Tedesco Excavating v. FWH Development
Opinion
J-A29017-23
2024 PA Super 129
TEDESCO EXCAVATING & PAVING, : IN THE SUPERIOR COURT OF INC. : PENNSYLVANIA : v. : : FWH DEVELOPMENT, LLC : : Appellant : No. 995 WDA 2022
Appeal from the Judgment of Sentence Entered August 1, 2022 In the Court of Common Pleas of Allegheny County Civil Division at No(s): GD 19-006017
BEFORE: BOWES, J., KUNSELMAN, J., and MURRAY, J.
OPINION BY KUNSELMAN, J.: FILED: June 24, 2024
I. Introduction
In this construction-contract dispute, the Defendant, FWH Development,
LLC, appeals from the $678,238.31 judgment that the trial court entered, after
a jury verdict in favor of Tedesco Excavating & Paving, Inc. Because FWH
anticipatorily repudiated the contract, and Tedesco sued before FWH invoked
a termination provision in that contract, we affirm.
II. Factual & Procedural Background
FWH desired to build a residential and commercial development in Butler
County, along State Route 228, known as Whitetail Meadows. It hired Jerrod
Crosby of David E. Wooster & Associates to serve as the Project engineer. The
plans included redoing an intersection on Route 228.
Mr. Crosby placed the Route 228 work, which involved widening the road
and adding traffic lights, out for bids. Tedesco was the lowest bidder. At Mr.
Crosby’s recommendation, on May 19, 2015, FWH’s owner, Fred Hespenheide, J-A29017-23
signed a unit-price contract with Tedesco to perform the Route 228 work. The
contract price was $1,259,000.00. See Plaintiff’s Ex. 53, Agreement § 2 at 2,
6. The contract required the work to be completed in 220 days, and time was
of the essence. See id.
The contract included Article 15, “Suspension of Work and Termination.”
Id., Agreement § 4 at 32-34. Under Article 15.4, FWH could terminate the
contract “without cause” after providing Tedesco and Mr. Crosby seven days’
written notice. Id. at 33. If FWH invoked the provision, it agreed to pay
Tedesco “for completed and acceptable work executed in accordance with the
contract . . . including fair and reasonable sums for overhead and profit on
such work.” Id. (some capitalization omitted). However, Tedesco could not
collect “anticipated profits or revenues or other economic loss arising out of
or resulting from such termination.” Id.
Tedesco planned to complete the Route 228 work in 2015, but FWH soon
informed it that FWH lacked funding for the Project. Thus, FWH could not
commence the Project, and Tedesco was left with a gap in its 2015 paving
schedule. As a result, Tedesco lost the 35% profit it expected to earn from
the Route 228 work that summer. Still, Tedesco remained ready and eager
to do the work whenever FWH obtained financing. The parties communicated
intermittently over the next three years, but the Project never commenced.
On March 20, 2018, FWH asked Tedesco to send an escalation proposal
for price increases from the original contract price, due to the rise in fuel,
materials, and labor costs. Tedesco submitted a proposal to Mr. Crosby for
-2- J-A29017-23
an estimated 5% increase, per year. This proposal brought the contract price
to $1,560,000.00.
FWH still failed to start the Project in 2018. Instead, it hired Momentum,
a Seattle-based company, to replace Wooster & Associates and Mr. Crosby as
site manager. Momentum sent Bob Saunders to monitor the subcontractors
and “the construction management on site and [to do] all of that work, labor
bids, supervising bids.” N.T., 5/12/22, at 538.
Mr. Saunders eventually met with Tedesco. He requested an updated
escalation proposal. On August 15, 2018, Tedesco e-mailed Mr. Saunders a
new contract price of $1,652,463.70. Mr. Saunders did not reply.
Seven months later, on March 25, 2019, in a communication to a third
party, Mr. Saunders stated that FWH “awarded the contract for site paving
and the [Route 228] improvements” to Shields Paving, Tedesco’s competitor.
Plaintiff’s Ex. 60 at 1.
Then, on April 4, 2019, FWH’s attorney wrote to Tedesco’s subcontractor
and Tedesco. He admitted FWH had no intention of honoring its contract with
Tedesco.1 According to FWH’s attorney:
In 2015, it was intended that Tedesco [would] serve as the [Route 228] contractor for the Whitetail Meadows . . . Project in Adams Township, Butler County . . .
. . . In late 2018, Tedesco submitted a revised estimate for the cost of the [Route 228] work. Tedesco’s revised cost estimate was substantially in excess of the original cost estimate provided by Tedesco in 2015. Tedesco’s revised cost estimate was also in ____________________________________________
1 FWH’s attorney has passed away. Thus, he did not testify at trial.
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excess of other cost estimates for the [Route 228] work FWH received from other contractors. As a result, [FWH will] no longer use Tedesco to complete the [Route 228] work for the Project.
Plaintiff’s Ex. 61 at 2.
Three weeks later, on April 23, 2019, Tedesco sued FWH for breach of
contract in the Court of Common Pleas of Allegheny County. It sought an
anticipated 35% overhead and lost profits from the Route 228 work.
Soon “after [FWH] got sued,” on May 3, 2019, it wrote Tedesco. N.T.,
5/12/22, at 576; see also N.T., 5/11/22, at 443 (accord). The letter stated,
“Pursuant to Section 15.4 of the General Conditions of the [May 19, 2015]
agreement, [FWH] hereby provides the requisite seven days’ notice of its
intention to terminate the agreement for convenience. Said termination will
be effective May 10, 2019.” Defendant’s Ex. 4 (some capitalization omitted).
The matter proceeded to a jury trial. The jurors found FWH in breach
of the 2015 contract and awarded Tedesco $401,046.00 for overhead and lost
profits. FWH sought post-trial relief. Also, Tedesco moved to mold the verdict
to include interest and attorneys’ fees under Pennsylvania’s Contractor and
Subcontractor Payment Act (“CASPA”).2 The trial court denied FWH’s motion
and partially granted Tedesco’s motion. It added $135,664.87 in interest;
$133,682.00 in attorneys’ fees; and $7,845.44 in legal costs to the verdict.
The trial court entered judgment in favor of Tedesco for $678,238.31.
FWH appealed to this Court.
____________________________________________
2 See 73 P.S. §§ 501-517.
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III. Analysis
FWH raises the following nine issues:3
1. Whether the trial court erred as a matter of law in entering judgment for Tedesco for breach of contract where Tedesco failed to meet conditions precedent?
2. Whether the trial court erred as a matter of law in entering judgment for Tedesco for breach of contract where Tedesco failed to identify or prove material breach?
3. Whether the trial court erred as a matter of law in entering judgment for Tedesco for breach of contract where the trial court refused to apply the intent of the parties through the terms of the agreement, including the termination provision, which explicitly prohibits recovery of lost profit and overhead?
4. Whether the trial court erred as matter of law in entering judgment for Tedesco for breach of contract where Tedesco failed to prove its damages with reasonable certainty?
5.
