Hopefully the Borough of West Chester hasn't spent the money! On July 14, 2014, the Chester County Court of Common Pleas awarded the Borough of West Chester (the "Borough") a Judgment in the amount of $1,719,235.27 against Wyeth Pharmaceuticals ("Wyeth"). Wyeth appealed and today the Commonwealth Court vacated the Judgment and remanded for a determination whether the Borough owes Wyeth money for overcharges between 2006 and 2011.
As background, the dispute arose out of a contract that the Borough and Wyeth had which provided for a cost sharing arrangement regarding the Goose Creek Waste Water Treatment Plant. Wyeth shut down its operations in 2006 and at that time ceased discharging wastewater. Despite the shutdown, the Borough continued to bill Wyeth and Wyeth continued to pay the invoices amounting to hundreds of thousands of dollars. In 2011, Wyeth gave notice to the Borough terminating the agreement and ceased paying any further invoices.
Wyeth filed a Declaratory Judgment Action in Chester County seeking an order that the contract was terminated and a Judgment that the Borough overcharged Wyeth between 2006 to 2011. The Borough counterclaimed for 2011 and 2012 unpaid invoices.
After a bench trial, the Lower Court ruled against Wyeth and in favor of the Borough on the Borough's counterclaim. The Lower Court awarded the Borough Judgment in an amount in excess of 1.7 million dollars.
On appeal, the Commonwealth Court found that despite the indefinite nature of the contract that it was terminable upon notice. The Court further gleaned the intent of the parties from the preamble to the contract. The Court found that the intent of the parties was for each party to pay their fair share. Based on Wyeth shutting down and discontinuing to discharge wastewater Wyeth was entitled to terminate the contract which occurred in 2011. The Commonwealth Court vacated the 1.7 million dollar Judgment. The Court further found that the Borough overcharged Wyeth and remanded the case for further proceedings for the Lower Court to determine the amount of the overcharges.
The final outcome is that the Borough went from being owed a 1.7 million dollar Judgment to owing Wyeth a yet to be determined sum of money.
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