Moscatiello Construction Co. v. Pittsburgh Water & Sewer Authority

648 A.2d 1249, 167 Pa. Commw. 508, 1994 Pa. Commw. LEXIS 547

• Court: Commonwealth Court of Pennsylvania
• Decided: September 20, 1994
• Docket: GD90-15247 and GD91-11898
• Status: Published

Opinions

McGINLEY, Judge.

Moscatiello Construction Company (Moscatiello) appeals from the orders of the Court of Common Pleas of Allegheny County (trial court) that granted summary judgment to the City of Pittsburgh (City), the Pittsburgh Water and Sewer Authority (Authority) and Mackin Engineering Company (Mackin) (collectively, Defendants). We reverse and remand this matter for trial.

FACTS

On May 2, 1988, the City and Moscatiello entered into the Glenbury Contract — Phase II (Contract). A dispute arose as to the method of calculating payment for the construction of pre-cast and cast-in-place concrete lagging. On September 24, 1990, Moscatiello filed a complaint against the City, alleging that the City was obligated to pay for the total surface area of concrete lagging installed. (5a.)¹ On October 10, 1990, the City filed its answer, new matter and counterclaim, contending that the Contract calls for payment per square foot of the front surface alone and that “[t]he claim of Moscatiello is barred, limited or otherwise circumscribed by the terms of the Phase II Contract documents. (25a.)²

Following extensive discovery, on January 27,1992, the City and Mackin filed motions for summary judgment, relying on several portions of the Contract. (309a-345a; 354a-359a.) The motions did not raise the issue of an alternative nonjudicial resolution of the dispute. On April 29, 1992, the trial court denied these motions for summary judgment.

Following the selection of a jury, the City filed a second motion for summary judgment, raising for the first time the Contract’s Settlement of Disputes clause calling for alternate non-judicial resolution of the dispute. (585a-590a.) The provision states:

3.63 SETTLEMENT OF DISPUTES. In the event of any disagreement, controversy or dispute between Contractor and Director as to the interpretation of the Specifications or interpretation of the proper execution of this contract or as to the Settlement thereunder or in the event of any disagreement as to any question or matter whatsoever which may arise or be in dispute under this contract or said Specification or of the terms or conditions thereof, such disagreements, controversy or dispute shall be immediately inquired into and decided by Director whose decision shall be final and conclusive as to all matters in controversy, without exception or appeal, and all rights or rights of action at law in equity or otherwise under and by virtue of this contract are expressly waived.

(587a.) On the same day, over Moscatiello’s objection, the trial court considered and granted the motion. (765a.)

Moscatiello appealed, arguing that it was denied procedural due process by the trial court’s granting the motion for summary judgment without allowing adequate time to respond. We agreed with Moscatiello’s argument, reversed the grant of summary judgment and remanded based on the Supreme Court’s recent decision in Cagnoli v. Bonnell, 531 , 611 A.2d 1194 (1992). Moscatiello Construction Co. v. City of Pittsburgh, 155 Pa.Commonwealth Ct. 361, 625 A.2d 155 (1993).

Upon remand to the trial court, Moscatiello was given an opportunity to respond to the City’s motion for summary judgment. The Authority and Mackin also filed motions for summary judgment based upon the Settlement of Disputes clause. After considering Moscatiello’s arguments, the trial court granted the Defendants’ motions for summary judgment. Moscatiello again appeals to this Court.³

Before this Court Moscatiello contends that the trial court erred in entering summary judgment in favor of the City because (1) the Settlement of Disputes clause is unconscionable and violates public policy; (2) there are several issues of fact which are material to the Settlement of Disputes clause; and (3) the City and Authority waived the Settlement of Disputes provision as a matter of law.