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J-A29017-23
2024 PA Super 129
TEDESCO EXCAVATING & PAVING, : IN THE SUPERIOR COURT OF INC. : PENNSYLVANIA : v. : : FWH DEVELOPMENT, LLC : : Appellant : No. 995 WDA 2022
Appeal from the Judgment of Sentence Entered August 1, 2022 In the Court of Common Pleas of Allegheny County Civil Division at No(s): GD 19-006017
BEFORE: BOWES, J., KUNSELMAN, J., and MURRAY, J.
OPINION BY KUNSELMAN, J.: FILED: June 24, 2024
I. Introduction
In this construction-contract dispute, the Defendant, FWH Development,
LLC, appeals from the $678,238.31 judgment that the trial court entered, after
a jury verdict in favor of Tedesco Excavating & Paving, Inc. Because FWH
anticipatorily repudiated the contract, and Tedesco sued before FWH invoked
a termination provision in that contract, we affirm.
II. Factual & Procedural Background
FWH desired to build a residential and commercial development in Butler
County, along State Route 228, known as Whitetail Meadows. It hired Jerrod
Crosby of David E. Wooster & Associates to serve as the Project engineer. The
plans included redoing an intersection on Route 228.
Mr. Crosby placed the Route 228 work, which involved widening the road
and adding traffic lights, out for bids. Tedesco was the lowest bidder. At Mr.
Crosby’s recommendation, on May 19, 2015, FWH’s owner, Fred Hespenheide, J-A29017-23
signed a unit-price contract with Tedesco to perform the Route 228 work. The
contract price was $1,259,000.00. See Plaintiff’s Ex. 53, Agreement § 2 at 2,
6. The contract required the work to be completed in 220 days, and time was
of the essence. See id.
The contract included Article 15, “Suspension of Work and Termination.”
Id., Agreement § 4 at 32-34. Under Article 15.4, FWH could terminate the
contract “without cause” after providing Tedesco and Mr. Crosby seven days’
written notice. Id. at 33. If FWH invoked the provision, it agreed to pay
Tedesco “for completed and acceptable work executed in accordance with the
contract . . . including fair and reasonable sums for overhead and profit on
such work.” Id. (some capitalization omitted). However, Tedesco could not
collect “anticipated profits or revenues or other economic loss arising out of
or resulting from such termination.” Id.
Tedesco planned to complete the Route 228 work in 2015, but FWH soon
informed it that FWH lacked funding for the Project. Thus, FWH could not
commence the Project, and Tedesco was left with a gap in its 2015 paving
schedule. As a result, Tedesco lost the 35% profit it expected to earn from
the Route 228 work that summer. Still, Tedesco remained ready and eager
to do the work whenever FWH obtained financing. The parties communicated
intermittently over the next three years, but the Project never commenced.
On March 20, 2018, FWH asked Tedesco to send an escalation proposal
for price increases from the original contract price, due to the rise in fuel,
materials, and labor costs. Tedesco submitted a proposal to Mr. Crosby for
-2- J-A29017-23
an estimated 5% increase, per year. This proposal brought the contract price
to $1,560,000.00.
FWH still failed to start the Project in 2018. Instead, it hired Momentum,
a Seattle-based company, to replace Wooster & Associates and Mr. Crosby as
site manager. Momentum sent Bob Saunders to monitor the subcontractors
and “the construction management on site and [to do] all of that work, labor
bids, supervising bids.” N.T., 5/12/22, at 538.
Mr. Saunders eventually met with Tedesco. He requested an updated
escalation proposal. On August 15, 2018, Tedesco e-mailed Mr. Saunders a
new contract price of $1,652,463.70. Mr. Saunders did not reply.
Seven months later, on March 25, 2019, in a communication to a third
party, Mr. Saunders stated that FWH “awarded the contract for site paving
and the [Route 228] improvements” to Shields Paving, Tedesco’s competitor.
Plaintiff’s Ex. 60 at 1.
Then, on April 4, 2019, FWH’s attorney wrote to Tedesco’s subcontractor
and Tedesco. He admitted FWH had no intention of honoring its contract with
Tedesco.1 According to FWH’s attorney:
In 2015, it was intended that Tedesco [would] serve as the [Route 228] contractor for the Whitetail Meadows . . . Project in Adams Township, Butler County . . .
. . . In late 2018, Tedesco submitted a revised estimate for the cost of the [Route 228] work. Tedesco’s revised cost estimate was substantially in excess of the original cost estimate provided by Tedesco in 2015. Tedesco’s revised cost estimate was also in ____________________________________________
1 FWH’s attorney has passed away. Thus, he did not testify at trial.
-3- J-A29017-23
excess of other cost estimates for the [Route 228] work FWH received from other contractors. As a result, [FWH will] no longer use Tedesco to complete the [Route 228] work for the Project.
Plaintiff’s Ex. 61 at 2.
Three weeks later, on April 23, 2019, Tedesco sued FWH for breach of
contract in the Court of Common Pleas of Allegheny County. It sought an
anticipated 35% overhead and lost profits from the Route 228 work.
Soon “after [FWH] got sued,” on May 3, 2019, it wrote Tedesco. N.T.,
5/12/22, at 576; see also N.T., 5/11/22, at 443 (accord). The letter stated,
“Pursuant to Section 15.4 of the General Conditions of the [May 19, 2015]
agreement, [FWH] hereby provides the requisite seven days’ notice of its
intention to terminate the agreement for convenience. Said termination will
be effective May 10, 2019.” Defendant’s Ex. 4 (some capitalization omitted).
The matter proceeded to a jury trial. The jurors found FWH in breach
of the 2015 contract and awarded Tedesco $401,046.00 for overhead and lost
profits. FWH sought post-trial relief. Also, Tedesco moved to mold the verdict
to include interest and attorneys’ fees under Pennsylvania’s Contractor and
Subcontractor Payment Act (“CASPA”).2 The trial court denied FWH’s motion
and partially granted Tedesco’s motion. It added $135,664.87 in interest;
$133,682.00 in attorneys’ fees; and $7,845.44 in legal costs to the verdict.
The trial court entered judgment in favor of Tedesco for $678,238.31.
FWH appealed to this Court.
____________________________________________
2 See 73 P.S. §§ 501-517.
-4- J-A29017-23
III. Analysis
FWH raises the following nine issues:3
1. Whether the trial court erred as a matter of law in entering judgment for Tedesco for breach of contract where Tedesco failed to meet conditions precedent?
2. Whether the trial court erred as a matter of law in entering judgment for Tedesco for breach of contract where Tedesco failed to identify or prove material breach?
3. Whether the trial court erred as a matter of law in entering judgment for Tedesco for breach of contract where the trial court refused to apply the intent of the parties through the terms of the agreement, including the termination provision, which explicitly prohibits recovery of lost profit and overhead?
4. Whether the trial court erred as matter of law in entering judgment for Tedesco for breach of contract where Tedesco failed to prove its damages with reasonable certainty?
