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Judge Awards Builder in Dispute With Township

The Legal Intelligencer - March 18, 2014

Klipper Construction Associates v. Warwick Township Water and Sewer Authority $800,341 Verdict

The Legal Intelligencer

Date of Verdict: Feb. 12.
Court and Case No.: C.P. Bucks No. 2009-1637-29-1.
Judge: Clyde W. Waite.
Type of Action: Breach of contract.
Injuries: Unjust enrichment.
Plaintiffs Counsel: Roy S. Cohen and Matthew A. Gioffre, Cohen Seglias Pallas Greenhall & Furman, Philadelphia.
Defense Counsel: Peter C. Amuso, Rudolph Clarke, Blue Bell Pa., for WTWSA; Glen D. Kimball, O'Connor Kimball, Philadelphia, for Carroll.
Comment:  A Bucks County trial judge awarded a molded jury verdict of $800,341 to plaintiff Klipper Construction Associates after a jury found that defendant Warwick Township Water and Sewer Authority breached its contract by failing to pay Klipper the balance of its contract for improvements it made to the township's wastewater treatment plant.
A jury had awarded Klipper about $726,810 in damages in July 2013, but there was some confusion as to whether the WTWSA or co-defendant Carroll Engineering should be responsible for paying the verdict.
In February, Bucks County Court of Common Pleas Judge Clyde W. Waite molded the verdict to add about $43,872, in interest along with about $24,790 in attorney fees.

Waite also said it was "manifest error" for the jury to find that Carroll could be held liable when it also found that Carroll did not breach a contract and was not negligent.

Therefore, Waite found, the WTWSA was solely responsible to pay Klipper the entire amount of the judgment.
According to Waite, the WTWSA contracted with Klipper as the general construction prime contractor on a project to make improvements to the Fishcreek Wastewater Treatment Plant.

Carroll, meanwhile, had an engineering consulting contract with the WTWSA, under which it was responsible for overseeing the entire construction project and making recommendations to the WTWSA as to whether the contractor's work was satisfactory and whether the contractor should be paid, Waite said.
The WTWSA had the final say on all decisions, however, Waite said.

Klipper did not submit the required certificate for substantial completion of the project until September 2010 and the WTWSA withheld the $147,942 balance of the parties' contract, arguing that Klipper did not finish the project in a timely manner, Waite said.

Klipper filed suit against the WTWSA, alleging breach of contract, constructive fraud, intentional nondisclosure, unjust enrichment and quantum meruit, according to Waite.
However, all of those claims were eventually either dismissed or withdrawn, except for breach of contract and constructive fraud, Waite said.

Klipper also filed suit against Carroll, alleging constructive fraud, intentional nondisclosure, negligent misrepresentation and tortious interference with contractual relations, though all but the constructive fraud claim were tossed, according to Waite.

Klipper said in its pretrial memorandum that it was unable to finish the Fishcreek project on schedule because of a large amount of solid bedrock that needed to be removed in order to install a retaining wall.
Klipper had alleged in its memorandum that it informed Carroll and the WTWSA of the bedrock before starting construction, but it said the defendants later refused to grant time extensions or provide additional funds to complete the work.
The WTWSA, however, argued in its own pretrial memorandum that the bedrock was not the only factor that delayed Klipper's work on the project.

Carroll alleged in its own pretrial memorandum that Klipper "failed to adequately staff the project and delayed and obstructed the performance of the electrical contractor."

"Throughout the course of the project, [Klipper]'s performance was marked by its late and deficient completion of work and its pattern of attributing responsibility to others for its poor performance," Carroll said.
On July 9, 2013, a unanimous 12-member jury awarded $726,809 to Klipper, according to Waite.
On the verdict sheet, according to Waite, the jury answered "no" to the question of whether the WTWSA engaged in any conduct independent of Carroll, meaning Carroll was responsible to pay the amount awarded.
However, Waite said, the jury also answered "yes" to the question of whether WTWSA breached its contract with Klipper and "yes" to the question of whether WTWSA acted in bad faith by withholding payment from Klipper.

Ultimately, Waite said WTWSA was responsible for paying the award because it, not Carroll, had a contract with Klipper.

Counsel for Klipper, Roy S. Cohen, called the verdict a "great result."
Counsel for WTWSA, Peter C. Amuso, said his client has already appealed to the Commonwealth Court.
Counsel for Carroll, Glen D. Kimball, said he was pleased with Waite's ruling.
- Zack Needles, of the Law Weekly

Reprinted with permission from the March 18, 2014, issue of the Legal Intelligencer© 2014 ALM Media Properties, LLC.  Further duplication without permission is prohibited.  All rights reserved.