PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______
No. 09-3890
______
WAYNE MOVING & STORAGE OF NEW JERSEY, INC.
v.
THE SCHOOL DISTRICT OF PHILADELPHIA;
THE SCHOOL REFORM COMMISSION,
Appellants
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2-06-cv-00676)
District Judge: Honorable Lawrence F. Stengel
______
Argued September 14, 2010
Before: SLOVITER, FISHER and GARTH, Circuit Judges.
(Filed: October 28, 2010)
Joseph Anclien
Carl A. Solano (Argued)
Schnader Harrison Segal & Lewis
1600 Market Street, Suite 3600
Philadelphia, PA 19103
Miles H. Shore
School District of Philadelphia
Office of General Counsel
440 North Broad Street, Suite 313
Philadelphia, PA 19130-4015
Counsel for Appellants
Wei-Wei Chiu
James P. Golden (Argued)
Shelley R. Goldner
Anthony V. Mannino, III
Jane C. Silver
Hamburg & Golden
1601 Market Street, Suite 3310
Philadelphia, PA 19103
Counsel for Appellee
Stuart L. Knade
Pennsylvania School Boards Association
400 Bent Creek Boulevard
P.O. Box 2042
Mechanicsburg, PA 17055
Counsel for Amicus Appellant,
Pennsylvania School Boards Association
______
OPINION OF THE COURT
______
2
FISHER, Circuit Judge.
This diversity action requires us to decide under
Pennsylvania law whether a subcontractor may recover
against a school district for a claim of unjust enrichment. The
case involves a dispute over unpaid services between the
subcontractor Wayne Moving & Storage of New Jersey
(“Wayne Moving”) and the appellants the School District of
Philadelphia and the School Reform Commission
(collectively, “School District”). Wayne Moving sued the
School District under a theory of unjust enrichment for
unpaid moving services. The United States District Court for
the Eastern District of Pennsylvania granted Wayne Moving‟s
motion for summary judgment and awarded it $830,071.18
plus interest. On appeal, the School District contends that
Wayne Moving‟s claim of unjust enrichment is barred by
Section 508 of the Pennsylvania Public School Code, which
applies to “contracts of any kind.” 24 Pa. Stat. Ann. § 5-508.
Appellants maintain that “contracts of any kind” include
those contracts implied by courts in unjust enrichment claims.
We agree and hold that those acts of the School District not in
compliance with the provisions of Section 508 are rendered
“void and unenforceable,” id., and cannot bind the School
District under an implied contract of unjust enrichment. We
further hold that the School District is not equitably estopped
from relying on Section 508.
For the following reasons, we conclude that the
District Court‟s denial of the School District‟s motion for
summary judgment was in error. Accordingly, we will
reverse the District Court‟s grant of summary judgment in
3
favor of Wayne Moving and remand for entry of summary
judgment for the School District.
I.
A.
Wayne Moving subcontracted with Facility Strategies,
a professional relocation consultant, to provide moving
services for the School District. The moving project dates
back to 2002 when Frank Siefert, the Special Assistant to the
Commission, suggested consolidating the School District‟s
five administrative office buildings into one central location.
On August 13, 2002, the School Reform Commission
approved the purchase of 440 North Broad Street to serve as
the new School District headquarters. On June 16, 2004, the
Commission authorized the School District to enter into a
contract for moving services in an amount not to exceed $1.4
million.
Facility Strategies and Wayne Moving submitted a
proposal for just under the $1.4 million authorized amount.
On September 1, 2004, Facility Strategies entered into a
subcontract agreement with Wayne Moving for an amount
not to exceed $840,115.68, and on September 24, 2004,
Facility Strategies and the School District entered into a
contract for an amount not to exceed $1,396,865.68.
The move into 440 North Broad Street encountered
numerous difficulties involving non-functioning elevators,
unanticipated work, and delays due to the School District‟s
disputes with a third party. The move was scheduled to begin
4
in January of 2005, and Facility Strategies and Wayne
Moving contracted to complete the move by September 30,
2005. But it did not begin until April 2005 and most of the
moving occurred in the final month before the deadline.