5. Whether the trial court abused its discretion by denying FWH’s objections at trial requesting that Tedesco be precluded from providing testimony on projects allegedly similar in scope to the FWH project, when Tedesco failed to lay a proper foundation and provide FWH with underlying ____________________________________________
3 FWH initially poses its nine issues as three compound questions. See FWH’s Brief at 4-5. Tedesco responds, “Despite purporting to assert ‘three’ issues in this appeal, FWH has crammed the majority of its Statement of [Errors] Complained of On Appeal’s 15 errors into its brief.” Tedesco’s Brief at 27-28, n.5. Tedesco claims this is “a taboo practice of appellate advocacy that raises the presumption that none of [FWH’s] issues . . . have any merit.” Id. at 27- 28 (citing Aldisert, The Appellate Bar: Professional Competence . . . , 11 CAP. U. L. REV. 445, 458 (1982) (“When I read an appellant’s brief that contains ten or twelve points, a presumption arises that there is no merit to any of them. I do not say that it is an irrebuttable presumption, but it is a presumption that reduces the effectiveness of appellate advocacy.”)). We agree. Nevertheless, we dissect FWH’s “three” questions into their component issues for ease of disposition. This mirrors the nine, separate arguments in FWH’s brief.
-5- J-A29017-23
documents on the allegedly similar projects during discovery or trial?
6. Whether the trial court erred as a matter of law in awarding interest and attorneys’ fees under CASPA, because the clear and unambiguous terms of the Act apply only to claims of non-payment for work actually performed?
7. Whether the trial court erred as a matter of law in awarding interest and attorneys’ fees under CASPA, because Tedesco failed to prove that FWH violated a payment term of the agreement?
8. Whether the trial court erred as a matter of law in awarding interest and attorneys’ fees under CASPA, because attorneys’ fees and interest for late payment is available only upon a finding that FWH violated a payment term of CASPA?
9. Whether the trial court erred as a matter of law in awarding interest and attorneys’ fees under CASPA, because Tedesco waived any claim or allegation of bad faith.
See FWH’s Brief at 4-5. We dispose of each issue in turn.
A. Tedesco’s Alleged Conditions Precedent
First, FWH requests judgment notwithstanding the verdict (“JNOV”),
because it believes the contract unambiguously required Tedesco to meet
conditions precedent before FWH owed it any money. In FWH’s mind, Tedesco
failed to prove it fulfilled those conditions. Specifically, FWH argues that the
contract required Tedesco to submit change orders to Mr. Crosby, if it wished
to increase the contact price. Further, FWH claims the contract obligated FWH
to provide supporting documents to justify any price increase. FWH thinks
Tedesco disregarded this procedure on August 15, 2018, when Mr. Saunders
asked it to submit a cost-escalation proposal.
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FWH also argues that, by submitting the issue of whether it materially
breached the contract to the jury, the trial court ignored the parties’ intentions
as expressed in the contract. In FWH’s view, the court thereby rewrote the
contract. Thus, the jury could not hold it in breach of contract, as a matter of
law.
Tedesco replies that FWH has waived this issue and its accompanying
theories of trial-court error. It contends, “The intent of the parties at the time
of contracting was not an issue that FWH argued at trial.” Tedesco’s Brief at
27. Additionally, the “issue of Tedesco’s adherence to purported ‘conditions
precedent’ was similarly never raised or briefed by FWH in its post-trial
submission.” Id.; see also id. at 44-46.
“The issue of waiver presents a question of law, and, as such, our
standard of review is de novo, and our scope of review is plenary.” Trigg v.
Children’s Hosp. of Pittsburgh of UPMC, 229 A.3d 260, 269 (Pa. 2020).
FWH’s brief contains no “Statement of Place of Raising or Preservation
of Issues,” in violation of Pennsylvania Rule of Appellate Procedure 2117(c).4
4 If “an issue is not reviewable on appeal unless raised or preserved below,
the Statement of the Case shall also specify:
(1) The state of the proceedings in the court of first instance, and in any appellate court below, at which, and the manner in which, the questions sought to be reviewed were raised.
(2) The method of raising them (e.g. by a pleading, by a request to charge and exceptions, etc.). (Footnote Continued Next Page)
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See FWH’s Brief at 6-8. Moreover, its reply brief does not indicate where FWH
preserved this issue at trial. Instead, FWH responds that “Tedesco’s wavier
argument is wholly unavailing.” FWH’s Reply Brief at 7. FWH then quotes its
Rule 1925(b) Statement of Errors to suggest that it properly preserved this
issue for appellate review. See id. at 7-8.
FWH misunderstands issue preservation in Pennsylvania. Admittedly,
“Issues not included in the [Rule 1925(b)] statement and/or not raised in
accordance with the provisions of this paragraph (b)(4) are waived.” Pa.R.A.P.
1925(b)(4)(vii). However, including an issue in a 1925(b) statement does not
preserve it for appeal, if an appellant abandoned that issue before, during, or
after trial. This is because a 1925(b) statement is filed after the notice of
appeal and, thus, after the trial court has lost jurisdiction over the case to an
appellate court. As a result, the trial court is unable to correct the alleged
error, and, if that error was not previous brought to the trial court’s attention,
the appellant never afforded the trial court an opportunity for self-correction.
Therefore, FWH’s contention that it preserved this issue by raising it for
the first time “in [its] Concise Statement . . . is wholly without merit.” Steiner
(3) The way in which they were passed upon by the court.
(4) Such pertinent quotations of specific portions of the record, or summary thereof, with specific reference to the places in the record where the matter appears (e.g. ruling or exception thereto, etc.) as will show that the question was timely and properly raised below so as to preserve the question on appeal.”
Pa.R.A.P. 2117(c).
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v. Markel, 968 A.2d 1253, 1257 (Pa. 2009). As the Steiner Court explained,
“a Rule 1925(b) statement cannot resurrect an otherwise untimely claim or
objection.” Id. FWH’s reliance upon its 1925(b) statement to rebut Tedesco’s
waiver argument is wholly unavailing.
Turning to the trial transcript and FWH’s post-trial motion, the record
supports Tedesco’s waiver argument. “Issues not raised in the trial court are
waived and cannot be raised for the first time on appeal.” Pa.R.A.P. 302(a).
Furthermore, when “a litigant files post-trial motions but fails to raise a certain
issue, that issue is deemed waived for purposes of appellate review.”
Diamond Reo Truck Co. v. Mid-Pac. Indus., Inc., 806 A.2d 423, 428 (Pa.
Super. 2002).
“This is because, as [the Supreme] Court has oft reminded, issue
preservation is foundational to proper appellate review.” Trigg, 229 A.3d at
269. “Requiring issues to be properly raised first in the trial court ensures
that trial judges have the opportunity to consider a potential appellate issue
and correct any error at the first available opportunity.” Id. “It also promotes
the orderly and efficient use of judicial resources, ensures fundamental
fairness to the parties, and accounts for the expense attendant to appellate
litigation.” Id.
During trial, FWH made two motions for judgment as a matter of law.
It moved for a compulsory nonsuit at the close of Tedesco’s case-in-chief and
for a directed verdict at the close of all the evidence. See N.T., 5/12/22, at
499, 713. Counsel for FWH said the grounds for the nonsuit were twofold.
