Mands Construction Co. v. Domus Inc.

J-A17033-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MANDS CONSTRUCTION COMPANY IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
DOMUS INC. AND PHILADELPHIA
REDEVELOPMENT AUTHORITY
Appellees No. 94 EDA 2015
Appeal from the Judgment Entered February 6, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): October Term, 2012 No. 001129
BEFORE: GANTMAN, P.J., BENDER, P.J.E., and OTT, J.
MEMORANDUM BY GANTMAN, P.J.: FILED JULY 29, 2015
Appellant, Mands Construction Company (“Mands”), appeals from the
judgment entered in the Philadelphia County Court of Common Pleas, in
favor of Appellee, Domus Inc. (“Domus”).1 We affirm.
The relevant facts and procedural history of this case are as follows.
The Board of Directors of Mount Vernon Manor, an apartment complex, hired
Domus as the contractor to renovate seventy-five (75) units within thirteen
(13) buildings. The contract was federally funded. Projects receiving federal
funds are subject to the Davis-Bacon Act (“DBA”). The DBA requires
employers to file certified payrolls, ensures wage standards are met, and
____________________________________________
1
The Philadelphia Redevelopment Authority (“PRA”) is not a party to this
appeal.
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limits the amount of hours employees can be required to work. Penalties for
violating the DBA include “debarment,” which would prevent Domus from
conducting future work on federally funded projects.
Domus hired Mands as the subcontractor to complete demolition work
on the property. Mands bid $300,000.00 for this work, and the parties
signed the contract on March 8, 2012. After Domus amended the contract
and removed a portion of the work, the total bid was $276,261.00.
The text of the contract between Domus and Mands incorporated the
DBA requirements. The contract also required the use of union labor.
Mands did not belong to a union, and hired a negotiator to arrange for
Mands to become a union company solely for this project. The negotiation
failed, so Domus and Mands amended the contract to arrange for Domus to
pay union benefits starting in week two while Mands continued to negotiate
with the union.
Mands began the job on September 6, 2012. On September 7, 2012,
a representative from the PRA visited the job site. The representative
interviewed each of the workers and reviewed the wages they should
receive. The representative also spoke with Gerald Washington, the
manager of this project and vice-president of operations for Mands,
regarding the prevailing rate of pay. Several employees of Mands
subsequently called the PRA and complained they were receiving $100.00
per day instead of the prevailing wage, which was $47.85 per hour. Mands
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terminated the complaining employees following these calls, allegedly for
other reasons.
After Domus learned of the PRA’s involvement, Domus contacted
Mands and asked for the certified payrolls. Domus sent Mands a letter on
September 13, 2012, warning Mands that Domus would terminate their
contract if Mands failed to follow the DBA standards. Mands did not turn
over any certified payrolls. Based on copies of the fronts of checks and sign-
in sheets Mands submitted, Thomas Pyle, the project manager for Domus,
estimated Mands’ labor costs for the project. Mr. Pyle calculated Mands
should have paid its employees $26,987.00 in wages for the 8% of the
project Mands had completed to date. The checks Mands submitted
reflected payment totaling only $8,965.60. On September 19, 2012, Domus
sent Mr. Washington a letter terminating Mands for cause, due to its failure
to comply with the DBA.
On October 9, 2012, Mands filed a complaint against Domus for
wrongful termination and a request for a preliminary injunction halting all
work on the project until Mands’ reinstatement as subcontractor, and for lost
profits. Domus filed an answer and a brief in opposition of the preliminary
injunction on October 23, 2012. On November 1, 2012, the court denied
Mands’ request for a preliminary injunction. Mands amended its complaint
on November 21, 2012, adding the PRA as a defendant, based on its alleged
lack of meaningful review when investigating the employee complaints.
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Mands amended the complaint a second time on December 27, 2012, and a
third time on February 4, 2013. On February 26, 2013, Mands and the PRA
stipulated Mands sought only a declaratory judgment that it did not violate
the DBA but sought no monetary damages from the PRA. On March 15,
2013, Domus filed a petition to compel arbitration. Mands filed an answer
on April 3, 2013. On April 23, 2013, the court denied the petition to compel
arbitration. The court dismissed the PRA from the case on June 25, 2014.
Dismissal of the PRA is not before us on appeal.
On August 25, 2014, the court held a non-jury trial. At trial, Mr.
Washington testified for Mands and claimed he had paid workers the
prevailing wage through Paychex, a payroll agency. He submitted copies of
the front of several checks as evidence. Mr. Washington testified to an
estimated profit between $140,000.00 and $150,000.00 on the project
based on Mands’ original bid of $300,000.00.