As a result of the delays, the project incurred
additional expenses. Sallyann Ferullo, President of Facility
Strategies, inquired of Frank Siefert at the School District as
to what should be done about the additional expenses. Siefert
told her, according to Ferullo‟s testimony, “[D]on‟t worry,
just document it. As long as we have documentation we‟ll
take care of it at the end.” Wayne Moving & Storage of N.J.
v. School Dist. of Phila., No. 06-0676, 2008 WL 65611, at *1
(E.D. Pa. Jan. 3, 2008). Ferullo then inquired as to whether
Facility Strategies and Wayne Moving should stop working.
Siefert, according to Ferullo‟s testimony, responded, “Oh no.
. . . You got to finish. We got to finish.” Id. Ferullo stated
that she would “get it done. Whatever it takes.” Id.
Two invoices and an extra work order are at issue.
Ferullo submitted an extra work order to the School District
on September 20, 2005 for $384,100. Siefert approved the
extra work order and, according to the School District, was
under the impression that: the project was still within the
$1.4 million budget; the work order only included cost
estimates; and the order was approved only on a not-to-
exceed basis. The District Court did not find otherwise. Id.
at *8.
Facility Strategies submitted an invoice on October 26,
2005 for part of the work performed in September. In a cover
letter, Ferullo informed Siefert that Facility Strategies
5
received additional invoices from Wayne Moving and that the
project was over the contracted amount by $158,000. Ferullo
also stated that she had yet to receive invoices from the last
week of September, “the most intensive week of work.” Id.
at *2. She went on to note that “[o]nce all of the invoices
have been received, it is my understanding that you will need
to go before the [School Reform Commission] for the
additional funding.” Id. But Ferullo expressed confidence
that the remaining expenses “will come within the projections
that we discussed in the itemized Extra Work Order.” Id.
The School District paid Facility Strategies after receiving the
invoice, and Facility Strategies subsequently paid Wayne
Moving the full $840,116 contracted amount.
Facility Strategies submitted a final invoice to the
School District on December 20, 2005 for $834,201.18,
which included $830,071.18 for the extra work performed by
Wayne Moving. Wayne Moving argued that the additional
expenses were due to the expanded scope of work and
unanticipated impediments. The District Court agreed and
found that the “$830,071.00 in extra work was attributed to
the compressed schedule, inoperable or inadequate elevators,
and an increased scope of the work to be performed.” Wayne
Moving & Storage of N.J. v. School Dist. of Phila.,
No. 06-0676, 2009 WL 123781, at *1 (E.D. Pa. Jan. 14,
2009). Regardless, the School District refused to pay because
the claimed amount was in excess of the $1.4 million
authorized by the School Reform Commission.
Wayne Moving did not submit additional written
demands for payment, nor did it file suit against Facility
6
Strategies. Wayne Moving, however, did file suit against the
School District.
B.
On February 14, 2006, Wayne Moving filed this
lawsuit against the School District in the United States
District Court for the Eastern District of Pennsylvania,
asserting claims for unjust enrichment for unpaid moving
services in the amount of $830,071.18. On August 15, 2006,
the District Court denied the School District‟s motion to
dismiss the complaint. Both parties filed motions for
summary judgment, and on January 3, 2008, the District
Court granted Wayne Moving‟s motion.
The School District argued that Wayne Moving‟s
claim should be denied for three reasons: (1) the prime
contract between the School District and Facility Strategies
and the Request for Proposal signed by Wayne Moving
independently bar Wayne Moving‟s claim; (2) Section 508
prohibits unauthorized payment to Wayne Moving; and (3)
privity of contract exists between the School District and
Wayne Moving, preventing Wayne Moving from bringing an
unjust enrichment claim, and the unjust enrichment claim
rests on disputed facts. The District Court held that the
provisions of the prime contract were not enforceable against
Wayne Moving because it was not a party to the contract
between the School District and Facility Strategies. With
respect to the second argument, the court held that the School
District was equitably estopped from relying on Section 508,
reasoning that Siefert misleadingly told Ferullo to order
Wayne Moving to perform the extra work. Finally, the court
7
held that Wayne Moving and the School District were not in
privity of contract and that the elements of unjust enrichment
were met. “Under these circumstances,” the District Court
stated, “it would be unconscionable and grossly inequitable
for the defendants to retain the benefits of additional moving
services without paying for them.” Wayne Moving, 2008 WL
65611, at *9. The District Court entered a judgment of
$1,003,908.33 ($830,071.18 in unpaid moving services plus
$173,837.33 in interest) in favor of Wayne Moving.