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First, FWH claimed that Tedesco “had not identified any term, any provision
of . . . the contract which has been breached.” Id. at 499. Second, FWH
argued that Tedesco offered legally insufficient evidence of its damages from
the breach. See id. at 499.
Regarding the claim that there was insufficient proof of breach, counsel
argued, “to prove a breach of contract, you have to show the particular
provision of the actual contract that existed has been breached.” Id. at 500.
“No provision of . . . the contract has been breached; no evidence has been
offered.” Id. “The only time that Tedesco was fired, Your Honor, was in the
termination for convenience provision. That was when he was fired. That was
after the complaint.” Id. at 501. “There is no breach of the document that
they brought, and it hasn’t been identified.” Id. Counsel never argued the
contract was unambiguous, that the trial court disregarded the parties’
intentions, or that Tedesco failed to fulfill conditions precedent.5
5 We also note that counsel stated FWH had a brief for the trial court in support
of its motion for a compulsory nonsuit. However, FWH neglected to file that brief of record. “The emphasis on the certified record is necessary because, unless the trial court certifies a document as part of the official record, the appellate judiciary has no way of knowing whether that piece of evidence was duly presented to the trial court or whether it was produced for the first time on appeal and improperly inserted into the reproduced record.” Commonwealth v. Preston, 904 A.2d 1, 6–7 (Pa. Super. 2006). “Simply put, if a document is not in the certified record, the Superior Court may not consider it.” Id.
Thus, for purposes of this appeal, the brief that FWH provided to the trial court at the time of its motion for compulsory nonsuit does not exist. Any additional arguments it may have made therein are waived based on its failure to include the brief in the record.
- 10 - J-A29017-23
As for the motion for directed verdict, counsel for FWH only said, “I don’t
believe [Tedesco] has shown breach. [It has] had the opportunity to present
challenge by the defense, and I stand by my argument that no breach has
been shown.” Id. at 713. Again, FWH’s attorney made no mention of contract
language being unambiguous, the trial court overriding the parties’ intentions,
or any conditions precedent as grounds for a directed verdict.
Additionally, FWH did not request JNOV based on a supposed failure of
Tedesco to prove that it fulfilled conditions precedent. See FWH’s Motion for
Post-Trial Relief at 4-9. Instead, FWH sought JNOV on two grounds: (1) “the
contract is clear and unambiguous that FWH could terminate for convenience”
and (2) “Tedesco failed to prove damages for breach of contract with
reasonable certainty.” Id. at 4, 7.
Because FWH did not raise its first appellate issue and accompanying
legal theories on conditions precedent at trial or in its post-trial motion, we
dismiss that issue as waived. See Pa.R.A.P. 302(a); Diamond Reo Truck,
supra.
B. FWH’s Anticipatory Repudiation
As its second issue, FWH requests JNOV, because “Tedesco failed to
identify what provision of the agreement FWH allegedly breached.” FWH’s
Brief at 25 (some capitalization removed). Curiously, FWH alleges Tedesco
failed to identify which provision it breached, but FWH then admits Tedesco
identified “almost every provision of the contract” as the basis of FWH’s
breach. FWH’s Brief at 26 (quoting N.T., 5/12/22, at 503) (emphasis added).
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FWH also acknowledges Tedesco answered its motion for a nonsuit by arguing
that “FWH didn’t intend to pay [Tedesco, and FWH] said [it does not] intend
to honor the contract.” Id. (quoting N.T., 5/12/22, at 503). “What more
fundamental breach can there be?” Id. Indeed. FWH’s own brief disproves
the underlying premise of its second issue. As we explain, Tedesco contended
and proved FWH anticipatorily repudiated the contract as a whole and, in
particular, its promise to pay Tedesco for doing the work.
When reviewing a trial court’s denial of JNOV, “we must consider the
evidence, together with all favorable inferences drawn therefrom, in the light
most favorable to the verdict winner.” A.Y. v. Janssen Pharms. Inc., 224
A.3d 1, 11 (Pa. Super. 2019). Thus, we accept as true Tedesco’s evidence,
because it prevailed at trial. “Concerning questions of credibility and weight
accorded the evidence at trial, we will not substitute our judgment for that of
the finder of fact.” Id. Also, JNOV “is a drastic remedy. A court cannot lightly
ignore the findings of a duly selected jury.” Id.
“We will reverse a . . . denial of a [JNOV] only when we find an abuse
of discretion or an error of law that controlled the outcome of the case.”
International Diamond Importers, Ltd. v. Singularity Clark, L.P., 40
A.3d 1261, 1267 (Pa. Super. 2012) (quoting Janis v. AMP, Inc., 856 A.2d
140, 143–44 (Pa. Super. 2004)). “There are two bases upon which a [JNOV]
can be entered: one, the movant is entitled to judgment as a matter of law
and/or two, the evidence is such that no two reasonable minds could disagree
that the outcome should have been rendered in favor of the movant.” Id.
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“Three elements are necessary to plead a cause of action for breach of
contract: (1) the existence of a contract, including its essential terms, (2) a
breach of the contract; and (3) resultant damages.” 412 N. Front St.
Assocs., LP v. Spector Gadon & Rosen, P.C., 151 A.3d 646, 657 (Pa.
Super. 2016). The parties agree that they entered a binding contract on May
19, 2015 for Tedesco to work on Route 228 and for FWH to pay Tedesco for
that work. Hence, FWH does not dispute proof of the first element.
Regarding the second element, FWH seemingly believes “that a breach
of contract . . . can occur only at the time that the terms of the promise
prescribed and under the conditions therein specified.” Corbin, 9 CORBIN ON
CONTRACTS § 959 at 756 (1979). In FWH’s view, it could only breach after
Tedesco performed the work and applied for payment under the conditions of
the contract.
“The existing law, however, is otherwise.” Id. FWH’s promise to pay
Tedesco imposed upon FWH “duties of immediate performance long before the
time set for” FWH’s payment arrived. Id. Thus, an “anticipatory repudiation
or breach” may occur when one party expresses “an absolute and unequivocal
refusal to perform or a distinct and positive statement of an inability to do so.”
Harrison v. Cabot Oil & Gas Corp., 110 A.3d 178, 184 (Pa. 2015).
The doctrine of anticipatory repudiation has existed in Pennsylvania for
at least 175 years. In Campbell v. Gates, 10 Pa. 483 (1849), on November
1, 1845, the parties entered into a five-year contract that Gates would mine,
properly clean, and haul iron ore to Campbell’s furnace. Gates delivered iron
- 13 - J-A29017-23
ore until the following August and Campbell sent him a letter complaining that
the ore was “of an inferior sort . . . which renders it very unproductive” in the
furnace. Id. at 484. Campbell’s letter then stated he would not accept future
deliveries of ore unless it was pure. When Gates attempted another delivery,
Campbell’s agent rejected the ore. Gates immediately sued Campbell for
breaching the entire contract.