Mr. Pyle testified for Domus, stating Mands could not possibly have
made this profit, based on labor calculations done at the prevailing rate of
pay. Mr. Pyle’s calculations showed a labor cost alone of $230,000.00. He
also testified to dumpster costs of about $38,000.00, which Domus would
have deducted from the total contract. Mr. Pyle stated the remaining
$8,000.00 would likely have gone to expenses like gas and tools, leaving
Mands with no profit margin.
Following the trial, the court ordered the parties to submit proposed
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findings of fact and conclusions of law. The court found in favor of Domus
on October 27, 2014; the court issued Rule 236 notice on October 28, 2014.
On November 7, 2014, Mands timely filed a post-trial motion for a new trial.
Domus filed an answer on November 14, 2014, and on the same day, the
court denied Mands’ motion. On December 11, 2014, Mands filed a
premature notice of appeal with this Court. On February 6, 2015, the court
entered judgment in favor of Domus.2 The court did not order, and Mands
did not file, a concise statement of errors complained of on appeal pursuant
to Pa.R.A.P. 1925(b).
Mands raises two issues for our review:
WHETHER THE TRIAL COURT ABUSED ITS DISCRETION IN
CONCLUDING THAT [MANDS] WAS JUSTIFIABLY
TERMINATED ON SEPTEMBER 19, 2012 FOR VIOLATING
THE DAVIS-BACON ACT?
WHETHER THE TRIAL COURT ABUSED ITS DISCRETION
WHEN IT CONCLUDED THAT [MANDS] HAD NOT
____________________________________________
2
Ordinarily, an appeal properly lies from the entry of judgment, not from
the order denying post-trial motions. See generally Johnston the Florist,
Inc. v. TEDCO Constr. Corp., 657 A.2d 511, 516 (Pa.Super. 1995).
Nevertheless, a final judgment entered during the pendency of an appeal is
sufficient to perfect appellate jurisdiction. Drum v. Shaull Equipment and
Supply, Co., 787 A.2d 1050 (Pa.Super. 2001), appeal denied, 569 Pa. 693,
803 A.2d 735 (2002). Here, the court denied Mands’ post-trial motion on
November 14, 2014. Mands filed a notice of appeal on December 11, 2014,
prior to the entry of final judgment. The court entered final judgment on
February 6, 2015. Thus, Mands’ notice of appeal was actually premature
when filed, but it related forward to February 6, 2015, the date the final
judgment was entered. See Pa.R.A.P. 905(a) (stating notice of appeal shall
be treated as filed on day of entry). Hence, there are no jurisdictional
impediments to our review.
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DEMONSTRATED AND WAS NOT ENTITLED TO DAMAGES?
(Mands’ Brief at 4).
In its first issue, Mands argues that Domus terminated the contract
without sufficient evidence to demonstrate Mands’ violation of the DBA.
Mands claims the PRA, the entity responsible for investigating complaints of
improper wage payments, had made no conclusion regarding Mands’ alleged
violations of the DBA at the time of Mands’ termination. Mands contends
Domus knew the PRA was responsible for determining DBA violations and
that the PRA had not done so here. Mands submits that agents of Domus
admitted in their testimony they acted on allegations, without waiting for
Mands to submit all its paperwork. Mands asserts the trial court erroneously
relied on testimony referring to sign-in sheets and wage calculations when it
decided Domus was justified in firing Mands, because Domus did not have
this information at the time it terminated the contract.3
Additionally, Mands maintains that even if such information was
available, Mands presented evidence of distributed checks showing it paid
____________________________________________
3
Mands complains about the trial court’s alleged improper reliance on
testimony referring to sign-in sheets and wage calculations for the first time
on appeal. Consequently, this claim is waived. See Pa.R.A.P. 302(a)
(stating issues not raised in trial court are waived and cannot be raised for
first time on appeal); Commonwealth v. Charleston, 16 A.3d 505
(Pa.Super. 2011), appeal denied, 612 Pa. 696, 30 A.3d 486 (2011)
(explaining to preserve claim of error for appellate review, party must make
specific objection to alleged error before trial court in timely fashion and at
appropriate state of proceedings; failure to raise such objection results in
waiver of underlying issue on appeal).
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employees $47.85 per hour. Mands contends the employees complaining to
the PRA did so only in retaliation after Mands fired them for theft. Mands
also claims it presented testimony showing Domus orally modified the
original contract to permit Mands to begin work on the project without using
union labor. Mands asserts it fulfilled its duty to pay the prevailing wage
rates under the DBA, and consequently, no breach of contract occurred.
Mands concludes Domus was unjustified in terminating their contract.
In its second issue, Mands argues it demonstrated a lost profit of
$140,000.00 to 150,000.00 on the project. Mands contends Domus made
alterations subsequent to the signing of the contract to reduce Mands’
profits. Mands concludes it is entitled to expectation damages in the amount
of its anticipated profits.
In response to Mands’ first issue, Domus argues that, pursuant to the
contract, Mands had the responsibility to abide by the DBA. Domus
contends the contract incorporated DBA provisions such as submitting
certified payrolls, which Mands did not do. Domus asserts it repeatedly
requested certified payrolls from Mands, which Mands failed to submit.
Domus emphasizes it warned Mands in a September 13, 2012 letter that
Mands would be fired if it continued to flout the contract requirements.
Domus maintains it was forced to terminate Mands due to Mands’
noncompliance, where Mands’ actions put Domus at risk for debarment.
Domus also insists Mands failed to comply with the contract requirement to
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use union labor. Domus contests Mands’ allegations that Domus knew
Mands was using nonunion labor. Domus contends it took additional steps
to ensure Mands’ compliance with the contract, by modifying the contract to
ensure payment of union benefits. Domus claims Mands presented no
evidence of an oral modification to the contract. Domus submits Mands’
breach of the contract requirement for union labor was another sufficient
basis for Domus to terminate the contract. Domus concludes the trial court
correctly determined Mands violated the terms of the contract, and Domus
was justified in terminating Mands.
In response to Mands’ second issue, Domus argues the details of the
contract precluded any recovery for lost profits. Domus asserts Mr.
Washington provided no evidence to corroborate his testimony concerning
Mands’ alleged expected profits for the project. On the other hand, Domus
contends it supplied credible evidence to show the expenses involved in the
job done properly would have foreclosed Mands from making a profit.
Domus submits that if Mands paid the prevailing wage, which it was required
to do, Mands would not profit from the project. Domus concludes the trial
court correctly decided Mands was not entitled to lost profits. We agree with
Domus’ positions on both issues.
Our standard of review of a trial court’s denial of a motion for a new
trial is as follows:
We will reverse a trial court’s decision to deny a motion for
a new trial only if the trial court abused its discretion. We
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must review the court’s alleged mistake and determine
whether the court erred and, if so, whether the error
resulted in prejudice necessitating a new trial. If the
alleged mistake concerned an error of law, we will
scrutinize for legal error. Once we determine whether an
error occurred, we must then determine whether the trial
court abused its discretion in ruling on the request for a
new trial. An abuse of discretion exists when the trial
court has rendered a judgment that is manifestly
unreasonable, arbitrary, or capricious, has failed to apply
the law, or was motivated by partiality, prejudice, bias, or
ill will.
Capoferri v. Children’s Hosp. of Philadelphia, 893 A.2d 133, 136
(Pa.Super. 2006) (en banc), appeal denied, 591 Pa. 659, 916 A.2d 630
(2006) (quoting Stalsitz v. Allentown Hosp., 814 A.2d 766, 771
(Pa.Super. 2002), appeal denied, 578 Pa. 717, 854 A.2d 968 (2004))
(internal quotation marks omitted).
Contract interpretation is a question of law; therefore, this Court is not
bound by the trial court’s interpretation. Kraisinger v. Kraisinger, 928
A.2d 333, 339 (Pa.Super. 2007). “Our standard of review over questions of
law is de novo and to the extent necessary, the scope of our review is
plenary as the appellate court may review the entire record in making its
decision. However, we are bound by the trial court’s credibility
determinations.” Id. (quoting Stamerro v. Stamerro, 889 A.2d 1251,
1258 (Pa.Super. 2005)).
“To maintain a cause of action in breach of contract, a plaintiff must
establish: (1) the existence of a contract, including its essential terms; (2) a
breach of a duty imposed by the contract; and (3) resulting damages.”
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Lackner v. Glosser, 892 A.2d 21, 30 (Pa.Super. 2006) (citing Gorski v.
Smith, 812 A.2d 683, 692 (Pa.Super. 2002), appeal denied, 579 Pa. 692,
856 A.2d 834 (2004)). “For a contract to be enforceable, the nature and
extent of the mutual obligations must be certain, and the parties must have
agreed on the material and necessary details of their bargain.” Lackner,
supra (citing Peck v. Delaware County Board of Prison Inspectors, 572
Pa. 249, 260, 814 A.2d 185, 191 (2002)). “An enforceable contract
requires, among other things, that the terms of the bargain be set forth with
sufficient clarity.” Lackner, supra at 30-31 (citing Biddle v.
Johnsonbaugh, 664 A.2d 159, 163 (Pa.Super. 1995)).
“It is firmly settled that the intent of the parties to a written contract is
contained in the writing itself. When the words of a contract are clear and
unambiguous, the meaning of the contract is ascertained from the contents
alone.” Chen v. Chen, 586 Pa. 297, 307, 893 A.2d 87, 93 (2006) (quoting
Mace v. Atlantic Refining Mktg. Corp., 567 Pa. 71, 80, 785 A.2d 491,
496 (2001)). Pennsylvania law states:
When interpreting the language of a contract, the intention
of the parties is a paramount consideration. In
determining the intent of the parties to a written
agreement, the court looks to what they have clearly
expressed, for the law does not assume that the language
of the contract was chosen carelessly. When interpreting
agreements containing clear and unambiguous terms, we
need only examine the writing itself to give effect to the
parties’ intent.
Melton v. Melton, 831 A.2d 646, 653-54 (Pa.Super. 2003) (internal
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citations omitted). In other words, the intent of the parties is generally the
writing itself. Kripp v. Kripp, 578 Pa. 82, 90, 849 A.2d 1159, 1163 (2004)
(internal citations omitted). “If left undefined, the words of a contract are to
be given their ordinary meaning.” Id. (citing Pines Plaza Bowling, Inc. v.
Rossview, Inc., 394 Pa. 124, 145 A.2d 672 (1958)).
Lost profits are the difference between the amount the claimant
actually earned and the amount the claimant would have earned had the
defendant not interrupted the claimant’s business. Smith v. Penbridge
Associates, Inc., 655 A.2d 1015 (Pa.Super. 1995). A court may award
damages for lost profits where the claimant introduces sufficient evidence to
permit a reasonably certain estimate of the amount of anticipated profits.
Jahanshahi v. Centura Development Co., Inc., 816 A.2d 1179
(Pa.Super. 2003). “Damages for lost profits…may not be awarded when the
evidence leaves the trier of fact without any guideposts except…speculation.”
Merion Spring Co. v. Muelles Hnos. Garcia Torres, S.A., 462 A.2d 686,
695 (Pa.Super. 1983). “A mere possibility that the plaintiff might have
made a profit…will not justify damages based on the assumption that the
profit would have been made.” Scobell Inc. v. Schade, 688 A.2d 715, 719
(Pa.Super. 1997) (quoting Aiken Industries, Inc. v. Estate of Wilson,
477 Pa. 34, 42, 383 A.2d 808, 812 (1978), cert. denied, 439 U.S. 877, 99
S. Ct. 216, 58 L. Ed. 2d 191 (1978)).
After a thorough review of the record, the briefs of the parties, the
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applicable law, and the well-reasoned opinions of the Honorable Gary S.
Glazer, we conclude Mands’ issues merit no relief. The trial court fully and
properly supported its decision. (See Trial Court Opinion, filed January 15,
2015, at 1; Opinion in Support of Order Denying Post-Trial Relief, filed
November 14, 2014, at 1-2; Findings of Fact and Conclusions of Law, filed
October 27, 2014, at 1-9) (finding: (1) contract incorporated DBA
provisions, requiring submission of certified payrolls and use of union labor;
Mands presented no evidence of oral modification of contract to allow for
nonunion labor; Mands was aware of requirement to pay employees
prevailing wages; Mands did not pay employees prevailing wages; Mands
should have paid employees $26,987.00 in labor for portion of contract
completed before termination, but Mands paid employees only $8,965.60;
Mands also failed to submit certified payrolls to Domus and failed to obtain
union labor; Mands’ noncompliance with DBA provisions incorporated in
contract justified Domus’ termination of Mands for cause; (2) details of
contract precluded any recovery for lost profits; Mands failed to proffer valid
claim for recoverable damages). Accordingly, we affirm on the basis of the
trial court’s opinions.
Judgment affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/29/2015
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'N THE COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY
FIRST JUDICIAL DISTRICT OF PENNSYLVANIA
CIVIL TRIAL DIVISION
MANOS CONSTRUCTION CO. OCTOBER TERM, 2012
Plaintiff NO. 01129
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OPINION
GLAZER,J. January 15, 2015
Plaintiff, Mands Construction Co., appeals from this court's Order of November 14,
2014, in which the court denied plaintiffs motion for new trial. In support of that Order, the
court issued an Opinion which incorporated the court's October 27, 2014 Findings-of-Fact and
Conclusions-of-Law, copies of which are attached hereto. For the reasons contained therein, the
court respectfully requests that its November 14, 2014 Order be affirmed on appeal.
BY THE COURT:
Mands Construction Company Vs Demus, lnc.-OPFlD
1111111111111111111111111111111
.:
12100112900086
I'
Circulated 07/14/2015 02:54 PM
IN THE COURT OF COMMON PLEAS OF PHKJLADELPHIA COUNTY
FIRST JUD[CIAL DISTRICT OF PENNSYLVANIA
CIVIL TRIAL DIVISION
MANOS CONSTRUCTION CO. OCTOBER TERM, 2012
Plaintiff NO. OJ129
v. COMMERCE PROGRAM
DOMUS, INC., and CONTROL NO. 14110860
PHILADELPHIA REDEVELOPMENT
AUTHORITY
Defendants DOCKETED
NOV 14 2014
C.HART
ORDER CIVIL ADMINISTRATION
AND NOW, this 14th day of November, 2014, upon consideration of the Motion for a
New Trial of plaintiff, Mands Construction Co., it is hereby
ORDERED
that the said Motion is DENIED.
BY THE COURT:
Circulated 07/14/2015 02:54 PM
,.- - IN THE COURT OF COM1\10N PLEAS OF PHILADELPHIA COUNTY
FIRST JUDICIAL D[STfilCT OIF PENNSYLVANIA
CIVIL TRIAL DIVISION
MANDS CONSTRUCTION CO. OCTOBER TERM, 2012
Plaintiff NO. 01129
v. COMMERCE PROGRAM
DOMUS, INC., and CONTROL NO. 14110860
PHILADELPHIA REDEVELOPMENT ·
AUTHORITY DOCKETED
Defendants NOV 14 2014
C.HART·
CIVIL ADMINISTRATION
OPINION
GLAZER, J. November 14, 2014
The issues in this case have been fully developed through extensive discovery and a one
day bench trial held before this court on August 25, 2014. The parties submitted their proposed
Findings of Fact and Conclusions of Law on October 19, 2014 and October 23, 2014. This court
entered a finding in favor of defendant and issued Findings of Fact and Conclusions of Law on
October 27, 2014. The facts and reasoning are hereby incorporated by reference. On November
7, 2014 plaintiff filed a post-trial motion alleging that the court erred in ruling for defendant. For
the reasons set forth below, the post-trial motion of plaintiff is denied.
DISCUSSION
Upon a written motion for post-trial relief, a court may affirm, modify or change its
original decision. Pa.R.C.P. 227.l(a)(4). The purpose of Rule 227.1 is to provide the trial court
with an opportunity to correct en-ors in its ruling and avert the need for appellate review. See
Pa.R.C.P. 227.l cmt. l.b. (1995)(cited by Chalkey v. Roush, 569 Pa. 462, 494 (Pa. 2002)).
Circulated 07/14/2015 02:54 PM
P'644 A.2d 1251 (1994).
63. Plaintiff has not produced any evidence to prove that the contract was orally
modified to allow Mands to use non-union labor to perform the work.
64. Because the job was federally funded, and because the contract states that all
federal labor standard work rules apply, the parties were required to comply with the provisions
of the Davis-Bacon Act. [D-1 at p. 14, Article 14.1.1].
65. The Davis-Bacon Act requires that local laborers and contractors are to be paid at
a rate based on the prevailing wages determined by the Secretary of Labor for corresponding
groups of workers. 40 U.S.C.A. § 3142(b) .
. 66. Under the Davis-Bacon Act, contractors and subcontractors are required to submit
certified payroll reports every week, and the contract requiredMands to use HUD form WH-347
for the reports. (D-12, p. PRA 0073, Article 2-3; D-1, Article 11.12].
67. Form WH-347 requires that someone sign the payroll and certify that the
information in the report is true. [D-12, p. PRA 0073, Article 2-3 (b)] .
68. The Davis-Bacon Act requires the principal contractor to ensure that the
subcontractor complies with the applicable labor standards provisions. [D-12, pg. PRA 0068,
Article 1-4 ).
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69. The contract between Demus and Mands characterizes Demus as the princips.
contractor and Mands as the subcontractor. [D-1, pg. 1].
70. Mands did not pay prevailing wages to employees, thereby violating the Davis-
Bacon Act.
71. Mands has not produced any copies of certified payroll reports, thereby violating
the Davis-Bacon Act.
72. Because Mands never certified that the company had complied with the Davis-
Bacon Act, and failed to furnish union labor as required under the express terms of the contract,
Demus was justified in terminating Mands for cause.
73. Mands has not asserted a valid claim for any recoverable damages.
74. A finding is entered in favor of the defendant, Dom us, lnc., and against plaintiff,
Mands Construction.
BY THE COURT:
GLAZER,J.
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