time held
on the Authority’s books and to use [her] personal, family illness and compensation
time beginning March 28, 2014[,] as is consistent with current Authority practices.”
Id. Notably, the Board approved her retirement in response to the March 13, 2014
resignation letter. Thus, Koszarek’s decision to retire could not have been based on
the Authority’s subsequent “approval of her wages and future benefits payment
package[.]”16 Koszarek Amended Br. at 50. Accordingly, the trial court did not err or
abuse its discretion when it held that, regardless of the Board’s approval of the alleged
16
Koszarek also cites Borkey v. Township of Centre, 847 A.2d 807 (Pa. Cmwlth. 2004), for
the proposition, “[t]he doctrine of equitable estoppel is an equitable remedy that may be asserted
against the Commonwealth or one of its political subdivisions.” Id. at 811. This Court does not hold
otherwise. Notably, the Borkey Court explained:
In order to apply the doctrine of equitable estoppel against the
Commonwealth, it must be shown that the Commonwealth (1)
intentionally or negligently misrepresented some material facts, (2)
knowing or having reason to know that the other party would rely on
that misrepresentation, and (3) thereby induced the party to act to his
or her detriment.
Id. at 811 (emphasis added). Koszarek’s March 13, 2014 resignation letter, wherein she described
her reasons for retirement, undermine Koszarek’s assertion that the Authority’s perceived
acquiescence in the alleged overpayments induced her to retire.
15
overpayments, the Authority was entitled to recover any proven overpayments from
Koszarek.
Koszarek next argues that the trial court abused its discretion by finding
that wage and benefit overpayments were made. According to Koszarek, “without
making any credibility determinations, the [trial c]ourt discussed the Authority’s
expert witnesses and ignored [] Koszarek’s own testimony, concluding only that she
‘did not present any independent testimony from an accountant or other [Authority]
employee supporting her assertions.’” Koszarek Amended Br. at 53 (quoting Rule
1925(a) Op. at 4).
Contrary to Koszarek’s contention, the trial court did not ignore
Koszarek’s testimony. Rather, it specifically noted that “Koszarek disputed the
findings of [the Authority’s] witnesses, including its outside accountant and forensic
account[ant] and maintained that all payments to the employees listed were
appropriate.” Rule 1925(a) Op. at 4, R.R. at 909a. Further, “[f]ailure to mention
testimony does not compel a conclusion that it was not considered.”17 Colt Indus. v.
Workmen’s Comp. Appeal Bd., 415 A.2d 972, 974 (Pa. Cmwlth. 1980).
Importantly, “it [is] within the province of the trial court to weigh
conflicting testimony, to make credibility determinations and to make findings of fact
based on those assessments[.]” In re Dauphin Cnty. Tax Claim Bureau, 834 A.2d 1229,
1232 (Pa. Cmwlth. 2003). “This Court is bound by the trial court’s findings of fact
unless those findings are not based on competent evidence in the record. Likewise, we
are bound by the trial court’s credibility determinations.” Big Bass Lake Cmty. Ass’n
17
Koszarek also contends that the trial court automatically discounted her testimony because
she was not presented as an expert witness. See Koszarek Amended Br. at 54. There is nothing in
the trial court’s opinion indicating such. Rather, in its Rule 1925(a) Opinion, the trial court referenced
Koszarek’s testimony and noted that she did not present corroborating or expert witness testimony.
See Rule 1925(a) Op. at 4, R.R. at 909a. It did not state that simply because Koszarek was not
presented as an expert witness, her testimony was less compelling.
16
v. Warren, 23 A.3d 619, 625 (Pa. Cmwlth. 2011) (citation omitted). “A trial court’s
factual findings will not be disturbed on appeal unless ‘the record affords them
inadequate evidentiary support or when they have been premised upon erroneous
inferences and deductions . . . from the evidence.’” Big Bass Lake Cmty. Ass’n v.
Warren, 950 A.2d 1137, 1147 n.16 (Pa. Cmwlth. 2008) (quoting Moyerman v.
Glanzberg, 138 A.2d 681, 684 (Pa. 1958)). “That the record may contain evidence that
supports a different result than that reached by the [fact finder] is irrelevant so long as
the record contains substantial evidence supporting the [fact finder’s] decision.” Lyft,
Inc. v. Pa. Pub. Util. Comm’n, 145 A.3d 1235, 1240 (Pa. Cmwlth. 2016); see also
Gnagey Gas & Oil Co. v. Pa. Underground Storage Tank Indemnification Fund, 82
A.3d 485 (Pa. Cmwlth. 2013). “On appeal, it is not the duty of the appellate court to
find the facts, but to determine whether there is evidence in the record to justify the
trial court’s findings of fact.” Bold Corp. v. Cnty. of Lancaster, 801 A.2d 469, 477 (Pa.
