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December 19, 1997


Appealed From No. 698 of 1996, G.D. Common Pleas Court of the County of Fayette. Judge BELL, Senior Judge.

Before: Honorable James R. Kelley, Judge, Honorable Jim Flaherty, Judge, Honorable Emil E. Narick, Senior Judge. Opinion BY Senior Judge Narick.

The opinion of the court was delivered by: Narick



Filed: December 19, 1997

Penn Transportation Services, Inc. (Penn Transportation) appeals an order of the Court of Common Pleas of Fayette County (trial court) which denied the post-trial relief motion of Penn Transportation.

The factual and procedural history is as follows. The Albert Gallatin Area School Board (Board) decided to undertake a series of renovations to the Albert Gallatin School District (School District) existing facilities and the possible construction of a new high school. In June of 1993, the Board hired an architectural firm to conduct a feasibility study with regard to two phases of a building project. Phase I involved renovations of three (3) existing elementary schools and Phase II involved construction of a new high school. The Board elected to proceed with both phases of the project and the architects established schedules for both projects. After approval of the Planning Construction Workbook (PLANCON G) *fn1 for Phase I, the Board held a special meeting on June 26, 1995. All members present voted to award the construction contracts. The Board proceeded with Phase I and that project is not herein at issue.

However, as to Phase II, a conflict existed as to location of the new high school. *fn2 In October of 1995, the Board was split with five (5) members in favor of the new school project and four (4) members against it. The Board held a hearing on October 3, 1995 and opened bids for the project. The bids were reviewed by the Board on October 5, 1995. At their next regularly scheduled meeting on October 18, 1995, the Board reviewed PLANCON G, passed a motion to approve it and submit it to the Department of Education. Written notice of approval of PLANCON G was received on October 31, 1995. *fn3

On November 2, 1995, the Board President, Dr. Hearn, signed twelve (12) construction contracts, including one for Penn Transportation. The contracts were signed without approval or authorization of the Board and without the signature of the Board secretary. Penn Transportation received the contract and a notice to proceed on that same date. On November 3, 1995, Penn Transportation began site preparation for the new high school. On November 4, 1995, a special meeting of the Board was held and the Board passed a resolution to declare all building project contracts null and void as of that date. The project for building of the new high school was placed on hold until a regular meeting of the Board in December. Following the meeting, Penn Transportation was notified by the district solicitor to stop construction. On December 5, 1995, a newly elected Board voted to stop the high school project.

On February 2, 1996, Penn Transportation filed a demand for arbitration seeking to recover compensable damages for work executed in the new high school project. The School District filed a Petition to Stay Arbitration on April 17, 1996. Penn Transportation filed an answer on May 11, 1996. A three (3) day evidentiary hearing was held before the trial court September 30, 1996 through October 3, 1996. Thereafter, the trial court entered an opinion on December 30, 1996 granting the Petition to Stay of the School District. On January 9, 1997, Penn Transportation filed a Motion for Post-Trial Relief. The Motion was denied by the trial court on January 29, 1996. *fn4 This appeal followed.

As to Phase II, the high school construction project, the trial court found four (4) steps were relevant to Disposition of the matter. The first step required the Board to hold a public meeting to review the construction project and establish the estimated cost. The second step required the School District to advertise for bids from construction companies. The third step required the Board to hold a meeting for approval of PLANCON G. The fourth step indicates that if the Department of Education approves PLANCON G, the Board is to hold a special meeting for the purpose of awarding contracts by majority vote, duly recorded, to successful bidders. This meeting can only be scheduled by the School District after written confirmation of the Department of Education's acceptance of PLANCON G is received.

It is the fourth step that is at issue herein. We are specifically asked to determine whether a valid, enforceable contract for construction services exists between Penn Transportation and the School District in the absence of a formal vote by a majority of the Board. Our standard of review of a trial court's denial of a motion for post-trial relief is limited to a determination of whether the trial court abused its discretion or committed an error of law. Pikur Enterprises, Inc. v. Department of Transportation, 163 Pa. Commw. 251, 641 A.2d 11 (Pa. Commw. 1994).

Here, the trial court determined that the award of the contract by the Board president to Penn Transportation was not in compliance with Sections 427 and 508 of the Public School Code of 1949 (Code), Act of March 10, 1949, P.L. 30, as amended, 24 P.S. § 4-427 and 24 P.S. § 5-508. Section 427 restricts the authority of the Board president and provides, in relevant part, as follows:

The president shall be the executive officer of the board of school directors, and . . . shall in no case, except where this section otherwise provides, sign any order for any sum unless the same ...

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