Myco Mechanical, Inc. v. The City of York

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Myco Mechanical, Inc., :
Appellant :
: No. 590 C.D. 2021
v. : SUBMITTED: June 3, 2022
:
The City of York :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER FILED: October 12, 2022
Myco Mechanical, Inc. appeals from an order of the Court of Common
Pleas of York County granting the City of York’s motion for summary judgment in
its entirety. We affirm.
This matter originated with the conversion of the City’s Old City Hall
at 50 West King Street, York, Pennsylvania, into headquarters for the City’s police
department. A heating ventilation and air conditioning (HVAC) contractor, Myco
entered into a 2012 contract with the City for $1,043,000. (Dec. 5, 2014 Compl., ¶
5.) In order to coordinate the work and enable the various trades to work efficiently,
the City required Myco and the other prime contractors to agree to perform their
respective work within the time frames provided in the project schedule incorporated
into the bid documents. (Id., ¶¶ 6 and 7.) Myco’s work was dependent upon the
other trades’ timely completion of work as set forth in that schedule. (Id., ¶ 13.)
In November 2012, the City issued Myco a notice to proceed triggering
the start of the 400-day duration of Myco’s work. (Id., ¶ 10.) Myco mobilized for
work with a start date in late November 2012 but had to demobilize when
predecessor work was incomplete. (Id., ¶¶ 14 and 15.) Myco remobilized and
commenced work in January 2013. (Id., ¶ 16.) Ultimately, the City extended the
project schedule to reflect an August 2014 completion date for Myco’s work. (Id.,
¶ 11.) The delay from the originally scheduled completion date in December 2013
to the actual completion date in August 2014 resulted in an additional 129 days for
Myco. (Id., ¶ 20.) Myco averred that the delay was caused by the City’s failure to
timely coordinate the other prime contractors and to complete the necessary
precursor work. (Id., ¶¶ 21 and 22.) In addition, Myco alleged that the City delayed
the project by failing to have the site available for work at the initial stages and at
various times throughout, thereby preventing Myco from completing its work. (Id.,
¶ 24.) Myco alleged: “As a direct and proximate result of the construction delays
caused by [the City], Myco [] incurred additional costs to complete its work on the
[p]roject beyond those originally contemplated by its contract . . . .” (Id., ¶ 25.)
In December 2014, Myco commenced a civil action against the City
seeking $258,200.36 in direct damages, plus interest, penalties, and counsel fees.
The complaint included four counts: (1) breach of contract (City unilaterally
modified and extended time for completion of Myco’s work on the project); (2)
unjust enrichment (in the alternative); (3) breach of implied contract (in the
alternative); and (4) a claim under what is commonly called the Prompt Pay Act.1 In
February 2015, the City filed an answer and new matter therein asserting a
1
Sections 3931 through 3939 of the Commonwealth Procurement Code, 62 Pa.C.S. §§ 3931-
3939, are frequently referred to as the Prompt Pay Act.
2
counterclaim. Following extensive discovery, the City filed the September 2020
motion for summary judgment on liability that is presently at issue. The trial court
granted the City’s motion in its entirety and Myco’s appeal to this Court followed.2
The success of Myco’s case depends upon the applicability of the
exculpatory “no damages for delay” clause found in the parties’ contract, which
provides for an extension of time but not monetary consideration in the case of delay.
The clause, which the City maintains constitutes Myco’s sole remedy for a delay
claim, states:
§ 8.3.3 Delays and Extensions of Time. No payment or
compensation or claim for damages shall be made to the
Contractor as compensation for damages for any delays or
hindrances from any cause whatsoever in the progress of
the Work, notwithstanding whether such delays be
avoidable or unavoidable. The Contractor’s sole remedy
for delays shall be an EXTENSION OF TIME ONLY,
pursuant to and only in accordance with this Paragraph
8.3; such extension to be a period equivalent to the time
lost by reason of any and all of the aforesaid causes, as
determined by the Architect. In consideration for this
grant of a time extension, neither the Owner or Architect
shall be held responsible for any loss or damage or
increased costs sustained by the Contractor through any
delays caused by the Owner or Architect, or any other
Contractor, or on account of the aforesaid causes or any
other cause of delay. In the event the Contractor shall
choose to litigate this clause or issue and loses said
2
The entry of summary judgment is proper where the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.
