HomeMy WebLinkAbout99-4072 civil ESHENAURS FUELS, INC., IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v. :No. 99-4072 CIVIL TERM
JOAN M. PITNICK, INDIVIDUALLY,
FORMERLY TRADING AS PITNICK
DEVELOPMENT COMPANY AND
NOW TRADING AS PITNICK
INVESTMENT COMPANY, AND
JOAN M. PITNICK, RICHARD
JAMES PITNICK, BRIAN JOSHUA
PITNICK AND SCOTT STEVEN
PITNICK, EXECUTRIX AND
EXECUTORS OF THE ESTATE OF
EUGENE PITNICK
Defendants
IN RE: DEFENDANTS' PRELIMARY OBJECTIONS
BEFORE HOFFER, P.J., and HESS, JJ.
ORDER OF COURT
ANDNOW, ~~~, 2000, after oral argument and
careful consideration of the parties' briefs, defendants' Preliminary Objections are
dismissed. However, defendants' objection as to whether Eshenaurs'
allegations are sufficient to support its claim for interest at a rate of one percent
monthly under the Contractor and Subcontractor Payment Act, 73 P.S. § 501, et
seq. merits discussion on the application of the act.
Defendant alleges that because the plaintiff failed to allege that the
payments were withheld in bad faith, plaintiff's allegations are insufficient to
supports its claim for interest at a rate of one percent monthly under the Payment
Act.
The Payment Act has two different interest provisions under which the
plaintiff contractor may be entitled to 1% interest, or a combined 2%, Sections
505(d) and 512(a). Section 505(d) states:
"(d) Interest.--Excepts as otherwise agreed by the parties, if any
progress or final payment to a contractor is not paid within seven
days of the due date established in subsection (c), the owner shall
pay the contractor, beginning on the eighth day, interest at the rate
of 1% per month or fraction of a month on the balance that is at the
time due and owing."
and section 512(a) states:
"(a) Penalty for failure to comply with act. --- If arbitration or litigation
is commenced to recover payment due under this act and it is
determined that an owner, contractor or subcontractor has failed to
comply with the payment terms of this act, the arbitrator or court
shall award, in addition to all other damages due, a penalty equal to
1% per month of the amount that was wrongfully withheld to the
extent it bears a reasonable relation to the value of any claim held in
good faith by the owner, contractor or subcontractor against whom
the contractor or subcontractor is seeking to recover payment."
The defendants argue that plaintiff is required to allege bad faith in order to
support a claim for statutory interest. Under the Act, the plaintiff is not required to
allege bad faith in order to support a claim for statutory interest. Instead, the
plaintiff is only required to allege that the owner has not paid the plaintiff in
accordance with the requirements of the Act. It is for the defendants to allege,
and ultimately prove, the affirmative defense that it withheld payments in good
faith.
In the instant case, the plaintiff has adequately alleged that the defendants
have not paid the plaintiff in accordance with the requirements of the Act.
Therefore, the preliminary objection regarding the statutory interest is dismissed
because the defendants must ultimately prove that they withheld payments in
good faith.
By the Court,
Reager, Adler & Cognetti, PC
Theodore A. Adler, Esquire
Thomas O. Williams, Esquire
2331 Market Street
Camp Hill, PA 17011-4642
Attorneys for Plaintiff
McNees, Wallace & Nurick
Helen L. Gemmill
Kimberly Colonna
100 Pine Street
P.O. Box 1166
Harrisburg, PA 17108-1166