Wheels Mechanical Contracting & Supplier, Inc. v. West Jefferson Hills School District

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Wheels Mechanical Contracting :
and Supplier, Inc. :
:
v. : No. 1803 C.D. 2016
:
The West Jefferson Hills :
School District and Nello :
Construction and Laborers' District :
Council of Western Pennsylvania, :
and Plumbers Local Union No. 27 :
:
Appeal of: West Jefferson Hills :
School District :
Wheels Mechanical Contracting :
and Supplier, Inc. and Plumbers :
Local Union No. 27 :
:
v. : No. 1827 C.D. 2016
:
The West Jefferson School District :
Nello Construction, and Laborers' :
District Council of Western :
Pennsylvania :
:
Appeal of: Laborers' District Council :
of Western Pennsylvania :
Wheels Mechanical Contracting :
and Supplier, Inc. :
:
v. : No. 1828 C.D. 2016
: Argued: February 6, 2017
The West Jefferson Hills School :
District and Nello Construction :
:
v. :
:
Laborers' District Council of Western :
Pennsylvania, and Plumbers Local :
Union No. 27 :
:
Appeal of: Nello Construction :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: February 28, 2017
In these consolidated appeals, the West Jefferson Hills School District
(District), Nello Construction (Nello) and Laborers’ District Council of Western
Pennsylvania (Laborers) (collectively, Appellants), appeal from an order of the
Court of Common Pleas of Allegheny County (trial court), which granted a
preliminary injunction in favor of Wheels Mechanical Contracting and Supplier,
Inc. (Wheels) and halted construction of a new high school.1 Significantly, the trial
court determined that the installation of storm sewers, sanitary sewers and water
service lines constituted “plumbing branch work,” as opposed to “site work,” that
should have been included in the plumbing prime contract and that District
violated Section 751 of the Public School Code of 1949 (School Code)2 and
Section 1 of the act commonly referred to as the Separations Act 3 by including this
work in the general construction prime contract. Appellants argue that the trial
1
See Pa. R.A.P. 311(a)(4) (orders granting injunctions, though interlocutory, are
appealable as of right).
2
Act of March 10, 1949, P.L. 30, as amended, 24 P.S. §7-751.
3
Act of May 1, 1913, P.L. 155, as amended, 71 P.S. §1618 (also classified as
53 P.S. §1003).
2
court erred or abused its discretion by granting the preliminary injunction where
the relief sought by Wheels was barred by the doctrine of laches; Wheels did not
meet the requisite elements for a preliminary injunction; and, the trial court lacked
subject matter jurisdiction. In addition, Nello claims the trial court erred or abused
its discretion by precluding it from presenting evidence on its cross-claim. Upon
determining Wheels’ action is barred by the doctrine of laches, we reverse the trial
court’s preliminary injunction order and remand for further proceedings.
I. Background
The Project is a $100-million construction project to build the Thomas
Jefferson High School (Project) in the Borough of West Jefferson Hills. The
Project’s location is a reclaimed strip mine, consisting of 160 acres.
In December 2015, the District solicited bids for electrical, plumbing,
heating and ventilating, and general construction. Of relevance here, the
specifications assigned all sanitary line, storm line, and water line installations
inside the building and up to five feet outside of the building to the plumbing prime
contractor. All site sanitary, site storm, and site waterline installation more than
five feet from the building was assigned to the general prime contractor as “site
utility” work because of the significant trenching and backfilling required. The
District received bids and awarded contracts in January 2016. The District
awarded the plumbing prime contract to Wheels and the general construction prime
contract to Nello.
On June 1, 2016, Wheels filed a complaint in equity as well as a
motion for a preliminary injunction against the District and Nello to stop certain
work on the Project. Wheels asserted the District violated Section 751 of the
3
School Code and Section 1 of the Separations Act by failing to include in the
plumbing prime contract all “plumbing branch work,” namely, work in connection
with the installation of sanitary sewer, storm sewer and water service lines (also
referred to as the “disputed work”). Laborers intervened in support of the District
and Nello, and Plumbers Union intervened in support of Wheels.