Marks v. Tasman, 589 A.2d 205, 206 (Pa. 1991). The record must be viewed in the light most
favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material
fact must be resolved against the moving party. Our review of an order granting summary
judgment involves only an issue of law. Hence, our review is plenary. Bourgeois v. Snow Time,
Inc., 242 A.3d 637 (Pa. 2020).
3
litigation, the Contractor shall reimburse the Owner and
the Architect for their reasonable attorney’s and expert
witness fees and all other costs and expenses incurred by
them in the litigation.
(City’s Mot. for Summ. J., ¶ 8; Reproduced Record “R.R.” at 54a.)
Exculpatory provisions such as “no damages for delay” clauses are
disfavored under the law. Vinikoor v. Pedal Pa., Inc., 974 A.2d 1233, 1238 (Pa.
Cmwlth. 2009). Nonetheless, they are generally enforceable but “cannot be raised
as a defense where (1) there is an affirmative or positive interference by the owner
with the contractor’s work, or (2) there is a failure on the part of the owner to act on
some essential matter necessary to the prosecution of the work.” Guy M. Cooper,
Inc. v. E. Penn Sch. Dist., 903 A.2d 608, 613 (Pa. Cmwlth. 2006).
Courts have found sufficient affirmative or positive interference to
overcome the applicability of the “no damages for delay clause” where the owner
but not the contractor was aware of pre-bidding problems with availability, access,
or design. Id. at 613-14. For example, in Coatesville Contractors & Engineers, Inc.
v. Borough of Ridley Park, 506 A.2d 862 (Pa. 1986), the owner knew of a preexisting
access problem caused by an undrained lake. In Department of Highways v. S.J.
Groves & Sons Co., 343 A.2d 72 (Pa. Cmwlth. 1975), the owner knew that a
contractor would not have access to a portion of the construction site for a fourteen-
week period while a utility removed and replaced cable conduits.
Likewise, “an owner cannot insulate itself from a delay damage claim
where it fails to perform an essential contractual duty.” Guy M. Cooper, 903 A.2d
at 614. Where an owner responsible for contractor cooperation directed a contractor
to proceed but the contractor was prevented from accessing the work area for five
months due to another contractor, the Supreme Court found that the owner had failed
to perform an essential duty. Gasparini Excavating Co. v. Pa. Tpk. Comm’n, 187
4
A.2d 157 (Pa. 1963). Another such example occurred when an owner that assumed
responsibility for negotiating the relocation of a water line failed to do so
expeditiously thereby precluding access while others relocated the water line. State
Highway & Bridge Auth. (Penn-DOT) v. Gen. Asphalt Paving Co., 405 A.2d 1138(Pa. Cmwlth. 1979).
Here, Myco asserted four sources of delay that allegedly established
active interference or neglect on the City’s part sufficient to overcome the
enforceability of the “no damages for delay” clause: discovery of additional asbestos
requiring remediation; discovery of lead-based paint requiring abatement; delivery
delay of air handling and condenser units by Johnson Controls; and Verizon’s delay
in performing information technology “IT” work. Myco’s first argument, that
material facts remained disputed, somewhat overlaps its second argument, that
certain periods of delay should be attributable to the City and constitute a defense to
the “no damages for delay” clause. We elaborate on the alleged sources of delay
where warranted.
I.
Myco first argues that the trial court erred in granting the motion for
summary judgment where material facts remain disputed, especially those that Myco
raised in its response to the motion via the expert report from Damian Cassin of
Progressive Construction Management (PCM Report).3 (June 16, 2017 PCM Report
3
Pursuant to Pennsylvania Rule of Civil Procedure 1035.3, it was Myco’s burden to produce
facts arising from the summary judgment record to contradict the City’s motion for summary
judgment. Contrary to the City’s suggestion, expert reports are among the documents that a court
may consider as part of a motion for summary judgment. In fact, “the summary judgment standard
requires a trial court to view the non-moving party’s expert reports, and all reasonable inferences,
in a light most favorable to the non-moving party, and the trial court cannot ‘sua sponte assail
them’ if their conclusions are ‘sufficiently supported[.]’” Bourgeois, 242 A.3d at 652 (citation
omitted).
