Bollinger v. Central Pennsylvania Quarry Stripping and Construction Co.

Supreme Court of Pennsylvania · Contracts

ContractsReformationMutual MistakeEquitycontract reformationmutual mistakeequitywritten agreement

Facts

The parties executed a written agreement allowing the defendant to deposit construction waste on the plaintiffs' property. The plaintiffs alleged that by mutual understanding the defendant was first to remove the topsoil, place the waste on the bare land, and then replace the topsoil over the waste, but that this term was omitted from the writing by mutual mistake. The plaintiffs signed without reading because they assumed the term had been included. The defendant initially performed in accordance with that understanding by removing and replacing topsoil, then stopped and asserted the written contract imposed no such obligation.

Issue

Whether a court of equity may reform the written contract to include the omitted topsoil-restoration term on the ground of mutual mistake, even though the defendant denied any mistake and the plaintiffs had signed the writing without reading it. Whether the defendant's claimed after-discovered evidence required rehearing or a different result was also before the court.

Rule

A court of equity may reform the written evidence of a contract so that it corresponds to the parties' actual understanding when the omission or error resulted from mutual mistake. The mistake must be mutual, but a finding of mutual mistake is not barred merely because one party later denies that any mistake was made. Although a party ordinarily cannot escape a written agreement by saying he did not understand what he signed, equity may grant relief when proper evidence shows a real, actual mutual mistake.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Erie, Pennsylvania, Dana and Luis Romero signed a written agreement allowing North Ridge Excavation, LLC to place clean fill on their vacant lot. Dana later sued in equity, alleging both sides had agreed that North Ridge would first strip and save the lot's gravel surface and then restore it after the fill was placed, but that the term was omitted from the writing; before the dispute arose, North Ridge had in fact stripped and restored the surface on the first section of the lot.

If the chancellor credits Dana's testimony and the initial performance is undisputed, which is the strongest basis for granting reformation?

Explanation. Equity may reform the written evidence of a contract so it corresponds to the parties' actual understanding when the omission resulted from mutual mistake. The majority emphasized that mutual mistake may be proved even if one party later disputes it, and that corroborating conduct—such as initially performing according to the omitted term—supports a finding that the mistake was real and actual rather than feigned. (Derived from Bollinger v. Central Pennsylvania Quarry Stripping and Construction Co. (n.d.).)