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Scandale Associated Builders & Engineers, Ltd. v. Bell Justice Facilities Corp.

October 11, 2006

SCANDALE ASSOCIATED BUILDERS & ENGINEERS, LTD., PLAINTIFF,
v.
BELL JUSTICE FACILITIES CORP., DEFENDANT.



The opinion of the court was delivered by: Judge Jones

MEMORANDUM AND ORDER

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:

Two Motions are pending before this Court. First, Defendant, Bell Justice Facilities Corp. ("Defendant" or "Bell"), filed a Motion for Partial Summary Judgment (doc. 47) on March 31, 2006. Second, Plaintiff, Scandale Associated Builders & Engineers, Ltd. ("Plaintiff" or "Scandale"), filed a Motion for Summary Judgment (doc. 49) on March 31, 2006. On May 19, 2006, both Motions were dismissed without prejudice. On August 23, 2006, this Court entered an Order enabling these Motions to be reasserted. For the reasons that follow, the Motions shall be denied.

PROCEDURAL BACKGROUND

On or about September 10, 2003, Plaintiff filed a Complaint against Defendant in the Court of Common Pleas of Wayne County, Pennsylvania. On October 6, 2003, pursuant to 28 U.S.C. § 1446, Defendant filed a Notice of Removal with this Court. That same day, Defendant filed a Motion to Dismiss Count III of the Complaint that was granted by Order of December 5, 2003. (Rec. Doc. 12). The remaining counts of Plaintiff's Complaint assert breach of contract (Count I), "unresolved additional direct cost issues" and delay and impact costs (Count II), and interest and penalties purportedly due under the Pennsylvania Contractors and Subcontractors Payment Act (Count IV).

Defendant did not file an Answer to Plaintiff's Complaint or raise any affirmative defenses. The time for filing or amending pleadings expired May 31, 2004. Discovery proceeded and closed. On March 31, 2006, Plaintiff and Defendant filed respective Motions for Summary Judgment that were briefed by the parties.

On April 24, 2006, Defendant filed a Motion for Leave to File an Answer, which was granted by Order of May 19, 2006. (Rec. Doc. 63). That Order also reopened discovery for a period of sixty (60) days and dismissed the Motions for Summary Judgment without prejudice. On May 31, 2006, Defendant filed an Answer. (Rec. Doc. 65). Subsequently, the period of discovery closed.

On August 23, 2006, this Court entered an Order allowing the previously filed and briefed Motions for Summary Judgment to be reasserted. (Rec. Doc. 71). The Motions are therefore ripe for disposition.

STANDARD OF REVIEW

Summary judgment is appropriate if "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Turner v. Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir. 1990). The party moving for summary judgment bears the burden of showing "there is no genuine issue for trial." Young v. Quinlan, 960 F.2d 351, 357 (3d Cir. 1992). Summary judgment should not be granted when there is a disagreement about the facts or the proper inferences that a fact finder could draw from them. See Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir. 1982).

Initially, the moving party has a burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). This may be met by the moving party pointing out to the court that there is an absence of evidence to support an essential element as to which the non-moving party will bear the burden of proof at trial. See id. at 325.

Rule 56 provides that, where such a motion is made and properly supported, the non-moving party must then show by affidavits, pleadings, depositions, answers to interrogatories, and admissions on file, that there is a genuine issue for trial. See Fed. R. Civ. P. 56(e). The United States Supreme Court has commented that this requirement is tantamount to the non-moving party making a sufficient showing as to the essential elements of their case that a reasonable jury could find in its favor. See Celotex, 477 U.S. at 322-23 (1986).

It is important to note that "the non-moving party cannot rely upon conclusory allegations in its pleadings or in memoranda and briefs to establish a genuine issue of material fact." Pastore v. Bell Tel. Co. of Pa., 24 F.3d 508, 511 (3d Cir. 1994) (citation omitted). However, all inferences "should be drawn in the light most favorable to the non-moving party, and where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true." Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992)(citations omitted).

Still, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). "As to materiality, the substantive law will identify which facts are material." Id. at 248. A dispute is considered to be genuine only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

STATEMENT OF RELEVANT FACTS

The facts in this matter are largely disputed by the parties. We are presented with detailed disputed factual summaries and extensive discovery material. We will not attempt to conduct a piecemeal examination of each fact presented by the parties, but will discuss the relevant factual background necessary to resolve the pending Motions. We will, where necessary, view the facts and all inferences to be drawn therefrom in the light most favorable to the non-moving party in our analysis of the pending Motions.

Bell was the general contractor on a project for the construction of the United States Penitentiary/Federal Prison Camp at Canaan, Pennsylvania ("Project"). (Rec. Docs. 48-3, ¶ 3; 54, ¶ 3). The owner of the Project is the United States Department of Justice/Federal Bureau of Prisons ("FBOP"). (Rec. Docs. 48-3, ¶ 3; 54, ¶ 3). On or about January 4, 2001, Scandale and Bell entered into a fixed-price written subcontract agreement (the "Subcontract") pursuant to which Scandale agreed to perform concrete work on Bell's Project. (Rec. Doc. 1-3, Ex. A, ¶ 1).

The parties agree that Scandale contracted initially to provide a complete and operable cast-in-place concrete system (docs. 48-3, ¶ 6; 54, ¶ 6) in exchange for a price of $5,413,000.00 (doc. 1-3, Ex. A, ¶ 3) and that the Subcontract contained a "flow down" provision pursuant to which Scandale assumed all rights and obligations toward Bell that Bell assumed toward the FBOP. (Rec. Docs. 48-3, ¶ 5; 54, ¶ 5; 1-3, Ex. A, ¶ 1).