5
at 1-32; R.R. at 770a-801a.) In support, Myco cites six conclusions from the PCM
Report:
1. “[A]s noted in this report, the presence of
abatement impacted not only initial demolition and
subsequent progress, but regularly resulted in interference
with access.” R.R. [at] 777a.
2. [I]nability to proceed with employee relocation
due to the lack of an IT prime contract delayed the “critical
activity of Stair 2 Demolition on the third floor” for 39
days. R.R. [at] 777a.
3. [A]batement work was required[.]
“[P]redecessor activity required before demolition could
proceed.”
4. “[L]imited work had proceeded on the project
due to delays in relocation and on-going abatement.” R.R.
[at] 781a.
5. “[T]he Engineer requiring performance
specifications which his own basis of design equipment
manufacturer apparently could not provide” caused a
three-month delay[.] R.R. [at] 783a.
6. “[T]he IT feed, and subsequent interior main
service feed and system programming, installed by
Verizon will comprise the single largest delay to the
project.” R.R. [at] 776a.
(Myco’s Br. at 17-18.)
The first, third, and fourth conclusions from the PCM Report are
interrelated. Turning to the first conclusion, there is no dispute that abatement
impacted the initial demolition and subsequent progress, as well as interference with
access. As for the third conclusion, there is no dispute that abatement was required
before demolition could proceed. Turning to the fourth conclusion, that only limited
work on the project had proceeded due to delays in relocation and continuing
6
abatement, there similarly is no dispute that there was delay and that work could not
always proceed.
The second and sixth conclusions are also interrelated. The second
conclusion provides that the inability to proceed with employee relocation due to the
lack of an IT prime contract delayed the Stair 2 Demolition on the third floor for
thirty-nine days. The sixth conclusion states that “the IT feed, and subsequent
interior main service feed and system programming, installed by Verizon will
comprise the single largest delay to the project.” (R.R. at 776a.) However, the fact
that there were delays attributable to IT-related issues is not in dispute. The IT
contractor whose job it was to get the project ready for the utility networks,
Computer Support Services, Inc. (CSSI), was the entity that caused unanticipated
delay. As the summary judgment record reflects, this issue was communicated to
the bidders and incorporated into the contract. In addition, the contractors were
continuously updated. (See City’s Mot. For Summ. J., Ex. 101, “Project Manual,
Addendum No. 2 Bid Form”; Ex. 102, “Re-bid Addendum A”; Ex. 103, “Re-Bid
Addendum C”; Ex. 104, “Re-Bid Addendum E”; and Ex. 105, “Re-Bid Addendum
F”; R.R. at 621a-33a.) As for Verizon, the City gave Myco the notice to proceed in
November 2012 and the contract with Verizon did not start until June 2013, well
after the project started. (May 7, 2021 Trial Ct. Op. at 30.) In addition, Myco failed
to provide a document identifying IT problems with Verizon or any other entity
between November 20, 2012 and January 7, 2013.
The fifth conclusion, which pertains to the City’s contract with Johnson
Controls to provide two air handling units and one condensing unit, states that there
was a three-month delay as a result of “the Engineer [Uday Patel, architect Buchart
Horn’s employee] requiring performance specifications which his own basis of
7
design equipment manufacturer apparently could not provide[.]” (R.R. at 783a.)
However, the summary judgment record does not reflect undisputed material facts
pertaining to Johnson Controls. In determining that Myco failed to establish active
interference or neglect on the City’s part, the trial court emphasized the timeline of
when Myco alleged the delay occurred, when the design specifications for these
units were resolved, and when the units were shipped. Myco alleged delay for the
period of January 2014 to March 2014. However, all three units had shipped by July
2013. In addition, in many instances Uday Patel reviewed the specifications in a
shorter period of time than that required under the contract. (May 7, 2021 Trial Ct.
