Kleinbard LLC v. Off. of the DA of Lancaster County, 2024 LEXIS 1848 (Pa. Super., December 17, 2024) (Dougherty, J.)
JUSTICE DOUGHERTY
We granted discretionary review to consider whether the Commonwealth Court correctly sustained preliminary objections and rejected as a matter of law the claim of a law firm to payment for services rendered to a county’s district attorney. The panel below determined the contract for legal services was void ab initio pursuant to certain provisions of the County Code and dismissed the corresponding counts of the lawsuit. Our review reveals the panel erred when it failed on preliminary objections to take certain operative allegations in the complaint as true, and accordingly, we reverse and remand to the Commonwealth Court for further proceedings.
1) Did the lower courts err when they applied 16 P.S. §1773 of the County Code to District Attorney-controlled accounts because the monies in those accounts are not appropriated from the County Treasury, and thus are not subject to the County Commissioners’ discretion?
2) Did the lower courts misconstrue Yost v. McKnight, 865 A.2d 979 (Pa. Cmwlth. 2005), and related case law given that the District Attorney sought to draw monies from District Attorney-controlled accounts and therefore did not ask the County Commissioners for additional monies from the County Treasury?
3) Did the lower courts’ holdings violate separation of powers principles by allowing the county Commissioners to interfere with the District Attorney’s right to spend monies within his budget in order to defend against the Commissioners’ illegal encroachment on his constitutional role in County government?
When it declared its uncertainty about the nature of the Program Accounts, and Stedman’s authority to use them, the panel disregarded Kleinbard’s factual allegation they “are not County taxpayer funded but instead are funded by fees paid by participants” in the District Attorney’s Office drug and alcohol diversionary and bad check restitution programs. Complaint at ¶30 (emphasis in original). The panel also failed to take as true Kleinbard’s factual allegation these are “District Attorney-controlled programs.” We are unpersuaded by appellees’ assertion that the issue of whether the District Attorney controls the Program Accounts is a question of law, particularly where they have presented neither facts nor legal support for that position. Appellees simply state the Program Accounts “are necessarily intertwined with the County’s budgeting process[,]” Appellees’ Brief at 12, but fail to explain more about what they are and how they operate. Indeed, neither the panel below nor appellees seem to have this information. Kleinbard, on the other hand, alleges the Program Accounts are funded independently from the monies used by the commissioners for their County Code appropriations; appellees and Kleinbard clearly see the operative facts differently, but material disputes of fact preclude demurrer. Where Kleinbard’s complaint was dismissed at the preliminary objections stage, it was error for the panel to affirm on the basis it was “unable to confirm” the nature of the Program Accounts. Instead, the lower courts should have taken Kleinbard’s allegations as true and assessed the legal viability of its claim in the context of those facts. The factual allegations in the complaint, taken as true, establish the Program Accounts are funded by fees paid by participants in the drug and alcohol diversionary and bad check restitution programs controlled by the District Attorney. These facts — if true — remove the Program Accounts from the purview of the prohibition in Section 1773(b) (now 16 Pa.C.S. §14976(b)) regarding Commissioner-appropriated sums.
Accordingly, we hold the Commonwealth Court erred in affirming the trial court’s order sustaining appellees’ preliminary objections in the nature of a demurrer. The Commonwealth Court’s order is reversed, and the matter remanded to the trial court for further proceedings. Jurisdiction relinquished. Chief Justice Todd and Justices Wecht, Mundy, Brobson and McCaffery join the opinion. Justice Wecht files a concurring opinion in which Justice McCaffery joins. Justice Donohue files a dissenting opinion.