On October 26, 2016, after a three-day evidentiary hearing, the trial
court entered an order granting injunctive relief. Although the term plumbing is
not defined by the Separations Act or School Code, or by any case law interpreting
those statutes, the trial court found that the installation of sanitary sewers, storm
sewers and water service lines outside of a public building is “plumbing branch
work” that must be included in the contract awarded to the plumbing prime
contractor. In so finding, the trial court applied the definitions of plumbing work
contained in Section 201 of the International Plumbing Code, 2009 (IPC) edition.4
Trial Court Preliminary Injunction Order, 10/26/16, at 3, ¶3. The trial court further
observed that the Allegheny County Plumbing Code (ACPC), which incorporated
and adopted the IPC 2009, provides:
No person, other than a licensed master plumber, a
licensed journeyman plumber in the employ of a licensed
master plumber, a registered plumbing apprentice in the
employ of a licensed master plumber, or a bonafide
owner presently occupying an existing single family
building shall install, alter, or make connections with any
sewer, water, drain, or any pipe connected therewith; or
alter the location of any existing plumbing fixtures, water
distribution piping system or sewer drainage system.
4
The 2009 edition of the IPC is part of our Uniform Construction Code, 34 Pa. Code
§403.1, and is available at http://www.achd.net/plumbing/pubs/pdf/plumbingcode15.pdf (last
visited 2/10/17).
4
Id. (quoting Section 106.5.8 of the ACPC).5 Thus, the trial court determined that
the bid specifications and contracts awarded clearly violated Section 751 of the
School Code, and Section 1 of the Separations Act because the plumbing prime
contract did not include all plumbing work. On this basis, the trial court found
Wheels established a clear right to relief.
In addition, the trial court found that Wheels satisfied the other criteria
necessary for a preliminary injunction. Specifically, the trial court found that the
violation of the School Code and Separations Act constituted irreparable harm per
se, and that greater harm will result from denying the relief because the harm of the
violation will continue unabated. Granting the relief will restore the status quo by
reversing the violations of the School Code and the Separations Act and requiring
future compliance with the law. The issuance of a stay will not harm public
interest, which has a profound interest in having its elected bodies adhere to the
law.
Further, the trial court rejected Appellants’ laches argument. The trial
court explained Wheels was under no duty to recognize the illegality of the bid
and, at the time Wheels filed suit, “no actual work had commenced on the exterior
plumbing work.” Trial Court Preliminary Injunction Order at 5-6, ¶10.
Thus, the trial court granted Wheels’ motion for a preliminary
injunction and ordered:
(a) The School District is enjoined from including in
the scope of the prime general contractor’s work, any
plumbing work, including the installation of storm
sewers, sanitary sewers and water service lines, and shall
5
ACPC is available at https://law.resource.org/pub/us/code/ibr/icc.ipc.2009.pdf (last
visited 2/10/17).
5
include such work in the scope of work of the prime
plumbing contractor, in this matter, Wheels Mechanical;
(b) The School District is enjoined from permitting
any continued work on the exterior plumbing, including
the sanitary sewers, storm sewers and water lines by the
general construction prime contractor, or its sub-
contractor, Macson, as of the date of this Order;
(c) The School District shall direct its construction
manager to issue a change order transferring to the scope
of work of the prime plumbing contractor, Wheels
Mechanical, all unfinished exterior plumbing work
involved in the installation of the sanitary sewer, storm
sewer and water lines and further directing that payment
for such work shall be at the actual value of the work
remaining, except to the extent that Wheels Mechanical
is required by [sic] to employ plumbers to perform the
plumbing work, in which case Wheels shall be
reimbursed for labor costs in excess of the rate paid for
laborers.
(d) The School District is enjoined from awarding any
future construction contracts that do not comply with the
provisions of the Separations Act or the School Code, in
the future for awarding any contract that does not comply
with the provisions of the Separations Act and of the end
of §7-751 of the School Code; and
(e) Wheels Mechanical shall post a bond in the
amount of $25,000.00.
Trial Court Preliminary Injunction Order at 6-7.
