Opinion
No. 1447 C.D. 2012
04-04-2013
Thomas James Logan, III, Appellant v. Borough of Dickson City
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE ROBERT SIMPSON, Judge (P.) HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY SENIOR JUDGE COLINS
Thomas James Logan, III, appeals from an opinion and order of the Lackawanna County Court of Common Pleas (trial court) that dismissed his breach of contract claim against the Borough of Dickson City (Borough). Logan alleged that the Borough violated the terms of the Dickson City Police Pension Plan when it determined that he was not eligible for disability benefits. The trial court dismissed Logan's complaint with prejudice for lack of subject matter jurisdiction, holding that claims under the Police Pension Plan are subject to mandatory arbitration under the Borough's collective bargaining agreement (CBA) with the Dickson City Police Department Bargaining Unit (Union). For the reasons that follow, we vacate the dismissal with prejudice, remanding to the trial court for entry of an order dismissing Logan's complaint without prejudice so that he may re-file his claim after arbitration under the CBA is completed.
Logan was employed by the Borough as a full-time, civil service police officer from 1996 until his employment was terminated on November 28, 2011. Logan injured his shoulder on October 20, 2008, in the scope of his employment. In a letter dated August 30, 2011, Logan requested disability benefits from the Borough on the grounds that he was "totally and permanently disabled" under Section 5.03 of the Pension Plan. (Reproduced Record (R.R.) at 6a.) The Borough responded in a letter dated December 6, 2011, denying Logan's request for disability benefits. (R.R. at 7a.)
Logan commenced the instant litigation by filing a complaint in the trial court on January 24, 2012, and filing an amended complaint two days later. Logan alleged one count for breach of contract. The Borough filed preliminary objections asserting that the trial court lacked subject matter jurisdiction because Logan's claim for breach of the Pension Plan is subject to the grievance provision in the parties' CBA.
The CBA between the Borough and the Union contains a "Grievance Procedure" that provides: "Grievances are limited to matters involving interpretation of this agreement, and also to include all matters of discipline." (CBA, Art. XIV, R.R. at 150a.) There seems to be no dispute that Logan did not follow the grievance procedure to its conclusion before commencing this action. The CBA contains no provision specifically providing that disputes concerning benefits under the Pension Plan, or disputes concerning the meaning of terms therein, must be grieved and arbitrated. In fact, the CBA does not even mention that police officers in Dickson City are provided disability benefits. The CBA does contain a provision entitled "Pension Benefits" that provides for certain benefits, but the CBA does not expressly incorporate by reference the terms of the Pension Plan itself, which is set forth in a separate document. (CBA, Art. XXI, R.R. at 153a.)
The trial court ruled in favor of the Borough and dismissed Logan's complaint with prejudice. The trial court found that whether Logan is entitled to disability benefits under the Plan is an issue subject to mandatory arbitration. (Trial Ct. Op. at 6-7.) The holding was premised on the trial court's determination that the CBA incorporated the Pension Plan, even though not expressly, so that a dispute regarding the terms of the Pension Plan was a dispute regarding an interpretation of the CBA itself.
Logan timely appealed to this Court and the Borough filed a motion to dismiss, asserting this Court lacked subject matter jurisdiction to hear the appeal. We denied the motion to dismiss because it raised the same issue as the appeal itself (i.e., whether the alleged violation of the Pension Plan is subject to mandatory arbitration), and ordered the parties to address the issue in their briefs on the merits. The parties filed briefs on the merits and Logan, along with his reply brief, filed a Supplemental Reproduced Record. The Borough moved to strike the Supplemental Reproduced Record.