On October 2, 2009, the School District timely
appealed, and it makes the same three arguments on appeal.
We only reach the second issue.
II.
The District Court had jurisdiction under 28 U.S.C. §
1332(a) because the parties‟ citizenship was completely
diverse and the amount in controversy exceeded $75,000. We
have jurisdiction under 29 U.S.C. § 1291. We review a
decision resolving a motion for summary judgment de novo.
Startzell v. City of Philadelphia, 533 F.3d 183, 192 (3d Cir.
2008). A party is entitled to summary judgment when it
demonstrates that there is no genuine issue of material fact
and that the evidence establishes its entitlement to judgment
as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986). In reviewing a motion
for summary judgment, we consider all evidence in the light
most favorable to the party opposing the motion. Brewer v.
Quaker State Oil Ref. Corp., 72 F.3d 326, 330 (3d Cir. 1995).
8
III.
We first consider whether Section 508 of the
Pennsylvania Public School Code bars Wayne Moving‟s
ability to recover from the School District. Section 508
states:
“The affirmative vote of a majority of all
members of the board of school directors in
every district, duly recorded, showing how each
member voted, shall be required in order to take
action on the following subjects: --
. . . Creating or increasing any
indebtedness. . . .
Entering into contracts of any
kind . . . where the amount
involved exceeds one hundred
dollars ($100). . . .
Failure to comply with the provisions of this
section shall render such acts of the board of
school directors void and unenforcible.”
24 Pa. Stat. Ann. § 5-508. This provision also applies to “any
subsequent modifications of a contract that would increase
the school district‟s indebtedness under that contract.”
Hazleton Area School Dist. v. Krasnoff, 672 A.2d 858, 862
(Pa. Commw. Ct. 1996). If Section 508 applies, any approval
that Siefert may have given for additional work is rendered
“void and unenforcible.”
9
To determine whether Section 508 applies, we must
examine the status of the relationship between Wayne
Moving and the School District. Wayne Moving is not
arguing that the School District is contractually bound to pay
for its services. In that situation, Section 508 would apply
directly. Instead, Wayne Moving claims that no contractual
relationship exists between them and that as a matter of
equity the School District must pay for its services. For
purposes of our analysis, we assume that there is no express
contract between Wayne Moving and the School District.1
The real issue, then, is whether Section 508 applies to implied
contracts in cases of unjust enrichment.
Before proceeding, we must consider the role of the
federal courts in diversity actions. “A federal court under
1
If, on the other hand, there is a contract between
Wayne Moving and the School District, then Wayne Moving
cannot bring a claim of unjust enrichment. In Wilson Area
School District v. Skepton, the Supreme Court of
Pennsylvania held that parties to a contract “are not entitled to
the remedies available under a judicially-imposed quasi[-
]contract [i.e., the parties are not entitled to restitution based
upon the doctrine of unjust enrichment] because the terms of
their agreement (express and implied) define their respective
rights, duties, and expectations.” 895 A.2d 1250, 1254 (Pa.
2006) (modifications in original) (quoting Curley v. Allstate
Ins. Co., 289 F. Supp. 2d 614, 620 (E.D. Pa. 2003)); see also
In re Penn Cent. Transp. Co., 831 F.2d 1221, 1230 (3d Cir.
1987) (holding that a party cannot assert a claim of unjust
enrichment “if there is an express contract on the same
subject”).
