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decided: December 5, 1974.


Appeals from the Order of the Court of Common Pleas of Philadelphia County in case of Framlau Corporation v. School District of Philadelphia, No. 3625 November Term, 1971.


Martin Horowitz, for School District of Philadelphia.

Stephen R. Bolden, with him Fell, Spaulding, Goff & Rubin, for Framlau Corporation.

President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers and Blatt. Judge Kramer did not participate. Opinion by Judge Mencer.

Author: Mencer

[ 15 Pa. Commw. Page 623]

Even in this day of widespread cynicism, we, influenced by necessity and practicality, proceed ahead, in nearly every area of our daily lives, on the basis of reasonable assumptions. Such assumptions carry inherent risks that, in any given situation, what nearly always happens will not occur. After excluding death and taxes, we soon come to realize that the unexpected happens with sufficient frequency to rule out the notion that anything is a certainty. The reasonable likelihood that automobiles approaching from another direction will pass by on the proper side of the highway prompts us to use this mode of transportation even in the face of predictable odds that some automobiles, somewhere, under some circumstances, will not be so operated, with resulting accidents and injuries to those involved. Countless other examples of common experiences could be mentioned to reinforce the truism that assumptions made concerning future events, although made in good faith and upon reasonable foundations, carry inherent risks of incorrectness.

This appeal results from the good faith and well-intentioned assumption of the lower court and the attorneys representing the parties to this litigation that the Board of Public Education of the City of Philadelphia would, following the advice and recommendation of its president and its attorney, agree to settle a lawsuit for the sum of $250,000.

The background for this appeal was succinctly set forth by the learned court below in its opinion filed in conjunction with this appeal, and we quote therefrom:

[ 15 Pa. Commw. Page 624]

"Plaintiff [Framlau Corporation], a general contractor, entered into a written contract with defendant, School District of Philadelphia, dated April 14, 1969 in the amount of $1,583,000.00 for construction of an addition to the Simon Gratz High School. After a substantial amount of work had been completed, defendant by letter dated May 18, 1971 notified plaintiff that it was terminating the contract, effective May 25, 1971. Thereupon plaintiff commenced an Action in Assumpsit alleging a wrongful unilateral termination of the contract and seeking damages, inter alia, for labor performed and materials supplied; for delay in readying the site for construction and impairing the orderly progress of the work; for extra work required by defendant and performed by plaintiff above and beyond the contract plans and specifications; for unlawful termination and loss of anticipated profits; for loss of plaintiff's bondability; and for consequential damages. Defendant counterclaimed for damages allegedly caused by plaintiff's breach of contract and improper refusal to complete the contract as well as the necessity of obtaining substiute performance.

"The matter came on for trial before the Court and Jury on April 2, 1973. On April 10, 1973, after six days of testimony, which encompassed the entire presentation of plaintiff's case and a partial presentation of the defendant's evidence, counsel for plaintiff and defendant entered into settlement discussions in the presence of the Court. As a result of these negotiations it was agreed that a fair settlement of the litigation would be the payment of the sum of $250,000.00 by defendant to plaintiff. Counsel for defendant, Mr. Horowitz, advised opposing counsel and the Court that he would recommend that settlement figure. Mr. Horowitz communicated by telephone to William Ross, President of the School Board, and thereafter informed plaintiff's counsel and the Court that Mr. Ross agreed with the

[ 15 Pa. Commw. Page 625]

    recommendation and the case was settled.*fn1 He indicated to plaintiff's counsel that a check in the amount of $250,000.00 would be forthcoming after approval by the School Board at its meeting on April 25, 1973. Counsel for defendant believed that Board approval would be no problem since the President of the Board had agreed to the settlement. The Court thereupon ...

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