In its charge, the trial court explained that whether Gates had properly
cleaned the ore prior to August 18, 1846 was a factual question for the jury.
But if the jury found Gates properly cleaned the ore, Campbell’s August 18 th
letter was an anticipatory repudiation, as a matter of law. Directing a verdict
for Gates on the element of breach, the court said:
The letter, like the contract, is for the court to construe, and, taking it as a whole . . . we have no hesitation in pronouncing it a refusal [by Campbell to perform] the contract of 1st November, 1845 – a repudiation of that agreement – and a proposition to substitute for it new and inconsistent conditions. The contract specifies the terms on which [Campbell was] to receive and pay for [Gates’] ore; the letter informs [Gates] that “hereafter I will not receive any more of your ore on any other terms than such as I conceive fair and just.” [But] the contract gives [Campbell] no right of dockage; the letter tells [Gates], plainly, that [Campbell has] assumed this right, “and if you think that you can stand the process of dockage of the ore you have hauled since the 1st of April, as well as that which you may haul hereafter, you may continue to haul.” The contract contemplated the delivery of ore properly cleaned, which . . . might, or might not, be absolutely clean ore; [by contrast,] the letter demands “nothing but the pure iron ore.”
Now, when it is considered that Gates had received no intimation that his ore was not according to the contract, and when the letter was followed by an authorized refusal to weigh the only load he carried to the furnace after the receipt of the letter,
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we hold that he was right in regarding a letter couched in such terms as an interruption of the contract, and a refusal on the part of [Campbell] to go on with its performance. [Gates] did so regard it. He carried no more ore, but instituted this action for damages.
Id. at 486 (emphasis in original).
The trial court also held that the anticipatory repudiation “seemed to be
comprehensive . . . .” Id. In other words, Gates could treat the repudiation
as if it were an immediate, material breach. Hence, as a matter of law, Gates
was entitled to “recover for the value of his contract for the whole time it had
[left] to run.” Id.
The jury found Gates properly cleaned the iron ore. Therefore, Campbell
had no right to withhold his acceptance of it. The jury awarded Gates his lost
profits for the five-year life of the contract. Campbell appealed and contended
the August 18, 1846 letter was not an anticipatory repudiation, as a matter of
law, but only “a requisition for exact performance . . . .” Id. at 487. Also, he
contended Gates could only recover losses sustained from work he actually
performed, not future lost profits.
Summarily rejecting Campbell’s claims of error, the Supreme Court of
Pennsylvania held that the jury charge was “accord[ed] with the views which
this Court entertains on the subjects discussed” and affirmed “for the reasons
stated by the learned judge.” Id. at 487. Thus, the Supreme Court adopted
the trial court’s anticipatory-repudiation charge as Pennsylvania law. Under
Campbell, if a party communicates his refusal to perform a contract to the
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other party, a breach-of-contract action for damages on the entire contract
immediately accrues to the other party.
Here, the Article entitled “Contract Price” dictated that FWH “shall pay
[Tedesco] for completion of the work . . . .” Plaintiff’s Ex. 53, Agreement § 2
at 2 (emphasis added). In July of 2015, FWH confessed its complete financial
inability to pay Tedesco. At that point, it anticipatorily repudiated the contract,
and Tedesco’s cause of action for breach of contract accrued. FWH reaffirmed
its anticipatory repudiation after it had acquired sufficient funds, when its
attorney wrote the April 4, 2019 letter to Tedesco and admitted FWH would
“no longer use Tedesco to complete the [Route 228] work . . . .” Plaintiff’s
Ex. 61 at 2.
Like the letter in Campbell, supra, FWH communicated its clear and
unequivocal refusal to pay Tedesco under the original contract. As a matter
of law, Tedesco “was right in regarding a letter couched in such terms as an
interruption of the contract, and a refusal on the part of [FWH] to go on with
its performance.” Campbell, 10 Pa. at 486. Thus, Tedesco offered sufficient
evidence to show “(1) the existence of a contract, including its essential terms
[and] (2) a breach of the contract . . . .” 412 N. Front St. Assocs., 151 A.3d
at 657.
Accordingly, FWH’s second claim of error is meritless.
C. FWH’s Untimely Invocation of Termination Provision
Third, FWH argues it is entitled to JNOV, because it invoked Article 15.4,
which gave FWH the right to terminate the contract without cause. Initially,
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FWH reiterates that it did not breach prior to invoking the provision. As stated
above, FWH anticipatorily repudiated the contract in July of 2015. It did not
invoke Article 15.4 until May 3, 2019, i.e., nearly four years later. Thus, any
contention that FWH invoked the termination provision before repudiating the
contract is factually erroneous.
Alternatively, FWH claims its anticipatory repudiation is irrelevant, as a
matter of law, because Tedesco did not prove FWH invoked the termination
provision in bad faith. FWH says, “there is no basis in the law which would
eliminate the right to terminate, simply because such action is taken after a
lawsuit is filed.” FWH’s Brief at 32. However, it cites no authority to support
that contention, and the law is contrary to it.
As Professor Murray explained, “an innocent obligee [i.e., Tedesco] may
respond to an anticipatory repudiation in different ways.” MURRAY ON
CONTRACTS § 110[D] at 683 (5th ed. 2011). The innocent obligee’s “two basic
choices are to treat the contract as immediately breached prior to the time for
performance or to await performance by the repudiating obligor.” Id.
Tedesco chose the first option when it sued FWH; Tedesco treated the
FWH contract as immediately breached prior to the time that FWH’s payment
obligation was due. By doing so, Tedesco terminated its contractual
obligations to FWH, including the obligation to adhere to the termination-
without-cause provision. “Where one party to an executory contract prevents
the performance of it, or puts it out of his own power to perform it, the other
party may regard it as terminated, and demand whatever damage he has
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sustained thereby.” Hocking v. Hamilton, 27 A. 836, 838 (Pa. 1893)
(quoting Lovell v. St. Louis Mut. Life Ins. Co., 111 U.S. 264, 275 (1884))
(emphasis added).
This Court has said, if a breach “constitutes a material failure of
performance, the non-breaching party is relieved from any obligation to
perform; thus, a party who has materially breached a contract may not insist
upon performance of the contract by the non-breaching party.” McCausland
v. Wagner, 78 A.3d 1093, 1101 (Pa. Super. 2013). In other words, a
repudiator may not hold the other party to terms of the repudiated contract.
When a repudiation occurs, “the plaintiff either may rescind the contract and
seek restitution or enforce the contract and recover damages based on
expectation.” Id. at 1102 (emphasis in original).
The jury found FWH’s anticipatory repudiation to be a material breach.
FWH does not challenge the finding of materiality on appeal. Thus, that factual
finding is now final.
Under Hocking, Lovell, and McCausland, Tedesco could properly treat
FWH’s anticipatory repudiation as a material breach that ended any obligations
Tedesco had under the contract. Thus, when Tedesco filed suit against FWH,
FWH lost its right to hold Tedesco to Article 15.4 and the limitation of damages
thereunder. FWH’s April 3, 2019 termination letter to Tedesco had no legal
force or effect. By then, the contract no longer bound Tedesco, the innocent
obligee. See Murray, supra.
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As such, the case upon which FWH relies, John B. Conomos, Inc. v.
Sun Co. (R&M), 831 A.2d 696, 700 (Pa. Super. 2003), is distinguishable.
There, Conomos agreed in May of 1996 to paint pipes in areas Seven, Eight,
and Nine of Sun’s refinery. Conomos completed area Seven and part of area
Eight. However, Sun’s inspector refused to approve Conomos’ site prep and
demanded that it take additional steps. Conomos complied but requested a
price increase. Sun ignored that request, and Conomos abandoned the work.
Two months later, Sun sent a letter to Conomos invoking a provision
that allowed Sun to cancel the contract, at any time. Upon Sun’s invocation
of the provision, Conomos “waive[d] any claim for . . . loss of anticipated
profits . . . .” Id. at 704. It could still collect “the sum of all costs properly
incurred by [Conomos] prior to the date of cancellation, plus any earned profit
on such incurred costs, but in no event [could] such amount be greater than
the contract price.” Id. Based on Sun’s interpretation of that provision, it
said that it owed the contract price for area Seven, plus 50% of the contract
price for area Eight, minus what it would cost to have someone else complete
the work. “Conomos thereafter filed suit for the balance due under the
contract, plus additional charges for the additional preparation required, as
well as a claim under [CASPA].” Id. at 702 (some punctuation omitted).
The jury found the Sun had not inspected the Conomos’ work in good
faith. Thus, it held Sun in breach of an implied obligation to inspect the work
in good faith and awarded damages. On appeal, this Court enforced the
cancellation provision and its cap on Conomos’ damages. Unlike this case,
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however, Conomos never treated Sun’s breach of its implied obligation to
inspect Conomos’ work in good faith as an anticipatory repudiation of the
contract. Conomos also did not file suit on that theory prior to Sun invoking
the cancellation provision. Thus, under that procedural posture, Conomos did
not end its contractual obligations before Sun sent the cancellation letter.
If FWH wished to avail itself of Article 15.4 under Conomos, it needed
to do so before it anticipatorily repudiated the contract and Tedesco filed suit.
FWH did not. Thus, neither Article 15.4 nor Conomos excuse its anticipatory
repudiation, which Tedesco and the jury deemed a material breach. By filing
suit after FWH’s anticipatory repudiation and before receiving formal notice of
termination, Tedesco ended its obligation under Article 15.4 and preserved its
common-law right to “demand whatever damage [Tedesco] sustained,”
including lost overhead and profits. Hocking, 27 A. at 838; see also
Campbell, supra.6 ____________________________________________
6 We note that FWH cites Weaver & Sons Excavation LLC v. Wohlsen Construction Co., Ci-15-04681, 2016 Pa.D.&C. LEXIS 991 (C.C.P. Lancaster 2016) (unpublished). There, the trial court sustained a preliminary objection (a demurrer) to Weaver & Sons’ claim for lost profits after Wohlsen timely terminated the contract. As alleged in the operable complaint, Weaver & Sons began excavation work under a contract with Wohlsen. In November of 2013, Wohlsen asked Weaver & Sons to remove its equipment from the site, and Weaver & Sons saw a competitor doing the work.
Instead of treating this as an anticipatory repudiation and immediately filing suit, Weaver & Sons wrote to Wohlsen inquiring about the project. Wohlsen replied that it did not require Weaver & Son’s services “at this time.” Id., Trial Court Opinion, 6/23/16, at 3. Then, on April 10, 2014, Wohlsen notified Weaver & Sons that the contract was terminated. Weaver & Sons (Footnote Continued Next Page)
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Hence, we dismiss FWH’s third appellate issue as meritless.
D. Tedesco’s Proof of Damages
Fourth, FWH claims Tedesco’s evidence of damages is speculative and,
therefore, insufficient. “Tedesco failed to present evidence to establish the
amount of profit [it] would have made on [Route 228] with reasonable
certainty.” FWH’s Brief at 39. FWH maintains the 35% mark-up for overhead
and profit in the unit-price contract in 2015 was mere guesswork by Tedesco.
FWH indicates that no “witness testified . . . as to the amount of profit Tedesco
would have actually received had Tedesco completed [the work] given real-
world conditions.” Id. at 40.
Attempting to establish “real-world conditions,” FWH cites the testimony
of its witnesses. FWH asserts the testimony of “Randy Park of Shields and
[Mr.] Saunders of Momentum demonstrates that, even if Tedesco were willing
to perform the actual project work, Tedesco would have encountered
unforeseen conditions and delays . . .” Id. at 41. These unforeseen
conditions, in turn, “would have affected Tedesco’s bottom line and which were
not accounted for or addressed by Tedesco.” Id. These arguments go to the
weight of the evidence, not its legal sufficiency.
In contract disputes, this Court has “recognized that proof of lost profits
is not entirely of an unspeculative nature.” Merion Spring Co. v. Muelles ____________________________________________
commenced its lawsuit on May 27, 2015, over a year after Wohlsen terminated the contract. Thus, Weaver & Sons did not allege an anticipatory repudiation or treat the contract as terminated before the obligor invoked the termination provision. Weaver & Sons is procedurally distinguishable.
- 21 - J-A29017-23
Hnos. Garcia Torres, S.A., 462 A.2d 686, 698 (Pa. Super. 1983) (some
punctuation omitted). “Such must always be the case because, as a
consequence of the breach, the injured party was not only deprived of
whatever profits it would have made from the transaction, but it has also been
deprived of the business records necessary to determine these profits with
specificity.” Id.
“The only situation in which specificity could have been maintained is
now lost due to [FWH’s] course of action breaching the contract.” Id. “Having
committed the breach, [FWH] cannot now be heard to complain about
imprecision in the method of estimating the profits lost” by Tedesco. Id.
Furthermore, FWH’s reliance upon its own witnesses violates our scope
and standard of review. Instead of viewing the record facts in the light most
favorable to Tedesco, as verdict winner, FWH views them in the light most
favorable to itself. We remind FWH that the “jury [was] free to believe all,
some, or none of the witness testimony presented at trial.” Carroll v.
Avallone, 939 A.2d 872, 874 (Pa. Super. 2007). Because it returned a verdict
in favor of Tedesco, we must reject the testimony of FWH’s witnesses on the
grounds that the finder of fact deemed them incredible. Thus, FWH’s attempt
to relitigate the weight of the evidence by comparing its witnesses’ testimony
to that of Tedesco’s witnesses fails to establish that FWH is entitled to JNOV.
Tedesco’s vice president and its accountant both testified that Tedesco
expected, and usually makes, a 35% profit on projects similar in nature and
scope to the Route 228 work. The jury was free to accept their testimony as
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true, and we will not reweigh the competing testimony of various witnesses
on appeal. See id. The testimony of Tedesco’s witnesses is sufficient, as a
matter of law, to establish the third and final element for a breach-of-contract
claim. See 412 N. Front St. Assocs., 151 A.3d at 657.
