HomeMy WebLinkAbout2006-2532 civil
STRICKLAND BROTHERS : IN THE COURT OF COMMON PLEAS
CONSTRUCTION, LLC, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff :
: NO. 06-2532 CIVIL TERM
:
v. :
:
CRAIG SEIG, : CIVIL ACTION – LAW
Defendant :
WESTFIELD INSURANCE : IN THE COURT OF COMMON PLEAS
COMPANY AS SUBROGEE OF : CUMBERLAND COUNTY, PENNSYLVANIA
CRAIG SEIG, :
Plaintiff
: NO. 08-0423 CIVIL TERM
:
v. :
:
STRICKLAND BROTHERS : CIVIL ACTION – LAW
CONSTRUCTION, LLC, :
Defendant
IN RE: NON-JURY TRIAL
ORDER OF COURT
st
AND NOW
, this 1 day of April, 2010, after nonjury trial in the above captioned matter,
the verdict of the Court is as follows:
1. On Strickland Brothers Construction, LLC’s claim of breach of contract by Seig
(Plaintiff’s Complaint, Count I) the Court finds in favor of Seig and against Strickland Brothers
Construction, LLC.
2. On Strickland Brothers Construction, LLC’s claim of unjust enrichment (Plaintiff’s
Complaint, Count II) the Court finds in favor of Strickland Brothers Construction, LLC and
against Seig and awards the amount of $12,907.77.
3. On Seig’s claim of breach of contract by Strickland Brothers Construction, LLC,
(Defendant’s Counterclaim, Count I) the Court finds in favor of Seig and against Strickland
Brothers Construction, LLC, and awards damages in the amount of $500.00.
4. On Seig’s claim of the violation 73 Pa.C.S.A. §201-2(4)(xvi) of the Unfair Trade
Practices and Consumer Protection Law, (Defendant’s Counterclaim Count II), the Court finds in
favor of Strickland Brothers Construction, LLC, and against Seig.
5. On Westfield’s claims of (1) breach of contract, (Westfield’s Complaint, Count I), (2)
breach of warranty, (Westfield’s Complaint, Count II), and (3) negligence (Westfield’s
Complaint, Count III), the Court finds in favor of Westfield and against Strickland Brothers
Construction, LLC, and awards damages in the amount of $18,569.61.
By the Court,
__________________________
M. L. Ebert, Jr., J.
Mark W. Allshouse, Esq.
Attorney for Strickland Brothers Construction, LLC
Paul M. Schofield, Jr., Esq.
Paul F. D’Emilio, Esq.
Attorneys for Westfield Insurance Company as Subrogee of Craig Seig
John Pietrzak, Esquire
Attorney for Craig Seig
2
STRICKLAND BROTHERS : IN THE COURT OF COMMON PLEAS
CONSTRUCTION, LLC, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff :
: NO. 06-2532 CIVIL TERM
:
v. :
:
CRAIG SEIG, : CIVIL ACTION – LAW
Defendant :
WESTFIELD INSURANCE : IN THE COURT OF COMMON PLEAS
COMPANY AS SUBROGEE OF : CUMBERLAND COUNTY, PENNSYLVANIA
CRAIG SEIG, :
Plaintiff
: NO. 08-0423 CIVIL TERM
:
v. :
:
STRICKLAND BROTHERS : CIVIL ACTION – LAW
CONSTRUCTION, LLC, :
Defendant
IN RE: NON-JURY TRIAL
OPINION and ORDER OF COURT
Ebert, J., April 1, 2010 –
FINDINGS OF FACTS
Strickland Brothers Construction, LLC (hereinafter SBC) is a corporation organized and
existing under the laws of Pennsylvania, doing business in Pennsylvania, with its principle place
of business at 623 Creek Road, Carlisle, PA 17013. Morris Jeffrey Strickland (hereinafter J.
1
Strickland) is a fifty percent owner of SBC. Matthew Gordon Strickland (hereinafter M.
2
Strickland) is the other fifty percent owner. Craig Seig (hereinafter Seig) owns Lot No. 6,
3
Longs Gap Road, Carlisle, PA. Westfield Insurance Company (hereinafter Westfield), subrogee
1
Notes of Testimony, Oct. 3, 2008, p. 5 (hereinafter N.T. Day 1 at __).
2
N.T. Day 1 at 5.
3
Notes of Testimony, Feb 18, 2009, p. 8 (hereinafter N.T. Day 2 at __).
3
of Seig, is a corporation authorized to do business in Pennsylvania, having an office at P.O. Box
5001, Westfield, OH 44251-5001.
