R.J. Cummins, d/b/a Bob Cummins Constr. Co. v. Bradford Sanitary Auth. ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Robert J. Cummins, d/b/a Bob :
Cummins Construction Company :
:
v. :
:
Bradford Sanitary Authority, : No. 1000 C.D. 2019
Appellant :
:
Robert J. Cummins, d/b/a :
Bob Cummins Construction Company, :
Appellant :
:
v. :
: No. 1009 C.D. 2019
Bradford Sanitary Authority : Submitted: May 15, 2020
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: June 8, 2020
Bradford Sanitary Authority (Authority) appeals from the McKean
County Common Pleas Court’s (trial court) June 27, 2019 order denying its Motion
for Post-Trial Relief (Authority Motion). Robert J. Cummins d/b/a Bob Cummins
Construction Company (Cummins) also appeals from the trial court’s June 27, 2019
order denying in part Cummins’ Motion to Mold the Verdict for Interest, Penalty
Interest and Attorney’s Fees (Cummins Motion). The Authority presents four issues
for this Court’s review: (1) whether the trial court erred by finding that the
Authority’s Contract 2013-2 General Construction (Contract) was ambiguous,
thereby allowing Cummins to introduce expert testimony; (2) whether the trial court
erred by finding that the Authority acted in bad faith; (3) whether the trial court erred
by allowing the jury to decide Cummins’ change order claims; and (4) whether the
trial court erred by denying the Authority a new trial. Cummins presents two issues
for this Court’s review: (1) whether the trial court erred by denying Cummins penalty
interest; and (2) whether the trial court abused its discretion by denying Cummins the
balance of its attorney’s fees. After review, we reverse the trial court’s June 27, 2019
order denying the Authority’s Motion, and vacate the trial court’s June 27, 2019 order
denying, in part, Cummins’ Motion.
Background
The Authority owns and operates a wastewater treatment plant (Plant) in
Foster Township, McKean County, that serves the City of Bradford and other nearby
communities. When the Authority sought to conduct Wastewater Treatment Plan
Upgrades (Project), it retained Gannett Fleming, Inc. (GF) to provide engineering and
construction management services. See Reproduced Record (R.R.) at 1152a. Part of
the Project required the construction of concrete tanks containing sequencing batch
reactors (SBR)1 to treat sewage and other wastewater at the Plant.
In 2013, the Authority issued an Invitation for Bids (IFB) from
contractors for the Project that included the Contract and documents attached thereto
1
“A[n SBR] is a type of bioreactor used to remove sludge and other organic matter from
sewage in order to produce clean water for discharge.” Amici Br. at 3. More specifically,
[a]n SBR sequentially conducts each phase of the treatment of
wastewater in a single tank: filling the tank with untreated wastewater
(fill stage); reacting the untreated wastewater with diffused oxygen
(aeration stage); allowing the reacted wastewater to settle so solids
can fall to the bottom of the tank (settle stage); decanting the treated
water out of the tank (decant stage).
Authority Br. at 11-12.
2
and incorporated therein (Contract Documents).2 The IFB included a Project Manual
containing, inter alia, Instructions to Bidders and the Contract.3 Section 11393 of the
Project Manual contained the specifications for the SBR and its ancillary structures,
equipment and controls (SBR Specifications). See R.R. at 148a-171a. The Authority
described that GF’s design and the SBR Specifications were based on
a continuous-flow SBR manufactured by ABJ Sanitaire . . .
with four separate SBRs installed in 4 adjacent, contiguous
tanks (Tanks 1-4) (thereby increasing the total volume of
wastewater that could be treated). Tanks 1 and 2 shared a
common ‘influent box’ where wastewater entered the SBR,
as did Tanks 3 and 4. ‘Influent’ is the untreated
wastewater, so the wastewater first entered the influent box.
Each tank had its own manual gate in the influent box, and
as designed the influent was to continuously and
intentionally flow over the gate, which generally remained
in the open position (unless a tank was being cleaned or
repaired). Influent entered the influent boxes through 20-
inch ductile iron influent pipes capable of supplying 13.88
million gallons per day (‘MGD’) of wastewater.
Authority Br. at 12 (record citations omitted); see also R.R. at 152a, 196a-198a.
GF’s drawings, included in the Contract Documents, were of the above-described
system. Notwithstanding, because the Project was competitively bid, in Section 1.05
2
“‘The statutory mandate of competitive bidding is grounded in sound public policy.’
Philips Bro[s.] Elec[.] Contractors, Inc. v. P[a.] T[pk.] Comm[’]n, 960 A.2d 941, 945 (Pa. Cmwlth.
2008). ‘[I]t is the taxpaying citizen who provides the necessary funds and whose interest must be
protected.’ Yohe [v. City of Lower Burrell,] 208 A.2d [847,] 850 [(Pa. 1965)].” Hanisco v. Twp. of
Warminster, 41 A.3d 116, 123 (Pa. Cmwlth. 2012).
The first round of bids were received in June 2013. However, the Project was rebid, and
rebids were received in September 2013. See R.R. at 632a-633a.
3
The Contract consisted of the documents set forth in Article 15.01 of the parties’
Agreement, see R.R. at 56a, and in Article 1.01.A.16 of the General Conditions (see R.R. at 317a),
which included, inter alia: Instructions to Bidders, Agreement, General Conditions, Supplementary
Conditions, Specifications, GF’s Contract Drawings, Addenda, Agreement Exhibits including the
Notice to Proceed and Cummins’ Bid, plus any Written Amendments, Work Change Directives and
Change Orders to be delivered on or after the Contract’s effective date (collectively, the Contract
Documents).
3
of the SBR Specifications, the Authority designated as “ACCEPTABLE
MANUFACTURERS”:
A. ABJ Sanitaire
B. Ashbrook Simon Hartley [(Ashbrook)]
C. Aqua Aerobics
R.R. at 152a.
Although the SBR Specifications authorized bidders to select Ashbrook
or Aqua Aerobics as acceptable manufacturers, Section 11.01.B of the Instructions to
Bidders (Section 11.01.B.3) stated:
1. Products named on the Contract Drawings, if any, and
products of manufacturers named first throughout the
Project Manual[,] constitute [GF’s] design.
2. Products of named manufacturers, other than the first
named manufacturer, appearing throughout the Project
Manual or on the Contract Drawings are accepted as
equal; however, the requirements of [Section] 6.03 of the
General Conditions regarding ‘equipment’ and
‘machinery’ shall apply.
3. If products of manufacturers other than those named first
differ from those named first in the Project Manual or on
the [Contract] Drawings to the extent that their proper
incorporation into the [work required by the Contract
Document (]Work[)4] requires changes to the structural,
piping, mechanical, electrical, instrumentation, or any
4
Section 1.01.A.42 of the General Conditions (DEFINED TERMS) defined “Work” as:
The entire completed construction, or the various separately
identifiable parts thereof required to be provided under the Contract
Documents. Work includes and is the result of performing or
providing all labor, services, and documentation necessary to produce
such construction, and furnishing, installing, and incorporating all
materials and equipment into such construction, all as required by the
Contract Documents.
R.R. at 320a.
4
other changes of whatsoever nature, the [c]ontractor
shall be responsible for such changes.
Section 11.01.B (R.R. at 137a).
Because it received a better deal on the SBR system from Ashbrook than
from ABJ Sanitaire, Cummins proposed to install an Ashbrook SBR, which is a true
sequencing (rather than continuous-flow) SBR system, in which only one of the four
SBR tanks fills at a time. Cummins proposed to install automatic gates to control
influent flow into a tank, rather than manual gates or a separate pipe with a valve into
each tank. Cummins was the winning bidder.