We need only address Moscatiello’s contention that the City and the Authority, by their conduct, accepted judicial resolution of this controversy and thus waived the Settlement of Disputes provision as a means of resolving this dispute. In support of its position Moscatiello relies on Samuel J. Marranca General Contracting v. Amerimar, 416 Pa. Superior Ct. 45, 610 A.2d 499 (1992) wherein the Superior Court held that a defendant is precluded on the ground of waiver from pursuing arbitration once it has taken the first steps in accepting the judicial process. In Marranca the Court noted:

Waiver is a voluntary and intentional abandonment or relinquishment of a known right. Zitelli v. Dermatology Education & Research Foundation, 409 Pa. Superior Ct. 219, 240, 597 A.2d 1173, 1184 (1991). See also 28 Am.Jur.2d, Estoppel and Waiver § 30. Waiver may be established by a party’s express declaration or by a party’s undisputed acts or language so inconsistent with a purpose to stand on the contract provisions as to leave no opportunity for a reasonable inference to the contrary. See 17A Am.Jur.2d, Contracts § 656. Here, Amerimar’s conduct amounts to waiver. Amerimar chose not to file a petition to compel arbitration. Amerimar also elected not to assert arbitration as an affirmative defense either in preliminary objections or in new matter. Instead, Amerimar waited until it had received an adverse ruling on pretrial motions before invoking and seeking to enforce the arbitration provision of the contract. Further, Amerimar initiated other proceedings in different jurisdictions regarding matters related to the contract. This conduct is inconsistent with Amerimar’s present contention that the arbitration provision is mandatory and not elective.

Amerimar had every opportunity to raise and pursue the issue of arbitration but failed to do so. Amerimar cannot avail itself of the judicial process and then pursue an alternate route when it receives an adverse judgment. To allow litigants to pursue that course and thereby avoid the waiver doctrine and our rules of court is to advocate judicial inefficiency; this we are unwilling to do.

Id. 416 Pa.Super. at 49-51, 610 A.2d at 501.

We believe that the rationale in Marranca is equally applicable in the present case. Like the defendant Amerimar in Marranca, the City and Authority in the present matter have availed themselves of the judicial process as indicated by the following: (1) the City never specifically raised the Settlement of Disputes clause in its answer, new matter or counterclaim; (2) the City responded to Moscatiello’s complaint by filing a counterclaim and requesting a jury trial; (3) the City engaged in extensive discovery, including interrogatories, requests for production of documents and depositions; (4) the City joined its engineering consultant as an additional defendant; (5) the City filed its initial motion for summary judgment based on various sections of the contract and it failed to raise the Settlement of Disputes clause in that motion; (6) the City retained an expert witness to rebut testimony on behalf of Moscatiello; and (7) the City participated in jury selection.

Only until after its initial motion for summary judgment was denied did the City raise in a subsequent motion for summary judgment the Settlement of Disputes clause as a means of alternative dispute resolution. In view of the foregoing we believe that the City and Authority, by virtue of their conduct, have waived any issues regarding the applicability and/or enforceability of the Settlement of Disputes clause to Moscatiello’s claim.⁴

The order of the trial court is reversed and this case is remanded for trial on the merits.

ORDER

AND NOW, this 20th day of September, 1994, the order of the Court of Common Pleas of Allegheny County in the above-captioned matter is hereby reversed and this case is remanded for further proceedings consistent with the foregoing opinion.

Jurisdiction is relinquished.

PELLEGRINI, J., did not participate in the decision in this case.

1 . Reproduced Record.

2 . The City joined Mackin demanding damages for the negligent drafting of the Contract and sought indemnification for any damages Moscatiello was due.

3 . Our standard of review in summaiy judgment cases is based upon Pa.R.C.P. No. 1035(b). Summaiy judgment is only proper where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. A grant of summary judgment will be reversed only where there has been an error of law or a manifest abuse of discretion. When reviewing an order granting summary judgment, we are obliged to read the record in the light most favorable to the non-moving party and resolve all doubt against the movant. J.R.W., Inc. v. Manchester Borough Council, 148 Pa.Commonwealth Ct. 238, 610 A.2d 1078 (1992).

4 . Having determined that the trial court erred in granting summary judgment on the ground that the City and Authority have waived any defense based upon the applicability of the Settlement of Disputes clause to Moscatiello's claim, we need not address the other issues raised by Moscatiello in this appeal.