10
Erie is bound to follow state law as announced by the highest
state court.” Sheridan v. NGK Metals Corp., 609 F.3d 239,
253 (3d Cir. 2010) (quoting Edwards v. HOVENSA, LLC, 497
F.3d 355, 361 (3d Cir. 2007)). The Supreme Court of
Pennsylvania has yet to consider whether Section 508 applies
to implied contracts. In this instance, “[w]hen the state‟s
highest court has not addressed the precise question
presented, [we] must predict how the state‟s highest court
would resolve the issue.” Orson, Inc. v. Miramax Film Corp.,
79 F.3d 1358, 1373 n.15 (3d Cir. 1996) (citing Erie R.R. Co.
v. Tompkins, 304 U.S. 64, 78 (1938)). “[W]e must consider
relevant state precedents, analogous decisions, considered
dicta, scholarly works, and any other reliable data tending
convincingly to show how the highest court in the state would
decide the issue at hand.” Covington v. Cont’l Gen. Tire,
Inc., 381 F.3d 216, 218 (3d Cir. 2004) (quotation marks and
citation omitted). Moreover,
“[w]here an intermediate appellate state court
rests its considered judgment upon the rule of
law which it announces, that is a datum for
ascertaining state law which is not to be
disregarded by a federal court unless it is
convinced by other persuasive data that the
highest court of the state would decide
otherwise.”
Sheridan, 609 F.3d at 254 (quotation marks and citations
omitted).
We begin our analysis with intermediate state court
judgments and grant them “significant weight in the absence
11
of an indication that the highest state court would rule
otherwise.” Orson, 79 F.3d at 1373 n.15 (quoting C.I.R. v.
Bosch’s Estate, 387 U.S. 456, 465 (1967)). In Price v. School
District of Borough of Taylor, the Superior Court of
Pennsylvania held that a school board treasurer had no
implied claim to compensation because he was not properly
appointed by the school board. 42 A.2d 99, 102 (Pa. Super.
Ct. 1945). The court rested its analysis on Section 508:
“This section is mandatory and there must be
strict compliance with its provisions before any
rights can be acquired against a school district.
... If the statutory methods for the
authorization of expenditures are not pursued, a
deserving plaintiff can have no recovery, even
on claims of quantum meruit, for the statute
excludes all equities and implied liabilities.”
Id. Likewise, In re Borough of Sykesville involved plaintiffs
who sued a school district for unpaid work under an implied
contract. 91 Pa. Super. 335 (Pa. Super. Ct. 1927). The
Superior Court of Pennsylvania held that the contractors
could not recover due to the statutory requirement that all
contracts must be authorized by the school board. Id. at 341.
“Regular official action, evidenced by official minutes, is
what the statute requires to ground such an action as the
present, and because it is a statutory requisition, all equities
and implied liabilities are excluded.” Id. (quoting Cascade
School Dist. v. Lewis School Dist., 43 Pa. 318, 321 (Pa. 1862)
(holding that a statute requiring school board approval for the
enforcement of a contractual arrangement between school
districts barred implied contracts and liabilities)).
12
Pennsylvania courts follow the general rule that the
Pennsylvania Commonwealth Court articulated in Hazleton:
“If the party can produce „solid proof‟ of the
majority‟s approval of the contract, then it may
maintain a claim for damages under that
contract. . . . If the party fails to satisfy this
burden of proof, there can be no recovery
against the school district, even on claims of
quantum meruit.”
672 A.2d at 862 (citations omitted). While not reaching the
issue of whether Section 508 applies to implied contracts, the
Supreme Court of Pennsylvania has interpreted the
requirements of Section 508 as mandatory. “To permit
contracts to be entered into and expenditures made without
compliance with the provisions of the act would defeat every
object the legislature had in mind in inserting them.” Yoder v.
Luzerne Twp. Sch. Dist., 160 A.2d 419, 421 (Pa. 1960)
(holding that Section 508 barred a claim for expenses in
excess of the authorized contract, even though they were
incurred at the direction of school directors). We therefore
conclude that the Supreme Court of Pennsylvania would
apply Section 508 to bar claims arising from implied
contracts.
