Argued: October 17, 2018
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge,
HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE P.
KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH,
Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE CHRISTINE
FIZZANO CANNON, Judge, HONORABLE ELLEN CEISLER, Judge
CHRISTINE FIZZANO CANNON, JUDGE
Vue Plumbing, Inc. (Port Vue) appeals a judgment of the
Allegheny County Court of Common Pleas (trial court) entered
against Port Vue and in favor of North Versailles Township
Sanitary Authority (Authority), awarding damages in the
amount of $39, 033.69 in a breach of contract action. In
doing so, the trial court rejected Port Vue's claim that
the four-year statute of limitations applicable to contract
actions barred the Authority from bringing its claim. The
trial court applied the discovery rule, reasoning that the
Authority had no reason to know of the breach until it
received a complaint from residents alleging damage to their
residence approximately 10 years later. We vacate and remand.
December 2002, the Authority contracted with Port Vue to
replace terra cotta sewer pipes along Bevan Road in North
Versailles Township. Port Vue agreed to replace the pipes
using the "pipe bursting" method, which bursts the
existing pipe while simultaneously pulling through a new
pipe. Notes of Testimony 11/21/2016 (N.T.) at 75, Reproduced
Record (R.R.) at 138a. The portion of sewer line to be
replaced stretched from manhole 755 to manhole 767. Port Vue
also contracted to excavate the new line to reconnect all
residential sewer laterals to the new line. In July 2003,
Port Vue notified the Authority that it had completed work on
the project and requested final payment, which was approved
by the Authority's engineer. Trial Court Opinion at
In accordance with the contract, the Authority paid Port Vue
for completion of the project. Id. at 1-2.
March 2012, the Authority was notified that the basement of a
house along Bevan Road belonging to Carmen and Barbara
Carulli (together, Carullis) had flooded with raw sewage.
Trial Court Opinion at 2. The Authority also discovered that
manhole 767 was surcharged to within several feet of its top.
Id. The Authority inspected the sewage lines with a
camera and discovered that 112.71 lineal feet of piping
between manhole 766 and manhole 767 had not been replaced in
accordance with the contract. Id. The Authority
requested that Port Vue replace the sewer line between
manhole 766 and manhole 767. Id. When Port Vue
refused, the Authority retained another contractor, State
Pipe Services, to replace the old sewer line. Id.
September 2012, the Carullis filed a complaint for damages
against the Authority. In response, on or about November 20,
2012, the Authority filed a complaint to join Port Vue as an
additional defendant arising from Port Vue's alleged
failure to fulfill its obligations under the contract. Trial
Court Opinion at 2. The Carullis settled their claims, and
the Authority and Port Vue proceeded to a non-jury trial.
the trial court, Port Vue argued that the statute of
limitations bars the Authority's claims. Trial Court
Opinion at 2. The parties did not dispute that
Pennsylvania's statute of limitations for a breach of
contract claim of this nature is four years. Id.
(citing 42 Pa.C.S. § 5525(1)). The parties also did not
dispute that Port Vue was not made a party to the lawsuit
until nearly 10 years after it completed work on the project.
Id. The Authority, however, claimed it was unaware
that a section of the project was unfinished until those
pipes caused the damage to the Carullis' home, and
therefore, the discovery rule tolled the running of the
statute of limitations. See id. at 2-3.
trial, the Authority presented the testimony of Donald Glenn
(Glenn), an engineer from the Authority's engineering
firm, Glenn Engineering and Associates Ltd. N.T. at 10-11,
R.R. at 73a-74a. Glenn testified that he designed the project
for the Authority, which consisted of replacing the sewer
lines, reconnecting the house laterals to the new line and
installing additional manholes. N.T. at 11, R.R. at 74a. The
project was to be completed in two phases. N.T. at 12, R.R.
at 75a. Phase 1 started at manhole 755 and ended at manhole
764. Id. Phase 2 started at manhole 764 and ended at
manhole 767. Id. Port Vue contracted to do the work
for both phases of the project. See N.T. at 13, R.R.
testified that he was not at the site every day to inspect
the work in progress. His colleague, Joseph Dursa (Dursa),
and the Authority's representative, Jack Gaffney
(Gaffney), were on-site. When asked if an individual could
visibly inspect the new sewer line between manholes 764 and
767, Glenn testified that "you can't physically
inspect" the pipe because there was no excavation of the
pipe line. N.T. at 25-26, R.R. at 88a-89a. Further, the
Authority did not have the physical equipment to do a camera
inspection of the sewer line. N.T. at 59, R.R. at 122a. Glenn
testified that Port Vue forwarded an invoice to him
representing that the project had been completed, including
bursting the entire line, and that based on such
representation, Glenn authorized payment in full to Port Vue.
N.T. at 24-25, R.R. at 87a-88a.
also testified about the incident that caused the damage to
the Carullis' property. Glenn testified that after the
incident, it was determined that the pipe bursting had not
been done for the entire length as specified in the contract.
N.T. at 27, R.R. at 90a. Glenn stated that this caused a
backup in the sewer line and a surcharge at manhole 767.
Id. Glenn testified that, after the incident, the
Authority determined the line had collapsed using two
methods: physical observation (climbing down a ladder in the
manhole and shining a flashlight up and down the sewer) and
inserting a camera. N.T. at 28-29, R.R. at 91a-92a. The
inspection revealed that the old terra cotta pipe had
collapsed and that a new liner had never been installed. N.T.
at 27-29, R.R. at 90a-92a. Glenn testified that the backup in
the sewer line and the surcharge at manhole 767, and the
resulting photographs from the inspection, were the first
indication that the sewer line had not been completed all the
way to manhole 767. See N.T. at 26-27, 31 & 81,
R.R. at 89a-90a, 94a & 144a. Despite Port Vue's
assertions to the contrary, Glenn testified that he never had
a conversation with anyone at Port Vue, including owner
Richard Perkoski (Perkoski), about doing other work instead
of replacing the sewer line between manhole 764 and manhole
767. N.T. at 33, R.R. at 96a.
testified that under the contract, Port Vue was to furnish
as-built drawings. N.T. at 32, R.R. at 95a. He stated he did
not personally request that Port Vue submit as-built drawings
after the contract was completed but that the request
"would have come from one of my other people at the
office." Id. Glenn testified that, to his
knowledge, Port Vue did not supply Glenn Engineering or the
Authority with as-built drawings. N.T. at 32-33, R.R. at
also testified that after it was determined the terra cotta
pipe collapsed, he told Port Vue it had to complete the
project, but it refused, so the Authority contracted with,
and paid, State Pipe Services to complete the work. N.T. at
29 & 32, R.R. at 92a & 95a.
cross-examination, Glenn stated that the contract defines the
scope of the work to be performed. N.T. at 36, R.R. at 99a.
Glenn also acknowledged that the terms of the contract
provided that the engineer could inspect the contractor's
work at any time. N.T. at 38, R.R. at 101a. Glenn also
testified that Glenn Engineering had assigned an inspector to
the project, although not a full-time inspector, and that
Gaffney, who worked for the Authority, was also an inspector.
Id. Glenn acknowledged that the contract provided
that the Authority's engineer was to perform a final
inspection to determine whether the job was completed.
Id. Glenn acknowledged that he certified that the
work had been completed even though neither he nor anyone
from his office did any type of inspection. N.T. at 53, R.R.
at 116a. Glenn also reconfirmed that the Authority had
determined that a portion of the line was not bursted when
the Authority looked into manhole 767. N.T. at 56a, R.R. at
119a. Glenn also conceded that the work could have been
visually inspected at any time without the aid of any type of
camera, although he stated "[i]t would take of lot of
effort to do that," explaining that "[y]ou would
have to climb down, get a flashlight, [and] shine it[.]"
Id. Glenn stated he "had no idea" whether
that was done at any time between Port Vue completing its
work in 2003 and when the backup incident occurred in 2012,
"but obviously not." Id.
Authority also presented Dursa's testimony; Dursa was a
project representative from Glenn Engineering who inspected
the work performed by Port Vue. N.T. at 103, R.R. at 166a. He
explained that, at the beginning of the construction period,
Port Vue laid out the new sections of pipe and fused the
pipes together so that they could be pulled through the old
terra cotta pipe during the bursting process. N.T. at 105,
R.R. at 168a. Dursa explained that during the installation of
[y]ou really can't view [the actual bursting of the
line], but you can just see the machines working, and
it's pulling the pipe through that they had on site
already put together behind the area [that] was dug out.
N.T. at 104, R.R. at 167a.
stated that in January 2003, when he arrived at the site, the
machine that was used for pipe bursting had stopped working
in the vicinity of manhole 766. See N.T. at 105,
R.R. at 168a. He understood that Port Vue was evaluating the
problem and attempting to get the machine working again. N.T.
at 105-06, R.R. at 168a-69a. Thereafter, Dursa went on
vacation, and upon his return, the equipment was no longer at
the same location. N.T. at 107, R.R. at 170a. Dursa testified
that he never spoke to Perkoski about not completing the line
replacement to manhole 767 and, instead, doing other work.
N.T. at 108 & 110-11, R.R. at 171a & 173a-74a. On
cross-examination, Dursa stated that he reviewed the contract
documents before he started his inspections and that he had
the contract documents on site, although he did not
"have a copy on me[.]" N.T at 116-17, R.R. at
179a-80a. He acknowledged that he understood what Port Vue
was supposed to do. N.T. at 119, R.R. at 182a.
McDonald (McDonald) also testified for the Authority.
McDonald was a foreman for State Pipe Services, which
replaced the broken sewer line in 2012. N.T. at 85, R.R. at
148a. Initially, State Pipe Services performed a
pre-inspection of the site using a camera. N.T. at 86, R.R.
at 149a. After determining that the old terra cotta pipe had
not been completely replaced, State Pipe Services continued
the pipe bursting process to the top of manhole 767, thereby
completing the project. N.T. at 88, R.R. at 151a.
a former foreman for the Authority at the time of the
project, also testified for the Authority. N.T. at 191-92,
R.R. at 254a-55a. Gaffney testified that he was instructed by
the office manager and the Board of the Authority to check in
daily if there was going to be any problems but it was not
his position to inspect anything, and he did not, nor was he
at the site daily. N.T. at 192-93, R.R. at 255a-56a. He
confirmed that he never had a conversation with Perkoski
about not completing the bursting of the line between
manholes 766 and 767. N.T. at 193, R.R. at 256a. Regarding
the visual inspection of a new sewer line, Gaffney explained:
If it's an open cut, in other words, if they excavate and
put the pipe in, both the engineer and myself if I'm in
the area, make sure that it's cemented out correctly with
stone, make sure that there's good flow on it.
However, if the inspectors work by themselves, you don't
go down into a sewer by yourself. It's a safety issue. By
[Occupational Safety and Health Administration] standard,
there should be three people on site.
I have never been there where it's just myself and/or Joe
[Dursa]. So we don't make it a habit or standard to go
down any sewers, manholes themselves because of safety
N.T. at 199-200, R.R. at 262a-63a.
case, Port Vue called its President, Perkoski. N.T. at
127-28, R.R. at 190a-91a. Perkoski testified that throughout
the duration of the project, his communications had been with
Glenn Engineering. N.T. at 129-30, R.R. at 192a-93a. Perkoski
explained that during phase 2 of the project, from manhole
764 to manhole 767, his workers encountered problems
connecting some of the homes to the new sewer line.
See N.T. at 140-41, R.R. at 203a-04a. They had to
enter the basements of these houses, cut the basement floors
to find the sewer, install a new eight-inch pipe, and then
clean up the basements. N.T. at 141, R.R. at 204a. This work
exceeded the scope of the work set forth in Port Vue's
contract with the Authority. Id. Perkoski testified
that Glenn Engineering was aware of this extra work and
agreed that it would be "traded for the other pipe
bursting," which was scheduled to be done for a payment
of $14, 000. N.T. at 143, R.R. at 206a. Perkoski explained:
[t]he remaining pipe bursting that had to be done, which
amounted to, if you looking [sic] at the schedule, [$]14,
000, and I did eight houses or seven houses, and it had to
cost me five to eight thousand at that time.
So I did $35, 000 worth of work for $14, 000, because [Glenn]
is a friend of [mine]. N.T. at 143-44, R.R.
206a-07a. When asked if he completed the 112 feet of
sewer line between manholes 766 and 767, Perkoski stated:
No. I guess if that's what we say, but that's what we
figured that we were going to get extras for the inside, and
they didn't have the money for the inside. So we said,
okay, we'll leave that existing sewer in and take that
money and apply it to each house.
N.T. at 156, R.R. at 219a.
questioned as to whether Port Vue ever supplied the Authority
or Glenn with as-built drawings after Port Vue completed the
project, Perkoski stated:
A. Yeah, I drew it with Joe [Dursa] and them on the job the
way it was. They knew the way it was. That's how these
come up and they're still wrong.
Q. Did you bring a copy of the as-builts with you?
A. No. We draw it on paper up at the job.
Q. You took a piece of paper at the site and said, This is
what I did?
A. Well, they could see what I did, but then they put it
wrong. It ain't even right on here.
Q. Well, they couldn't see that you did not complete the
121 feet that was underground.
A. Well, we agreed to eliminate it to save money.
N.T. at 165, R.R. at 228a. Perkoski acknowledged that the
payment application that his company submitted to the
Authority indicated that Port Vue had completed 100% of the
bursting of the lines from manhole 764 to manhole 767. N.T.
at 171, R.R. at 234a.
the one-day trial, the trial court entered a verdict in favor
of the Authority and awarded it $39, 033.69 in damages. Trial
Court Opinion at 6. The trial court concluded that "the
discovery rule applie[d] to toll the statute of limitations
until March of 2012 when the Authority became aware that
[Port Vue] failed to complete the work as required by the
contract." Id. at 4. The trial court also
concluded that a 2008 consent order signed by the Authority
in a separate case did not bar the instant case. Id.
at 4-5. Finally, the trial court rejected Port Vue's
argument that it could only be held liable for the cost of
the work it did not complete in the original contract, which
was $14, 351.00. Id. at 5. Port Vue sought
post-trial relief, which was denied. R.R. at 61a. The present
Arguments and Analysis
appeal,  Port Vue raises three arguments. First, it
contends that the four-year statute of limitations applicable
to breach of contract claims bars the Authority's claims.
Second, Port Vue contends that a 2008 consent order between
the parties released it from any future claims related to the
project. Third, Port Vue contends that the amount of damages
awarded to the Authority exceeded what it would have been
paid under the contract and, therefore, exceeded those
allowed by law.
response, the Authority argues that the trial court did not
err or abuse its discretion in concluding that the
Authority's claim was not barred by the statute of
limitations. Next, the Authority argues that this matter is
not barred by the consent order because that order involved a
separate nucleus of facts and did not release Port Vue from
the present claim. Finally, the Authority responds that the
trial court did not award damages in excess of those allowed
by law because the Authority is entitled to compensation for
all damages resulting from Port Vue's failure to fulfill
case was originally argued before a panel of three judges of
this Court. Subsequently, the Court issued an order directing
the parties to file supplemental briefs addressing: (1)
"[w]hether a sewer authority may invoke the doctrine of
nullum tempus occurit Regi ["time does not run
against the king"] to defeat an otherwise applicable
statute of limitations defense . . ." and whether the
Authority "acted in its governmental capacity to enforce
an obligation imposed by law"; and (2) "[w]hether
the statute of limitations begins to run upon occurrence of a
breach of contract or upon the discovery of the breach in all
types of contracts." Cmwlth. Ct. Order 8/7/18. The
matter was then argued before the Court en banc.
begin by addressing Port Vue's argument that the consent
order bars this action because it released Port Vue from any
future claims related to the project.
of background, in 2005, two property owners along Bevan Road,
William Roney and Gina Buzzard, filed suit against multiple
parties including Port Vue and the Authority, following land
subsidence events behind their homes in 2002 and 2003 related
to the sewer line replacement. See Trial Court
Opinion at 4- 5; Consent Order ¶¶ 1 & 3, R.R.
at 23a-24a. The lawsuit was resolved by a settlement
agreement, wherein the Authority agreed to release Port Vue
from any claim or cause of action related to the litigation.
See R.R. at 23a-24a. Port Vue contends that,
"[b]ut for the contract between [it] and the Authority
to perform pipe bursting on the hillside below Bevan Road
[it] would not have been involved in the above
litigation." Port Vue's Brief at 13.
Pennsylvania, a consent decree in an equity action is not
considered a legal determination by the courts but is an
agreement between the parties." Penn Township v.
Watts, 618 A.2d 1244, 1247 (Pa. Cmwlth. 1992).
"'It is in essence a contract binding the parties
thereto.'" Cecil Township v. Klements, 821
A.2d 670, 674 (Pa. Cmwlth. 2003) (quoting Commonwealth v.
Rozman, 309 A.2d 197 (Pa. Cmwlth. 1973)).
consent order provided that the parties to the agreement,
including Port Vue and the Authority, agreed to release and
discharge one another from all claims or damages
"arising from the slide or land subsidence occurring
behind the Roney and Buzzard residences in 2002 and 2003 and
including, but not limited to, any claim or cause of action
arising out of, or related to, these consolidated litigation
matters and it is so ORDERED." Consent Order ¶ 5,
R.R. at 24a-25a. Based on ...