The District filed a motion to stay with the trial court, which the trial
court denied. On October 27, 2016, the District filed a notice of appeal in this
Court (at No. 1803 C.D. 2016), which triggered the operation of an automatic
supersedeas pursuant to Rule 1736(b) of the Pennsylvania Rules of Appellate
Procedure because the District is a political subdivision. Thereafter, both Nello
6
and Laborers filed separate appeals (at Nos. 1828 C.D. 2016 and 1827 C.D. 2016,
respectively).
In response, Wheels filed an application to vacate the automatic
supersedeas pursuant to Pa. R.A.P. 1732, which the trial court granted on
November 7, 2016. The District then filed an emergency application to reinstate
the supersedeas, which this Court, after argument, granted in part and denied in
part upon determining the preliminary injunction order was overreaching, contrary
to the School Code and Separations Act, and did not maintain the status quo.
Specifically, we stayed application of subparts (a) and (c) of the trial court’s
preliminary injunction order, but upheld the preliminary injunction order in all
other respects pending disposition of the merits of this appeal.
Thereafter, the appeals were consolidated.6 The parties filed separate
briefs.7
II. Issues
On appeal,8 Appellants argue that the trial court erred or abused its
discretion in holding that the relief sought by Wheels was not barred by the
6
Commonwealth Court Order, 12/9/16.
7
Nello joins in the District’s brief, but separately briefed the issue of whether the trial
court abused its discretion by precluding Nello from presenting evidence in support of its
crossclaim.
8
Appellate review of a trial court's application or denial of the doctrine of laches is
limited to whether the trial court's findings are supported by the evidence “or predicated upon
erroneous inferences and deductions or errors of law.” See Hicks v. Saboe, 555 A.2d 1241, 1244
(Pa. 1989) (quoting Payne v. Kassab, 361 A.2d 263, 267 (Pa. 1976)). In addition, our review of
a preliminary injunction that is prohibitive or preventive in nature is “highly deferential.”
Summit Towne Centre, Inc. v. Shoe Show of Rocky Mount, Inc., 828 A.2d 995, 1000 (Pa. 2003).
“[W]e do not inquire into the merits of the controversy, but only examine the record to determine
if there were any apparently reasonable grounds for the action of the court below.” Id. (quoting
Roberts v. Board of Directors of School District, 341 A.2d 475, 478 (Pa. 1975)). However, a
(Footnote continued on next page…)
7
doctrine of laches. In addition, they claim the trial court erred by granting a
preliminary injunction where Wheels did not establish the requisite elements.
Namely, Appellants assert Wheels does not have a clear right to relief where
neither the Separations Act nor the School Code defines plumbing work and it is
industry custom and practice to include the installation of storm sewers, sanitary
sewers and water service lines in the site work contract of the general contractor.
The alleged violation of the School Code and Separations Act does not constitute
irreparable harm as any injury suffered by Wheels may be compensated by
monetary damages. Greater harm resulted from granting the injunction as it has
stalled the Project, to the detriment of Appellants, innocent subcontractors, and the
taxpaying public. The injunction is also not narrowly tailored to correct the
alleged wrong, requires the School District to violate public bidding laws, and does
not restore the status quo.
In addition, Laborers contends the trial court erred by failing to
address whether the court lacked subject matter jurisdiction over the underlying
claim because all parties in this lawsuit are bound by the jurisdictional dispute
provisions of the Project Labor Agreement, which provide for binding arbitration if
issues concerning work jurisdiction on the Project are not resolved. It further
claims that the trial court erred by failing to address whether Wheels’ requested
relief was preempted by Sections 8(b)(4)(D) and 10(k) of the National Labor
(continued…)
mandatory injunction, which commands the performance of some positive act, is subject to much
“greater scrutiny.” Mazzie v. Commonwealth, 432 A.2d 985, 988 (Pa. 1981).
8
Relations Act (NLRA).9 Lastly, Nello claims the trial court abused its discretion
by precluding it from presenting evidence in support of its cross-claim.
III. Discussion
A. Doctrine of Laches
First, Appellants assert that the trial court erred in determining that the
doctrine of laches did not apply. Laches bars relief when the complaining party is
guilty of want of due diligence in failing to promptly institute the action to the
prejudice of another. Appellants maintain that Wheels knew or should have known
that the disputed work was not included in the specifications when it bid on the
Project seven months earlier. The bid specifications were available to all bidders,
including Wheels, for inspection and review. The specifications assigned all
sanitary line, storm line, and water line installations inside the building and up to
five feet outside of the building to the plumbing prime contractor. All site sanitary,
site storm, and site waterline installation more than five feet from the building was
assigned to the general prime contractor. Wheels did not bid on the disputed work.
Wheels was well aware when it submitted its bid that the disputed work was part of
the general construction contract and not part of the plumbing contract. Yet,
Wheels failed to exercise due diligence by waiting months after construction was
underway to institute the action. Wheels’ delay has greatly prejudiced Appellants.
Appellants maintain that the trial court relied upon the false premise
that no work had commenced on the disputed work prior to the lawsuit, which
Wheels filed on June 1, 2016. However, the testimony and payment applications
entered into evidence clearly established that not only were materials purchased
and delivered before June 1, 2016, but significant work had also begun on the site
9
29 U.S.C. §§158(b)(4)(D) and 160(k).
9
utilities. Appellants explain that, typically, pay applications lag behind the work
performed by one or two months. By the time of the preliminary injunction
hearing, approximately 70 percent of the site storm sewer was completed and 50
percent of the site sanitary sewer was completed. Wheels brought the lawsuit too
late to return the parties to the status quo. As for Wheels’ acceleration claims,
evidence presented shows that, since the Project kick-off meeting in March 2016,
the disputed work was tentatively scheduled to commence in June 2016 and July
2016, and that some of the disputed work needed to be completed earlier to
coordinate with other site work being done.
“Laches is an equitable doctrine that bars relief when a complaining
party is guilty of want of due diligence in failing to promptly institute an action to
the prejudice of another.” Stilp v. Hafer, 718 A.2d 290, 292 (Pa. 1998); accord
Sprague v. Casey, 550 A.2d 184, 187 (Pa. 1988). The doctrine of laches bars
“prosecution of stale claims and is the practical application of the maxim that those
who sleep on their rights must awaken to the consequence that they have
disappeared.” Fulton v. Fulton, 106 A.3d 127, 131 (Pa. Super. 2014) (internal
quotations and citations removed). Whether laches applies is a question of law.
Id. However, applicability of the doctrine of laches is a factual determination
made on a case-by-case basis. Id.“For laches to apply, there must be a lack of due diligence in pursuing
a cause of action and resulting prejudice to the other party.” Sedor v. West Mifflin
Area School District, 713 A.2d 1222, 1225 (Pa. Cmwlth. 1998); accord Sprague,
550 A.2d at 187; White v. Township of Upper St. Clair, 968 A.2d 806, 811 (Pa.
Cmwlth. 2009), appeal denied, 995 A.2d 355 (Pa. 2010). “The test for due
diligence is not what a party knows, but what he might have known by the use of
10
information within his reach.” White, 968 A.2d at 811. “Prejudice may be found
where there has been some change in the condition or relations of the parties which
occurs during the period the complainant failed to act.” Stilp, 718 A.2d 290, 294
(Pa. 1998).
In analyzing whether a delay occurred in this case, the trial court
stated as follows:
The relief requested is not barred by laches. The
suggestion that [Wheels] had a duty to recognize the
illegality of the bid process and should be barred from
seeking relief because [it] did not notify the [] District of
their [sic] violation of the law is without merit. The []
District was in a far superior position to act in
compliance with the law and cannot complain[] that
[Wheels] failed to act to prevent their violation of law.
In addition, the evidence established that at the time this
action was filed, no actual work had commenced on the
exterior plumbing work and the only thing commenced
was the purchase and delivery of materials. The []
District's failure to abide by the provisions of the
Separations Act and the School Code means that it does
not come to court with clean hands.
Trial Court Preliminary Injunction Order at 5-6, ¶10.
We disagree with the trial court that Wheels was under no duty to
recognize its claims during the bid process. The District prepared and solicited
separate bids for the plumbing, heating, ventilation, and electrical work, as well
general construction. Reproduced Record (R.R.) at 1214a. The Project
specifications were advertised and available to Wheels and all other prospective
bidders on November 18, 2015. R.R. at 274a, 395a; 461a, 516a; 1214a, 1997a.
The Project specifications clearly assigned all sanitary line, storm line, and
waterline installations inside the building and up to five feet outside of the building
footprint to the plumbing prime contractor. R.R. at 1216a. The specifications
11
assigned all “site utilities,” which included site sanitary, site storm, and site
waterline installations more than five feet from the building, to the general prime
contractor. R.R. at 1215a. On December 18, 2015, there was a mandatory pre-bid
conference.
Bidders were permitted to submit questions regarding the
specifications until December 16, 2015. R.R. at 395a. Wheels asked whether the
prime contractor, which it acknowledged was responsible for installing the exterior
storm, sanitary, and water, should be responsible for all aspects from the main line
utility connection to the five foot building perimeter, including related tap/utility
fees. R.R. at 1289a. Wheels’ question led to Addendum No. 4, which provides:
It is the intent of the Site Civil drawings that all utility
work beyond 5' outside of the building be completed by
the General Contractor since significant trenching and
backfilling will be required. If a registered plumber is
required for any of the work (5' beyond the building), the
Site Contractor will be responsible for providing a
registered plumber.
R.R. at 67a; see R.R. at 417a.
Wheels prepared a bid for the plumbing work pursuant to the bid
specifications. Wheels did not bid on the disputed work – the site sanitary, site
storm or site waterline work more than five feet from the building – as this was
included in the general construction specifications. The sealed bids were due by
noon on January 12, 2016 and opened to the public immediately thereafter. R.R. at
394a-395a, 419a; 519a; 1997a. On January 27, 2016, the District awarded Wheels
the plumbing contract and Nello the general construction contract. R.R. at 274a,
461a; 1997a. The Project kicked off in early March 2016. R.R. at 461a; 1997a.
Wheels, as a bidder for the plumbing contract, was well aware when it
submitted its bid what work was part of the plumbing prime contract and what
12
work was in the general construction prime contract. The information was in its
reach. Yet, Wheels did not raise a bid protest during the bid process. Rather,
Wheels waited until June 1, 2016, to file this action, which was nearly seven
months after notice of the bid specifications, five months after the bids were
awarded, and four months after work on the Project commenced.
We have reviewed cases alleging violations of the Separations Act
and we are aware of no case where the party waited seven months after the
advertisement for bid to seek redress. Generally, the complainant filed an action
within two months of the advertisement for bid. See, e.g., Mechanical Contractors
Association of Eastern Pennsylvania, Inc. v. Department of Education, 934 A.2d
1262, 1266 (Pa. 2007) (declaratory judgment action challenging the bid was filed
two months after school district advertised the bid); Philips Brothers Electrical
Contractors, Inc. v. Valley Forge Sewer Authority, 999 A.2d 652, 653-54
(Pa. Cmwlth. 2010) (prospective bidder filed complaint in equity within one week
of the municipal authority's solicitation for bid); Mechanical Contractors
Association v. Senior Citizen Health Care Council, 674 A.2d 752, 753
(Pa. Cmwlth. 1996) (suit filed one month after bid was advertised); Housing
Authority of Pittsburgh v. Metz, 550 A.2d 599, 601 (Pa. Cmwlth. 1988), appeal
denied, 575 A.2d 571 (Pa. 1990) (owners of plumbing business filed an equity
action claiming violation of Separations Act less than one month after
advertisement for bid); see also Pennsylvania Associated Builders and
Contractors, Inc. v. Commonwealth Department of General Services, 932 A.2d
1271, 1276 (Pa. 2007) (contractors association filed an injunction action alleging a
request for proposals process violated the law prior to any actual solicitations for
bid); American Totalisator Co., Inc. v. Seligman, 414 A.2d 1037, 1039 (Pa. 1980)
13
(disappointed bidder suit filed one month after cost proposals were revealed and
less than two weeks after contract was awarded to other bidder); Pleasant Hills
Construction Co., Inc. v. Public Auditorium Authority of Pittsburgh, 782 A.2d 68,
76 (Pa. Cmwlth.), rev'd on other grounds, 784 A.2d 1277 (Pa. 2001) (a one-month
delay in filing a complaint after notice that a higher bid was accepted was not
excessive). Although application of the doctrine of laches does not depend upon
the mere lapse of time, but rather whether the complaining party is guilty of want
of due diligence in failing to institute his action to another's prejudice, see Sprague,
these cases illustrate that vigilance and swift action is critical in the context of the
competitive bidding process.
