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MERRITT-CHAPMAN & SCOTT CORP. v. PENNSYLVANIA TURN

November 28, 1966

MERRITT-CHAPMAN & SCOTT CORPORATION, Plaintiff,
v.
PENNSYLVANIA TURNPIKE COMMISSION, Defendant



The opinion of the court was delivered by: FOLLMER

 This matter is before the Court on motion of defendant to stay the above-captioned action and all proceedings therein until an arbitration shall be held in accordance with the terms of the contract entered into between plaintiff and defendant.

 As grounds for the motion, defendant alleges that:

 1. On August 6, 1962, plaintiff contracted with defendant for the construction of Allegheny Tunnel No. 2 on the Pennsylvania Turnpike in Allegheny and Stony Creek Townships, Somerset County, Pennsylvania, which contract was designated "Contract 145-1".

 2. Sections 1.9.9 and 1.10 of the General Requirements and Covenants of said contract provide as follows for the presentation and disposition of plaintiff's claims:

 
"1.9.9 PRESENTATION OF CONTRACTOR'S CLAIMS-
 
* * *
 
"(1) Manner of Presenting Claims. All claims for additional compensation, or for damages, arising out of this contract or in any manner related thereto, or any breach of said contract, including claims for additional compensation for any work performed which was or was not covered by the approved drawings, specifications or contract, or for any other cause, including damages for delay, shall be prepared in writing by the contractor in detail and submitted in triplicate to the Chief Engineer.
 
"No claim may be submitted to the Chief Engineer unless the contractor shall have given the Chief Engineer due written notice of his intention to present such claim in the manner hereafter designated; provided, that the contractor shall not be denied the right to present any claim which is based on differences in measurements or errors in computations which were not disclosed until final computations were made.
 
"The written notice as above required must have been given to the Chief Engineer prior to the time that the contractor shall have performed such work, or that portion thereof, giving rise to the claim or claims for additional compensation; or shall have been given to the Chief Engineer, within ten (10) days from the date the contractor was prevented by the engineer from performing any work provided by the contract; or within ten (10) days from the happening of the event, thing or occurrence giving rise to the alleged claim.
 
"(2) Limitation of Time for Submitting Claims. The date on which the Chief Engineer notified the contractor of the final payment computations, or revised computations, shall be the date from which the time limit shall begin to run for the submission of claims to the Board of Arbitration named in Section 1.10.
 
"No claim will be entertained by the Board of Arbitration unless such claim has been presented to the Chief Engineer in detail within three (3) months from the date of the notification above, and before final payment is made.
 
"Section 1.10 ARBITRATION
 
"The Chief Engineer shall render his decision upon the claim or claims in due course, and when such decision has been served upon the contractor, he shall be deemed to have accepted the same unless he shall, within fifteen (15) days thereafter, have submitted the claim, in the precise language it was presented to the Chief Engineer, to a Board of Arbitration. Such Board of Arbitration shall consist of the Consulting Engineer or an engineer designated by the Consulting Engineer, an engineer designated by the contractor, and the Commission's Counsel. Such claims shall be submitted to the Board in triplicate and shall conform in every detail with the claim as submitted to the Chief Engineer. The Arbitrators, after hearing, shall make their decision regarding the claim or the claims submitted, and thereafter notify the Commission and the contractor thereof in writing. The decision of the Arbitrators, or a majority of them, shall be final, except as provided by statute."

 3. Commencing on June 5, 1964 and continuing through July 16, 1965 plaintiff has submitted to arbitration thirty-three separate claims in the total amount of $946,838.20 in accordance with Section 1.10 Arbitration set forth in numbered paragraph 2 above.

 4. Each letter transmitting and submitting said thirty-three claims to arbitration contained the following paragraph:

 
"Be advised that we hereby appeal the decision of the Chief Engineer to the Board of Arbitration provided for under Section 1.10 Arbitration of the General Requirements and Covenants of the Contract. In accordance with Section 1.10 Arbitration of these Requirements, transmitted herewith are three (3) copies each of the claim as submitted to the Chief Engineer."

 5. On February 12, 1965 plaintiff notified defendant it had designated A. A. Mathews as a member of the Board of Arbitration as provided in Section 1.10 above.

 6. By agreement with defendant, plaintiff took certain depositions and conducted discovery at the Administration Building of defendant, at its Field Office near the site of the construction and in the principal office of the Consulting Engineer of defendant, which discovery proceedings continued through September 22, 1965.

 7. In the meantime the Board of Arbitration was not convened for the taking of testimony.

 8. By letter of October 8, 1965, A. A. Mathews, engineer-designee of plaintiff on Board of Arbitration notified defendant that he could not serve.

 9. By letter of October 19, 1965, defendant notified plaintiff to designate another engineer in place of Mathews.

 10. To date plaintiff has failed to make such designation.

 11. The claims set forth in this action arise out of or relate to the aforesaid contract and are substantially the claims which plaintiff has ...


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