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F.J. BUSSE v. DEPARTMENT GENERAL SERVICES (12/05/79)

decided: December 5, 1979.

F.J. BUSSE, INC., PETITIONER
v.
DEPARTMENT OF GENERAL SERVICES, RESPONDENT



Appeal from the Order of the Board of Arbitration of Claims in case of F.J. Busse, Inc. v. Commonwealth of Pennsylvania, General State Authority (now the Department of General Services), Docket No. 408.

COUNSEL

James F. Manley, with him Burns, Manley & Little, for petitioner.

Barbara Sumple, with her Arnold L. Wainstein, Assistant Attorney General, Theodore A. Adler, Chief Counsel, and J. Justin Blewitt, Acting Attorney General, for respondent.

Judges Mencer, Blatt and MacPhail, sitting as a panel of three. Opinion by Judge MacPhail.

Author: Macphail

[ 47 Pa. Commw. Page 540]

This is an appeal from an order of the Board of Arbitration of Claims (Board) denying contract damages to F.J. Busse, Inc. (Busse).

On May 25, 1972, Busse and the General State Authority (GSA) entered into a contract for the construction of a fountain at Point State Park in Pittsburgh, Pennsylvania, where the Allegheny and Monongahela Rivers join to form the Ohio River. This area has been subject to frequent flooding in years past. Busse began construction on May 30, 1972, and on June 23, 1972, when the grading and excavation work was nearly completed, Hurricane Agnes deposited approximately six to eight inches of dirt and silt on the construction site which Busse had to remove in order to complete construction. Busse submitted a change

[ 47 Pa. Commw. Page 541]

    order for more than $85,000, the cost of the additional work required to remove the silt and mud. The GSA granted Busse an extension of time to perform its contract but did not accept or execute the change order forwarded to it by the architect. The GSA did attempt to collect federal reimbursement funds for the flood damage and indicated that it would pay Busse any funds recovered. Unfortunately for Busse, the federal authorities refused to make any payment. At all material times GSA maintained that the risk of loss from the damages wrought by the hurricane was on Busse. After the construction was completed, Busse filed a complaint against GSA with the Board, the decision of which is the subject of this appeal.

We think that the GSA has succinctly stated the narrow issue to be decided by this Court -- who must bear the loss from a destruction of part of the unfinished work which the contractor had contracted to do where that destruction is caused by an act of God through no fault of either of the contracting parties? Although both parties agree that the hurricane was "an act of God" and that the consequent damage was caused by no fault of either of the contracting parties, Busse contends that: (1) the Board committed fundamental error when it failed to find that the hurricane caused an increased scope of the work contemplated by the contract as well as a change of conditions at the job site; (2) the Board erred as a matter of law when it failed to find that Busse was excused from performance because the condition of the job site was changed and performance was thereby rendered impossible; (3) the Board erred when it found that under the terms of the contract the risk of flooding was on Busse; and (4) the Board erred as a matter of law when it concluded that in order to find in Busse's favor it would have to rewrite the terms of the contract. GSA, of course, contends that the findings of the

[ 47 Pa. Commw. Page 542]

Board are supported by substantial evidence and that its order is in accordance with the law.

Our law is to the effect that where one of two innocent persons must sustain a loss, the law will place that burden on the party that has agreed to sustain it. Reading Steel Products v. Alexander, 47 Dauphin 369 (1939). In their carefully researched briefs, both counsel have referred us to cases where the courts have come down on both sides of the question now before us, but in nearly all of those cases, the decisions reached depended on which party the terms of the contract imposed the risk of loss. In the instant case the Board found that ...


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