Pennsylvania Electric v. Berwind Corp.

J-A04023-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
PENNSYLVANIA ELECTRIC COMPANY, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
BERWIND CORPORATION,
Appellee No. 972 WDA 2014
Appeal from the Order Entered May 20, 2014
In the Court of Common Pleas of Somerset County
Civil Division at No(s): 1383 Civil 2009
BEFORE: BOWES, OLSON AND STRASSBURGER, JJ.*
MEMORANDUM BY OLSON, J.: FILED APRIL 28, 2015
Appellant, Pennsylvania Electric Company, appeals from the order
entered on May 20, 2014, granting a motion for summary judgment filed by
Berwind Corporation (Berwind). Upon review, we affirm.
The trial court summarized the facts of this case as follows:
[Appellant] is a Pennsylvania public utility providing
electrical service within the Commonwealth of Pennsylvania
and has it principal office at 1001 Broad Street, Johnstown,
Pennsylvania 15907. [Berwind] is a Pennsylvania
Corporation with its principal place of business at 3000
Centre Square West, 1500 Market Street, Philadelphia,
Pennsylvania 19102. [Berwind] is the owner of certain
mineral-rich land located in Shade Township, Somerset
County, Pennsylvania. At all pertinent times, [Berwind] has
intended to mine the coal located on this property. In order
to avoid having to go through with the process to condemn
a right-of-way on [Berwind’s] property, [Appellant] and
[Berwind] entered into a right-of-way agreement (the
“Agreement”), which granted [Appellant] a right-of-way
over [Berwind’s] land on which to erect and maintain a
*Retired Senior Judge assigned to the Superior Court.
J-A04023-15
power line and related facilities. Specifically, the Agreement
granted [Appellant] a right-of-way described as:
a right-of-way for a power line within a width of not
exceeding one hundred twenty (120) feet, subject to
the exceptions and reservations hereinafter set forth,
together with the right and privilege to construct,
maintain, repair and operate an electric power line,
with the necessary poles, wires, guy stubs and
anchors for the transmission of electrical energy over
and through the hereinafter described lands situated
in the Township of Shade, County of Somerset and
State of Pennsylvania.
The Agreement specified that “the rights and privileges
hereby granted shall continue so long as [Appellant] shall
operate and maintain in good and safe repair the said power
line on the herein described premises… .” Moreover, the
Agreement specified, in pertinent part:
[Berwind], for itself, its successors, lessees, assigns
and grantees, hereby expressly excepts and reserves
the rights and privilege to mine and remove, by any
method or methods chosen by it, all of the coal and
minerals, including the pillars, owned by it or
hereafter acquired by it, underlying or adjoining the
fee and/or mineral lands of [Berwind] over which the
said power line is to be constructed and maintained;
and also the exclusive right to use for farming
purposes and to cross at any point the said power
line with power lines, water lines, streets, alleys,
tramroads, railways, above or below ground; all of
these rights to be exercised by [Berwind], its
successors, lessees and assigns, without let,
hindrance or molestation, and without liability for
damages.
Furthermore, the Agreement stated:
[Appellant] hereby remises and releases [Berwind],
its successors, lessees and assigns, from any and all
damages whatsoever which may result to the power
line and appurtenances of [Appellant] on the
right-of-way herein granted by reason of the mining
-2-
J-A04023-15
and removing of all the coal and minerals or any part
thereof, or by reason of the exercise of any of the
rights and privileges hereby excepted and reserved.
The Agreement was made and entered into by the parties
on January 10, 1977. Thereafter, [Appellant] promptly
installed a power line, along with poles and other equipment
necessary for the transmission of electrical energy within
the right-of-way, and [Appellant] has since operated and
maintained the power line in good and safe repair.