2002) (quoting Torbik v. Luzerne Cnty., 696 A.2d 1141, 1145 (Pa. 1997)).
Here, according to the trial court, “[t]he facts established that [the
Authority] overpaid Koszarek in the total amount of $26,399.77[,]” R.R. at 911a-912a,
and the overpayments were “proved by clear and substantial evidence[,]” R.R. at 910a.
The trial court further determined:
[The Authority] received no return additional benefit but
believed that the payments were properly calculated and due
to Koszarek in exchange for her employment as previously
agreed. This was not the case, however, as [the Authority]
later discovered after Koszarek left. Koszarek was neither
entitled to[,] nor in any way earned[,] the extra money she
received and therefore must pay restitution to [the Authority]
as a result.
Id. at 7, R.R. at 912a.
Koszarek argues:
17
The analysis and conclusions of . . . Barbagallo, upon which
[the Authority] bases its case, were seriously flawed and
subject to dispute at trial, both through cross[-]examination
and by [] Koszarek on rebuttal, demonstrating that []
Barbagallo did not rely on the entirety of the Authority’s
policies and procedures. He admitted, for instance that a
missing wage letter and sticky note referenced at note 8 of
his own report was not considered. He admitted that he was
not aware that comp [sic] time was usually accounted for as
regular pay due to limitations in the computerized payroll
accounting system. He admitted that he did not consider that
vacation pay was approved by Koszarek’s supervisors and
the Board [] upon her resignation. He admitted regarding
sick time that he did not consider Authority policy as
developed from prior grievance decisions or the approval of
[] Koszarek’s retirement letter. He admitted that he did not
consider that [] Koszarek’s comp [sic] time was approved by
her supervisor and the Board and further admitted that he
relied on the hearsay interpretation of collective bargaining
agreements that directly contradicted the plain language of
those agreements. And he admitted that he had no
knowledge concerning the accounting system and how it was
managed.
Koszarek Amended Br. at 53-54 (emphasis added).
“It has long been Pennsylvania law that, while conclusions recorded by
experts may be disputed, [determinations regarding] the credibility and weight
attributed to those conclusions . . . reside in the sole province of the trier of fact[.]”
Summers v. Certainteed Corp., 997 A.2d 1152, 1161 (Pa. 2010).
‘An expert may base an opinion on facts or data in the case
that the expert has been made aware of or personally
observed. If experts in the particular field would reasonably
rely on those kinds of facts or data in forming an opinion on
the subject, they need not be admissible for the opinion to be
admitted.’ Pa.R.E. 703; In re D.Y., 34 A.3d 177, 182-83 (Pa.
Super. 2011) . . . . ‘If the expert states an opinion the expert
must state the facts or data on which the opinion is based.’
Pa.R.E. 705 and Comment (explaining otherwise
inadmissible facts and data supporting expert opinion are
considered only to explain basis for expert’s opinion, not as
substantive evidence). ‘Once expert testimony has been
18
admitted, the rules of evidence then place the full burden
of exploration of facts and assumptions underlying the
testimony of an expert witness squarely on the shoulders
of opposing counsel’s cross-examination.’ In re D.Y., [34
A.3d] at 183. Opposing counsel bears the burden of
exposing and exploring ‘any weaknesses in the
underpinnings of the expert’s opinion.’ Id.
Commonwealth v. Prendes, 97 A.3d 337, 358 (Pa. Super. 2014) (emphasis added),
impliedly overruled on other grounds by Commonwealth v. Hvizda, 116 A.3d 1103,
1106 (Pa. 2015).
Here, Barbagallo testified regarding the basis for his expert opinion that
Koszarek had been overpaid. He explained: “[W]e looked at the hiring documents and
contract, and we looked at the dates involved. And what we did was look at what was
paid during those dates in accordance with [B]oard actions, hiring letter, contract, [sic]
and determine whether she was overpaid in accordance with those documents.” R.R.
at 756a. The alleged inadequacies of his analysis were explored on cross-examination.
Notably, “[e]xpert testimony is competent to support a finding of fact even where the
witness admits to uncertainty, doubt, reservation, or a lack of information with regard
to medical and scientific details; provided that the witness does not recant the opinion
or belief first expressed.” Corcoran v. Workers’ Comp. Appeal Bd. (Capital
Cities/Times Leader), 725 A.2d 868, 872 (Pa. Cmwlth. 1999).
In the instant matter,
through cross-examination, [Koszarek] had the opportunity,
and in fact did point out, what [she] perceived to be errors . .