On February 12, 2014, the Authority and Cummins executed the
Contract. On March 11, 2014, GF issued Cummins a Notice to Proceed. See R.R. at
284a. Pursuant to Section 1330 of the Project Manual (Submittal Procedures), see
R.R. at 1672a-1675a, Cummins submitted the Ashbrook product data and shop
drawings reflecting changes Ashbrook proposed to GF’s design to incorporate the
Ashbrook SBR. GF determined, based on Cummins’ and Ashbrook’s assurances
during the bid and submittal processes, that the proposed Ashbrook SBR would meet
the SBR Specifications with regard to hydraulic and organic capacity, in particular,
that it could handle up to 13.88 MGD of influent. After several meetings and some
changes, GF marked Cummins’ final SBR shop drawings “Reviewed,” R.R. at 640a,
3405a, and Cummins installed the Ashbrook SBR at the Plant.5
After the SBR was put into operation in 2015, the parties discovered an
influent overflow problem with the SBR system, which Cummins claimed was due to
the 20-inch influent piping being too small to accommodate the Ashbrook system’s
sequencing. The Authority/GF disputed that the piping size was the cause, and
claimed that the overflow resulted from the automatic gates not controlling the flow,
5
Cummins argues that GF reviewed and approved the drawings, but GF only marked them
“Reviewed.” R.R. at 640a, 3405a.
5
and that a different piping configuration was necessary to accommodate the
Ashbrook SBR. Notwithstanding, neither Cummins nor Ashbrook had previously
identified to GF a need to increase the size of the 20-inch influent pipes in GF’s
design or to reconfigure the piping for the Ashbrook SBR to deliver the contractual
13.88 MGD of wastewater.6 The parties disagreed on the solution and the cost
thereof.
On or about December 22, 2015, GF certified that the Project was
substantially complete – with the exception of the SBRs and two other items. See
R.R. at 273a-282a. However, because the Authority believed Cummins’ performance
was contrary to the Contract’s provisions relative to the SBRs and other Project
components, it denied certain of Cummins’ change orders and withheld Cummins’
final payment to correct or complete Cummins’ work.
On March 17, 2016, Cummins filed a complaint in the trial court against
the Authority, alleging that the Authority breached the Contract, and sought recovery
of the retainage ($259,920.00), and costs it incurred to perform extra work required
by the change orders ($393,523.00), plus interest, penalty interest and attorney’s fees.
Cummins amended its complaint on June 29, 2016. On July 28, 2016, the Authority
6
Cummins encouraged Ashbrook to submit a Technical Proposal to GF to be included as an
Acceptable Manufacturer for the Project. See R.R. at 706a, 4211a-4215a. In Ashbrook’s July 23,
2013 Technical Proposal, it represented:
Ashbrook proposes the elimination of the pre-react walls, as they are
not required for the Ashbrook SBR process proposed for this
[P]roject. Ashbrook will require the use of [four] (4) 20” electrically
actuated plug valves to feed/isolate each SBR basin in lieu of the
influent distribution splitter box and the [] weir gates shown in . . . the
[P]roject plans.
R.R. at 705a. Without GF’s input, Ashbrook changed its proposal to install automated influent
control gates in lieu of GF’s designed manual gates and, in advance of the rebids, Ashbrook sent its
modified Technical Proposal to the potential bidders. See R.R. at 3530a-3535a. As a result, the
above language was not included in Cummins’ rebid, or in its submittal after it won the Contract.
See R.R. at 706a, 4211a-4213a.
6
filed its answer and new matter to Cummins’ amended complaint, and
counterclaimed regarding various alleged defective or incomplete work, as well as
liquidated damages for delay. On August 29, 2016, Cummins filed its reply to the
Authority’s new matter and counterclaim. On November 14, 2016, the trial court
ordered the parties to complete discovery by January 30, 2017. The parties
conducted extensive discovery and exchanged expert reports.
On October 17, 2017, the parties filed competing motions for partial
summary judgment. The Authority asked the trial court to interpret, as a matter of
law, that the Contract made Cummins solely responsible for SBR overflows and
barred certain of Cummins’ requested change orders. See R.R. at 7a-563a. Cummins
requested that the trial court enter judgment in its favor, as a matter of law, on the
Authority’s SBR-related claims and counterclaims. See R.R. at 564a-1052a. The
parties opposed one another’s motions. See R.R. at 1227a-2554a. On February 28,
2018, the trial court denied both partial summary judgment motions, see R.R. at
2555a-2560a, stating: “[I]t is apparent that the facts alleged in each cannot both be
simultaneously true, and there is much doubt in the record about what facts exist.”
R.R. at 2556a.
On October 31, 2017, Cummins filed a second amended complaint to
include additional change order claims. See R.R. at 1053a-1149a. On November 8,
2017, the Authority filed an answer and new matter to Cummins’ second amended
complaint, and asserted counterclaims against Cummins for costs the Authority
incurred as a result of Cummins’ purported failure to correct SBR deficiencies that
allowed untreated wastewater to overflow the SBR gates. See R.R. at 1150a-1226a.
On February 15, 2019, the Authority filed two motions in limine in the
trial court. In the first, the Authority requested the trial court to preclude Cummins’
expert James D. Hannon (Hannon) of Hannon Engineering, P.C. from expressing
opinions regarding Cummins’ and GF’s contractual responsibilities that are contrary
7
to the Contract’s express terms. See R.R. at 2604a-2676a. In the second, the
Authority sought to have the trial court find Cummins responsible for identifying and
making changes necessary to incorporate the Ashbrook SBR into GF’s design
pursuant to Section 11.01.B.3. See R.R. at 2677a-2717a. Cummins opposed the
motions in limine. See R.R. at 2760a-2806a.
On March 7, 2019, the trial court partially granted the Authority’s
motion in limine to exclude Hannon’s opinions, stating that no expert shall give
opinions regarding legal issues. See R.R. at 2819a-2820a. On the same date, the trial
court deferred a ruling on the Authority’s motion in limine concerning Contract
interpretation, stating that “the [trial c]ourt is without sufficient evidence to consider
the contract as a whole, which is a factor the [trial c]ourt must weigh in determining
ambiguity.” See R.R. at 2817a. The trial court further ruled that the matter “may be
appropriately decided after a jury verdict through post-trial motions[.]” R.R. at
2818a.
The trial court conducted a jury trial from March 11 to 20, 2019. On
March 15, 2019, at the end of Cummins’ case-in-chief, the Authority moved for non-
suit, arguing: (1) the Contract required judgment in the Authority’s favor on all of
Cummins’ SBR-related claims because Cummins was solely responsible for
identifying, modifying, making, and paying for all changes necessary to incorporate
the Ashbrook SBR into GF’s design; (2) the jury should not be permitted to decide,
under the Commonwealth Procurement Code,7 Cummins’ bad faith claims related to
the Authority’s payments and the $260,000.00 it retained; and (3) certain of
Cummins’ extra work/change order claims were barred by the Contract’s express
terms. See R.R. at 4393a-4409a. Cummins opposed the motion. See R.R. at 4409a-
4418a. The trial court denied the Authority’s non-suit motion. See R.R. at 4418a.
