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August 1, 1997


Appealed From No. 1120. State Agency, Board of Claims.

Before: Honorable James Gardner Colins, President Judge, Honorable Joseph T. Doyle, Judge, Honorable Bernard L. McGINLEY, Judge Honorable Doris A. Smith, Judge, Honorable Dan Pellegrini, Judge, Honorable Rochelle S. Friedman, Judge, Honorable Jim Flaherty, Judge. Opinion BY President Judge Colins. Judge Smith Dissents.

The opinion of the court was delivered by: Colins


FILED: August 1, 1997

Shovel Transfer, Inc. (Shovel) petitions for review of the decision of the Board of Claims dismissing the breach of contract claim Shovel asserted against the Pennsylvania Liquor Control Board (LCB). We affirm the Board of Claims' dismissal of the claim based on its finding that a valid contract did not exist between the parties.

After ten years and an extended tour through this Commonwealth's legal system, including two trips to the Supreme Court of Pennsylvania, the merits of Shovel's claim against the LCB shall finally be reviewed by this Court. Since there are two Supreme Court opinions, two Commonwealth Court opinions, and one opinion by the Board, we feel compelled to set forth the entire procedural history of the case distinguishing that which has been decided and that which is currently before the Court.

I. History of the Litigants

For thirty or more years Shovel had warehoused and distributed alcoholic beverages in southwestern Pennsylvania pursuant to contract with the LCB. In 1986 the LCB transferred the distribution district from Youngswood to Pittsburgh. Shovel was made aware of the geographical change and immediately engaged in locating a new facility to support the warehousing requirements of the LCB. A facility was located, inspected and approved by the LCB, and the LCB forwarded Shovel a document designated "Draft Contract" for Shovel's review. The "Draft Contract" was subsequently memorialized in a formal writing (hereinafter "agreement").

The parties to the agreement were the LCB and Shovel Transfer, Inc. The last page of the agreement contained the following typewritten provision, which is being relied upon by the LCB in supporting its position that an enforceable contract does not exist between the parties: "The parties intending to be legally bound hereby, have set forth their hands and seals this 10th day of November, 1986[]", signature lines for Shovel, LCB Chairman, LCB Chief Counsel, LCB Comptroller (comptroller), State Secretary for Budget and Administration (budget secretary), and a representative of the Attorney General's office follow. The contract was signed by all signatories except the LCB Comptroller and the Budget Secretary, who refused to affix their signatures because the contract was not the product of the normal bidding process. Subsequently, a Request for Proposal (RFP) was released for the project, and the contract was awarded to GENECO. Not receiving the contract it had anticipated, Shovel brought suit in Commonwealth Court.

II. Case History

In Commonwealth Court, Shovel filed a petition for review in the nature of mandamus seeking declaratory and injunctive relief with the named defendants being LCB Comptroller Simpson and Budget Secretary Hershock (collectively "defendants"). The defendants answered by way of preliminary objections on jurisdictional grounds contending that jurisdiction over contract claims where the Commonwealth or agency is a party properly lies in the Board of Claims. *fn1 Judge MacPhail determined Shovel's action was not a contract claim, therefore, the jurisdiction of the Board of Claims had not been invoked. Judge MacPhail overruled the preliminary objections and defendants were directed to file an answer to petitioner's complaint thirty days thereafter. See Shovel Transfer and Storage v. Simpson, 112 Pa. Commw. 129, 535 A.2d 251 (1987).

An Answer having been timely filed, the issue then before Commonwealth Court was whether the signatures of both the comptroller and the budget secretary were necessary for the formation of the contract. Cross-motions for summary judgment were filed by the parties. By memorandum opinion filed June 10, 1988, Judge MacPhail granted Shovel's motion for summary judgment, concluding that an enforceable contract existed between the parties. Defendants took a direct appeal to the Supreme Court. *fn2

The Supreme Court in an opinion authored by then-Mr. Chief Justice Nix, found that Commonwealth Court erred on the issue of jurisdiction. *fn3 Accordingly, Commonwealth Court was reversed and the case remanded to the Board of Claims for a decision on the merits of the complaint. See Shovel Transfer and Storage v. Simpson, 523 Pa. 235, 565 A.2d 1153 (1989).

The Board of Claims (Board) found that the signatures of the comptroller and budget secretary (hereinafter, collectively "Simpson") were a prerequisite to the formation of the contract and the absence of those signatures rendered the contract unenforceable. The Board dismissed the claim and Shovel filed a notice of appeal with the Board dated November 28, 1994. On December 14, 1994 the Board returned the notice to Shovel because it was improperly filed. On December 15, 1994, Shovel sent the ...

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