. in the [Authority’s] expert’s testimony. It is the function of
the [fact finder] to determine and resolve the discrepancies in
the testimony of the expert witnesses. The weight of the
testimony may be affected, but not its admissibility.
In re Condemnation by Dep’t of Transp., 501 A.2d 1172, 1175 (Pa. Cmwlth. 1985)
(emphasis added). The trial court, as it was empowered to do, weighed the evidence,
including Barbagallo’s testimony both on direct and cross-examination, and concluded
19
that the Authority had proven Koszarek’s overpayments. Although the trial court did
not explicitly declare Barbagallo’s testimony credible, it unambiguously credited the
Authority’s evidence (which included Barbagallo’s testimony calculating the
overpayments) as “clear and substantial[.]” Rule 1925(a) Op. at 5, R.R. at 910a.
Barbagallo’s testimony and expert report,18 along with that of the Authority’s other
witnesses is substantial evidence which supports the trial court’s decision. Thus, this
Court is bound by the trial court’s factual findings. Further, because “the record
adequately supports the trial court’s reasons and factual basis, the [trial] court did not
abuse its discretion.” Harman, 756 A.2d at 1123 (quoting Coker, 625 A.2d at 1187).
Next, Koszarek argues that the trial court erred or abused its discretion by
rejecting Koszarek’s counterclaim based on the Settlement Agreement. According to
Koszarek, “[her] counter[]claims concern actions by the Authority that clearly occurred
after she signed the release of all claims. This [] Koszarek could not have waived as a
matter of law.” Koszarek Amended Br. at 56.
In consideration of the $70,000.00 settlement payment, Koszarek agreed,
inter alia, to
refrain from filing any future claims, complaints, or
lawsuits[19] with any federal, state, or local court,
administrative body or agency against [the Authority] and
any entity or individual related to [the Authority] . . . arising
from Koszarek’s employment, her separation from
employment, any employment-related or non-employment
related conduct by [the Authority], or any entity related to
[the Authority] in or outside any workplace(s), or for any
other reason, whether currently known or unknown.
R.R. at 477a.
18
The trial court admitted Barbagallo’s expert report into evidence on agreement of both
counsel. See R.R. at 748a.
19
In exchange for the release of her claims, the Authority did not similarly agree to refrain
from filing future claims, complaints, or lawsuits against Koszarek.
20
Further, Koszarek
irrevocably and unconditionally release[d], acquit[ted],
h[e]ld harmless and forever discharge[d the Authority] . . .
from any and all causes of action, suits, appeals, damages . .
. whether known or unknown, now existing or
subsequently arising . . . which were brought or could have
been brought, whether or not filed, pertaining to (1) the
events and transaction that are the subject matter of the
[a]ction; (2) Koszarek’s employment with and separation
from [the Authority]; and/or (3) any and all claims based on
state, federal or local laws . . . arising out of or related to any
wage, compensation, or bonus payments claim resulting
from Koszarek’s employment with [the Authority],
separation from employment with [the Authority], or [] due
to any employment-related or non-employment conduct in or
outside of any of the [Authority] workplace(s), or for any
other reason, whether known or unknown as of the effective
date of this release . . . .
R.R. at 477a-478a (emphasis added).20
The Pennsylvania Supreme Court has explained:
‘[A] long line of Pennsylvania cases has held that a release
covers only those matters which may be fairly said to have
been within the contemplation of the parties when the release
was given.’ Restifo v. McDonald, . . . 230 A.2d 199, 201
([Pa.] 1967).
Waivers which release liability for actions not accrued at the
time of the release are generally only invalid if they involve
20
The Settlement Agreement also contains a Non-Disparagement provision which provided
in relevant part:
(a) . . . [W]ithout the prior written consent of [the Authority], neither
Koszarek nor any person acting on behalf of or under her direction or
control, shall provide any testimony, statements, declarations . . . or
shall otherwise assist, any person adverse to [the Authority], . . . in
connection with any legal proceeding or investigation . . . .
(b) Koszarek agrees that she will not take any action or make any
statements, verbal or written, which disparage [the Authority.]
R.R. at 480a. There is no similar language constraining the Authority.
21
future actions entirely different than ones contemplated by
the parties at the time of the release.
Bowman v. Sunoco, Inc., 65 A.3d 901, 909 (Pa. 2013).
