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PENNSY SUPPLY v. NICHOLSON COMPANY (12/02/83)

filed: December 2, 1983.

PENNSY SUPPLY, INC., APPELLANT,
v.
THE NICHOLSON COMPANY



No. 1242 Philadelphia 1981, Appeal from the Order of the Court of Common Please, Civil Division, of Cumberland County at No. 3755 Civil 1979.

COUNSEL

Arthur Berman, Harrisburg, for appellant.

James F. Carl, Harrisburg, for appellee.

Wickersham, Beck and Popovich, JJ.

Author: Popovich

[ 321 Pa. Super. Page 476]

This is an appeal from an order denying appellant's motion to modify or vacate an arbitration award. We reverse.

[ 321 Pa. Super. Page 477]

The appellant, Pennsy Supply, Inc. (hereinafter referred to as Pennsy), supplied transit-mixed concrete during the construction of an industrial storage silo at the Ralston Purina plant in Mechanicsburg, Pennsylvania. A problem arose during construction of the silo, causing a delay before construction could be resumed. As general contractor, appellee, The Nicholson Company (hereinafter referred to as Nicholson), absorbed the costs of the delay. Nicholson alleged that the cause of the delay was faulty concrete provided by Pennsy. Pennsy denied liability, and the parties agreed to have an arbitrator with engineering expertise resolve the dispute.

Hearings were held before an arbitrator on March 27 and 28, 1979, at which Pennsy and Nicholson each presented extensive technical evidence regarding the composition of the concrete mixture supplied by Pennsy. Although the hearings were closed on March 28, 1979, Nicholson sent the arbitrator a letter dated April 10, 1979, attached to which were two additional letters dated March 29, 1979 and April 6, 1979. The March 29 and April 6 letters were addressed to Nicholson's counsel and were signed by an expert witness who testified on behalf of Nicholson at the arbitration hearings. The letter of March 29 included a table and graph "showing the relationship of absorbences . . . to reference concretes made with . . . Plastocrete [concrete mixture], Plastocrete from Pennsy Supply . . ., and concrete from the [storage bin which Nicholson was constructing]." (Excerpt from the letter of March 29, 1979.) The letter of April 6 contained the expert's "comments regarding the mechanisms by which greater than a normal dose . . . of Plastocrete N could have occurred in the concrete furnished by Pennsy Supply . . . . The comments [were] based upon information made available during the arbitration hearing on March 27 and 28, 1979, and [an] analysis of Plastocrete obtained from Pennsy Supply during January . . . ." (Excerpt from the letter of April 6, 1979.)

Nicholson sent copies of the above letters to Pennsy's counsel. In a letter to the arbitrator dated April 16, 1979, counsel for Pennsy wrote:

[ 321 Pa. Super. Page 478]

With this letter I must strongly object to [Nicholson's] submitting to you copies of letters . . . received from [Nicholson's expert witness] . . . dated March 29, 1979 and April 6, 1979. Neither of these were [ sic ] requested or solicited by you at the hearing. They were made post-hearing without the opportunity of cross-examination on the part of the other party and consequently we would view a submission of this nature and magnitude as a reprehensible act on the part of a participant in arbitration and we further strongly feel that this alone might be sufficient to effect the validity of a determination to be made by you in this proceeding. We also view this as a serious breach of ethical conduct in this arbitration proceeding.

As the record indicates that the arbitration proceedings were closed at the conclusion of the receipt of testimony, except for the information to be obtained from [a specified third-party chemical company], although we see errors and misrepresentations of [the Nicholson ...


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