Here, Wheels knew the plumbing specifications did not include the
disputed work when it placed its bid, yet it never made an examination or inquiry
to discern whether such work should have been included in the plumbing contract
until long after the contracts were awarded and work on the Project commenced.
We conclude Wheels has not acted with due diligence in pursuing its claims.
Moreover, Wheels’ delay in filing suit prejudiced the District and
other contractors by critically delaying work on the entire Project after construction
began. At the time of suit, not only were contracts awarded and materials
purchased, but the Project construction was well underway. Although the parties
disagree as to whether any actual work had begun on the disputed work before
June 1, 2016, the record shows Nello billed the District for $164,851.20 for
materials purchased and work completed on the storm sewer. R.R. at 1712a.
Nello subcontracted with Macson to perform the disputed work. R.R. at 779a,
930a-931a.
14
Even if the disputed work had not begun, other phases of construction
had begun according to schedule. All phases of work must be sequenced and
coordinated with the overall construction to maintain progress. Wheels’ suit
disrupted the flow of construction, which will delay completion of the Project and
cause financial harm to the District, Nello, innocent subcontractors, and the
taxpaying public. The relative hardships are out of proportion because the cost to
the enjoined parties of obeying the injunction is far greater than any damage
incurred by Wheels by the continuation of the enjoined action. Moreover, at the
time Wheels filed suit, it was impossible to return the parties to the status quo. See
Tilghman v. Commonwealth, 366 A.2d 966, 968 (Pa. Cmwlth. 1976), decree aff'd,
374 A.2d 535 (Pa. 1977) (where it would be impossible to restore the status quo
and innocent parties are greatly prejudiced by the delay, the plaintiff's claim is
barred by laches). Such would not have occurred had Wheels filed its action
sooner as a bid protest.
Under the facts and circumstances, we conclude Wheels did not act
diligently in pursuing its claim, and its delay in initiating a legal action challenging
the bid specifications and contract awards prejudiced Appellants. Thus, the trial
court erred by failing to apply the doctrine of laches to preclude the equitable relief
sought by Wheels.
15
IV. Conclusion
Accordingly, we reverse the trial court’s preliminary injunction
order.10
MICHAEL H. WOJCIK, Judge
10
In light of this disposition, we need not address the remaining issues.
16
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Wheels Mechanical Contracting :
and Supplier, Inc. :
:
v. : No. 1803 C.D. 2016
:
The West Jefferson Hills :
School District and Nello :
Construction and Laborers' District :
Council of Western Pennsylvania, :
and Plumbers Local Union No. 27 :
:
Appeal of: West Jefferson Hills :
School District :
Wheels Mechanical Contracting :
and Supplier, Inc. and Plumbers :
Local Union No. 27 :
:
v. : No. 1827 C.D. 2016
:
The West Jefferson School District :
Nello Construction, and Laborers' :
District Council of Western :
Pennsylvania :
:
Appeal of: Laborers' District Council :
of Western Pennsylvania :
Wheels Mechanical Contracting :
and Supplier, Inc. :
:
v. : No. 1828 C.D. 2016
:
The West Jefferson Hills School :
District and Nello Construction :
:
v. :
:
Laborers' District Council of Western :
Pennsylvania, and Plumbers Local :
Union No. 27 :
:
Appeal of: Nello Construction :
ORDER
AND NOW, this 28th day of February, 2017, the order of the Court of
Common Pleas of Allegheny County, dated October 26, 2016, is REVERSED, and
this matter is REMANDED to the trial court for proceedings consistent with the
foregoing opinion.
__________________________________
MICHAEL H. WOJCIK, Judge
18