However, the parties' accord with respect to the effect of Subcontract terms ends there. Bell highlights those provisions that enable Bell to withhold 10% retention on partial payments until, "among other things, Scandale provid[ed] evidence that it had 'paid in full all bills for labor and materials'" (doc. 48-3, ¶ 7 (quoting doc. 1-3, Ex. A, ¶ 3)); to order Scandale to work overtime, with additional payment for labor only if Scandale was not responsible for falling behind schedule; and to modify Scandale's work. (Rec. Doc. 48-3, ¶ 8-10). Bell also notes that the Subcontract provided time as the exclusive remedy in the event of delay beyond Scandale's control. (Rec. Doc. 48-3, ¶ 10). Paragraph nineteen (19) of the Subcontract states:

If the Subcontractor [Scandale] shall be delayed in the commencement, prosecution or completion of the work or shall be obstructed or hindered in the orderly progress of the work by any act, neglect or default of the Contractor [Bell], the Owner [FBOP], the Architect, another contractor or subcontractor or by any cause beyond the control of the Subcontractor, then the time fixed for completion of the work shall be extended for a period equivalent to the period of the delay incurred by the Subcontractor as determined by the Contractor . . . The Subcontractor expressly agrees not to make, and hereby waives, any claim for damages on account of any delay, obstruction or hindrance for any cause whatsoever, including but not limited to the aforesaid cause, and agrees that its sole right and remedy in the case of any delay, obstruction or hindrance shall be an extension of the time fixed for completion of work unless and to the extent that the Contractor recovers the same from the Owner. (Rec. Doc. 1-3, Ex. A, ¶ 19).

Scandale, on the other hand, refers this Court to the Subcontract's choice of law provision, which provides that the Subcontract be construed in accordance with the law of "'where the project is located.'" (Rec. Doc. 50, ¶ 7 (quoting Rec. Doc. 1-3, Ex. A, ¶ 22)). Because the Project is located in Pennsylvania, Pennsylvania law governs. (Rec. Doc. 50, ¶ 7). Thus, Scandale alleges that the Subcontract's provisions are not dispositive because Pennsylvania does not give effect to exculpatory provisions when a defendant has actively delayed and hindered the performance of the contract (doc. 53 at 11), as Scandale alleges that Bell has. (Rec. Doc. 50, ¶ 23).

Both parties agree that Scandale encountered numerous delays in its work on the Subcontract. (Rec. Docs. 50, ¶ 23-24; 59, ¶ 23). For example, from on or about June 18, 2001 through on or about August 8, 2001, earthwork on the Project was suspended due to stop work orders issued by state and federal agencies. (Rec. Docs. 48-3, ¶ 14; 54, ¶ 14).

However, the parties disagree as to the causes of, responsibility for, and effects of the stop work orders. Scandale claims that Bell frustrated Scandale's ability to perform under the Subcontract and caused substantial damages to Scandale. (Rec. Doc. 50, ¶ 24). Scandale cites a non-exclusive list of twelve alleged acts and/or omissions by Bell, including such items as earthwork delays resulting in shut down from June 18, 2001 through August 8, 2001, change in performance conditions, re-sequencing of work areas, and failure of Bell to properly supervise and coordinate the work of all subcontractors. (Rec. Doc. 50, ¶ 23).

Several of Scandale's exhibits appear to support its allegations. In his affidavit, Mark Paradise, the secretary of Scandale, discusses the problems that Scandale encountered during its work on the Project. (Rec. Doc. 51, Ex. 2, ¶ 6-9). Paradise indicates that various on-site problems resulted in a twenty-six (26) week delay in the Project, and that as a result of that and other delays, Scandale suffered substantial impact costs above the original contract price. (Rec. Doc. 51, Ex. 2, ¶ 6-9). Scandale's Request for Equitable Adjustment Financial Summary, which provides that it does not include any unpaid balance due on the Subcontract or any unpaid retainage being held by Bell, requests an additional $1,441,089. (Rec. Doc. 51, Ex. 5). Scandale also cites a December 21, 2001 Memorandum from the Project Manager that indicates that "extending your finish date is not an option."

(Rec. Doc. 51, Ex. 6).

Bell denies Scandale's allegations that Bell is responsible for the delays. (Rec. Doc. 59, ¶ 23). Bell claims that Scandale's allegations are unsupported by the record and that Scandale and other actors caused some of the delays. (Rec. Doc. 59, ¶ 23). Further, Bell claims that Scandale was not precluded from working during the earthwork shutdown, and that, in fact, Scandale continued to construct footings during the alleged shutdown. (Rec. Doc. 59, ¶ 23).

The report prepared by Bell's expert, Patrick W. Brannon, P.E., corroborates Bell's denials. Mr. Brannon suggests that Scandale's allegations are unfounded. (Rec. Doc. 59-5, Ex. 3 at 10-17). He notes that Bell provided Scandale all of the time necessary to perform its work, that Scandale waived delay damages under the Subcontract, and that Bell has not received compensation from the FBOP for delays associated with the earthwork stoppage. (Rec. Doc. 59-5, Ex. 3 at 11). Further, Mr. Brannon indicates that Scandale has not demonstrated how a 57 day work stoppage resulted in a 411 day delay, and that, in fact, Bell afforded Scandale the opportunity to work on multiple aspects ...


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