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Scungio Borst & Assocs. v. 410 Shurs Lane Developers, LLC

Superior Court of Pennsylvania

November 20, 2014

SCUNGIO BORST & ASSOCIATES, Appellants
v.
410 SHURS LANE DEVELOPERS, LLC AND KENWORTH II, LLC, AND ROBERT DEBOLT, Appellees

Submitted August 5, 2014

Appeal from the Judgment of Sentence July 12, 2012 of the Court of Common Pleas, Philadelphia County, Civil Division, No(s): 946 November Term, 2008. Before MCINERNEY, J.

Paul P. Padien, Media, for Scungio Borst & Associates, appellants.

Evan Barenbaum, Warrington, for Robert Debolt, appellee.

BEFORE: FORD ELLIOTT, P.J.E., BENDER, P.J.E., BOWES, SHOGAN, ALLEN, MUNDY, OTT, WECHT, and STABILE, JJ. Ford Elliott, P.J.E., and Shogan, Allen, Ott, and Stabile, JJ. joined the Opinion. Bender, P.J.E., filed a Dissenting Opinion in which Mundy and Wecht, JJ. joined.

OPINION

Page 104

BOWES, J.:

Scungio Borst & Associates (" SBA" ) appeals following entry of judgment in its favor and against 410 Shurs Lane Developers, LLC (" 410 SLD" ) and Kenworth II, LLC (" Kenworth" ), and challenges the September 30, 2010 order granting summary judgment in favor of Robert DeBolt, a principal in 410 SLD. The underlying action was commenced for breach of contract, unjust enrichment, fraud, and for a violation of the Contractor and Subcontractor Payment Act (" CASPA" ), 73 P.S. § § 501-516. After thorough review, we affirm.

The pertinent facts are as follows. 410 SLD contracted in writing with SBA for general contracting services on its condominium construction project. SBA performed the contracted-for construction services, as well as $2.6 million in additional work at the direction of 410 SLD and its President and fifty percent shareholder, Mr. DeBolt. When SBA was not paid approximately $1.5 million incurred due to the additional work, it filed the within lawsuit against 410 SLD, Mr. DeBolt and others.

Mr. DeBolt subsequently filed a motion for summary judgment as to all claims pending against him individually, and the trial court granted the motion.[1] Claims against 410 SLD and Kenworth were tried non-jury, and judgment was entered against both entities for $1,979,341 on July 12, 2012. SBA timely appealed, challenging the grant of summary judgment in favor of Mr. DeBolt on the CASPA claim. Specifically, SBA raises the following issue for our review:

1. Did the lower court commit an error of law or abuse its discretion in granting

Page 105

summary judgment to DeBolt under CASPA, where:
(a) CASPA makes the owner (410) [SLD] and the " agent of the owner acting with the owner's authority" (DeBolt) liable to contractors such as SBA,
(b) DeBolt is a fifty percent owner of 410 [SLD],
(c) SBA consistently dealt with DeBolt and received his authorizations for change orders, and
(d) SBA never received payment for the change orders?

Appellant's brief at 5.

This Court may reverse a trial court's order granting or denying summary judgment only if there has been an error of law or an abuse of discretion. Summers v. Certainteed Corp., 606 Pa. 294, 997 A.2d 1152, 1160 (Pa. 2010). To the extent that we must resolve a question of law, we shall review the grant of summary judgment in the context of the entire record. Id. at 1159. The record includes " all pleadings, as well as any depositions, answers to interrogatories, admissions, affidavits, and expert reports." LJL Transp., Inc. v. Pilot Air Freight Corp., 599 Pa. 546, 962 A.2d 639, 647 (Pa. 2009). We examine the record " in a light most favorable to the non-moving party, and we resolve all doubts as to the existence of a genuine issue of material fact against the moving party." Id. Summary judgment is proper only if the moving party's right is " clear and free from doubt." Id. The instant appeal involves an issue of statutory construction, which presents a pure question of law, and " our review is plenary and non-deferential." Commonwealth v. Zortman, 611 Pa. 22, 23 A.3d 519, 522-23 (Pa. 2011).

The fundamental issue in the instant appeal is whether SBA can maintain this action under CASPA against Mr. DeBolt, President and fifty-percent shareholder in 410 SLD, based upon 410 SLD's failure to pay SBA. 410 SLD is the owner of the improved property and the party that contracted for its improvement. SBA's theory of liability is that Mr. DeBolt, as an authorized agent of 410 SLD, is an " owner" as that term is defined in the statute, and therefore subject to CASPA liability for SLD's non-payment.[2]

This dispute stems from the General Assembly's use of the terms " owner" and " contracting party," terms that are not necessarily synonymous, in referring to those obligated to pay or make payment to contractors. " Owner" is defined as

A person who has an interest in the real property that is improved and who ordered the improvement to be made. The term includes successors in interest of the owner and agents of the owner acting with their authority.

73 P.S. § 502. " Person" is defined as, " A corporation, partnership, business trust, other association, estate, trust foundation or a natural individual." Id. It is undisputed that 410 SLD is a " person" with an interest in the property that ordered the improvements, and thus, an owner for purposes of the statute. 410 SLD is also the entity that contracted for the improvements. " Agent" is undefined. SBA maintains

Page 106

that Mr. DeBolt was the authorized agent of 410 SLD, and for purposes of summary judgment, we will treat him as such.

SBA argues first that the plain language of the statute unambiguously subjects owners and their agents, such as Mr. DeBolt, to CASPA liability for non-payment. It relies upon the definition of an owner as including " agents of the owner," and section 512, which imposes penalties for failure of owners, contractors and subcontractors to comply with the payment terms of the act, as the basis for imposing liability against Mr. DeBolt under CASPA.

We note preliminarily that the definitions provision of the statute is prefaced with the caveat that its definitions " shall have the meanings given to them in this section unless the context clearly indicates otherwise[.]" 73 P.S. § 502. Furthermore, CASPA applies to a " construction contract," which is defined as an " agreement, whether written or oral, to perform work on any real property located within this Commonwealth." Prieto Corp. v. Gambone Constr. Co., 2014 PA Super 196, 100 A.3d 602, (Pa.Super. 2014); 73 P.S. § § 502, 515.

CASPA provides that when a contractor or subcontractor performs, he is entitled " to payment from the party with whom the contractor or subcontractor has contracted." 73 P.S. § 504, § 507(a) (emphasis added). Although the plain language of § § 504 and 507 speaks in terms of the contracting party's liability for payment, other statutory provisions address the respective duties of the owner to the contractor and the contractor to the subcontractor upon completion of performance. For instance, the duty to pay arises and the timetable for payment commences when the contractor submits a final ...


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