Opinion
11-05-2015
WYETH PHARMACEUTICALS, INC., a Delaware Corporation, successor to Wyeth Laboratories Inc., a New York Corporation, Appellant v. BOROUGH OF WEST CHESTER and Pfizer Inc.
Maureen M. McBride, West Chester, Nathan P. Heller, Philadelphia, John E. Griffith, Jr., Baltimore, MD, for appellant. Sigmund J. Fleck, West Chester, for appellee.
Maureen M. McBride, West Chester, Nathan P. Heller, Philadelphia, John E. Griffith, Jr., Baltimore, MD, for appellant.
Sigmund J. Fleck, West Chester, for appellee.
Opinion
OPINION BY Judge LEAVITT.
Wyeth Pharmaceuticals, Inc. appeals an order of the Court of Common Pleas of Chester County that denied its request for a declaratory judgment that its contract with the Borough of West Chester had terminated and denied its request for a refund of invoices it had paid after the contract's termination. Instead, the trial court granted the Borough of West Chester $1,719,235.27 on its counter-claim for breach of contract. For the reasons set forth below, we reverse and remand.
Background
This case concerns a contract between Wyeth and the Borough of West Chester relating to the reconstruction of a Borough wastewater treatment plant known as the Goose Creek Plant. In the 1970's, the Pennsylvania Department of Environmental Resources ordered the Borough to rebuild the Goose Creek Plant because it had been repeatedly cited for exceeding its discharge limits. At the time, Wyeth, which began operating a penicillin manufacturing facility in the Borough in the 1950's, was one of the largest industrial dischargers of wastewater in the Borough. The Borough obtained the agreement of Wyeth and two other industrial dischargers to share in the costs of the upgrade to the Goose Creek Plant. The terms of the agreement between Wyeth and the Borough were set forth in a written contract (Agreement) that was executed on July 31, 1984.
Under the Agreement, Wyeth promised to contribute both to the capital costs of upgrading the Goose Creek Plant and to its operational and maintenance expenses. The Agreement recited the following:
Significant portions of the Costs of the Project ... are attributable to equipment and facilities necessary to treat the companies' Sewage. Therefore, the companies should pay their share of the principal and interest on money borrowed to finance the Costs of the Project, including costs and expenses of financing, and the companies should also pay their share of the annual Operating and Maintenance Expenses attributable to the treatment of the companies' waste.
Agreement, “Background of Agreement,” at 2 (hereinafter “Background Clause”); Reproduced Record at 985a (R.R. ––––) (emphasis added). A 1976 letter from Wyeth's Vice President to the Borough Solicitor explained that “[t]he intended period of use of the treatment facilities by Wyeth Laboratories Inc. shall be for the life of the treatment works or as long as Wyeth Laboratories shall remain in the Borough of West Chester.” R.R. 1067a.
Under the final terms, Wyeth agreed to cover 49.2% of the capital costs of upgrading the Goose Creek Plant and 49.2% of the plant's Operational and Maintenance Expenses.
Id.
Wyeth discharged wastewater into the reconstructed Goose Creek Plant from 1988 until the mid–2000s. In 2004, Wyeth ceased all operations at its West Chester pharmaceutical facility, and, by February 2005, had completely decommissioned the site. It has not discharged wastewater since then. In 2006, Wyeth razed all structures at its West Chester facility, abandoned its sewer connection and has not used the property since. Attempts to sell the property have failed, and it remains undeveloped.
In 1997, Wyeth completed the payment of the capital costs required under the Agreement. When Wyeth stopped using the Goose Creek Plant, the Borough stopped sending it invoices for variable costs. The Borough agrees that Wyeth has fully discharged its contractual obligations for the capital costs and variable costs. The parties disagree on Wyeth's continuing liability for the fixed costs portion of the Operational and Maintenance Expenses of the plant as provided in the Agreement.
Although Wyeth has not used the Goose Creek Plant since 2005, the Borough's invoices to Wyeth for fixed costs have steadily increased, as shown by the following table: