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OAK RIDGE CONSTRUCTION COMPANY v. ROY R. TOLLEY AND AURELINE TOLLEY (12/27/85)

decided: December 27, 1985.

OAK RIDGE CONSTRUCTION COMPANY
v.
ROY R. TOLLEY AND AURELINE TOLLEY, HIS WIFE, APPELLANTS



Appeal from the Judgment entered October 30, 1984 in the Court of Common Pleas of Monroe County, Civil Division, at No. 2898-1982-Civil.

COUNSEL

Brenda M. Flock, Philadelphia, for appellants.

Peter J. O'Brien, Mount Pocono, for appellee.

Cavanaugh, Olszewski and Hoffman, JJ.

Author: Hoffman

[ 351 Pa. Super. Page 36]

This is an appeal from the lower court's judgment awarding appellee, Oak Ridge Construction Co. (Oak Ridge), damages for appellants', the Tolleys', anticipatory breach of a construction contract. The Tolleys contend on appeal that the lower court erred in (1) finding that they, rather than Oak Ridge, had breached the contract; (2) striking testimony as to the unreasonableness of drilling an 800 foot well; and (3) awarding damages to Oak Ridge. We affirm in part, reverse in part, and remand for further proceedings.

In June, 1982, the Tolleys and Oak Ridge entered into a contract pursuant to which Oak Ridge agreed to construct a residence on the Tolleys' property for $64,500.*fn1 The Tolleys provided Oak Ridge with specifications, which were incorporated into the contract, and a plot plan. The specifications contained, inter alia, the following provision:

20. Water Supply

Drill well 150' deep with 40' of 6" casing, 1/3 H.P. submersible pump and a 21 gallon storage tank. Should well be more than 150' a charge of $6.50 per ft. will be made. Should casing be over 40' a charge of $7.00 per ft. will be made. Should well depth require a deep lift pump, extra cost to be borne by owner. Well depth over 100' may require a larger pump.

(Emphasis in original). Before drilling began, Oak Ridge warned the Tolleys that the well might be very deep because other wells in the area had been drilled to depths of

[ 351 Pa. Super. Page 37760]

and 975 feet. Oak Ridge then drilled the well at a place indicated by one of the Tolleys' employees after referring to the plot plan. It was completed on August 24, 1982, after being drilled to a depth of 800 feet. On August 27, Oak Ridge sent the Tolleys an invoice including charges of $4225 for the extra 650 feet of drilling and $616 for an extra 88 feet of casing, amounts computed using the rates specified in the contract. On September 2, Mr. Tolley wrote Oak Ridge stating that those charges were "in dispute or disagreement. All work under item 20 (Water Supply) . . . are [sic] to cease pending satisfactory resolution or settlement under item 13 (Arbitration) of our construction agreement."*fn2 Oak Ridge replied on September 7, stating that it believed that the Tolleys had breached the contract by refusing to pay the invoice and that it was giving them ten days notice under paragraph seven of the contract (Termination by Contractor), which provides as follows:

Should owner in any manner, by act or omission, violate or breach any covenant herein, then CONTRACTOR may, at his option, terminate this agreement, upon ten (10) days written notice to OWNER of any such violation or breach. Upon failure of OWNER to correct the same within the ten (10) day period, then, and in such event of termination, CONTRACTOR shall be entitled to receive payment for all unpaid materials, labor, and work of sub-contractors, for work and materials completed, installed, delivered on site, and ordered but undelivered and not installed, plus 20% of the total contract price as ...


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