7
62 Pa.C.S. §§ 101-2311.
8
Also, after Cummins’ case-in-chief, and before commencement of the
Authority’s case-in-chief, the trial court denied the Authority’s motion in limine
concerning Contract interpretation, stating that the Contract, particularly Section
11.01.B.3 applicable to the SBR, was ambiguous as a matter of law. See R.R. at
2865a-2867a. The trial court explained:
[] [The Authority] contends that [Section 11.01.B.3] is plain
in its meaning and that a contractor is responsible for any
and all changes to incorporate a contractor’s item selections
in [GF’s] design. [Cummins] responds that while the
contractor may suggest changes in its bid to afford the
greatest savings to [the Authority], [GF] is ultimately
responsible for ensuring that the project design is a
functioning whole, at least in theory. Furthermore,
[Cummins] contends that a contractor is bound to construct
according to [GF’s] design and has no discretion absent
[GF’s] or [the Authority’s] approval.
[] After considering the whole contract and recognizing the
context of how public projects are bid and executed in
practice, including how this project specifically transpired,
it is apparent to the [trial c]ourt that a contractor’s work is
greatly informed, if not dictated, by the project engineer’s
design. Moreover, there is no apparent contract clause or
mechanism that allows for a contractor to re-design how a
portion of the project should be constructed (or for a
contractor to construct sua sponte) to address a needed
design change, even if a contractor identified design
changes necessary to incorporate alternate equipment or
items, as chosen by the contractor, that are in contradiction
with the project engineer’s basis of design. In light of these
findings of fact surrounding the [C]ontract, the [trial c]ourt
must determine that the [C]ontract is susceptible to more
than one reasonable interpretation.
R.R. at 2866a-2867a. The Authority renewed its non-suit motion at the close of all of
the evidence, which the trial court again denied. See R.R. at 5310a. Accordingly, the
trial court permitted the jury to decide Cummins’ contract-based claims. See R.R. at
5310a.
9
Over the Authority’s objection, the trial court instructed the jury that it
could interpret Section 11.01.B.3, explaining:
[Cummins] and the [Authority] disagree about the meaning
of some of [the] words and terms in the [C]ontract. Each
party must prove that its interpretation is correct. When
deciding which interpretation is correct, you should
consider the following. The parties intent at the time they
entered into the [C]ontract. The [C]ontract as a whole, so
all parts make sense when read together. The parties’
words and conduct after they entered into the [C]ontract.
The words’ plain and ordinary meaning unless you find that
the parties intended the words to have another meaning, or
if they are technical words, the meaning used by people in
that trade or business. Whether the parties intended to
exclude other similar items. Whether specific words or
terms control general words or terms.
....
If and only if you cannot determine what the parties
intended the disputed words or terms to mean based upon
the above considerations, then you may consider which
party drafted the [C]ontract and interpret the language
against that perianal [sic]. Again, this rule should be your
last resort in determining which party’s interpretation of the
[C]ontract is correct. Notwithstanding, when a contract is
clear and unequivocal, its meaning must be determined by
its contents alone. The fundamental rule in interpreting the
meaning of a [C]ontract is to ascertain and to give effect to
the intent of the [C]ontract of the parties.
See R.R. at 5413a-5415a.
On March 21, 2019, the jury rendered a verdict in favor of Cummins in
the amount of $488,243.24, consisting of the Contract balance that the Authority
withheld, along with a number of Cummins’ change order claims. See R.R. at 2868a-
2876a. The jury also found that the Authority acted in bad faith in retaining the
Contract balance. See R.R. at 2869a. In addition, the jury found against the
Authority on 19 of its 20 counterclaims. See R.R. at 2873a-2874a.
10
Facts
On March 29, 2019, Cummins filed the Cummins Motion, therein
seeking to have the trial court award the following additional amounts: (1) regular
interest in the amount of $112,548.00; (2) penalty interest in the amount of
$88,372.00; (3) attorney’s fees and costs in the amount of $449,107.55; and (4)
litigation expenses in the amount of $35,464.87. See R.R. at 2877a-2900a, 3056a-
3264a. The Authority opposed Cummins’ Motion. See R.R. at 2989a-3005a.
On April 1, 2019, the Authority filed the Authority Motion, see R.R. at
2901a-2988a, seeking judgment in its favor and against Cummins, claiming that the
trial court improperly determined that the Contract was ambiguous and erred by
allowing the jury to interpret the Contract provisions. See R.R. at 2946a-2960a. The
Authority also asserted that the trial court erred by permitting the jury to decide
Cummins’ bad faith claim, see R.R. at 2960a-2965a, and extra work/change order
claim. See R.R. at 2967a-2983a. Cummins opposed the Authority’s Motion. See
R.R. at 3006a-3055a.
On June 27, 2019, relative to Cummins’ Motion, the trial court entered
judgment upon the verdict for the amounts the jury awarded to Cummins, and
awarded regular interest and some of Cummins’ requested attorney’s fees, but denied
Cummins’ request for penalty interest. See Authority Br. App. B. By separate June
27, 2019 order, the trial court denied the Authority’s Motion.8 See Authority Br.
App. A.
On July 23, 2019, the Authority appealed to this Court.9 See Pa.
Cmwlth. No. 1000 C.D. 2019. On July 25, 2019, Cummins filed a cross-appeal in
this Court. See Pa. Cmwlth. No. 1009 C.D. 2019. On July 29 and August 5, 2019,
8
Notably, the trial court’s order did not address the challenged change orders.
9
Also, on July 23, 2019, the McKean County Prothonotary issued a Notice of Entry of
Judgment against the Authority in the amount of $857,743.14. See R.R. at 5468a.
11
respectively, the trial court directed the parties to file Statements of Errors
Complained of on Appeal pursuant to Pennsylvania Rule of Appellate Procedure
(Rule) 1925(b) (1925(b) Statement). On August 16 and 23, 2019, respectively, the
parties filed their Rule 1925(b) Statements. See R.R. at 5469a-5480a. On October
15, 2019, the trial court issued its opinion pursuant to Rule 1925(a) (1925(a)
Opinion). See R.R. at 5481a-5527a. On October 21, 2019, this Court consolidated
the appeals.10 On January 3, 2020, the American Council of Engineering Companies
of Pennsylvania and GF filed an Amici Curiae brief.
Discussion
1. Authority’s Motion
In its Motion, the Authority sought judgment notwithstanding the verdict
(JNOV) or a new trial based on the trial court’s interpretation that the Contract was
ambiguous.
a. SBR
The Authority argued that the trial court should have determined as a
matter of law that the Contract placed sole responsibility on Cummins for defective
system performance related to Cummins’ Ashbrook SBR and, by failing to do so, the
trial court erred by allowing the jury to interpret the Contract language based on
extrinsic evidence.
“Under [this Court’s] applicable standard of review, we will reverse a
trial court’s denial of a motion for JNOV or a new trial only if we find an abuse of
discretion or an error of law that controlled the outcome of the case.” Walnut St.
Assocs., Inc. v. Brokerage Concepts, Inc., 982 A.2d 94, 97 (Pa. Super. 2009), aff’d,
10
The Authority is the designated appellant.
12
20 A.3d 468 (Pa. 2011). The crux of the Authority’s appeal is that the trial court
improperly determined that the Contract was ambiguous. “[T]he question of whether
a contract is ambiguous is a question of law.” Kripp v. Kripp, 849 A.2d 1159, 1164
n.5 (Pa. 2004); see also PBS Coals, Inc. v. Dep’t of Transp., 206 A.3d 1201 (Pa.
Cmwlth. 2019).11 “When, as here, the issue raised on appeal presents a question of
law, [this Court’s] standard of review is de novo and our scope of review is plenary.”