Op. at 29.) Consequently, “the design specifications for all three units were resolved,
and all three units had been shipped, well before the period of time in which Myco
alleges a delay occurred.” (Id.)
Moreover, the trial court noted Myco’s seeming acknowledgment that
it was paid the entire amount to which it was entitled. In support, the trial court cited
Myco’s answer to interrogatory No. 24 of the City’s second set of interrogatories:
Interrogatory No. 24.
Are you contending that you performed additional work in
the project—beyond what you bid for the work—that you
have not been paid for? If so, identify all such additional
unpaid work.
Answer:
No.
(May 7, 2021 Trial Ct. Op. at 4.)
Accordingly, the six assertions from the PCM Report do not indicate
that there are genuine issues of material fact that directly contradict the facts that the
8
trial court found dispositive regarding the City’s actions pertaining to the periods of
delay.
II.
Myco next argues that the City’s actions constituted active interference
or neglect sufficient to overcome any defense involving the “no damages for delay
clause” and, therefore, should have precluded the trial court’s entry of summary
judgment. To that end, Myco asserts that the delays in the project were caused by
the City’s failure to have the proposed site available for work at the start of the
project and at various times throughout thereby preventing Myco from performing
and completing its work in a timely and orderly fashion. As noted, the four alleged
sources of delay arguably attributable to the City are as follows: discovery of
additional asbestos requiring remediation; discovery of lead-based paint requiring
abatement; delivery delay of air handling and condenser units by Johnson Controls;
and Verizon’s delay in performing IT work. In addition, Myco contends that the
City waived any defense related to the “no damages for delay” clause by processing,
approving, and paying some delay claims during the course of the project.
In determining that Myco failed to sufficiently demonstrate either
active interference or neglect on the City’s part, the trial court copiously considered
the four alleged sources of delay. Turning first to asbestos, the trial court concluded
that there was no evidence in the summary judgment record upon which a reasonable
inference could be made that the City was hiding information from Myco or had not
disclosed information regarding asbestos-containing materials. To the contrary, the
trial court found that the City advised Myco that asbestos existed at the site and that
more could be discovered once the renovation and demolition commenced. In
addition, the trial court noted that an asbestos survey was included in the bid
9
specifications explaining that, even though a thorough inspection had been
conducted, more asbestos-containing materials could be found in a structure of the
general age and size of Old City Hall. (May 7, 2021 Trial Ct. Op. at 25.) As the
trial court concluded: “While the . . . record certainly reflects that there were issues
with additional asbestos being discovered throughout the [p]roject—and
specifically, when demolition and construction commenced . . . we find that Myco
has not demonstrated that the delay, which resulted from those issues, was due to or
caused by any active interference or neglect on the part of the City.” (Id. at 26.)
Turning to lead-based paint, the trial court similarly rejected Myco’s
contention that the City failed to recognize the presence of lead or the necessity for
remediation before commencing work. Noting Myco’s alleged period of delay
attributable to lead (November 20, 2012 to January 7, 2013),4 the trial court found
that the record revealed that lead was not discovered until February 26, 2013, well
after Myco’s alleged period of delay. In addition, the record reflected that once the
general contractor requested information regarding lead, the issue was promptly
addressed. (Id. at 28.)
As for Myco’s contention that the City knew about the lead-based paint
when the contracts were bid, Myco cites the deposition testimony of David Rudolph,
the City’s superintendent of the electrical bureau and building maintenance.
Rudolph testified that lead abatement work was originally to be performed when the
contracts were bid. (Apr. 27, 2016 Dep. of David Rudolph, Notes of Test. “N.T.” at
28-29; R.R. at 881a-82a.) In addition, he stated that lead abatement work added only
a week to the project schedule and that it was not a big issue. To that end, he testified
that the same company simultaneously did lead and asbestos abatement at the time
4
(Myco’s Oct. 16, 2019 Am. Resps. & Objs. to the City’s Fourth Set of Interrogs., ¶ 4(3);
R.R. at 595a.)