In her first counterclaim, Koszarek alleged that the Authority violated
whistleblower laws by retaliating against her and filing unfounded complaints with the
Ethics Commission and the District Attorney’s Office, and reporting the allegations to
the press. Specifically, Koszarek asserts:
The post-release activities about which [] Koszarek
complained in her counterclaim included continuing to
cooperate with the District Attorney’s [Office’s]
investigation after the June 10, 2015 release, and up to
March 28, 2016, when the District Attorney[’s Office]
declined to prosecute. The Authority also referred []
Koszarek for prosecution before the . . . Ethics Commission
sometimes [sic] in April of 2015, but continued to cooperate
with the [Ethics] Commission and push for prosecution until
the [Ethics] Commission dismissed the investigation with
prejudice on its own motion on May 16, 2016, well after the
June 10, 2015 release was executed. Moreover, well after
the release was signed, an unflattering article concerning []
Koszarek appeared on February 19, 2016 in
Levittownnow.com that reported on the nonpublic
Barbagallo [r]eport, which had been secretly released to it
by someone at the Authority with access to that internal
report.[21] And Board Member Richard Altmiller published
an opinion editorial in the very same newspaper on July 18,
2016, in which he publicly regretted that the District
Attorney[’s Office] had refused to prosecute [Koszarek22] --
yet another action that occurred well after the June 10, 2015
execution of the release. Further, the Authority’s actions to
sue [] Koszarek occurred well after the release was signed.
21
Contrary to Koszarek’s assertion, there is no record evidence demonstrating that “someone
at the Authority” released Barbagallo’s report to Levittownnow.com. Koszarek Amended Br. at 56.
22
In her Reply Brief, Koszarek similarly contends that the Authority “allowed the release of
confidential material to the press which resulted in publication of an unflattering article about
[Koszarek], and allowed one of its board members to publish an aggressively critical op-ed piece
regarding [Koszarek.]” Koszarek Reply Br. at 3 (emphasis added). There is no record evidence
establishing that the Authority consented to or otherwise allowed the release of Barbagallo’s report,
or that the Board participated in its member’s decision to publish the July 18, 2016 opinion editorial.
22
Koszarek Amended Br. at 55-56 (italic emphasis added).
In the Settlement Agreement, Koszarek irrevocably and unconditionally
released the Authority “from any and all causes of action, suits, appeals, damages . . .
whether known or unknown, now existing or subsequently arising . . . which were
brought or could have been brought, whether or not filed, pertaining to . . . Koszarek’s
employment with and separation from [the Authority.]” R.R. at 478a (emphasis
added). The Authority notified both the District Attorney’s Office and the Ethics
Commission in April of 2015 of the alleged overpayments, before Koszarek signed the
Settlement Agreement on June 10, 2015.23 See R.R. at 496a, 501a. Whether or not
Koszarek was aware of the Authority’s conduct in contacting the District Attorney’s
Office or the Ethics Commission, Koszarek released the Authority from liability
therefor. Further, the Authority’s continued cooperation in preexisting, ongoing
investigations was consistent with its duty to “benefit the people of the Commonwealth
by, among other things, increasing their commerce, health, safety and prosperity . . .
[,]” 53 Pa.C.S. § 5607(b)(2), and with its fiscal responsibilities under Section 5612 of
the Act, and is not indicative of retaliatory behavior.
Given that the Authority is a public entity, Koszarek should have
contemplated the possibility that it might make public and release relevant information
concerning investigations and any money it believed it was owed.24 Except for the
release of the Barbagallo report and the opinion editorial, the actions which form the
basis for Koszarek’s retaliation counterclaim were in process when she signed the
23
Koszarek characterizes the Authority’s “continuing” cooperation with the District
Attorney’s Office and Ethics Commission investigations after Koszarek signed the Settlement
Agreement as retaliatory. Koszarek Amended Br. at 55 (emphasis added). Koszarek’s position
necessarily acknowledges that both investigations and the Authority’s cooperation therewith began
before Koszarek signed the Settlement Agreement.
24
Neither the February 19, 2016 article in Levittownnow.com nor Board Member Richard
Altmiller’s July 18, 2016 opinion editorial identified Koszarek by name.
23
Settlement Agreement. Accordingly, the trial court properly dismissed Koszarek’s first
counterclaim.
In Koszarek’s second counterclaim, she alleged that the Authority abused
the legal process by, inter alia, filing the instant lawsuit after both the District
Attorney’s Office and the Ethics Commission determined that the Authority’s
allegations were meritless, for the alleged purpose of retaliating against her for filing
and settling her discrimination and whistleblower complaints, and for having raised
complaints with the Authority about Rajput. See R.R. at 64a.
This Court acknowledges:
‘The tort of ‘abuse of process’ is defined as the use of legal
process against another ‘primarily to accomplish a purpose
for which it is not designed.’’ Rosen v. Am[.] Bank of Rolla,
. . . 627 A.2d 190, 192 ([Pa. Super.] 1993) (quoting
RESTATEMENT (SECOND) OF TORTS § 682 [Am. Law Inst.
