Highland Township v. County of Elk

740 A.2d 279, 1999 Pa. Commw. LEXIS 838
CourtCommonwealth Court of Pennsylvania
DecidedOctober 26, 1999
StatusPublished

This text of 740 A.2d 279 (Highland Township v. County of Elk) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Highland Township v. County of Elk, 740 A.2d 279, 1999 Pa. Commw. LEXIS 838 (Pa. Ct. App. 1999).

Opinion

PELLEGRINI, Judge.

The County of Elk, June H. Sorg, Christine Gavazzi and Joseph Koch, Commissioners (collectively, the County) appeal from an order of the Court of Common Pleas of the Fifty-Ninth Judicial District, Elk County Branch' (trial court) finding that the County was not entitled to impose a 2% administrative fee on national forest fund money that it distributed to Highland [281]*281Township, Spring Creek Township, Jones Township, Millstone Township, Ridgway Township, Johnsonburg Area School District and Ridgway School District (collectively, Recipients).

Since 1908, pursuant 16 U.S.C. § 500,1 the federal government has made grants to states and territories in which national forest land is located. The grants are intended to benefit public schools and public roads located within the national forests. Under the Act of April 27,1925, P.L. 324, as amended, 72 P.S. §§ 3541-3543 (Act), the Commonwealth distributes the funds it receives to the counties in which the national forest is located in proportion to the amount of national forest located within the boundaries of the county.2 Although the funds are given to the individual counties, the Act requires that the counties distribute three-fourths of the funds for the benefit of public schools and the remaining one-fourth for the benefit of public roads of the townships of the county in which the national forest is located. Section 2 of the Act, 72 P.S. § 3542. Alternatively, the grants may be distributed between the public schools and townships, each receiving one-half of the monies upon a majority of the electorate voting in favor of the distribution scheme. Section 3 of the Act, 72 P.S. § 3543. The Allegheny National Forest is partially located in the County, and the County receives from the Commonwealth national forest grants that the Commonwealth receives from the federal government for further distribution to local governments and school districts.

In 1991, the County began retaining a 2% administration fee from the grants purportedly to defray its costs in distributing the grant funds to the eligible school districts and townships. It was not, however, until 1994 that the County informed the Recipients that it was doing so. When told, the Recipients, who all receive a share of the national forest grant, each filed a complaint against the County, some in 1994 and others in 1995, challenging its imposition. The County answered, contending that it was entitled to the fee because as trustee of the national park grant funds it received from the state, it was, as any trustee is, entitled to fees to defray its expenses. In New Matter, the County also alleged that any claim with respect to a fee retained longer than two years before a claim was filed was time barred by the two-year statute of limitations provided for in 42 Pa.C.S. § 5524 related to the non-payment of money.3

At trial, no testimony was taken but instead certain stipulations were entered into by the parties. Among those stipulations was that the County acted as a trustee of the funds it received, and in 1991, it [282]*282began imposing a 2% administrative fee without any notice to the Recipients. The parties also stipulated that the Recipients first had actual knowledge of the. fee’s imposition in the spring of 1994, with written notice in November 1994. It also was stipulated that the County would maintain a single audit for each year in question that was open for inspection and showed that an administrative fee was being imposed listing it as a revenue source.

Based on the facts contended in the stipulations, the trial court held that nothing in the applicable state and federal legislation relating to the distribution of national park funds authorized the County to impose an administration fee and, by doing so, it breached its fiduciary duty to Recipients. Even though there is the two-year statute of limitations contained in 42 Pa. C.S. § 5524 relating to the non-payment of money, it held that Recipients were not time barred from claiming fees retained more than two years prior to the filing of their actions because Recipients did not have actual notice of the County taking the 2% administrative fee until the spring of 1994, and only then did the two-year statute time begin to run as to all retained fees. After the trial court dismissed its post-trial motions, the County’s appeal followed.

Relying on In re Ischy Trust, 490 Pa. 71, 415 A.2d 37 (1980), the County again contends4 that as trustee of the those funds, once it receives them from the state, it is entitled to an administrative fee to defray the cost of distributing the national park grants to Recipients because a trustee can charge a reasonable fee for it services. In Ischy, our Supreme Court stated:

We begin with the established principle that fiduciaries in this Commonwealth are entitled to fair and just compensation for services they perform, Williamson Estate, 368 Pa. 343, 82 A.2d 49 (1951); Kennedy Trust, 364 Pa. 310, 314, 72 A.2d 124, 126 (1950), a rule required by statute, 20 Pa.C.S. § 7185.5 Thus the [283]*283absence of any compensation provision in a trust document or the absence of any independent compensation agreement is not a bar to compensation. Reed Account, 467 Pa. 371, 376, 357 A.2d 138, 140-41 (1976); Bosler’s Estate, 161 Pa. 457, 462, 29 A. 57.

490 Pa. at 80, 415 A.2d at 37, 42. See also: Estate of Salus, 421 Pa.Super. 87, 617 A.2d 737 (1992).

While a trustee carrying out the terms of a trust document is entitled to a fee, that entitlement is one given by 20 Pa.C.S. § 7185, which only applies to private trustees that are carrying out a private trust, not a governmental entity carrying out a statutory duty. When so required, a governmental entity must do so in accordance with how legislation denominates how the public funds are to be spent or disbursed. In this case, no fee authority exists in the Act and none can be inferred because the Act requires that all funds be distributed to the Recipients. If the General Assembly wanted to provide for such an administrative fee, it would have so provided as it has for both private trustees in 20 Pa.C.S. § 7185 as well as where governmental entities are required to collect and disburse funds from and for other governmental entities. See generally the Act of November 1, 1971, P.L. 495, as amended, 16 P.S. § 11011-6(1) (providing that the recorder of deeds withhold 2% of money obtained from deed transfer tax collections and turn the money over to the County to pay for administration of the Act); the Act of March 4, 1971, P.L. 6, 72 P.S. § 7226 (providing that each county treasurer, in collecting sales and use tax, may retain costs of administering the provision, not to exceed 1% of the amount of use taxes collected); the Act of October 11, 1984, P.L. 906, 35 P.S.

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Related

Williamson Estate
82 A.2d 49 (Supreme Court of Pennsylvania, 1951)
McCauley v. Owens-Corning Fiberglas Corp.
715 A.2d 1125 (Superior Court of Pennsylvania, 1998)
In Re Fourteenth & Partial Account of REED
357 A.2d 138 (Supreme Court of Pennsylvania, 1976)
Kennedy Trust
72 A.2d 124 (Supreme Court of Pennsylvania, 1950)
In Re Estate of Salus
617 A.2d 737 (Superior Court of Pennsylvania, 1992)
In Re Testamentary Trust Created Under the Last Will & Testament of Ischy
415 A.2d 37 (Supreme Court of Pennsylvania, 1980)
County of Elk v. Highland Township
677 A.2d 398 (Commonwealth Court of Pennsylvania, 1996)
Bosler's Estate
29 A. 57 (Supreme Court of Pennsylvania, 1894)

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Bluebook (online)
740 A.2d 279, 1999 Pa. Commw. LEXIS 838, Counsel Stack Legal Research, https://law.counselstack.com/opinion/highland-township-v-county-of-elk-pacommwct-1999.