Disputes concerning the language of collective bargaining agreements under Act 111 are subject to mandatory arbitration. See Section 1, Policemen and Firemen Collective Bargaining Act (Act 111), Act of June 24, 1968, P.L. 237, as amended, 43 P.S. § 217.1 (providing that "Policemen or firemen employed by a political subdivision of the Commonwealth or by the Commonwealth shall, through labor organizations or other representatives designated by fifty percent or more of such policemen or firemen, have the right to bargain collectively with their public employers concerning the terms and conditions of their employment, including compensation, hours, working conditions, retirement, pensions and other benefits, and shall have the right to an adjustment or settlement of their grievances or disputes in accordance with the terms of this act" (emphasis added)); City of York v. International Association of Firefighters, Local Union No. 627, 35 A.3d 822, 826 (Pa. Cmwlth. 2011) (explaining that the court is bound by an arbitrator's interpretation of the collective bargaining agreement, even where that interpretation determines the scope of his jurisdiction); Pennsylvania State Police v. Pennsylvania State Troopers Association, 840 A.2d 1059, 1063 (Pa. Cmwlth. 2004) (holding that courts must apply an extreme standard of deference applicable to Act 111 bargaining on issues that depend upon fact-finding or the interpretation of the collective bargaining agreement, "that is, we are bound by the arbitrator's determination of these matters even though we may find them to be incorrect").
Before this Court, Logan argues that the dispute concerns an interpretation of the Pension Plan, not the CBA, specifically, whether he is "totally and permanently disabled" as defined in the Plan. That issue, according to Logan, is not subject to arbitration.
In reviewing a lower court's decision to grant a demurrer, our Court's standard of review is de novo. Stilp v. Commonwealth, 601 Pa. 429, 435, 974 A.2d 491, 494 (2009); Insurance Adjustment Bureau, Inc., v. Allstate Ins. Co., 588 Pa. 470, 480 n.4, 905 A.2d 462, 468 n.4 (2006).
The trial court found that the issue before it was whether the provision of the Pension Plan that contained the "totally and permanently disabled" language was incorporated into the CBA, such that an interpretation of the Pension Plan language was subject to mandatory arbitration. (Trial Ct. Op. at 6.) The trial court concluded that the Pension Plan was incorporated into the CBA and that, as a result, the trial court did not have jurisdiction to rule on Logan's disability claim. Although we agree with the trial court's decision to dismiss the case for lack of subject matter jurisdiction, we find that it did so for the wrong reason. At the urging of the Borough, the trial court went one step too far by affirmatively ruling that disputes over the Pension Plan must be arbitrated. The trial court did not have the authority to make such a ruling. Rather, whether disputes over the Pension Plan must be arbitrated is itself an arbitrable issue, because it requires an interpretation of the CBA.
The trial court, and the Borough on appeal, relied on City of Erie v. Fraternal Order of Police, Lodge 7, 977 A.2d 3 (Pa. Cmwlth. 2009), for the proposition that the Pension Plan here is incorporated into the CBA, even though no provision in the CBA expressly incorporates the Pension Plan. This was error. The City of Erie case came to this Court after arbitration, where the arbitrator determined that the CBA at issue in that case incorporated by reference the municipality's pension ordinance. We held that the arbitrator's determination that he had jurisdiction under the CBA was not erroneous. We did not make that finding in the first instance.
The CBA expressly provides that "Grievances are limited to matters involving interpretation of this agreement . . . ." (CBA, Art. XIV, R.R. at 150a.) Thus, where the question of whether an arbitrator has jurisdiction under the CBA hinges on an interpretation of the CBA, as it does here, it is an issue that must be decided first by an arbitrator. Accordingly, it will be left to an arbitrator to decide the scope of arbitration under the CBA.
Logan next argues that the trial court erred by dismissing the complaint with prejudice, rather than staying the matter pending completion of arbitration. Alternatively, Logan argues that dismissal should have been without prejudice so that he may re-file his claim depending on the outcome of arbitration. Logan fears that dismissal with prejudice will appear in future proceedings to be a final adjudication on the merits of his disability claim that has binding, res judicata effect on his claim. The Borough responds that Logan failed to request a stay in the trial court and he may not raise the issue for the first time on appeal and, in any event, there is no legal requirement that the trial court stay a case pending arbitration. The Borough also insists that dismissal with prejudice was proper.
