No. 356 January Term, 1979, Appeal from the Order of the Commonwealth Court, No. 232 C.D. 1978, dated August 10, 1979.
Thomas J. Sharkey, Morton J. Gordon, Hazelton, for appellant.
Kenneth Lee Sable, Paul A. Logan, Asst. Attys. Gen., Michael D. Reed, Waynesburg, for appellee.
O'Brien, C. J., and Roberts, Nix, Larsen, Flaherty, McDermott and Hutchinson, JJ. Hutchinson, J., filed a dissenting opinion.
This is an appeal from the order of the Commonwealth Court denying appellant's petition to open a default judgment entered against him by the Pennsylvania Department of Transportation ("PennDOT"). The sole issue presented is whether appellant established in the Commonwealth Court a sufficient basis to require the opening of the default judgment. We conclude that such a basis was
established and, accordingly, reverse the order of the Commonwealth Court.*fn1
Appellant Robert Nemeth, owner of a commercial janitorial service company in Luzerne County, placed a bid with PennDOT in late 1977 to perform janitorial and maintenance work at two highway rest areas. Appellant was the low bidder on this project, and on January 15, 1978 appellant and PennDOT entered into a written contract in which appellant agreed to maintain the rest areas for a one year period in exchange for a lump sum payment from PennDOT not to exceed $73,000.00. The contract included the following provision:
E. Surety Bonds. The successful bidder will be required upon award of contract, to furnish PennDOT with an appropriate specific project or blanket Performance Bond and Payment Bond, with surety satisfactory to the Commonwealth . . . . Within ten days from the bid opening, the successful bidder is required to submit a letter of guarantee that he will be bonded for the total amount.
Appellant provided PennDOT with a letter dated December 13, 1977, from Hazelton Insurance Center, Inc. ("Hazelton"), notifying PennDOT that the required bond had been authorized and was being prepared. After PennDOT and appellant had concluded their maintenance agreement, Hazelton informed appellant that no bond would be issued. PennDOT then cancelled its contract with appellant, awarded a contract to the next lowest bidder, and on October ...