(1977)]). ‘To establish a claim for abuse of process it must
be shown that the defendant (1) used a legal process against
the plaintiff, (2) primarily to accomplish a purpose for which
the process was not designed; and harm has been caused to
the plaintiff.’ Id. . . . The gravamen of abuse of process is
the perversion of the particular legal process for a purpose of
benefit to the defendant, which is not an authorized goal of
the procedure. Id. In support of this claim, the [plaintiff]
must show ‘‘some definite act or threat not authorized by the
process, or aimed at an objective not legitimate in the use of
the process . . . ; and there is no liability where the defendant
has done nothing more than carry out the process to its
authorized conclusion, even though with bad intentions.’’ Di
Sante v. Russ Fin[.] Co., . . . 380 A.2d 439, 441 ([Pa. Super.]
1977) (quoting PROSSER, TORTS, § 100, at 669 (2d [e]d.
1955)).
Shiner v. Moriarty, 706 A.2d 1228, 1236 (Pa. Super. 1998).
It is not enough that the defendant had bad or malicious
intentions or that the defendant acted from spite or with an
ulterior motive. Rather, there must be an act or threat not
authorized by the process, or the process must be used for an
illegitimate aim such as extortion, blackmail, or to coerce or
24
compel the plaintiff to take some collateral action. ‘There is
no liability where the defendant has done nothing more than
carry out the process to its authorized conclusion, even
though with bad intentions.’ Shaffer v. Stewart, . . . 473 A.2d
[1017,] 1019 [(Pa. Super. 1984)][.]
Al Hamilton Contracting Co. v. Cowder, 644 A.2d 188, 192 (Pa. Super. 1994)
(emphasis added; citations omitted).
Here, the Authority successfully pursued the instant action against
Koszarek to recover money which the trial court found the Authority was rightfully
owed.25 Notably, of all the employee overpayments Koszarek made, the overpayments
she made to herself constituted the most significant and costly loss of the Authority’s
funds. See R.R. at 521a-522a. Even assuming, arguendo, that the Authority pursued
this action with “bad or malicious intentions,” it has “done nothing more than carry out
the process to its authorized conclusion[.]” Id. Thus, the trial court properly dismissed
Koszarek’s abuse of process claim.26
Finally, Koszarek argues that the trial court erred or abused its discretion
by concluding that the Authority recouped overpayments from other employees.
Notably, the record contains a $47.38 check dated April 21, 2015 from Rajput
reimbursing the Authority for his overpayment.27 See R.R. at 570a. The record
evidence further reflects that on April 25, 2018, the Authority sent letters to several
employees notifying them of payroll overpayments and requesting repayment. See
R.R. at 562a-569a. As addressed supra, under restitution principles, the Authority was
entitled to recover alleged overpayments to Koszarek, if such overpayments were
proven. This recovery is permissible, regardless of whether the Authority sought to
25
In fact, Koszarek admitted that she had overpaid herself $906.30.
26
“An appellate court is permitted to affirm an order of the trial court on other grounds if the
correct result was reached.” Citimortgage, Inc. v. KDR Invs., LLP, 954 A.2d 755, 756 n.2 (Pa.
Cmwlth. 2008).
27
The memo line on the check describes the payment as “[r]eimbursement of overpayment of
wages 2012-2014.” R.R. at 570a.
25
recover overpayments from other employees and whether those employees actually
reimbursed the Authority. In fact, the Authority pursued investigations of the
individual allegedly responsible for the overpayments. Upon confirming such
overpayments, the Authority sought Koszarek’s repayment before seeking repayment
from other employees.
Finally, with respect to Koszarek’s assertion that the trial court erred by
concluding that the Authority recouped overpayments from other employees, such is
harmless error because the Authority did recoup repayment from one employee and it
is not relevant or determinative with respect to the Authority’s rights to restitution from
Koszarek for the overpayments. Accordingly, this Court discerns no reversible error
or abuse of discretion.
For all of the above reasons, the trial court’s order is affirmed.
___________________________
ANNE E. COVEY, Judge
26
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Lower Bucks County Joint :
Municipal Authority :
:
v. :
:
Patricia Koszarek, : No. 686 C.D. 2020
Appellant :
ORDER
AND NOW, this 11th day of December, 2020, the Bucks County Common
Pleas Court’s April 6, 2020 decision is affirmed. Patricia Koszarek’s Application to
File Post-Argument Communication is granted.
___________________________
ANNE E. COVEY, Judge