No dispute arose between the parties until October 17,
2007, when [Berwind’s] lessee notified [Appellant] that it
planned to mine coal located within the right-of-way. On
May 14, 2008, [Appellant’s] representative responded,
writing that [Appellant] agreed to permit mining only if
[Berwind] agreed to certain written restrictions that would
be placed on the coal mining activities with the intention of
protecting the power line and electrical facilities. On June
20, 2008, [Berwind’s] representative rejected the
restrictions and advised [Appellant] that the stated
conditions were unacceptable as they contradicted the
Agreement. Sometime thereafter, [Berwind] offered
[Appellant] the option of relocating its power line and
facilities to another area on [Berwind’s] property at
[Appellant’s] cost, or paying [Berwind] for the unmined coal
within the right-of-way. [Berwind] further advised
[Appellant] that [it] would proceed to mine the coal even if
the power line was damaged in the process. In May 2009,
[Appellant] opted to move the power line to a different
location on [Berwind’s] property, but reserved the right to
seek damages from [Berwind].
After obtaining approval from the Pennsylvania Public Utility
Commission (hereinafter, the “PUC”), [Appellant] relocated
its power line and electrical facilities, calculated in
accordance with [Appellant’s] Tariff No. 79 (hereinafter
“Tariff”), totaled $420,640.18.
Trial Court Opinion, 5/20/2014, at 3-5 (record citations omitted).
The case progressed procedurally as follows:
-3-
J-A04023-15
[Appellant] instituted this action on December 15, 2009
by filing a complaint for declaratory judgment. On January
15, 2010, in response to the complaint, [Berwind] filed an
answer and new matter to [Appellant’s] complaint for
declaratory judgment and counterclaim for declaratory
judgment. On March 24, 2010, [Appellant] filed an
amended complaint for declaratory judgment, seeking a
declaration from [the trial court] that [Berwind was]
obligated to reimburse [Appellant] for the cost of relocating
its power line and electrical facilities. On April 13, 2010, in
response to the amended complaint, [Berwind] filed its
answer to [the] amended complaint, and counterclaim for
declaratory judgment. In its counterclaim, [Berwind]
request[ed] that [the trial court] declare that [Berwind had]
no liability to [Appellant] for costs associated with the
relocation of [Appellant’s] power line and related facilities.
On December 3, 2013, [Appellant] filed a motion for
summary judgment, a brief in support [], and [a] statement
of material facts[]. […] On January 17, 2014, [Berwind]
filed a cross-motion for summary judgment, a brief in
opposition to [Appellant’s] motion for summary judgment
and in support of its cross-motion for summary judgment,
and a response to [Appellant’s] statement of material
facts[]. [The parties filed responses and replies.]
On April 16, 2014, [the trial court] heard argument by
counsel on the parties’ cross-motions for summary
judgment. [On May 20, 2014, the trial court entered an
order, and filed an accompanying opinion,] deny[ing]
[Appellant’s] motion for summary judgment and grant[ing]
[Berwind’s] cross-motion for summary judgment.
Id. at 1-3 (unnecessary capitalization and parentheticals omitted). This
timely appeal resulted.1
____________________________________________
1
Appellant filed a notice of appeal on June 16, 2014. On June 25, 2014, the
trial court entered an order pursuant to Pa.R.A.P. 1925(b) directing
Appellant to file a concise statement of errors complained of on appeal.
Appellant complied on July 15, 2014. Relying upon its prior opinion issued
(Footnote Continued Next Page)
-4-
J-A04023-15
On appeal, Appellant presents the following issues for our review:
1. Did the lower court err in failing to find that the
right-of-way agreement granted the right-of-way in
[Appellant] in perpetuity so long as the electrical facilities
were maintained and did not contain any provision
requiring [Appellant] to relocate them or buy any coal?
2. Did the lower court err in failing to find that Berwind, as
the party benefitted, must pay for the relocation of
electrical facilities if Berwind wants to strip mine the coal
under the area needed to provide surface support for the
electrical facilities?
3. Did the lower court err in construing the reservation of
right to mine and remove coal and the waiver of
damages to allow Berwind to recklessly or intentionally
harm the electrical facilities to strip mine coal in the area
needed to provide surface support for the electrical
facilities requiring [Appellant] to pay for the relocation of
the electrical facilities or buy the coal in order to avoid
having them intentionally destroyed by Berwind?
4. Did the lower court err in disregarding [Appellant’s] filed
and approved PUC Tariff in determining whether Berwind
was responsible for payment of the relocation costs and
in finding that Berwind was not an “applicant” when it
demanded that [Appellant] relocate the electrical
facilities for its benefit?
