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COMMONWEALTH PENNSYLVANIA v. HARTFORD ACCIDENT AND INDEMNITY COMPANY (01/24/79)

decided: January 24, 1979.

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL RESOURCES, PLAINTIFF
v.
THE HARTFORD ACCIDENT AND INDEMNITY COMPANY, DEFENDANT. CHEMICAL SEPARATIONS CORPORATION AND THE CHESTER ENGINEERS, INC., ADDITIONAL DEFENDANTS



Original jurisdiction in case of Commonwealth of Pennsylvania, Department of Environmental Resources v. The Hartford Accident and Indemnity Company v. Chemical Separations Corporation and The Chester Engineers, Inc.

COUNSEL

Susan J. Forney, Deputy Attorney General, with her Norman J. Watkins, Deputy Attorney General, Chief, Civil Litigation, and Gerald Gornish, Acting Attorney General, for plaintiff.

Henry C. Herchenroether, Jr., with him Alter, Wright & Barron, for defendant.

John H. Morgan, with him Robert L. Allman, II, and Eckert, Seamans, Cherin & Mellott, for additional defendants.

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

Author: Blatt

[ 40 Pa. Commw. Page 134]

The Commonwealth of Pennsylvania through its Department of Mines and Minerals, now the Department of Environmental Resources, (Commonwealth) instituted this action against The Hartford Accident and Indemnity Company (Hartford) which is the surety on a performance bond for the construction of a water demineralization plant by the Pitt Construction Company (Pitt). Hartford has filed preliminary objections to the Commonwealth's complaint in the

[ 40 Pa. Commw. Page 135]

    nature of a motion to strike, a motion for a more specific pleading and a demurrer. Hartford has also filed complaints to join as additional defendants Chemical Separations Corporation (Chem-Seps) and The Chester Engineers, Inc. (Chester). Chem-Seps has filed preliminary objections in the nature of a demurrer to Hartford's third-party complaint. These preliminary objections are presently before this Court.

This matter arises out of a contract which was awarded by the Commonwealth in 1969 to Pitt to construct a water demineralization plant for the price of $669,680. The contract incorporates by reference the plans and specifications for the project and it provides that the Commonwealth will retain up to 10% of the contract price for one year after completion and acceptance of the plant. It also states that if the plant fails to meet the performance specifications and if Pitt does not remedy the failure within that time, Pitt forfeits the monies retained by the Commonwealth. Pitt subcontracted the design, construction and installation of two Continuous Countercurrent Ion Exchange (CCIX) units to Chem-Seps. In 1972, Pitt went out of business. The plant allegedly did not comply with the performance standards because the plant as built does not produce the specified quantity of water.

The Commonwealth contends that the failure of the plant to produce the specified quantity of water is a breach of the contract and that Hartford, as the surety for performance of the contractor, is therefore either liable for the full obligation of the bond or should complete the contract at its own expense.

Hartford argues by way of its preliminary objections in the nature of a motion to strike off the complaint and for a more specific pleading, that the Commonwealth has no cause of action upon which relief may ...


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