In this dispute between the Borough of West Chester and a former industrial discharger of wastewater, the Commonwealth Court held that the industrial discharger could not be required to make perpetual payments for operational and maintenance costs of waste water facilities when it no longer discharged any wastewater.
In the 1970s the Borough of West Chester was ordered by the Pennsylvania Department of Environmental Resources to rebuild a Borough wastewater treatment plant (the Plant) due to repeated citations for exceeding its discharge limits. The Borough entered into a written contract (the Agreement) in 1984 with Wyeth and two other industrial dischargers in the Borough to share in the cost of upgrading the Plant. Under the Agreement Wyeth agreed to contribute 49.2% of the capital costs of upgrading the Plant and 49.2% of its variable and fixed operational and maintenance expenses.
In 2004 Wyeth ceased all operations at its plant and severed its sewer connection in 2006. Payments toward the capital costs were completed in 1997 and charges for variable costs ceased in 2006. Wyeth continued to pay steadily increasing fixed costs until December 2011 when it gave the Borough notice that it was terminating the agreement. Wyeth then filed suit for declaratory judgment that the Agreement was terminated in 2006 when it severed its sewer connection, or alternatively in 2011 when it gave notice to the Borough. Wyeth argued that because the agreement did not contain an express termination date, it was a contract of indefinite duration and as such could be terminated by either party. The Borough counterclaimed for invoices Wyeth had not paid in 2012 and 2013. The Court of Common Pleas of Chester County found for the Borough and Wyeth appealed.
On appeal the Commonwealth Court reversed. It found the trial court had erred in its construction of the Agreement and concluded the Agreement had a reasonable, not infinite or perpetual, duration because there was no express language to that effect. Without such express language, the Agreement was terminable at will by either party once Wyeth had paid for its share of the capital costs and operating and maintenance expenses attributable to the treatment of its waste. The Agreement therefore terminated when Wyeth gave notice to the Borough in 2011.