Cliffwood Electrical Contractor, Inc. v. Century General Construction & Contracting, LLC (In Re Cliffwood Electrical Contractor, Inc.)

415 B.R. 149, 2009 WL 2902747
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedJuly 31, 2009
Docket19-11248
StatusPublished

This text of 415 B.R. 149 (Cliffwood Electrical Contractor, Inc. v. Century General Construction & Contracting, LLC (In Re Cliffwood Electrical Contractor, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cliffwood Electrical Contractor, Inc. v. Century General Construction & Contracting, LLC (In Re Cliffwood Electrical Contractor, Inc.), 415 B.R. 149, 2009 WL 2902747 (Pa. 2009).

Opinion

Opinion

STEPHEN RASLAVICH, Chief Judge.

Introduction

Before the Court is the motion (“Motion”) of defendants, Century General Construction and Contracting, LLC (“Cen *150 tury”) and Lam’s Realty Corp. (“Lam’s Realty”), for summary judgment against plaintiff, Cliffwood Electrical Contractor, Inc. (“Debtor”). Debtor originally filed this action in state court seeking to recover on a mechanics’ lien which it filed against Century and Lam’s Realty (collectively referred to as “Defendants”). However, Defendants removed the action to this bankruptcy court and filed an answer containing two counterclaims to the Debt- or’s complaint. Defendants move for summary judgment on: (1) Debtor’s claims; and (2) their counterclaims. Upon consideration, Defendants’ Motion shall be granted on Debtor’s claims but denied as to Defendants’ counterclaims.

Background

Lam’s Realty is the owner/franchisee of a ten story hotel located at 1201 Race Street in Philadelphia (the “Hotel”). Motion, Exhibit A ¶ 4. Century is the owner of a construction project (“Project”) for the Hotel. Id. ¶ 3. On or about September 19, 2007, Century and Debtor entered into a written agreement (the “Agreement”) for Debtor to complete all remaining electrical work for the Project for the sum of $240,000. Motion, Exhibit A ¶¶ 5-7 & Exhibit C; Plaintiff’s Memorandum of Law in Objection to Defendants’ Motion for Summary Judgment (“Debtor’s Opposing Brief’), Exhibit A ¶ 3. According to the Agreement, Debtor was required to complete “all remaining work for the entire building consisting of the basement, 1st floor, mezzanine, floors 3, 4, 5, 6, 7, 8, 9 and 10, the mechanical room on the roof of the building and all exterior electrical work.” Motion, Exhibit C at Article 111(2).

Article XIV of the Agreement acknowledges that Debtor “is a union contractor.” Motion, Exhibit C at Article XIV(6). Around the time that Century entered into the Agreement with the Debtor, Defendants learned that the Debtor either had or was having problems paying its union wages and benefits due to the International Brotherhood of Electrical Workers— Local 98 (“IBEW Local 98”) and to the International Brotherhood of Electrical Workers — -Local 351. Motion, Exhibit A 9. Consequently, Century and the Debtor executed an addendum to the Agreement (“Addendum to Agreement”), dated October 1, 2007, which provided, in pertinent part:

1. Health and Welfare. [Debtor] and [Century] agree that Century shall issue joint checks for I.B.E.W. 98 LABOR for the Project payable to the International Brotherhood of Electrical Workers Local 98 and [Debtor]. The I.B.E.W. Local 98 shall invoice [Century] and [Debtor] monthly with all payments due and payable to I.B.E.W. Local 98 in accordance with the agreed upon terms of the specific order. The joint check is to be delivered to the International Brotherhood of Electrical Workers Local 98 located at 1701 Spring Garden Street, Philadelphia, Pennsylvania.

Motion, Exhibit B (Addendum to Agreement) 1 to Exhibit S (Defendants’ Amended Answer).

Debtor subsequently commenced work on the Project and the progress payments due under the terms of the Agreement were paid to Debtor. Motion, Exhibit A ¶ 13. On October 24, 2007, the parties executed a change order (Change Order # 1) for $25,000 for the Project. Id. H & Exhibit D. Century tendered $25,000 to Debtor for Change Order # 1. Motion, Exhibit Ay 15 & Exhibit E.

On December 10, 2007, the parties executed a second change order (“Change Order #2”) for $54,0000 whereby Debtor agreed to take over the installation of fire alarms on for Tech. Security Services. *151 Motion, Exhibit A % 16 & Exhibit F. Century paid Debtor $30,000 of the $54,000 owed to it on Change Order # 2. Motion, Exhibit 17 & Exhibit G.

By the end of 2007, Century had paid Debtor $219,000 towards the $240,000 owed under the Agreement and $55,0000 of the $75,000 owed under Change Orders # 1 and # 2. Motion, Exhibit A 18. From January 7, 2007 through January 27, 2008, Century paid Debtor an additional $18,000 pursuant to the Agreement, leaving a balance remaining on the Agreement of only $3,000, and paid $38,413.96 in Debt- or’s union worker and health benefits. Motion, Exhibit A 19.

On January 29, 2008, the parties executed an agreement which they labeled “Addendum to Contract.” Motion, Exhibit A ¶20 & Exhibit J. In the Addendum to Contract, the parties agreed to the following:

1. Century would make “all payments to IBEW for health and welfare for November 2007 and December 2007.”
2. From that point forward, Debtor “shall be responsible for payment of health and welfare to the IBEW[.]”
3. Century owed Debtor a balance of $59,202.
4. The $59,202 was for labor only and did not include equipment.
5. Century would pay Debtor fifty percent (50%) of the $59,202 on January 29, 2008 and the other fifty percent (50%) “at the completion of the electrical work pending approval by the appropriate city officials in Philadelphia.”
6. Completion included the “original scope of work, fire system, low voltage, and change orders.”

Motion, Exhibit J (emphasis added). 1

Pursuant to the Addendum to Contract, Century paid fifty percent (50%) of the $59,202 to Debtor so that under the terms thereof, only $29,601.00 was left due and owing for Debtor’s labor. Motion, Exhibit A ¶¶ 21-22, Exhibit J & Exhibit K. In total, Century paid Debtor $321,604 on the Project and paid $38,413.96 in Debtor’s union worker and health benefits. Added together ($321,604 + $38,413.96), these amounts total $360,014.96.

Apparently, the Addendum to Contract did not resolve the parties’ disagreement concerning what the Debtor was owed because, thereafter, the Debtor made repeated demands to Defendants via letters and phone calls for payment for work that it asserted “had been authorized and completed.” Opposing Brief, Exhibit A 5. Defendants did not respond to Debtor’s demands. Id.

On February 11, 2008, which was thirteen days after the parties had executed the Addendum to Contract, there was a meeting between Debtor and Century. Motion, Exhibit B at 22. Debtor informed Century that it would terminate the Agreement, as revised, unless Century paid: (i) $12,500 to it in new change orders; (ii) $70,000 to Billows Electrical Supply which was its sub-contractor on the Project; and (iii) additional health and welfare payments to IBEW Local 98. Mo

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Cite This Page — Counsel Stack

Bluebook (online)
415 B.R. 149, 2009 WL 2902747, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cliffwood-electrical-contractor-inc-v-century-general-construction-paeb-2009.