This interpretation is consistent with the plain meaning
and policy of the statute. Section 508 applies to “contracts of
any kind.” 24 Pa. Stat. Ann. § 5-508. This, we find, includes
contracts implied by law. Since the statute‟s adoption, the
Supreme Court of Pennsylvania has maintained a strict
interpretation, which serves to preserve precious money
13
reserved for public education. Finding that Section 508
covers implied contracts conforms with the general policy of
the statute as articulated by the Supreme Court of
Pennsylvania:
“This statute is a valuable one, intended to
compel the expression of each individual
member of the school board on a subject all-
important in the public education, and this for
the very purpose of preventing jobbery, and the
exercise of a one-man power, in the conduct of
our common schools; we are, therefore, not
inclined to permit the abrogation of its force and
efficiency by a weak construction designed to
meet a particular case.”
Mullen v. Bd. of Sch. Dirs. of DuBois Area Sch. Dist., 259
A.2d 877, 880 (Pa. 1969) (quotation marks and citation
omitted). We may safely predict that the Supreme Court of
Pennsylvania would apply Section 508 to bar unjust
enrichment claims, for we are unaware of any “other
persuasive data that the highest court of the state would
decide otherwise.” Sheridan, 609 F.3d at 254 (citations
omitted).
Finding that Section 508 applies to claims for unjust
enrichment, we must apply it to the facts. Section 508
requires school board approval for any services valued above
$100 or “any subsequent modifications of a contract that
would increase the school district‟s indebtedness under [the]
contract.” Hazleton, 672 A.2d at 862. It is undisputed that
the School Reform Commission did not authorize the
14
$830,071.68 claimed by Wayne Moving. Therefore, Wayne
Moving‟s claim of unjust enrichment is barred by Section
508.
IV.
The District Court held that even if Section 508 applies
to implied contracts, the School District is equitably estopped
from relying upon it. Under Pennsylvania law, equitable
estoppel consists of three elements: “1) misleading words,
conduct, or silence by the party against whom the estoppel is
asserted; 2) unambiguous proof of reasonable reliance upon
the misrepresentation by the party asserting estoppel; and 3)
the lack of a duty to inquire on the party asserting the
estoppel.” Chester Extended Care Ctr. v. Pennsylvania Dep’t
of Pub. Welfare, 586 A.2d 379, 382 (Pa. 1991). We disagree
with the District Court and hold that Wayne Moving has
failed to demonstrate the necessary elements of equitable
estoppel.
We must first determine whether equitable estoppel
can be applied against the Commonwealth of Pennsylvania or
its subdivisions. The District Court correctly stated that
equitable estoppel can be so applied, even where doing so
would violate a statute or ordinance, such as Section 508.
Wayne Moving, 2008 WL 65611, at *8; see, e.g., Chester
Extended Care Ctr., 586 A.2d at 382 (“The doctrine of
estoppel is an equitable remedy that may be asserted against
the government in this jurisdiction.”). But “[i]t is also the law
of Pennsylvania that the Commonwealth or its subdivisions
and instrumentalities cannot be estopped „by the acts of its
agents and employees if those acts are outside the agent‟s
15
powers, in violation of positive law, or acts which require
legislative or executive action.‟” Cent. Storage & Transfer
Co. v. Kaplan, 410 A.2d 292, 294 (Pa. 1980) (quoting
Kellams v. Pub. Sch. Emp. Ret. Bd., 403 A.2d 1315, 1318 (Pa.
1979)). The Supreme Court of Pennsylvania resolved the
tension between these principles in holding that “[a]lthough it
is the general rule that estoppel against the government will
not lie where the acts of its agents are in violation of positive
law, . . . this rule cannot be slavishly applied where doing so
would result in a fundamental injustice.” Chester Extended
Care Ctr., 586 A.2d at 383 (citation omitted).
There is no evidence in the record that the School
District misled Wayne Moving, nor is there “unambiguous
proof” that Wayne Moving reasonably relied upon or was
even notified of any misrepresentations of the School District.