We agree with the Borough that, pursuant to Pennsylvania Rule of Appellate Procedure 302(a), issues not raised in the lower court are waived and cannot be raised for the first time on appeal, and, accordingly, Logan may not seek a stay for the first time on appeal. We agree with Logan, however, that the trial court's dismissal with prejudice was error. A dismissal with prejudice signifies that the trial court adjudicated a claim on the merits. See Fox v. Garzilli, 875 A.2d 1104, 1108 (Pa. Super. 2005) (discussing significance of dismissal with and without prejudice). That is not what occurred in the trial court here. Rather, there was no adjudication on the merits of Logan's disability claim and dismissal was for a lack of jurisdiction and a curable procedural defect. Thus, dismissal should have been without prejudice. Id. ("[The] court has interpreted the phrase 'without prejudice' as importing the contemplation of further proceedings. Furthermore, when this phrase appears in a decree it shows that the judicial act done is not intended to be res judicata of the merits of the controversy.") (citations omitted); Jonas v. Wiesmeth Const. Co., 520 A.2d 40, 41 (Pa. Super. 1987) (same). If an arbitrator decides that Logan's claim is not subject to arbitration under the CBA, Logan may re-file his claim in the trial court. For that reason, we will vacate the order of the trial court and remand with instructions for entry of an order dismissing the complaint without prejudice.
Next, we address the Borough's request for costs and fees pursuant to Pennsylvania Rules of Appellate Procedure 2741 and 2744. Costs may be awarded pursuant to Rule 2741. 42 Pa. C.S. § 1726. A party who desires costs shall state them in an itemized and verified bill of costs filed with this Court within fourteen days after the entry of a final order. Pa. R.A.P. 3751. We will make no ruling on the Borough's request for costs until such a bill is properly before us, other than to note that Logan was partially victorious in this appeal and an award of costs to one party may not be appropriate. Rule 2744 provides for a sanction of reasonable counsel fees and delay damages where this Court determines that "an appeal is frivolous or taken solely for delay or that the conduct of the participant against whom costs are to be imposed is dilatory, obdurate or vexatious." Pa. R.A.P. 2744. We find that sanctions are not warranted here. Although the Borough asserts that it should have been clear under the law that Logan was required to complete arbitration before filing a complaint in the trial court, we note that even the Borough urged the incorrect legal standard in the trial court, requiring us to clarify and vacate the court's holding. Thus, we cannot agree that the issues Logan raised in this appeal were frivolous or intended to delay or that Logan's comportment was dilatory, obdurate, or vexatious.
Finally, we address the Borough's motion to strike Logan's supplemental reproduced record filed as an exhibit to Logan's reply brief. The Court may consider on appeal only what is in the certified record. B.K. v. Department of Public Welfare, 36 A.3d 649, 657-58 (Pa. Cmwlth. 2012). A party may not put new documents before the Court at the appellate stage by attaching them to its appellate papers or including them in a reproduced record. Id. at 657; Krenzel v. Southeastern Pennsylvania Transportation Authority, 840 A.2d 450, 453-54 (Pa. Cmwlth. 2003). The correct method for seeking this Court's permission to supplement the record is to file an application for relief pursuant to Rule 123 of the Pennsylvania Rules of Appellate Procedure. See Greenwood Gaming and Entertainment, Inc. v. Commonwealth, 45 A.3d 455, 456 (Pa. Cmwlth. 2012). Under the circumstances here, we must grant the Borough's motion to strike.
Logan submitted a series of letters between the Borough and the Union, in which the Union demanded arbitration regarding Logan's claim for disability benefits. The letters are not in the certified record from the trial court. The exchange of letters occurred almost one year before Logan filed suit in the trial court. The exchange culminates in a letter from the Borough dated February 3, 2011, in which the Borough states that "[t]he Borough does not believe that you are raising a matter which is subject to the grievance procedure," because it involves an interpretation of the Pension Plan, not the CBA. (Supplemental Reproduced Record at 266a.) The Borough also states that "the jurisdiction of the arbitrator is determine [sic] by the arbitrator himself," and that the Borough would raise the issue of arbitrability with the arbitrator. (Id.) There is no indication in the record whether arbitration was actually commenced. --------
An appropriate order follows.
/s/ _________
JAMES GARDNER COLINS, Senior Judge ORDER
AND NOW, this 4th day of April, 2013, the order of the Lackawanna County Court of Common Pleas is VACATED and this case is REMANDED to the trial court for entry of an order dismissing the complaint of Thomas James Logan, III, WITHOUT PREJUDICE for the reasons set forth in the attached memorandum opinion.
The Borough's Motion to Strike the supplemental reproduced record filed by Logan is GRANTED.
The Borough's request for counsel fees and other sanctions is DENIED.
Jurisdiction relinquished.
/s/ _________
JAMES GARDNER COLINS, Senior Judge