Walnut St. Assocs., Inc., 982 A.2d at 97. “Thus, ‘we need not defer to the
conclusions of the trial court and are free to draw our own inferences.’” PBS Coals,
Inc., 206 A.3d at 1210 (quoting Sw. Energy Prod. Co. v. Forest Res., LLC, 83 A.3d
177, 187 (Pa. Super. 2013)).
The Pennsylvania Supreme Court has explained:
It is [] well established that under the law of contracts, in
interpreting an agreement, the court must ascertain the
intent of the parties.
In cases of a written contract, the intent of the parties is the
writing itself. If left undefined, the words of a contract are
to be given their ordinary meaning. When the terms of a
contract are clear and unambiguous, the intent of the parties
is to be ascertained from the document itself. When,
however, an ambiguity exists, parole evidence is admissible
to explain or clarify or resolve the ambiguity, irrespective of
whether the ambiguity is patent, created by the language of
the instrument, or latent, created by extrinsic or collateral
circumstances. A contract is ambiguous if it is reasonably
susceptible of different constructions and capable of being
understood in more than one sense. While unambiguous
contracts are interpreted by the court as a matter of law,
ambiguous writings are interpreted by the finder of fact.
Kripp, 849 A.2d at 1163 (citations omitted). “The fact that the parties do not agree
upon the proper interpretation does not necessarily render the contract ambiguous.”
11
Appeal granted in part, 218 A.3d 373 (Pa. 2019) (Table).
13
Parshall v. Parshall, 560 A.2d 207, 211 (Pa. Super. 1989) (quoting Vogel v. Berkley,
511 A.2d 878, 881 (Pa. Super. 1986)).
Here, the trial court concluded that the “[C]ontract was ambiguous[,]”
Trial Ct. June 27, 2019 Op. at 2 (R.R. at 5495a), based on “the [C]ontract clause most
exemplary of the dispute,”12 Trial Ct. June 27, 2019 Op. at 4 (R.R. at 5497a), Section
11.01.B.3, which stated:
If products of manufacturers other than those named first
differ from those named first in the Project Manual or on
the [Contract] Drawings to the extent that their proper
incorporation into the Work requires changes to the
structural, piping, mechanical, electrical,
instrumentation, or any other changes of whatsoever
nature, the [c]ontractor shall be responsible for such
changes.
Section 11.01.B.3 (R.R. at 137a). The parties do not dispute that ABJ Sanitaire was a
manufacturer “named first in the Project Manual or on the [Contract] Drawings[,]” and
that Ashbrook was a manufacturer “other than [the one] named first in the Project
Manual or on the [Contract] Drawings.” Id. (emphasis added). Therefore, Section
11.01.B.3 mandated that “to the extent that incorporation [of the Ashbrook SBR] into
[GF’s design] require[d] changes to the structur[e], piping, mechanic[s] . . . or any other
changes whatsoever, [Cummins] shall be responsible for such changes.” Id.The parties also agree that changes were necessary to incorporate the
Ashbrook SBR into GF’s design because there were fundamental flow differences
between the Ashbrook system and the ABJ Sanitaire system. Cummins presented
12
Although the trial court added that Section 11.01.B.3 was “not the only [Contract] clause
in dispute,” Trial Ct. Op. at 4 (R.R. at 5497a), it was the only Contract clause the trial court
analyzed in reaching its conclusion that the entire Contract was ambiguous. In its 1925(a) Opinion,
the trial court stated: “[Section] 11.01.B.3 was the exemplary clause and was discussed in great
detail in the [trial c]ourt’s previous [o]rders[,] eliminating the need for reiteration [in the 1925(a)
Opinion].” Trial Ct. 1925(a) Op. at 4-5 (R.R. at 5484a-5485a). Accordingly, this Court’s review is
likewise limited herein to Section 11.01.B.3.
14
changes to GF in the shop drawing submittal process and GF reviewed them. The
dispute arose after the overflow problem. The parties disagreed about whether GF or
Cummins was responsible for identifying that the 20-inch influent pipe in GF’s
design was undersized for the Ashbrook system. The Authority interpreted Section
11.01.B.3 to mean that Cummins was required to identify, make and pay for all changes
necessary to incorporate the Ashbrook SBR into GF’s design. Cummins interpreted
Section 11.01.B.3 such that, although it was required to make and pay for changes
necessary to incorporate its Ashbrook SBR, it was not liable for the overflow issues or
the fix because GF was responsible during the shop drawing submittal process to ensure
that the SBR system worked as a functioning whole, regardless of which SBR
manufacturer was used.
Because this Court’s review of whether the trial court erred turns on
whether Section 11.01.B.3 is ambiguous, we must first examine the Contract to interpret
the parties’ intent.13 The Contract consisted, inter alia, of the following Contract
Documents: Instructions to Bidders, the Agreement, General Conditions, Contract
Drawings, and SBR Specifications. See Section 15.01 of the Agreement (CONTRACT
DOCUMENTS) (R.R. at 56a), Section 1.01.A.16 of the General Conditions (DEFINED
TERMS/CONTRACT DOCUMENTS) (R.R. at 317a).
According to the Contract, as part of the bid process, Cummins made
assurances that it carefully reviewed and understood the Work, including GF’s basis
of design as incorporated into GF’s Contract Drawings and the SBR Specifications.14
13
For clarity, this Court replaced Contract references to “OWNER” with “the Authority,”
references to “ENGINEER” with “GF,” and references to “CONTRACTOR” with “Cummins.”
14
Section 1.01.A.42 of the General Conditions (DEFINED TERMS) defined “Specifications”
as
[t]hat part of the Contract Documents consisting of written technical
descriptions of materials, equipment, systems, standards, and
workmanship as applied to the Work, and certain administrative
details applicable thereto. The arrangement, style and format of the
15
Section 11.01.B.1 of the Instructions to Bidders explained: “Products named on the
Contract Drawings, if any, and products of manufacturers named first throughout
the Project Manual[,] constitute [GF’s] design.” R.R. at 137a (emphasis added).
Generally, Section 1.01 of the SBR Specifications summarized that “[t]he work
specified . . . consists of providing the [SBR] equipment in the reinforced concrete
SBR tanks and all ancillary equipment and controls.” R.R. at 148a (emphasis
added). Again, Section 1.03 of the SBR Specifications detailed the system
description based on the ABJ Sanitaire SBR. See R.R. at 148a-150a. In Section 1.05
of the SBR Specifications, the Authority designated as “ACCEPTABLE
MANUFACTURERS”:15
A. ABJ Sanitaire
B. [Ashbrook]
C. Aqua Aerobics
Specifications is solely for convenience; and does not constitute
segregation of the Work for subcontracts, products, or labor, nor does
it control the extent of Work to be performed by any trade.
R.R. at 319a.
15
Section 1.02.A.1 of the General Conditions (TERMINOLOGY) declared:
Whenever in the Contract Documents the terms ‘as allowed,’ ‘as
approved,’ or terms of like effect or import are used, or the adjectives
‘reasonable,’ ‘suitable,’ ‘acceptable,’ ‘proper,’ ‘satisfactory,’ or
adjectives of like effect or import are used to describe an action or
determination of [GF] as to the Work, it is intended that such action
or determination will be solely to evaluate, in general, the
completed Work for compliance with the requirements of and
information in the Contract Documents and conformance with
the design concept of the completed [P]roject as a functioning
whole as shown or indicated in the Contract Documents. The use
of any such term or adjective does not create any duty or authority
by [GF] to supervise or direct the performance of the Work or
any duty or authority to undertake responsibility contrary to . . .
any other provision of the Contract Documents.