Moreover, the requirement that actions of the School District
must rise to the level of a “fundamental injustice” imposes a
demanding threshold that has not been met. Instead, the
general rule of Pennsylvania should be applied. Wayne
Moving cannot assert estoppel against the School District, a
subdivision of the Commonwealth, by the acts of its agent
Frank Siefert because those acts require legislative or
executive action and do not rise to the level of a fundamental
injustice.
We start with the record. The closest Siefert comes to
making a misleading statement is found in Ferullo‟s
testimony, where she stated that Siefert told Facility
Strategies, “don‟t worry, just document it. As long as we
have documentation we‟ll take care of it at the end.” Wayne
Moving, 2008 WL 65611, at *1. Addressing Facility
16
Strategies‟ question of whether they should stop working on
the project, Siefert then allegedly told Ferullo, “Oh no. . . .
You got to finish. We got to finish.” Id. Even these
statements, though, are ambiguous. If this was said with the
understanding that all expenses would be within the
authorized amount, then Siefert is not misleading Facility
Strategies or Wayne Moving into believing that they would
receive payment.
Wayne Moving may also claim that Siefert‟s silence
was misleading. Siefert failed to respond to Ferullo‟s
statement in her letter of October 26, 2005 that “[o]nce all of
the invoices have been received, it is my understanding that
you will need to go before the [School Reform Commission]
for the additional funding.” Instead, Siefert waited until
receiving the final invoice before informing Facility
Strategies that he would not seek approval for the additional,
unauthorized payments. This, however, fails to meet the
threshold of a “fundamental injustice.” Siefert claims that he
was under the impression that the project would be within the
$1.4 million authorized amount until he received the last
invoice. At this point in our analysis, it is informative to look
at Pennsylvania case law where courts have held that the
Commonwealth committed a fundamental injustice in
misleading the plaintiff and inducing reliance.
Findings of fundamental injustice are generally limited
to cases “involving unusual situations” and particularly
egregious behavior. Carroll v. City of Phila., Bd. of Pensions
& Ret. Mun. Pensions Fund, 735 A.2d 141, 146 (Pa. Commw.
Ct. 1999). In Chester, a State agency misled a nursing home
facility into believing that it was eligible for the federal
17
Medical Assistance program. 586 A.2d at 382. The State
agency “continued to reimburse appellant for the skilled
nursing care of its Medical Assistance patients,” “never made
any effort to remove Medical Assistance patients,”
“continued to send additional Medical Assistance patients to
appellant‟s facilities,” and “never informed appellant that [the
federal government] considered its termination . . .
irrevocable.” Id. at 382. Unlike Chester, where the Supreme
Court of Pennsylvania held that there was “no dispute that
[the State agency] mislead appellant,” id., the record before
us fails to indicate that Siefert committed a fundamental
injustice against Wayne Moving.
An additional difficulty facing Wayne Moving‟s claim
is that none of the statements made by Siefert were directed
towards Wayne Moving, and there is no evidence that Wayne
Moving was informed of Siefert‟s statements. In Chester and
Cameron Manor, Inc. v. Department of Public Welfare, the
government‟s misleading communications were made directly
to the plaintiff. 586 A.2d at 382; 681 A.2d 836, 841 (Pa.
Commw. Ct. 1986) (holding that the plaintiff was “misled by
several assurances” from the government that directly
induced reasonable reliance). Moreover, the communications
induced reasonable reliance, creating “unambiguous proof of
reasonable reliance upon the misrepresentation.” Id. Here,
the School Board communicated to Facility Strategies, which
was fully informed of the authorization requirement.
Facility Strategies, in its independent judgment,
decided to proceed with the project, and only then was Wayne
Moving induced to rely upon a belief that it would be paid for
its services. At that point, Wayne Moving was relying upon
18
the statements made by Facility Strategies, which interpreted
its obligations under the prime contract and calculated the
likelihood of payment. The intervening cause and
independent judgment of Facility Strategies therefore
distinguish this case from those where Pennsylvania courts
have found a fundamental injustice with unambiguous proof
of reasonable reliance. While Wayne Moving had no direct
conversations with Siefert, it could not rely upon the
statements or representations made by Siefert to Facility
Strategies. Wayne Moving should have known that Siefert
did not have the power to approve expenditures beyond those
approved by the Board. In fact, Stanley MacHugh, the
business manager of Wayne Moving, testified that he
understood that extra work orders would have to be approved
by the School Board and that Facility Strategies notified him
of this fact at the time of the extra work order. (App. A855.)
