Green International, Inc. v. Department of General Services

518 A.2d 1323, 103 Pa. Commw. 84, 1987 Pa. Commw. LEXIS 1846
CourtCommonwealth Court of Pennsylvania
DecidedJanuary 8, 1987
DocketAppeals, 2875 C. D. 1985 and 2862 C. D. 1985
StatusPublished
Cited by5 cases

This text of 518 A.2d 1323 (Green International, Inc. v. Department of General Services) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Green International, Inc. v. Department of General Services, 518 A.2d 1323, 103 Pa. Commw. 84, 1987 Pa. Commw. LEXIS 1846 (Pa. Ct. App. 1987).

Opinion

Opinion by Judge Craig,

Green International, Inc. (Green) and McCormick, Taylor & Associates, Inc. (MTA), two corporations acting as a joint venture, and the Department of General Services (DGS) cross-appeal from an order of the Board of Claims (board) directing DGS to pay the joint venture $157,446.68 in damages for a breach of a construction contract executed by the parties on September 23, 1971.

*86 I. Facts

According to the boards findings of fact, DGS and the joint venture executed an agreement under which the joint venture was “to provide all necessary design services and review and inspection of construction” for project No. GSA 800-145: facility improvements at the Pennsylvania State University. Originally, the scope of the project included additions to the university’s potable water system, sanitary sewage system, electrical system and the central heating plant, as well as the construction of a central security and environmental monitoring system for campus buildings. DGS administered the project in two distinct phases: Phase I construction, which proceeded as planned, and Phase II construction, which is the subject of this appeal.

A major dispute between the parties centers upon the amount to which the joint venture is entitled for delays in the construction of Phase II. DGS awarded two Phase II construction contracts, both of which established a scheduled completion date of August 27, 1976. Phase II construction did not, however, conclude until December, 1980. The board found several reasons for the delay: (1) MTAs unanticipated difficulty in drilling a test well; (2) Greens submission of an incomplete design at the pre-final stage of Phase II; (3) Greens work on a non-DGS project to which Green had given priority; and, (4) several design revisions.

Before Phase II completion, the joint venture submitted a claim to DGS for additional compensation because of the delay. In response, DGS paid the joint venture $43,649.01 by way of an amendment to the contract executed on February 22, 1980. The joint venture, however, now claims that it is entitled to additional compensation based on further delays beyond those contemplated in the 1980 amendment and on improper *87 delay damage calculations by DGS when it made the $43,649.01 award.

The boards calculation of damages is as follows: Basic Service Fee $311,077.73
Additional Compensation for
Delay 90,120.25
Additional Work 83,164.15
New Water Well 95,770.00
Change Order Fees 4,069.93
TOTAL: $584,202.06
Subtract payments received by Claimant 426,755.38
TOTAL due Claimant $157,446.68

Both parties contend that the board committed computational errors and errors of law when it arrived at the $157,446.68 total due to the joint venture. We will address each claim in the order in which it is raised.

II. DGS Appeal

A. New Well Payments

On April 2, 1975, DGS and the joint venture executed an amendment to the agreement providing:

(c) The Professional shall receive an additional sum not to exceed the amount of Ninety-Five Thousand, Seven Hundred Seventy and 00/100 Dollars ($95,770.00) to cover the cost of a New Water Well. . . .

The agreement designates Green and MTA as “the Professional”.

The parties do not dispute the joint ventures performance under the terms of the amendment through a subcontractor to the MTA Corp. Neither do the parties dispute DGS’ tender of $105,347 in six checks payable to MTA ($95,770 plus 10% contractors fee). DGS, how *88 ever, argues that the board erred when it failed to credit DGS with the $105,347 payment to MTA. 1 The joint venture contends that the board properly excluded the credit because DGS tendered payment to MTA alone, and not to the joint venture as designated in the amendment.

The record contains the following: five letters mailed from MTA to DGS between September 6, 1974 and April 27, 1975 enclosing invoices from the subcontractor, Layne-New York Company, Inc., for work done on GSA 800-145 — Penn State University-New Well; six invoices from Layne-New York Company totalling $95,768.38; and copies of six checks drawn by DGS under project No. 800-145 “Par C” — the amounts of which correspond to the Layne invoices plus a ten percent fee for MTA.

The joint venture contends, without citing authority, that for DGS to claim credit for the new well payments, it must prove: (1) that the joint venture with whom it contracted is a partnership rather than an association; (2) that MTA was acting as a member of such partnership when it received the payments totalling $105,347; and (3) that DGS’s proof of the payments is credible.

DGS argues that it made the checks payable to MTA alone to expedite payment to Layne-New York Co., the subcontractor under MTAs supervision, and that the classification of the joint venture as a partnership or an association is irrelevant to the validity of the credit *89 claim. DGS argues that the relevant determination is the board’s Conclusion of Law No. 16 which states:

Payment to one party of a joint venture constitutes payment to the joint venture.

We need not resolve the question of whether or not the board’s Conclusion of Law No. 16 is a correct statement of Pennsylvania law, however, because it is not determinative of DGS’s entitlement to the $105,347 credit. Even if payment to MTA does not constitute payment to the joint venture in this case, DGS’ oversight amounts to an immaterial departure from the contract’s requirements.

A review of the facts concerning the operation of the joint venture reveals that the Green-MTA joint venture is a joint venture in name only. The record does not contain evidence of a joint venture agreement between Green and MTA, nor does the record indicate that the two companies exerted mutual control over any segment of the project. To the contrary, the record reveals that Green requested that DGS treat Green and MTA separately for GSA 800-145 purposes because the work of the two companies did not interrelate. DGS refused to alter the agreement treating MTA and Green as a joint venture. 2

Furthermore, Green and MTA state that they do not share in the profits or losses realized in the DGS contract. Apparently, the only area of joint control between the companies is a joint checking account into which DGS payments are deposited and from which individual disbursements are made to Green or MTA.

*90

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Bluebook (online)
518 A.2d 1323, 103 Pa. Commw. 84, 1987 Pa. Commw. LEXIS 1846, Counsel Stack Legal Research, https://law.counselstack.com/opinion/green-international-inc-v-department-of-general-services-pacommwct-1987.