5. If this matter is reversed, should the matter be referred
to the PUC to determine the proper amount to be
awarded to [Appellant] for the relocation of the electrical
facilities?
Appellant’s Brief at 3 (some capitalization omitted).
_______________________
(Footnote Continued)
on May 20, 2014, the trial court entered an order, on July 23, 2014,
declining further supplementation.
-5-
J-A04023-15
Appellant’s first three issues are inter-related and, thus, we will
examine them together. Appellant contends that the trial court erred by
granting summary judgment to Berwind based upon its interpretation of the
right-of-way contract at issue. More specifically, Appellant claims that “[t]he
agreement does not contain any provision whatsoever that requires
[Appellant] to relocate its facilities for any reason.” Id. at 17. Appellant
argues that by demanding relocation or threatening destruction of its power
lines, Berwind took actions that completely denied Appellant use of the
easement.2 Id. at 18-23. Relying principally on the Pennsylvania Supreme
Court’s decision in Minard Run Oil Co. v. Pennzoil Co., 214 A.2d 234 (Pa.
1965), Appellant avers that because Berwind sought to change the status
quo, Berwind bore the relocation costs. Id. at 24-27. Appellant also
contends that the trial court erred by taking into account the “nominal”
consideration it paid for the easement ($12,000.00) or the potential of
Berwind instituting condemnation proceedings, in rendering its opinion. Id.
at 28-29. Finally, Appellant argues that the reservation and release
____________________________________________
2
For this proposition, Appellant cites this Court’s decisions in Amerikohl
Mining Co., Inc. v. Peoples National Gas Co., 860 A.2d 547 (Pa. Super
2004), as well as the Pennsylvania Supreme Court’s decision in Merrill v.
Manufacturers Light and Heat Co., 185 A.2d 573 (Pa. 1962). Appellant
maintains “[t]he import of the cases involving improved lands indicate that
the courts in this Commonwealth have been reluctant to require the
relocation of the improvements at the easement holder’s expense or permit
the destruction of the improvements on the surface.” Appellant’s Brief at
23.
-6-
J-A04023-15
provisions of the agreement “do not support the claim that [Appellant]
consented in advance to Berwind engaging in intentional or reckless conduct
that would damage or destroy the very facilities to be placed on the granted
right-of-way under the agreement.” Id. at 31. Appellant argues that the
term damages “contemplates unintentional injury to the power lines, not the
intentional destruction of them.” Id. at 40.
Our standard of review with respect to a trial court's decision to grant
or deny a motion for summary judgment is as follows:
A reviewing court may disturb the order of the trial court
only where it is established that the court committed an
error of law or abused its discretion. As with all questions of
law, our review is plenary.
In evaluating the trial court's decision to enter summary
judgment, we focus on the legal standard articulated in the
summary judgment rule. Pa.R.C.P. 1035.2. The rule states
that where there is no genuine issue of material fact and
the moving party is entitled to relief as a matter of law,
summary judgment may be entered. Where the non-moving
party bears the burden of proof on an issue, he may not
merely rely on his pleadings or answers in order to survive
summary judgment. Failure of a nonmoving party to adduce
sufficient evidence on an issue essential to his case and on
which it bears the burden of proof establishes the
entitlement of the moving party to judgment as a matter of
law. Lastly, we will view the record in the light most
favorable to the non-moving party, and all doubts as to the
existence of a genuine issue of material fact must be
resolved against the moving party.
Socko v. Mid-Atlantic System of CPA, Inc., 99 A.3d 928, 930 (Pa. Super.
2014).
-7-
J-A04023-15
“It is well established that the same rules of construction that apply to
contracts are applicable in the construction of easement grants.”
Zettlemoyer v. Transcon. Gas Pipeline Corp., 657 A.2d 920, 924 (Pa.
1995). Regarding contract interpretation, we have determined:
The interpretation of any contract is a question of law and
this Court's scope of review is plenary. Moreover, we need
not defer to the conclusions of the trial court and are free to
draw our own inferences. In interpreting a contract, the
ultimate goal is to ascertain and give effect to the intent of
the parties as reasonably manifested by the language of
their written agreement. When construing agreements
involving clear and unambiguous terms, this Court need
only examine the writing itself to give effect to the parties'
understanding. This Court must construe the contract only
as written and may not modify the plain meaning under the
guise of interpretation.
We have explained:
Contracts are enforceable when the parties reach a
mutual agreement, exchange consideration, and
have set forth the terms of their bargain with
sufficient clarity. An agreement is sufficiently definite
if it indicates that the parties intended to make a
contract and if there is an appropriate basis upon
which a court can fashion a remedy. Moreover,
when the language of a contract is clear and
unequivocal, courts interpret its meaning by its
content alone, within the four corners of the
document.
Stephan v. Waldron Elec. Heating & Cooling LLC, 100 A.3d 660, 665
(Pa. Super. 2014) (internal citations omitted).
At issue here, the right-of-way agreement provides, in pertinent part:
This Agreement, made in duplicate, and entered into
this 10th day of January, A.D. 1977, by and between
-8-
J-A04023-15
BERWIND CORPORATION, a corporation organized and
existing under and by virtue of the laws of the
Commonwealth of Pennsylvania, party of the first part, and
PENNSYLVANIA ELECTRIC COMPANY, likewise a corporation
of Pennsylvania, party of the second part.
WITNESSETH:
That for and in consideration of the convenants and
agreements hereinafter contained and on the part of
[Appellant] to be kept, performed and observed, as well as
for and in consideration of the sum of One Dollar ($1.00),
and for other good and valuable considerations, receipt of
which is hereby acknowledged, [Berwind] hereby gives and
grants unto the party of the second part a right-of-way for a
power line within a width of not exceeding one hundred
twenty (120) feet, subject to the exceptions and
reservations hereinafter set forth, together with the right
and privilege to construct, maintain, repair and operate an
electric power line, with the necessary poles, wires, guy
stubs and anchors for the transmission of electrical energy
over and through the hereinafter described lands situated in
the Township of Shade, County of Somerset and State of
Pennsylvania. It is distinctly understood and agreed that
the fee simple in the land hereinafter described is not
hereby granted, but only the rights and privileges for the
purpose aforesaid, subject to the agreements and
conditions herein contained.
* * *
[Berwind], for itself, its successors, lessees, assigns and
grantees, hereby expressly excepts and reserves the right
and privilege to mine and remove, by any method or
methods chosen by it, all of the coal and minerals, including
the pillars, owned by it or hereafter acquired by it,
underlying or adjoining the fee and/or minerals lands of
[Berwind] over which the said power line is to be
constructed and maintained; and also the exclusive right to
use for farming purposes and to cross at any point the said
power line with power lines, water lines, streets, alleys,
tramroads, railways, above or below ground; all of these
rights to be exercised by [Berwind], its successors, lessees
-9-
J-A04023-15
and assigns, without let, hindrance or molestation, and
without liability for damages.
* * *
SECOND [PARAGRAPH]: [Appellant] hereby remises and
releases [Berwind], its successors, lessees, and assigns,
from any and all damages whatsoever which may result to
the power line and appurtenances of [Appellant] on the
right-of-way herein granted by reason of the mining and
removing of all the coal and minerals or any part thereof, or
by reason of the exercise of any of the rights and privileges
hereby excepted and reserved.
Right-of-Way Agreement, 1/10/1977, at 1-2.
Here, the plain language of the agreement provides that Berwind, as
land owner, expressly reserved “the right and privilege to mine and remove,
by any method or methods chosen by it, all of the coal and minerals …
underlying … lands of [Berwind] over which the said power line is to be
constructed and maintained.” Id. at 1 (emphasis added). There is no
ambiguity regarding whether Berwind was entitled to mine all of the coal
under the right-of-way, by any method. Moreover, Berwind was permitted
to exercise “all of these rights … without let, hindrance or molestation, and
without liability for damages.” Id. (emphasis added). Appellant also
agreed to “remise[] and release[] [Berwind] … from any and all damages
whatsoever which may result to the power line and appurtenances of
[Appellant] on the right-of-way … by reason of the mining and removing of
all the coal and minerals[.]” Id. at 2. When the provisions are read
together, it is clear that Berwind provided land to Appellant for a right-of-
- 10 -
J-A04023-15
way, conditioned upon the right to mine all of the coal underneath the
easement at any time, by any method. Had Berwind mined the coal before
Appellant relocated its power lines, Berwind would have been held harmless
for any damage to the original structures.
We reject Appellant’s argument that Berwind sought to engage in
intentional or reckless conduct that would damage or destroy the power
lines. Berwind sought to exercise its reserved right to mine all of the land
under the right-of-way. While complete destruction was a distinct
possibility, there is nothing of record to suggest that Berwind intended to
intentionally or outright destroy the power lines. Rather, at all times,
Berwind sought to exercise its express reservation to mine the land, with
ancillary damage to Appellant almost certain to occur.
We reject also Appellant’s suggestion that relocation changed the
status quo between the parties, because the agreement always
contemplated mining and expressly granted Berwind the option to do so, at
its sole discretion. There is no language to suggest that Berwind was
required to negotiate further with Appellant before mining operations under
the right-of-way began. Instead, Berwind reserved the right to remove any
and all minerals, by any method, underlying the land where the power line
was constructed and maintained. The plain language did not place
limitations on the amount of coal mined or the method of mining. Again,
had Berwind exercised its rights and begun mining operations under the
- 11 -
J-A04023-15
agreement, without first offering Appellant the opportunity to relocate,
Berwind could have done so “without let, hindrance or molestation, and
without liability for damages.” Id. Hence, when Berwind notified Appellant
of its intentions to mine coal under the right-of-way, under the express
reservation, it then became Appellant’s decision to either bear the brunt of
potential damage or move its power lines at its own expense, because
Appellant also agreed that Berwind would be held harmless for any damages
resulting from mining operations.
While it is true that the right-of-way agreement is silent regarding
relocation, to adopt Appellant’s reasoning would fundamentally rewrite the
agreement by holding Berwind liable for damages for exercising its rights as
clearly delineated under the agreement. The argument that relocation
expenses to avoid damages is somehow different than suffering actual
damages ignores the reality of the situation. Had Berwind proceeded with
mining operations and destroyed the power lines in the process, Appellant
would have suffered damages and Berwind would not have been liable.
Thus, Appellant would have been responsible for those damages, as well as
damages for potential hazards or interruptions in service caused by the
damage. If we were to adopt Appellant’s logic, liability would be assigned to
different parties under the same agreement, depending on how Berwind
chose to proceed in exercising its clearly established rights. Under such a
- 12 -
J-A04023-15
scenario, Berwind would have been better off mining without Appellant’s
input and would not have been liable for damages.
Likewise, we reject Appellant’s reliance on Merrill, Amerikohl, and
Minard Run as those cases are unmistakably distinguishable. In both
Merrill and Amerikohl, the courts conducted plain language interpretations
of easement agreements in relation to mining operations. However, in those
matters the contracts contained language, not implemented here, related
specifically to deep mining operations and whether there were limitations to
the manner in which coal could be mined. More specifically, in those
matters, the right-of-way agreements contained releases from landowner
liability for the removal of coal in deep mining operations requiring surface
support, but did not relieve the landowners for damages due to strip mining.
See Merrill, 185 A.2d at 576-577 (release contained in an instrument
expressly granting pipeline right-of-way easement, relieving grantor of
liability for damage to pipeline from the removal of “surface support”
thereunder in the mining of coal, dealt with the removal of the coal and
rocky or sand strata which lay between the coal measures and did not
permit surface destruction or strip mining.); see also Amerikohl, 860 A.2d
at (easement agreement release merely granted landowner the right to mine
without being required to provide or leave support to the overlying strata,
but did not specifically mention surface mining or deep mining and only
contemplated deep mining.)
- 13 -
J-A04023-15
In Minard Run, the landowner sought to compel the pipeline
easement holder to move an established pipeline so that the landowner
could improve a roadway over it; in that case, however, there was no
contractual language providing for such future conditions. See Minard
Run, 214 A.2d at 236 (landowner’s right to the full use of the surface of the
land was necessarily circumscribed by the granted easement and pipeline
owners had the right to insist that the easement remain as granted.)