FWH’s fourth issue is meritless.
E. Tedesco’s Demonstrative
Next, FWH seeks a new trial, because the trial court “erred as a matter
of law and abused its discretion in permitting Tedesco to testify concerning
and [to] present a demonstrative [chart] containing information regarding
allegedly similar projects.” FWH’s Brief at 38. However, FWH neglected to
file that demonstrative with the Allegheny County Department of Court
Records.7 FWH’s neglect of the filing procedure implicates waiver.8
We may not review anything beyond the record. Something “which is
not part of the official certified record is considered to be non-existent,” and
“[w]here a review of an appellant’s claim may not be made because of such a
defect in the record, we may find the issue waived.” Eichman v. McKeon,
824 A.2d 305, 316 (Pa. Super. 2003).
7 Following oral argument, our staff took the extraordinary step of contacting
the Allegheny County Department of Court Records to ask if they accidentally forgot to forward the demonstrative to this Court. County personnel verified that the demonstrative was not of record. As such, no breakdown in the court system occurred.
8 Our scope and standard of review for wavier appear in section III(A), supra.
We reincorporate them here by reference.
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“The original papers and exhibits filed in the lower court; paper copies
of legal papers filed with the prothonotary by means of electronic filing; the
transcript of proceedings, if any; and a certified copy of the docket entries
prepared by the clerk of the lower court shall constitute the record on appeal
in all cases.” Pa.R.A.P. 1921 (emphasis added). “All involved in the appellate
process have a duty to take steps necessary to assure that the appellate court
has a complete record on appeal[, but u]ltimate responsibility for a complete
record rests with the party raising an issue that requires appellate court access
to record materials.” Pa.R.A.P. 1921, Note.
Here, FWH did not comply with the Rule. It failed to perfect the certified
record by ensuring that the objected-to demonstrative was of record for this
appeal. Further, FWH’s summary in its brief of what it recalls of the
demonstrative is a pale substitute for the demonstrative itself. And more
importantly, because FWH did not include the demonstrative in the certified
record, it “is considered to be non-existent.” Eichman, 824 A.2d at 316.
We cannot perform a meaningful, abuse-of-discretion review of the trial
court’s rationale for permitting the use of a demonstrative that does not exist.
Accordingly, FWH’s failure to perfect the certified record by including the
demonstrative therein has made it impossible for us to review the trial court’s
decision or the demonstrative’s potential prejudicial effect, if any, upon the
jury. FWH’s violation of Rule 1921 is waiver. See Eichman, supra.
FWH’s fifth appellate issue dismissed as waived.
F. CASPA’s Plain Language
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As its sixth issue, FWH challenges the trial court’s order to mold the
verdict pursuant to CASPA, 73 P.S. §§ 505-507. Under CASPA, the trial court
awarded Tedesco an additional $277,192.31 for interest, attorneys’ fees, and
legal costs. FWH contends this was error, because CASPA only applies if a
contractor or subcontractor works on site. FWH believes that, by repudiating
the contract before affording Tedesco a reasonable opportunity to work, FWH
exculpated itself from CASPA liability. We disagree.
Whether CASPA applies when an innocent obligee treats an anticipatory
repudiation as a material breach by filing suit appears to be a matter of first
impression. Neither party cites any precedent where a court has considered
CASPA’s application in such a situation, and our research reveals none.
“The interpretation and application of a statute is a question of law.”
Int. of C.K.M., 279 A.3d 610, 611 (Pa. Super. 2022), appeal denied, 291
A.3d 864 (Pa. 2023). “As with all questions of law, we must employ a de novo
standard of review and a plenary scope of review . . . .” Id. at 612.
Our “goal in interpreting any statute is to ascertain and effectuate the
intention of the General Assembly while construing the statute in a manner
that gives effect to all its provisions.” Id. (citing 1 Pa.C.S.A. § 1921(a)). As
with all statutory interpretation, our review begins and pretty much ends with
the statute itself. “It is well settled that the best indication of the General
Assembly’s intent may be found in a statute’s plain language.” Id. “When
the words of a statute are clear and free from all ambiguity, the letter of it is
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not to be disregarded under the pretext of pursuing its spirit.” 1 Pa.C.S.A. §
1921(b).
CASPA is “a comprehensive statute enacted in 1994 to cure abuses
within the building industry involving payments due from owners to
contractors, contractors to subcontractors, and subcontractors to other
subcontractors.” Zimmerman v. Harrisburg Fudd I, L.P., 984 A.2d 497,
500 (Pa. Super. 2009). A remedial statute, it is “to protect contractors and
subcontractors and to encourage fair dealing among parties to a construction
contract.” Id. at 500–01 (some punctuation omitted). When CASPA applies,
“interest, penalty, attorney fees, and litigation expenses may be imposed on
an owner . . . who fails to make payment to a contractor . . . in compliance
with the statute.” Id. at 501.
Under that statute, “Performance by a contractor or a subcontractor in
accordance with the provisions of a contract shall entitle the contractor or
subcontractor to payment from the party with whom the contractor or
subcontractor has contracted.” 73 P.S. § 504. FWH claims this section
requires actual work as a prerequisite for a contractor or subcontractor to
recover under CASPA. Section 504 expresses no such requirement.
Presumably, when the General Assembly enacted CASPA in 1994, it was
well aware of Pennsylvania’s common law of contracts, including the doctrine
of anticipatory repudiation, which has existed since 1846. See Campbell,
supra. Thus, if the legislature had wished to exclude cases such as this –
where an owner anticipatorily repudiates a construction contract, and the
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contractor (or the subcontractor) treats the repudiation as a material breach
– from the scope of CASPA, it would have said so. The legislature did not.
Nothing in the plain language of Section 504 (or any other section)
excludes anticipatory-repudiation claims from the statutory coverage. We can
conceive of no reasons why the General Assembly would intend to punish
obligors for breaching after a contractor (or subcontractor) has performed but
not also intend to punish obligors for materially breaching before performance.
The latter situation is more egregious, because it completely deprives the
contractor (or subcontractor) of its expectation interest, whereas the former
scenario only partially impacts that interest. Why would the General Assembly
intend to remedy the lesser breach but not the greater? FWH offers no
rationale for drawing such an absurd distinction based on when an owner
materially breaches a construction contract. “The General Assembly does not
intend a result that is absurd . . . .” 1 Pa.C.S.A. § 1922(1).
In our view, 73 P.S. § 504 merely recodifies a basic principle of contract
law – namely, that a contractor or subcontractor has the right to be paid for
doing the work. See MURRAY ON CONTRACTS § 108[B][2] at 665 (explaining
that, when an owner fails to make a payment under a construction contract,
“traditionally, such a failure has been regarded as a material breach by the
owner.”). More critically, Section 504 does not mention, much less govern,
the liability of owners under CASPA; it only mentions contractors and
subcontractors. Hence, Section 504 offers FWH no relief.
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Additionally, FWH relies on 73 P.S. § 506(a). That subsection provides,
“The owner may withhold payment for deficiency items according to the terms
of the construction contract. The owner shall pay the contractor according to
the provisions of this act for any item which appears on the invoice and has
been satisfactorily completed.” 73 P.S. § 506(a). The legislature defined
“deficiency item” as “Work performed but which the owner, the contractor
or the inspector will not certify as being completed according to the
specifications of a construction contract.” 73 P.S. § 502 (emphasis added).
FWH did not allow Tedesco to work, because it anticipatorily repudiated
the contract. There were no “deficiency items,” for which FWH could withhold
payment under Section 506(a), because FWH’s violation of contract law
prevented Tedesco from performing any work. We hold that in order for an
owner to invoke Section 506(a) of CASPA, the owner must not have
anticipatorily repudiated and, instead, must have allowed the contractor (or
subcontractor) a meaningful opportunity to perform the work. Any result to
the contrary would be absurd and palpably frustrate the remedial nature of
CASPA. Thus, Section 506 does not shield FWH from statutory liability
following its anticipatory repudiation.
Instead, as Tedesco contends, 73 P.S. § 505 imposes statutory duties
upon owners, such as FWH. “The owner shall pay the contractor strictly in
accordance with terms of the construction contract.” 73 P.S. § 505(a).
On April 24, 2019, Tedesco provided FWH Application for Payment #2
for Final Payment, which detailed the lost overhead and profits that Tedesco
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sought in the wake of FWH’s anticipatory repudiation and material breach.
Upon Tedesco’s application for final payment, according to Article 5.2 of the
contract, FWH “shall pay the remainder of the Contract Price . . . .” Plaintiff’s
Ex. 53, Agreement § 2 at 2, 3.
The parties agree that FWH did not pay Tedesco the amount listed in
Application for Payment #2 for Final Payment. Therefore, FWH did not “pay
[Tedesco] strictly in accordance with terms of the construction contract.” 73
P.S. § 505(a). We hold that, where (1) a party anticipatorily repudiates a
construction contract, (2) the contractor (or subcontractor) demands final
payment for its lost overhead and profits, and (3) the repudiating party
refuses to pay the demanded sum, CASPA applies. All of those things occurred
here. Hence, the trial court correctly applied the statute in this case.
FWH’s sixth claim of error is meritless.
G. FWH’s Reliance upon Conditions Precedent
Next, FWH attempts to overturn the trial court’s award of interest and
attorneys’ fees based on conditions precedent that it believes Tedesco needed
to fulfill in submitting Application for Payment #2 for Final Payment. FWH also
reiterates its prior contention that it terminated the contract in its May 3, 2019
letter. Based on the reasons expressed in section III(C), supra, we reject
FWH’s claim that it could invoke the termination-without-fault provision after
anticipatorily repudiating and after Tedesco treated that repudiation as a
material breach by filing suit. As explained above, Tedesco exercised its right
to end its obligations to FWH under the repudiated contract.
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Similarly, Tedesco did not need to fulfill conditions precedent to submit
Application for Payment #2 for Final Payment, such as seeking prior approval
of the engineer. Its obligations under the contract ended when FWH materially
breached. See Hocking and Lovell, supra. Moreover, by then, FWH had
replaced Mr. Crosby as engineer, and Tedesco had no contractual relationship
with Momentum. Hence, claiming that Tedesco should have submitted
Application for Payment #2 to Mr. Crosby, rather than sending it directly to
FWH itself, is facially illogical.
FWH’s seventh issue is meritless.
H. Tedesco’s Status as Substantially Prevailing Party
Next, FWH asserts that Tedesco is not a “substantially prevailing party.”
According to FWH, “Tedesco must prove that ‘it is the substantially prevailing
party in any proceeding to recover any payment under this act.’” FWH’s Brief
at 49 (quoting 73 P.S. § 512(b) (some punctation omitted). As explained in
section III(F), supra, Tedesco may recover under CASPA; hence, it is the only
prevailing party in the post-trial CASPA proceeding. This issue is meritless.
I. Tedesco’s Interest Award
Finally, FWH indicates the trial court awarded Tedesco “interest” in the
amount of $135,664.87, “without identifying which type of interest – regular
or penalty” – the award represented. FWH’s Brief at 50. It then makes a
conditional argument if the interest award was for penalty interest. See id.
at 51-52. FWH argues, assuming the trial court awarded penalty interest,
Tedesco waived any claim of bad faith by FWH at trial and, by doing so,
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Tedesco forfeited penalty interest under CASPA. While the trial court did not
specify whether its award was regular or penalty interest, this issue is moot.
Even if the trial court erroneously awarded the interest as a penalty,
Tedesco sought both penalty and regular interest. See Tedesco’s Motion to
Mold the Verdict. The interest amounts are identical. Regular interest accrues
“at the rate of 1% per month or fraction of a month on the balance that is at
the time due and owing.” 73 P.S. § 505(d). Similarly, penalty interest is “1%
per month of the amount that was wrongfully withheld.” 73 P.S. § 512(a)(1).
The trial court only awarded $135,664.87 in interest, rather than the
$271,329.74 in interest that Tedesco sought. As explained above, Tedesco
proved that it was entitled to recover under CASPA, including regular interest
of $135,664.87.
This Court “may affirm the decision of the trial court on any valid basis
appearing of record.” Louis Dreyfus Commodities Suisse SA v. Fin.
Software Sys., Inc., 99 A.3d 79, 82 (Pa. Super. 2014). If the trial court
awarded the $135,664.87 as penalty interest and if Tedesco should not have
received penalty interest, we would affirm the order molding the verdict
upward by $135,664.87 on the alternative basis that Tedesco deserved that
sum as regular interest under CASPA. Thus, we would grant FWH no appellate
relief, even if the trial court erroneously awarded penalty interest.
We dismiss FWH’s final appellate issue as moot.
IV. Conclusion
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In sum, Tedesco offered sufficient evidence to defeat FWH’s motions for
judgment as a matter of law. By unequivocally announcing to Tedesco, first,
that it could not and, later, that it would not pay Tedesco for the Route 228
work, FWH anticipatory repudiated the May 19, 2015 contract. Upon FWH’s
repudiation, Tedesco, the innocent obligee, could and did treat the repudiation
as a material breach by filing suit. Like the trial court, we hold that the filing
of the Complaint negated FWH’s ability to terminate the contract thereafter.
Thus, FWH may not escape liablity for its repudiation under Article 15.4 of the
repudiated contract.
Moreover, a case of anticipatory repudiation is actionable under CASPA.
Where an innocent obligee demands final payment for its expectation interest
in a repudiated contract, the repudiator’s refusal to meet that demand exposes
it to CASPA liability, just as if the repudiator had allowed the obligee to perform
the contract in full. We agree with the trial court’s decision to award Tedesco
1% monthly interest, attorneys’ fees, and legal costs.
Judgment affirmed.
Judge Murray joins.
Judge Bowes files a concurring/dissenting opinion.
DATE: 06/24/2024
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2024 Pa. Super. 129 (Tedesco Excavating v. FWH Development) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.