10
of remediation. (N.T. at 29-30; R.R. at 882a.) While it is true that he later provided
a supplemental affidavit stating that he was mistaken in answering that he was aware
of lead paint in the building before the bid process, he reiterated that lead abatement
was not a big issue and did not interfere with Myco’s work. (Jan. 12, 2021 Rudolph
Aff. at 1-2; Suppl. R.R. “S.R.R.” at 8b-9b.)
As for the Johnson Controls delay issue, our determination in Section I
of this opinion—that there were no undisputed material facts with regard to this
particular delay—applies here. Accordingly, we agree with the trial court that this
delay did not constitute active interference or neglect on the part of the City
sufficient to overcome the applicability of the “no damages for delay” clause.
Turning to the delay attributed to Verizon, Myco asserts that the City’s
knowledge of a contract dispute with Verizon before the project started and failure
to communicate that fact to the bidders constituted active interference sufficient to
preclude the applicability of the “no damages for delay” clause. In rejecting Myco’s
assertion, we refer to our determination in Section I concluding that Myco failed to
establish that any issues with Verizon constituted genuine issues of material fact that
directly contradicted the facts that the trial court found to be dispositive.
Accordingly, we agree with the trial court that Myco failed to establish active
interference on the City’s part with respect to any delays related to Verizon.
As for the City’s alleged waiver of the defense pertaining to the “no
damages for delay” clause, the City acknowledges that it paid out monies to certain
contractors due to unforeseen difficulties. (City’s Br. at 17.) However, the City
made the payments pursuant to a “concealed or unknown conditions” clause
providing:
§ 3.7.4 Concealed or Unknown Conditions. If the
Contractor encounters conditions at the site that are (1)
11
concealed physical conditions that differ materially from
those indicated in the Contract Documents or (2) unknown
physical conditions of an unusual nature, that differ
materially from those ordinarily found to exist and
generally recognized as inherent in construction activities
of the character provided for in the Contract Documents,
the Contractor shall promptly provide notice to the Owner
and the Architect before conditions are disturbed and in no
event later than 21 days after first observance of the
conditions. The Architect will promptly investigate such
conditions and, if the Architect determines that they differ
materially and cause an increase or decrease in the
Contractor’s cost of, or time required for, performance of
any part of the Work, will recommend an equitable
adjustment in the Contract Sum or Contract Time, or both.
If the Architect determines that the conditions at the site
are not materially different from those indicated in the
Contract Documents and that no change in the terms of the
Contract is justified, the Architect shall promptly notify
the Owner and Contractor in writing, stating the reasons.
If either party disputes the Architect’s determination or
recommendation, that party may proceed as provided in
Article 15.
(Contract, ¶ 3.7.4; R.R. at 858a-59a.)
The City’s payment pursuant to a “concealed or unknown conditions”
clause does not preclude the applicability of the “no damages for delay” clause. In
other words, the employment of one clause does not necessarily preclude the
applicability or constitute waiver of another clause. Notably, the two contractual
provisions pertain to different subjects and project delays may or may not be
attributable to concealed or unknown conditions. In addition, the entire contract
should be read as a whole, an interpretation must seek to give effect to all of its
provisions, and one provision should not be interpreted in a manner which results in
another portion being annulled. Commonwealth by Shapiro v. UPMC, 208 A.3d
898, 911 (Pa. 2019). As the trial court concluded, the issue before it was whether
12
the “no damages for delay clause” was a valid exculpatory provision and whether
Myco established an exception to overcoming the clause’s enforceability. (May 7,
2021 Trial Ct. Op. at 24; R.R. at 936a.)
III.
Finally, Myco maintains that the trial court erred in concluding that the
City met its burden of proving that the exculpatory provision was valid and
enforceable. As stated, these clauses are generally enforceable as long as the
recognized exceptions do not apply. Upon review of the summary judgment record,
we agree with the trial court that Myco failed to come forward with evidence
sufficient to contradict the City’s summary judgment motion. Accordingly, we
affirm.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita
Judge Fizzano Cannon did not participate in the decision for this case.
13
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Myco Mechanical, Inc., :
Appellant :
: No. 590 C.D. 2021
v. :
:
The City of York :
ORDER
AND NOW, this 12th day of October, 2022, the order of the Court of
Common Pleas of York County is hereby AFFIRMED.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita