General Equipment Manufacturers v. Westfield Insurance

DEL SOLE, Judge:

This appeal results from a jury verdict in favor of General Equipment Manufacturers, Inc. [Gem] which sued West-field Insurance Co., [Westfield], which is the surety on the bond of Coco Bros. [Coco], a general contractor. The jury awarded $78,486.00 to Gem to which was added interest.

Gem brought this action on the unpaid amount on it’s contract with Coco, which was engaged by the School Board of Pittsburgh to renovate the Oliver High School. Coco employed a number of subcontractors, including Gem, on this project. In late March or early April of 1987, the Board dismissed Coco as general contractor, which was binding on the sub-contractors, who could proceed no further in completing the renovations. The entire contract between Gem and Coco was worth $240,000.00, and prior to the time Coco was terminated, Gem had billed Coco in the sum of $106,-552.00 for work and materials provided to the project. $28,065 had been paid to Gem by Coco, leaving a balance of $78,486.00 unpaid.

On appeal, Westfield raises seven issues for our consideration. Most of these argue that Gem failed to make out a case for payment of the balance submitted, and that certain evidence and defenses were erroneously excluded from consideration by the jury. The jury found for Gem, and the trial court, in its opinion and order, following post-trial motions, held that, “it was simply a matter of whether Gem did the work for which it seeks payment.” Westfield, in contrast, invokes general principles of contract law, and claims certain defenses based on these same principles. Gem, however, argues that the language of the surety bond issued by Westfield for Coco is determinative of the surety’s obligation,¹ and they cite the following language, from the surety bond:

Every person, firm, or partnership, association or corporation who, whether as subcontractor or other furnished materials or supplied or performed labor or furnished machinery for use in the prosecution of the work provided, and who has not been paid therefor, may sue on this bond in accordance with the provisions of [the] School Code of 1949, as amended and/or (b) the Public Works Contractor’s Bond Law of 1967 ...

Thus, Westfield’s surety bond incorporates Pennsylvania’s Public Works Contractors’ Bond Law and the bond requirements of the School Code of 1949, and the proof required for payment, and the defenses available to West-field, are thus determined by interpreting the provisions of these Commonwealth statutes. 8 Pa.S.A. § 194 states in pertinent part:

[A]ny claimant who has performed labor or furnished material in the prosecution of the work provided for in any contract for which a payment bond has been given ... and who has not been paid in full therefore ... may bring an action in assumpsit to recover any amount due him for such labor or material, and may prosecute such action to final judgment and have execution on the judgment. 8 Pa.S.A. § 194(a)

Because the instant appeal raises an issue involving the interpretation and application of statutes which regulates the affairs of a political subdivision, namely the School Board, we find that it is appropriate to transfer this case to the jurisdiction of the Commonwealth Court.

The applicable section of the Judicial Code which establishes the jurisdiction of the Commonwealth Court provides:

§ 762 Appeals from the Courts of Common Pleas (a) General Rule.—Except as provided in subsection (v), the Commonwealth Court shall have exclusive jurisdiction of appeals from final orders of the courts of common pleas in the following cases:

(4) Local government civil and criminal matters.—

(i) All actions or proceedings ... where is drawn in question the application, interpretation or enforcement of any:

(A) statute regulating the affairs of political subdivisions, municipality and other local authorities or other public corporations or the officers, employees or agents thereof ... 42 Pa.C.A. § 762(a)(4)(i)(A) [Emphasis added].

In United Plate Glass v. Metal Trims Industries, 351 Pa.Super. 225, 505 A.2d 613, 616 (1986), where the issue concerned the statute of limitations of a payment bond which was issued in conformance with the Public Works Bond Law, we transferred the case to the Commonwealth Court. See also, Valley Forge Industries v. Armand Cons., 248 Pa.Super. 53, 374 A.2d 1312 (1977). We held that:

the division of labor between this court and our sister court would be served rather than disrupted if the Commonwealth Court heard all appeals involving the application and interpretation of the Pennsylvania Public Work Contractors’ Bond Law. Id., 505 A.2d at 616.

Furthermore, in an earlier case where the parties were Coco Brothers, Inc. and the Board of Education, and the same construction project was in dispute, we again transferred the case to the Commonwealth Court. In this case the issue was whether the School Board properly offset various arbitration awards against each other. We held that 53 P.S. § 7232-7234 regulated the affairs of the school district in this matter, and when they were called in to question, it was for the Commonwealth Court to determine its merits. Coco Bros, Inc. v. Board of Public Education of the School District of Pittsburgh, 383 Pa.Super. 29, 556 A.2d 412 (1989).

We have held that in order to guard against the possibility that two inconsistent lines of interpretation might develop between the two courts concerning the statute of limitations of the Public Works Contractors’ Bond Law, it was best to transfer the case to Commonwealth Court, United Plate Glass, supra., 505 A.2d at 616. Similarly, here, in order to avoid any inconsistencies in interpretation of the Bond Law and the Public School Code as it concerns the proof of the payment owed, the evidence admissible, and the defenses allowed, this case should be transferred to the Commonwealth Court.

Case transferred to Commonwealth Court.

BROSKY, J., files a dissenting opinion.

1 . The Dissent argues that there is nothing ambiguous in the language of the statute requiring interpretation by the Commonwealth Court. We agree that there is no ambiguity, but only because the statute completely omits any reference to the defenses available to the surety, or the evidence sufficient to show proof of costs, the very issues raised in this appeal. Therefore, on these issues where there is no settled law, the courts must construe the statutes in question in order to decide the questions presented. As we said, en banc, in Valley Forge Industries v. Armand Construction, Inc., 248 Pa.Super. 53, 60-61, 374 A.2d 1312 (1977), when,

[t]he question presented is a matter of important public policy affecting existing and future bonds on thousands of public works projects ... it would be far better for this Court to defer to the Commonwealth Court, which has been designated by the legislature as the appropriate forum for resolving disputes arising out of an interpretation of statutes regulating the affairs of local governments and agencies, at least until the law becomes settled in this particular area.