R.R. at 321a (emphasis added).
16
R.R. at 152a. However, Section 1.04.D of the SBR Specifications cautioned: “The
naming of a manufacturer in this Specification Section is not an indication that
the manufacturer’s standard equipment is acceptable in lieu of the specified
component features. Naming is only an indication that the manufacturer may
have the capability of engineering and supplying a system as specified.” R.R. at
151a (emphasis added).
Section 1.01 of the Agreement (WORK) represented: “[Cummins] shall
complete all Work as specified or indicated in the Contract Documents. The
Work is generally described as follows: “[Cummins] shall at its sole expense furnish
all labor, . . . materials, supplies, equipment, . . . and all things necessary or proper
for, and to perform all work necessary or incidental to, and perform all other
obligations imposed by this Contract for [the Project].”16 R.R. at 50a (emphasis
added).
16
Section 1.02 of the General Conditions (TERMINOLOGY) declared:
D. Furnish, Install, Perform, and Provide:
1. The word ‘furnish,’ when used in connection with
services, materials, or equipment, shall mean to supply and
deliver said services, materials, equipment to the Site . . .
ready for use or installation.
2. The word ‘install,’ when used in connection with services,
materials, or equipment, shall mean to put into use including
all necessary hook-ups, connections, and testing; and/or
place in final position said services, materials, or equipment
complete and ready for its intended use.
3. The words ‘perform’ or ‘provide,’ when used in
connection with services, materials, or equipment, shall
mean to furnish and install said services, materials, or
equipment complete and ready for its intended use.
4. When ‘furnish,’ ‘install,’ ‘perform,’ or ‘provide’ is not
used in connection with services, materials, or equipment in
a context clearly requiring an obligation of [Cummins],
‘provide’ is implied.
17
Section 3.01 of the General Conditions (INTENT) declared, in relevant
part:
A. The Contract Documents are complementary; what is
called for by one is as binding as if called for by all.
B. It is the intent of the Contract Documents to describe
a functionally complete Project or part thereof, to be
constructed in accordance with the Contract
Documents.
1. Any labor, documentation, services, materials
or equipment that may reasonably be inferred
from the Contract Documents, or from prevailing
custom or trade usage as being required[17] to
produce the intended result, shall be provided,
whether or not specifically called for, at no
increase in the Contract [p]rice.
....
D. [Cummins] acknowledges that the Contract
Drawings and Specifications are intended only to show
the intent of the completed Project. [Cummins]
E. Unless stated otherwise in the Contract Documents, words or
phrases which have a well-known technical or construction
industry or trade meaning are used in the Contract Documents in
accordance with such recognized meaning.
R.R. at 321a-322a.
17
Section 9.10.I of the General Conditions (LIMITATIONS ON THE ENGINEER’S AUTHORITY
AND RESPONSIBILITIES) declares:
The words ‘required’, ‘prescribed’, ‘directed’, or ‘ordered’ by
[GF] or words of like import where used in these Contract Documents
shall have the meaning only of interpreting the Contract Documents,
directing notice to or attention of the materials, and finished results
for conformity to and compliance with the Contract Drawings; and or
not intended or implied as any directions, instructions, or
superintendence of [Cummins’] methods of construction; or use
of equipment, . . . ; or acceptance of liability therefore [sic]; by
[the Authority] or [GF].
R.R. at 369a.
18
represents that it is qualified to construct the Work as
depicted in the Contract Documents; and to determine its
own means, methods, techniques, sequences, and
procedures. To the extent that means, methods,
techniques, sequences, and procedures are identified in the
Contract Documents; [Cummins] is required to
independently evaluate those means, methods,
techniques, sequences, and procedures for the purpose
of determining whether the means, methods, techniques,
sequences, and procedures depicted in the Contract
Documents are adequate to construct the Work.
[Cummins] further represents that it has based its bid upon
its own determination of the appropriate means, methods,
techniques, sequences, and procedures required to construct
the Contract Work.
R.R. at 324a-325a (emphasis added).
Accordingly, Section 4.06.A. of the Instructions to Bidders
(EXAMINATION OF BIDDING DOCUMENTS AND THE SITE) also stated, in pertinent part:
Before submitting a Bid, it is the responsibility of each
Bidder to do the following:
1. Examine and carefully study the Bidding
Documents,[18] including any Addenda and the other related
data identified in the Bidding Documents.
....
4. Determine the means and methods the Bidder proposes to
use to construct the Work consistent with the Contract
Documents.
....
9. Correlate the information known to the Bidder,
information and observations obtained from visits to the
Site, reports and drawings identified in the Bidding
Documents, and all additional examinations, investigations,
18
According to Section 1.01.A.5 of the General Conditions (DEFINED TERMS), the Bidding
Documents consisted of: “The Bidding Requirements, proposed Contract Documents current at the
time of the Bid, Resource Drawings, and all Addenda issued prior to opening of Bids.” R.R. at
316a (emphasis added).
19
explorations, tests, studies, and data with the Bidding
Documents.
....
11. Promptly give [GF] written notice of all conflicts,
errors, ambiguities, or discrepancies that the Bidder
discovers in the Bidding Documents; and confirm that the
written resolution thereof by [GF] is acceptable to Bidder.
12. Determine that the Bidding Documents are generally
sufficient to indicate and convey an understanding of all
terms and conditions for the performance of the Work.
R.R. at 132a-133a (emphasis added); see also Section 4.10.A of the Instructions to
Bidders (ADEQUACY OF BIDDING DOCUMENTS), R.R. at 134a. Section 7.01 of the
Instructions to Bidders (QUESTIONS, INTERPRETATIONS, AND CLARIFICATIONS)
reiterated that “[a]ll questions about the meaning or intent of the Bidding Documents
shall be submitted to [GF] in writing . . . .” R.R. at 135a.
By signing the Agreement, Cummins repeated its understanding.
Section 7.01 of the Agreement (CONTRACTOR REPRESENTATIONS) provided, in
relevant part:
In order to induce [the Authority] to enter into this
Agreement[,] [Cummins] makes the following
representations:
A. [Cummins] has examined and carefully studied
the Contract Documents and the other related data
identified in the Bidding Documents.
....
G. [Cummins] has correlated the information known to
[Cummins], information and observations obtain[ed] from
visits to the Site, reports and drawings identified in the
Contract Documents, and all additional examinations,
investigations, explorations, tests, studies, and data with the
Contract Documents.
20
H. [Cummins] has given [GF] written notice of all
conflicts, errors, ambiguities, or discrepancies that
[Cummins] has discovered in the Contract Documents, and
the written resolution thereof by [GF] is acceptable to
[Cummins].
I. The Contract Documents are generally sufficient to
indicate and convey [an] understanding of all terms and
conditions for performance and furnishing of the Work.
R.R. at 54a (emphasis added).
Moreover, Section 2.05.A.1 of the General Conditions (BEFORE
STARTING CONSTRUCTION) (General Conditions (BEFORE)), required: “Before
undertaking each part of the Work, [Cummins] shall carefully study and compare
the Contract Documents and check and verify pertinent figures therein and
apply all field measurements.” R.R. at 323a (emphasis added). Section 2.05.C of
the General Conditions (BEFORE) repeated: “[Cummins] shall promptly report in
writing to [GF] any conflict, error, ambiguity, or discrepancy which [Cummins] may
discover; and shall obtain a written interpretation or clarification from [GF] before
proceeding with the Work affected thereby.” R.R. at 323a.
In Section 6.20 of the General Conditions (CONTRACTOR’S REVIEW OF
CONTRACT DOCUMENTS), Cummins again agreed:
A. Submission of a Bid and/or execution of the
Agreement by [Cummins] is a representation that
[Cummins] has thoroughly reviewed and evaluated the
Contract Documents to determine whether [Cummins]
needs clarification of the Contract Documents or
additional interpretation of the intent of the Contract
Documents to determine its Bid, and that it has requested
any needed clarification prior to submitting its [B]id.
B. [Cummins] represents that it has the knowledge,
skill, and expertise to perform the Work; that it
understands that it must make reasonable inferences to
determine portions of the Work not shown in the
Contract Documents that would be required for a
proper and complete Project, and it has included all costs
21
for such inferences in its Bid; and, that [Cummins] is not
relying on representations the Contract Documents or
by [the Authority] or [GF] for the purpose of
determining the cost, means, methods, sequences, or
procedures of performing the Work.
R.R. at 359a-360a (emphasis added).
By bidding with the Ashbrook SBR and entering into the Contract,
Cummins also understood and guaranteed its work in accordance with the Contract
Documents. Article 6 of the General Conditions (CONTRACTOR RESPONSIBILITIES), in
Section 6.01.A thereof directed that “[Cummins] shall be solely responsible for the
means, methods, techniques, sequences, and procedures of construction[,]” and
“[Cummins] shall be responsible to see that the completed Work complies
accurately with the Contract Documents.” R.R. at 341a (emphasis added).
According to Section 6.03.A: “Unless otherwise specified in the General
Requirements, [Cummins] shall provide and assume full responsibility for all
services, materials, equipment, labor . . . and all other facilities and incidentals
necessary for the performance, testing, start up, and completion of the Work.”
R.R. at 341a (emphasis added). By Section 6.19.A of the General Conditions
(CONTRACTOR’S GENERAL WARRANTY AND GUARANTEE), Cummins “warrant[ed]
and guarantee[d] to [the Authority] and [GF] . . . that all Work, materials,
equipment, and other Contract performances shall be in accordance with the
Contract Documents . . . .” R.R. at 358a (emphasis added).
In Section 10.01 of the Agreement (CONTRACTOR SHALL GUARANTEE
THE WORK), Cummins agreed:
[Cummins] shall guarantee its work, material and
equipment and the other Contract performances, and
shall remedy, without cost to [the Authority], any
defects which may develop therein during a period of one
(1) year from the date of the [Authority’s] acceptance of the
Certificate of Substantial Completion issued by [GF].
22
R.R. at 55a (emphasis added).
Finally, under the Contract, GF’s review of Cummins’ shop drawings
did not shift liability for the Ashbrook system’s functionality to GF. Notably, Section
1.01.A.17.a of the General Conditions declared: “Shop drawings and other
[Cummins’] submittals are not Contract Documents as so defined.” R.R. at 317a
(emphasis added); see also Section 1.01.A.40 of the General Conditions (R.R. at 319a).
Section 6.17.B.2 of the General Conditions (SUBMITTALS) provided:
The data shown in [Cummins’] [s]hop [d]rawings shall be
complete with respect to quantities, dimensions,
specified performance and design criteria, materials and
similar data to show [GF] the services, materials and
equipment [Cummins] proposes to provide, and to enable
[GF] to review the information for the limited purposes
set forth in Subparagraph 6.17.F.
R.R. at 356a (emphasis added). According to Section 6.17.E.2 of the General
Conditions, “[b]efore submitting each [s]hop [d]rawing, . . . [Cummins] shall have
determined and verified . . . [a]ll . . . quantities, dimensions, specified
performance criteria, installation requirements, materials, . . . and similar
information with respect thereto[,]” R.R. at 356a (emphasis added), “shall have
reviewed and coordinated each [s]hop [d]rawing . . . or other submittal . . . with
the requirements of the Work and the Contract Documents[,]” and shall have
supplied written verification that it satisfied those obligations. R.R. at 357a
(emphasis added).
Section 6.17.E.4.a of the General Conditions further specifies that, “[a]t
the time of each submittal, [Cummins] shall give [GF] specific written notice if
any [s]hop [d]rawing . . . or other submittal [] deviates from the requirements of
the Contract Documents,” which notice is separate from the submittal, plus
“[Cummins] shall cause a specific notation to be made on each [s]hop [d]rawing .
23
. . or other submittal.” R.R. at 357a (emphasis added). Notwithstanding, according
to Section 6.17.E.5:
[Cummins’] obligations are not changed by an approval
of any [s]hop [d]rawing or other submittal.
a. If [Cummins] intends that a change to the
Contract be made by any information in a [s]hop
[d]rawing, it shall affirmatively state that the [s]hop
[d]rawing depicts a change in the Work, and submit a
written notice in accordance with the procedure in
Subparagraph 6.17.E.4.
b. Notations, marks, or other comments by [GF] on a
submittal . . . do not change the Contract Documents.
R.R. at 357a (emphasis added).
Regarding GF’s review of shop drawings and submittals, Section 6.17.F
of the General Conditions prescribed that, even if GF had “approved” Cummins’
shop drawings:
1. [GF’s] review and approval of [s]hop [d]rawings .
. . and other submittals will be only for general
conformance to the information given in the Contract
Documents and compatibility with the design concept of
the completed Project as a functioning whole as
indicated by the Contract Documents.
....
b. [GF’s] review and approval shall not extend to
the means, methods, techniques, sequences, or
procedures of construction . . . .
c. The review and approval of a separate item as
such will not indicate approval of the assembly in
which the item functions.
2. [GF’s] review and approval of [s]hop [d]rawings
or other submittals shall not relieve [Cummins] from
responsibility for any variation from the requirements
of the Contract Documents.
24
R.R. at 357a-358a (emphasis added).
Section 6.19.C of the General Conditions (CONTRACTOR’S GENERAL
WARRANTY AND GUARANTEE) stated:
[Cummins’] obligation to perform and complete the
Work in accordance with the Contract Documents shall
be absolute; none of the following shall constitute an
acceptance of Work, materials, equipment, or other
Contract performances that are not in accordance with
the Contract Documents, or a release of [Cummins’]
warranty or guarantee or obligation to perform the Work in
accordance with the Contract Documents:
1. Observations by [GF].
2. Recommendation by [GF] or payment by [the
Authority] of any progress or final payment.
3. The issuance of a [C]ertificate of Substantial
Completion by [GF] or any payment related thereto by [the
Authority].
....
6. Any review and approval of a [s]hop [d]rawing or
[s]ample submittal, or the issuance of a notice of
acceptability by [GF].
R.R. at 359a (emphasis added).
Consequently, if Ashbrook failed to take into account the hydraulics and
the influent piping size for the SBR system, the Contract made Cummins responsible
therefor. Section 6.06.D of the General Conditions (CONCERNING SUPPLIERS AND
OTHERS), specified: “[Cummins] shall be fully responsible to [the Authority] and
[GF] for all acts and omissions of the . . . [s]uppliers, and other individuals or
entities performing or furnishing any of the Work just as [Cummins] is responsible
for [its] acts and omissions.” R.R. at 348a (emphasis added).
According to Section 9.10.C of the General Conditions (LIMITATIONS ON
THE ENGINEER’S AUTHORITY AND RESPONSIBILITIES), “[GF] will not be responsible
25
for [Cummins’] failure to perform the Work in accordance with the Contract
Documents.” R.R. at 368a (emphasis added). Section 9.10.D thereof stated: “[GF]
shall not be responsible for the acts or omissions of [Cummins], or of any . . .