Here, however, as previously discussed, the express language of the
right-of-way agreement has no such restrictions. Instead, the agreement
provided Berwind with the right to remove any and all minerals, by any
method. As the trial court noted, this case more closely resembles the facts
and issues examined in Mount Carmel R. Co. v. M.A. Hanna Co., 89 A.2d
508 (Pa. 1952). Compare Mount Carmel, 89 A.2d at 512 (landowner
retained all coal under railroad’s right of way “with the full and free right of
digging for mining and taking away [coal], at any time or times, or in any
manner or by any method of mining without let or hinderance of the said
[railroad] and without any compensation therefor or liability of any kind or
nature whatever[;]” strip mining is an excepted manner or method of coal
mining.)(emphasis in original).
Finally, because we find no ambiguity in the clear contract language,
there was no reason for the trial court to look outside the four corners of the
contract to effectuate the parties’ intent, i.e., consideration Appellant paid
- 14 -
J-A04023-15
for the easement ($12,000.00) or the potential of Berwind instituting
condemnation proceedings. Moreover, it should be noted that the
agreement specifies “[t]he true, full and complete value of the right-of-way
herein granted, including liens and other encumbrances, if any[,] is
$12,000.00.” Right-of-Way Agreement, 1/10/1977, at 3. In Minard Run,
our Supreme Court looked at the amount of consideration paid for the
easement and determined, “[the landowner] has been and is in the oil, gas
and timber business. It sold the pipeline easement for the comparatively
insignificant sum of $788[.00], which in and of itself, would suggest that it
never intended to relinquish the right to use the rest of the land in a manner
profitable to its own business.” Minard Run, 214 A.2d at 235. Thus, we
question whether it was error for the trial court to consider the amount of
consideration paid. However, because the contract language was not
ambiguous, additional reliance on parol evidence is harmless in light of our
prior determinations.
For all of the foregoing reasons, Appellant’s first three claims are
without merit. Appellant entered into a conditional easement agreement
that permitted Berwind to mine all of the coal under the right-of-way by any
method. The easement agreement held Berwind not liable for damages
when exercising those rights. Appellant was given the option of relocating to
avoid damage to its power lines, which it chose to do. That cost is borne by
- 15 -
J-A04023-15
Appellant. Thus, the trial court properly entered summary judgment in
Berwind’s favor.
Appellant’s last two remaining issues are inter-related so we will
examine them together. Appellant argues that, as a public utility, it filed
Tariff No. 79, with the Pennsylvania Public Utility Commission that requires
Berwind to pay relocation costs. Appellant’s Brief at 43-47. Appellant
requests that, if this Court agrees, we refer the issue to the Public Utilities
Commission, under its primary jurisdiction, for a determination of costs. Id.
at 48-50.
The Commonwealth Court has stated:
A tariff is a set of operating rules imposed by the State that
a public utility must follow if it wishes to provide services to
customers. It is a public document which sets forth the
schedule of rates and services and rules, regulations and
practices regarding those services. It is well settled that
public utility tariffs must be applied consistently with their
language. 66 Pa.C.S.A. § 1303. Public utility tariffs have the
force and effect of law, and are binding on the customer as
well as the utility.
PPL Elec. Utilities Corp. v. Pennsylvania Pub. Util. Comm'n, 912 A.2d
386, 402 (Pa. Cmwlth. 2006).
Public utility tariffs are used in governing the services public utilities
provide to their customers. In this instance, relocation was not based upon
providing electrical service to a customer. Rather, it was based upon the
clearly defined terms of the written agreement that reserved Berwind’s right
to mine under an easement granted to Appellant. Moreover, upon review of
- 16 -
J-A04023-15
the record, Tariff No. 79 did not become effective until January 11, 2007,
almost 30 years after the parties entered into the right-of-way agreement.
Simply stated, Berwind cannot be bound unilaterally by the terms of Tariff
No. 79. Thus, Appellant’s fourth assignment of error lacks merit. Having
determined that Appellant was responsible for relocation costs, an additional
determination of costs is unnecessary. Hence, Appellant’s fifth issue is
moot.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/28/2015
- 17 -