County of Mercer v. Amundsen

879 A.2d 366, 2005 Pa. Commw. LEXIS 356
Commonwealth Court of Pennsylvania·Decided July 13, 2005·Published·Cited by 1 cases

Opinions

OPINION BY

Judge SIMPSON.

This is an appeal from a judgment in mandamus which essentially determined the Mercer County Controller need not disperse part of a loan to the former County nursing home. The Court of Common Pleas of Mercer County (trial court)1 determined that the Mercer County Board of Commissioners (Commissioners) was not authorized to make the loan under The County Code (Code).2 The central issue is whether the express authority to make an appropriation includes the power to loan money.

The facts underlying this controversy are stipulated. Mercer County is a fifth class county with the Commissioners as the governing body. Thomas W. Amundsen is the Controller of Mercer County.

Woodland Place was organized as a Pennsylvania non-profit corporation in 1997 to give medical care to dependents of the County without discrimination. On January 1, 1998, Woodland Place purchased the Mercer County nursing home facilities, collectively known as the Living Center and Sunbridge, from the County.

The Purchase and Sale Agreement provided that Woodland Place would use commercially reasonable efforts to cause not less than 80% of its occupied beds to be occupied by County residents who are eligible for a governmental program such as Medicare/Medicaid “which is designed to fund the cost of nursing care for the medically and financially indigent.” Stipulated Facts, No. 6; Reproduced Record (R.R.) at 63a. In addition, the Agreement provided that Woodland Place would “meet any obligations of the county imposed by Federal or State law to provide necessary services to the indigent of the county.” Id.

Prior to the sale, the County nursing home experienced operating losses, and these continued after the sale to Woodland Place. Stipulated Facts, No. 4; R.R. at 63a, 67a; R.R. at 129a-31a. In addition, [368]*368the facilities purchased by Woodland Place were in a state of deterioration. Stipulated Facts, No. 5; R.R. at 63a. Extensive renovations ensued. Stipulated Facts, No. 12; R.R. at 64a.

Despite a restructuring of debt in 2002 and a grant from the County Commissioners’ Association of Pennsylvania, Woodland Place’s ability to meet its required payments and complete renovations became questionable. In an attempt to deal with the situation, a majority of the Commissioners approved a loan to Woodland Place in the principal amount of $1,000,000. In August 2004, the Commissioners submitted to the Controller a payment request in the amount of $304,050 against that loan amount. The next day the Controller disapproved the payment, stating that “this fiscal transaction is not authorized by law” and returned it unpaid to the Board. The Controller continued to refuse to make the disbursement even after further notification from the Commissioners.

Section 1752 of The County Code, 16 P.S. § 1752, requires an order of court directing a controller to approve payment under these circumstances.3 Therefore, the Commissioners filed a complaint in mandamus and a motion for preemptory judgment.

After hearing, the trial court denied the Commissioners’ motion for preemptory judgment. Later, it entered judgment for the Controller. In its opinion, the trial court concluded that The County Code does not grant the Commissioners the power to make the loan to Woodland Place either expressly or by necessary implication. Among other statutory provisions, the trial court examined Section 2169 of The County Code, 16 P.S. § 2169, which authorizes appropriations to non-profit corporations organized to give medical care to dependents of the county. The trial court concluded that while the Commissioners are empowered to make annual appropriations to support certain institutions, the power to lend is not included. Reproduced Record (R.R.) at 92a.

After timely appeal to this Court, the Commissioners argue the trial court committed an error of law.4 In particular, the Commissioners rely on § 2169 of The County Code. They contend the County has the power to make an appropriation to Woodland Place and by necessary and fair implication, the subject loan.5

The Controller relies on two tenets of statutory construction espoused by the trial court: political subdivisions have no inherent powers and may do only those things which the General Assembly has expressly or by necessary implication placed in their power; and, any fair, reasonable doubt as to the existence of power [369]*369in a political subdivision is resolved against its existence. Denbow v. Borough of Leetsdale, 556 Pa. 567, 729 A.2d 1113 (1999). The Controller notes that the statutory sections upon which the Commissioners rely refer to appropriations, not loans.

Mandamus is an extraordinary writ and is a remedy used to compel performance of a ministerial act or a mandatory duty. Council of City of Philadelphia v. Street, 856 A.2d 893 (Pa.Cmwlth.2004). A ministerial act is defined as one which a public officer is required to perform upon a given state of facts in a prescribed manner in obedience to the mandate of legal authority and without regard to his own judgment or opinion concerning the propriety or impropriety of the act to be performed. Id. In order to obtain a writ of mandamus, the proponent must demonstrate: 1. a clear legal right for the performance of the ministerial act or mandatory duty; 2. a corresponding duty in the appellant to perform the ministerial act or mandatory duty; and, 3. the absence of any other appropriate or adequate remedy. Id.

The error in the Controller’s position, which was accepted by the trial court, arises from a misunderstanding of the term “appropriation.” The Controller assumes this means an absolute grant or gift, without any conditions or restrictions. However, the term “appropriation” is generic, describing a process and not specifying a form. The term embraces the action taken by the Commissioners here.

Section 2169 of The County Code, 16 P.S. § 2169, provides (with emphasis added):

The commissioners of each county of the fourth, fifth, sixth, seventh or eighth class shall have the power to make annual appropriations from the funds of the county for the support of any public institution operated, or to any nonprofit corporation organized, to give medical care to the dependents and children of the county without discrimination as to membership in any organization or as to race or sect.

There is no dispute that the purpose of the loan in question meets this statutory requirement. The only dispute is whether the form of the assistance comports with this enabling provision.

Because the term “appropriation” is not otherwise defined in The County Code, we look to its common and approved usage. 1 Pa.C.S. § 1903. Our Supreme Court defines “appropriation” to mean “a designation of money raised by taxation to be withdrawn from the public treasury for a specifically designated purpose.” Shapp v. Sloan, 480 Pa. 449, 466, 391 A.2d 595

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County of Mercer v. Amundsen, 879 A.2d 366, 2005 Pa. Commw. LEXIS 356 (Pa. Ct. App. 2005).

879 A.2d 366 (County of Mercer v. Amundsen) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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