[s]upplier, or any other individual or entity performing the Work.”19 R.R. at
368a (emphasis added).
Contrary to Cummins’ position, the Authority’s naming of Ashbrook as an
additional manufacturer did not make the Ashbrook SBR interchangeable with the ABJ
Sanitaire SBR around which the Project was designed. Nor did the Contract Documents
make any tacit guarantee that the Ashbrook SBR would fit and function without design
changes. Rather, this Court has explained:
It is well settled that where the government orders a
structure to be built, and in so doing prepares the
project’s specifications prescribing the character,
dimension, and location of the construction work,
the government implicitly warrants, nothing else
appearing, that if the specifications are complied
with, satisfactory performance will result.
If [a] court finds the cause of faulty construction to
be a deficiency in a design specification the
government would bear the risk, and consequently
be liable for reasonable costs incurred by the
plaintiff. Defective design specifications may
entitle a contractor to an equitable adjustment of the
contract for the reparative work required to build a
satisfactory end-product.
In fact, Section 9.10.H General Conditions (LIMITATIONS ON THE ENGINEER’S AUTHORITY
19
AND RESPONSIBILITIES) provided:
[GF] makes no representations or warranties to [Cummins], or [its] . .
. [s]uppliers . . . regarding the completeness, accuracy, the suitability
of any means or methods shown, or fitness of use of the plans,
estimates and Contract Documents; or that the Work can be
performed or constructed using normal and reasonable construction
methods.
R.R. at 368a.
26
But not all contract specifications are design
specifications - some are merely performance
specifications:
Design specifications explicitly state how the
contract is to be performed and permit no
deviations. Performance specifications, on the
other hand, specify the results to be obtained,
and leave it to the contractor to determine how
to achieve those results.
The government does not implicitly warrant
performance specifications for complete accuracy
or adequacy. Typical performance type
specifications set forth an objective or standard to
be achieved, and the successful bidder is expected
to exercise his ingenuity in achieving that objective
or standard of performance, selecting the means
and assuming a corresponding responsibility for
that selection.
A.G. Cullen Constr., Inc. v. State Sys. of Higher Educ., 898 A.2d 1145, 1157 (Pa.
Cmwlth. 2006) (bold emphasis added), disapproved of on other grounds by A. Scott
Enters., Inc. v. City of Allentown, 142 A.3d 779 (Pa. 2016) (quoting George Sollitt
Constr. Co. v. United States, 64 Fed. Cl. 229, 296-97 (2005) (emphasis added)
(citations and quotations omitted)).
This Court expounded:
In order to differentiate between design and performance
specifications, courts examine the level of discretion that
exists within a given specification; ‘discretion serves as the
touchstone for assessing the extent of implied warranty and
intended liability.’ Conner Bros. Constr. Co., Inc. v.
U[.]S[.], 65 Fed. Cl. 657, 685 (2005). A contractor
claiming a particular specification is ‘design’ rather than
‘performance’ must establish the specification ‘do[es] not
permit meaningful discretion . . . and the defective
specification [is] the cause of [the] injury.’ Id.Of particular import here, the mere identification of a
product or manufacturer does not create a design
specification. Where a government agency identifies a
27
particular product or manufacturer by name, but
permits substitution of ‘an approved equal,’ such a
specification is ‘performance’ in nature and, as a result,
carries no implied warranty. See W.G. Yates & Sons
Constr. Co., Inc. v. United States, 53 Fed. Cl. 83 (2002);
Florida Bd. of Regents v. Mycon Corp., 651 So.2d 149 (Fla.
Dist. Ct. App. 1995). See also Philip L. Bruner and Patrick
J. O’Connor, Jr., 3 Bruner & O’Connor on Constr[.] Law §
9:93 (2005).
A.G. Cullen Constr., Inc., 898 A.2d at 1157 (emphasis added).
“A contract is not ambiguous if the court can determine its meaning
without any guide other than a knowledge of the simple facts on which, from the
nature of language in general, its meaning depends[.]” State Highway & Bridge Auth.
v. E. J. Albrecht Co., 430 A.2d 328, 330 (Pa. Cmwlth. 1981) (quoting 8 P.L.E.
Contracts § 146 (1971)). Here, based solely on the Contract language, the meaning
of Section 11.01.B.3 is clear. Because Cummins’ bid offered an SBR other than that
for which GF prepared the Contract Drawings, Cummins was at all times solely
responsible for incorporating the Ashbrook SBR as specified in the Contract
Documents. In that context, Section 11.01.B.3 mandated: “[T]o the extent that [the
Ashbrook SBR’s] proper incorporation into the Work require[d] changes to the
structural, piping, mechanical, electrical, instrumentation, or any other changes of
whatsoever nature, [Cummins was] responsible for” exercising its (or Ashbrook’s)
ingenuity anticipating and identifying changes necessary to make the Ashbrook SBR
and the connecting systems work as required by the Contract Documents, designing
or at the very least making GF aware of such changes and/or working with GF to
incorporate them, and ultimately guaranteeing an operational SBR system in
accordance with the Contract Documents, all at Cummins’ expense. Section
11.01.B.3 (R.R. at 137a) (emphasis added). The Contract expressly shifted to the
contractor the responsibility and risk for “changes of whatsoever nature,” Section
28
11.01.B.3, for a contractor to incorporate a different SBR and/or equipment into GF’s
design.20 Thus, this Court concludes that Section 11.01.B.3 is not ambiguous.
To the extent that Section 11.01.B.3 was “the [C]ontract clause most
exemplary of the dispute,” Trial Ct. June 27, 2019 Op. at 4 (R.R. at 5497a), and this
Court has ruled, based upon its extensive review of the Contract Documents, that
Section 11.01.B.3 is not ambiguous, the trial court erred by concluding that the entire
Contract was ambiguous. The trial court should have determined as a matter of law,
before allowing Cummins to proceed with its case-in-chief and relying on Cummins’
evidence to reach its conclusion, that the Contract placed sole responsibility on
Cummins for defective system performance related to its Ashbrook SBR.21 By
failing to do so, the trial court erred by allowing the jury to interpret the Contract
language based on extrinsic evidence. Accordingly, the trial court’s June 27, 2019
order denying the Authority’s Motion must be reversed.
b. Change Orders/Extra Work
The Authority also argues that the trial court erred as a matter of law and
abused its discretion by allowing the jury to decide Cummins’ claims for certain
20
Otherwise, the Authority and, by extension, the public would have borne the cost to have
GF design in advance for at least three potential SBRs and the myriad of configurations and
connectivity that a bidder may have included in its bid. Because the Contract did not expressly
prohibit bids proposing SBRs other than the ABJ Sanitaire, Ashbrook and Aqua Aerobics, based on
Cummins’ logic, the Authority would have to have paid GF to design the system to accommodate
the configuration and operability of every potential SBR system. Cummins’ interpretation was not
intended in the Contract, and is against public policy, as it would not protect taxpayer funds.
Hanisco.
21
In light of this Court’s holding that Section 11.01.B.3 is unambiguous, the Authority’s
interpretation of Section 11.01.B.3 was reasonable. Therefore, the Authority’s withholding of the
Contract balance due to its belief that Cummins was contractually responsible for the gate
overflows was not in bad faith. Accordingly, this Court need not further analyze that issue in this
appeal.
29
change orders when those claims were barred by the Contract terms and undisputed
evidence.
In its Motion, the Authority claimed:
12. For the same reason, the [trial c]ourt erred in failing to
enter judgment on liability for [the Authority] on [the
Authority’s] own SBR-related claims. Because [Section]
11.01[.]B imposed sole contractual responsibility on
[Cummins], [Cummins] was liable for [the Authority’s]
SBR-related damages.
13. In addition, the [trial c]ourt erred as a matter of law in
permitting the jury to decide [Cummins’] extra work claims
relating to survey and control (No. 1), re-routing the sewer
line (No. 3), removal and replacement of the roof of the UV
plant to install the UV equipment (No. 19), and topsoil (No.
58) because the Contract Documents barred those claims
based on [Cummins’] prior execution of change orders.
(Ex. D-2 at pp. 186-187) ([Project Manual (]PM[)],
[General Conditions (]GC[)], 00700-64/65 at Art. 12.01(E),
(F))[.]
14. The [trial c]ourt erred as a matter of law in allowing the
jury to decide [Cummins’] extra work claim related to
communication (No. 30) as [Cummins] bore sole
contractual responsibility for the work described in the
claim. (Ex. P-3) (Agreement, Art. 1.01, 4.04(A), (B), 9.01);
(Ex. D-2) (PM, GC, 00700 at Art. 6.01(A); GC, 00700 at
Art. 6.03(A); GC, 00700 at Art. 6.06(E); GC, 00700 at Art.
6.13(A), (D), (E); GC, 00700 at Art. 6.19(C); GC, 00700 at
Art. 7.02(A); GC, 00700 at Art. 8.08(A))[.]
15. The [trial c]ourt erred as a matter of law in allowing the
jury to decide [Cummins’] extra work claims relating to
painting (Nos. 111-115) and additional painting because the
contract required [Cummins] to paint the exposed interior
concrete and masonry walls in Headworks No. 2 and
because [Cummins’] execution of change orders relating to
painting pipes barred [Cummins’] request for additional
compensation. (Ex. P-3) (Agreement, Art. 1.01(A)); (Ex.
D-2) (PM, § 01311 [] ¶1.03(D)(2)(g); § 09900 [] ¶¶1.09(B),
2.02(E)(1), (2), 3.02(J), 3.09(B), (C); GC, 00700 at Art.
3.01(A); GC, 00700 at Art. 12.01(E), (F))[.]
30
16. The [trial c]ourt erred as a matter of law in failing to
enter judgment for [the Authority] and in allowing the jury
to decide [Cummins’] extra work claim relating to
[Cummins’] pump entering the bar screen in Headworks
No. 1 (No. 41) because the Contract imposed sole liability
on [Cummins] for [Cummins’] use of its own equipment
and any damage associated with that use. (Ex. P-3)
(Agreement, Art. 9.01); (Ex. D-2) (PM, GC, 00700 at Art.
6.13(A), (D), (E); GC, 00700 at Art. 6.21(A))[.]
17. The [trial c]ourt erred as a matter of law in failing to
enter judgment for [the Authority] and in allowing the jury
to decide [Cummins’] extra work claim relating to the SBR
blower repair costs (Nos. 109, 116, 119, 120, 121) because
the Contract Documents imposed all liability on [Cummins]
for damage to equipment and because [Cummins] already
paid for that damage. (Ex. D-2) (PM, GC, 00700 at Art.
6.11(A), (B)(1)(a); GC, 00700 at Art. 10.05(A)(1), (F); GC,
00700 at Art. 12.01(G); § 01660 [] ¶¶1.02(A), 1.07)[.]
18. The [trial c]ourt erred as a matter of law in failing to
enter judgment for [the Authority] and in allowing the jury
to decide [Cummins’] claim for consequential damages
based on the sale of Florida real estate. [The Authority]
filed a pretrial motion in limine to preclude that evidence
and also sought judgment in its Nonsuit Motions.
[Cummins] argued that it was entitled to several hundred
thousand dollars, which sale was necessary (according to
Bob Cummins) as a result of the failure to release the
Contract balance. The jury initially awarded $75,000 on the
verdict sheet and then changed its verdict to $0. However,
that evidence reinforced [Cummins’] claim to the jury that
he was severely harmed by the non-release of the contract
balance and affected the outcome on both the bad faith
claim and the extra work claims, as evidenced by the jury’s
initial award of consequential damages. The evidence also
did not support a finding that [the Authority’s] withholding
of the Contract balance was the factual cause of the sale
inasmuch as [Cummins] acknowledged that he had another
major financial hardship relating to the East Branch Dam
project and purchasing equipment for his newly-formed
concrete company.
Authority Motion at 5-6 (R.R. at 2906a-2907a).
31
The trial court did not specifically address or mention its interpretation
of any Contract change order or extra work provisions or any ambiguity related
thereto in its June 27, 2019 order denying the Authority’s Motion. In its 1925(a)
Opinion, the trial court merely stated:
[The Authority’s] Twelfth, Thirteenth, Fourteenth, Fifteenth,
Sixteenth, Seventeenth, and Eighteenth points of appeal are
again all based upon contract interpretation. [This trial c]ourt
has ruled that the [C]ontract was ambiguous and it can
reasonably be inferred from the [j]ury’s verdict that [it]
agreed. [The Authority’s] arguments must now fail as they
have before.
Trial Ct. 1925(a) Op. at 9 (R.R. at 5489a). Because the trial court’s only basis for
denying the Authority’s Motion relative to the change order and extra work claims was
that the Contract was ambiguous, and this Court has ruled that the Contract was not
ambiguous, the trial court’s June 27, 2019 order denying the Authority’s Motion must
be reversed.
2. Cummins’ Motion
In light of this Court’s ruling that the trial court erred by denying the
Authority’s Motion, and allowing the matter to proceed to a jury trial on the basis of
contract ambiguity, the trial court’s order granting in part and denying in part Cummins’
Motion to mold the jury’s verdict for interest, penalty interest and attorney’s fees is
moot and must be vacated.
Conclusion
Based on the foregoing, the trial court’s June 27, 2019 order denying the
Authority’s Motion seeking JNOV or a new trial is reversed, and this matter is
remanded for the trial court to determine whether, in light of this Court’s ruling, any
issues remain. If there remain no outstanding issues, then the trial court is to grant
32
the Authority’s Motion for JNOV; however, if there are outstanding issues, then the
trial court is to grant the Authority’s Motion for a new trial. The trial court’s June 27,
2019 order denying in part Cummins’ Motion is vacated.
___________________________
ANNE E. COVEY, Judge
33
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Robert J. Cummins, d/b/a Bob :
Cummins Construction Company :
:
v. :
:
Bradford Sanitary Authority, : No. 1000 C.D. 2019
Appellant :
:
Robert J. Cummins, d/b/a Bob :
Cummins Construction Company, :
Appellant :
:
v. :
: No. 1009 C.D. 2019
Bradford Sanitary Authority :
ORDER
AND NOW, this 8th day of June, 2020, the McKean County Common
Pleas Court’s (trial court) June 27, 2019 order denying the Bradford Sanitary
Authority’s (Authority) Motion for Post-trial Relief is REVERSED, and this matter is
REMANDED to the trial court to determine whether, in light of this Court’s ruling,
the Authority shall be granted a judgment notwithstanding the verdict or a new trial.
The trial court’s June 27, 2019 order denying in part Robert J. Cummins
d/b/a Bob Cummins Construction Company’s Motion to Mold the Verdict for
Interest, Penalty Interest and Attorney’s Fees is VACATED.
Jurisdiction is relinquished.
___________________________
ANNE E. COVEY, Judge