Wayne Moving therefore should have been aware that private
companies that do business with the School District “do so at
their own peril” and have an affirmative responsibility to
“inquire into the powers of the [School District] and its agents
to enter into any contracts.” City of Scranton v. Heffler,
Radetich & Saitta, LLP, 871 A.2d 875, 879 (Pa. Commw. Ct.
2005), appeal denied, 897 A.2d 1184 (Pa. 2006). We deny
equitable estoppel because the School District did not mislead
by “words, conduct, or silence” and there is no “unambiguous
proof of [Wayne Moving‟s] reasonable reliance.” Chester
Extended Care Ctr., 586 A.2d at 382. We need not reach the
issue of whether Wayne Moving lacked a duty to inquire, the
third element of equitable estoppel.
Holding that equitable estoppel does not apply to the
facts of this case is in conformity with the general position of
19
Pennsylvania courts with respect to Section 508. In a case
with similar facts involving a contractor who was induced to
perform extra work and relied upon assurances from
government officials that equitable compensation would be
provided, the Commonwealth Court of Pennsylvania held that
“individual members of the School Board could not have
bound the School District absent majority approval.”
Hazleton, 672 A.2d at 863. Pennsylvania courts have abided
by the general rule derived from Section 508 that “[a]ction by
the board is indispensable, and no liability can be imposed
upon a school district without it.” Matevish v. Sch. Dist. of
Borough of Ramey, 74 A.2d 797, 800 (Pa. Super. Ct. 1950)
(holding that a school board official‟s modification of
contract was uneforceable because it was not approved by a
majority of the school board). An early case involving the
application of what is today Section 508 articulates the
position of Pennsylvania courts. In Waltman v. Albany
Township School District, an unsuspecting school teacher was
induced into working without a valid contract. The Superior
Court of Pennsylvania stated that they “appreciate the
hardship and disappointment that the plaintiff may experience
by reason of this decision . . . but we cannot allow or permit,
the hardships of an individual case to override and overcome
the plain requirements of the act of assembly.” 64 Pa. Super.
458, 467-68 (Pa. Super. Ct. 1915). While Wayne Moving is
certainly a sympathetic plaintiff who performed valuable
services for the School District, Wayne Moving cannot
receive compensation for its services because the additional
expenses were not authorized by a majority of the School
Board, as required by Section 508.
20
V.
The School District also argues that Wayne Moving‟s
claim for unjust enrichment is barred by contract provisions
found in the prime contract between the School District and
Facility Strategies and that the elements of unjust enrichment
have not been sufficiently established. Because we dispose of
this case on the grounds that Section 508 of the Pennsylvania
Public School Code bars Wayne Moving‟s claim for unjust
enrichment, we do not reach the School District‟s other
arguments for reversal.2
We conclude that the District Court‟s grant of Wayne
Moving‟s motion for summary judgment and denial of the
School District‟s motion for summary judgment were in error.
We direct entry of summary judgment for the School District.
2
The School District argued that Wayne Moving‟s
unjust enrichment claim was separately barred by the terms of
the subcontract between Wayne Moving and Facility
Strategies. Specifically, the subcontract contained an
incorporation clause that, the School District argued,
incorporated the “Waiver Provisions” contained in the
primary Relocation Contract between Facility Strategies and
the School District. These waiver provisions prohibited all
legal claims against the School District arising from the
contracted-for services. Because we determine that Wayne
Moving‟s unjust enrichment claim is barred by Section 508,
we need not address nor decide whether the subcontract
incorporated the prime contract between the School District
and Facility Strategies or whether Wayne Moving‟s claim is
separately barred by the relevant contractual provisions.
21
Accordingly, we will reverse and remand for entry of
summary judgment for the School District.
22