On September 11, 2005, Seig met J. Strickland and reviewed the plans and proposals for
construction of a residential home on Lot No. 6 along Longs Gap Road in North Middleton
4
Township. They discussed what each party’s scope of work would be. SBC’s scope of work
generally included pouring the foundation, laying the deck, framing of the interior and exterior
5
walls, finishing the exterior with siding and constructing the roof. Construction of the roof in
this case consisted of installing pre-engineered roof trusses supplied by PB Truss Inc., laying 4 x
8 sheets of oriented strand board (O.S.B.) over the roof trusses, laying tar paper over the OSB,
6
and then installing 30 year architectural shingles. Seig’s scope of work included the excavation,
7
all interior work, and the installation of exterior doors and windows. During the meeting Seig
was advised that both J. Strickland and M. Strickland would be taking vacation during November
8
of 2005.
On September 26, 2005, settlement on the construction loan from Commerce Bank to
9
Craig Seig was completed. Additionally, even though Seig has maintained that he was serving
as the general contractor of this project, he allowed Plaintiff’s Exhibit No. 1 to be presented to
the bank in order to give the impression to the bank that he had hired a general contractor. Seig’s
motive for doing this is clear. It was necessary because banks were reluctant to grant
construction loans directly to property owners who had not hired legitimate recognized
4
Stip. of Facts at 1, N.T. Day 1 at 8, N.T. Day 2 at 9.
5
N.T. Day 2 at 11.
6
Plaintiff’s Exhibits 1, 3.
7
N.T. Day 2 at 10.
8
Stip. of Facts at 1.
9
Stip. of Facts at 1.
4
10
contractors. This explains why Seig went through with the closing utilizing Plaintiff’s Exhibit
11
No. 1 even though he felt that he was between a “rock and a hard place.”
At settlement, J. Strickland stated that the house would be under roof by Christmas of
12
2005 and completed within six months. The Court finds that the December 25 date was a
reasonable estimate, but one which could be easily impacted by factors such as weather and
completion of excavation. There is no signed document that specified when the house would be
13
under roof. The Construction Loan Agreement between Seig and Commerce Bank set
14
April 26, 2006, as the time limit for the completion of the project. April 26, 2006, was six
15
months plus an additional thirty-day grace period from the date of settlement. The end loan
16
interest rate was locked in until April 26, 2006.
SBC maintains that they never agreed to finish the home in six months and that they
17
normally recommend a twelve month term for construction. The Court does not find this
credible. Clearly, when J. Strickland went to the construction loan closing, he signed a
“Guarantee of Completion and Performance” which said that the project would be “substantially
completed within the time limits set forth in the construction loan agreement.” The construction
loan agreement signed by Seig at the same closing clearly indicates at page 4 “borrower
(emphasis added) agrees to complete the project for purposes of final payment to the general
18
contractor on or before April 26, 2006, regardless of the reason for any delay.”
10
N.T. Day 1 at 7.
11
N.T. Day 2 at 12.
12
N.T. Day 1 at 169.
13
N.T. Day 1 at 176.
14
N.T. Day 1 at 165.
15
N.T. Day 1 at 165.
16
N.T. Day 1 at 169.
17
Plaintiff’s Ex. 15.
18
Def. Ex. 4, N.T. Day 1 at 163-164.
5
SBC was to be paid for their work from the draw schedule established by the
19
Construction Loan Agreement. The previously agreed upon breakdown of the scope of work
20
was not reflected in any contract signed by both parties. SBC has consistently maintained that
the document presented to the Court as Plaintiff’s Exhibit No. 1 constitutes a “construction
agreement” which was in essence the contract between SBC and Seig to construct the home in
question. The Court having examined the document and the context in which it was utilized
finds that this was not a written construction contract. In reality, SBC provided this document to
Seig in order to establish for the bank the general specifications of the house being built and the
21
cost of construction. Plaintiff’s Exhibit No. 1 lists the construction cost as $253,000.00.
Commerce Bank provided a construction loan for $250,000.00 and Seig provided the additional
$3,000.00 as evidenced in Defendant’s Exhibit No. 8, the “Advance Schedule,” to cover the total
construction cost of $253,000.00 reflected in Plaintiff’s Exhibit No. 1.
SBC had scheduled Peifer Construction (hereinafter PC) to pour the footers for the
foundation on October 11, 2005. Seig was responsible for excavation of the hole in which the
foundation footers and concrete basement walls were to be built. However, Seig’s excavator,
Mike Neidig (hereinafter Neidig), did not even start excavation until October 17, 2005, and
22
completed the excavation on October 19, 2005. Consequently, since the hole was not even dug
by the time PC’s footer crew arrived on October 11, 2005, to begin pouring the footers, PC
rescheduled this work for their next available date which was not until November 16, 2005. The
footers were completed on November 19, 2005. On November 29, 2005, PC began to pour the
concrete basement walls which were completed on December 1, 2005. Consequently, the Court
finds that at least one month of construction time was lost as a result of Seig not having the
19
N.T. Day 2 at 12.
20
N.T. Day 2 at 12, N.T. Day 2 at 16.
21
N.T. Day 2 at 14 -15.
22
Stip. of Facts at 1, N.T. Day 2 at 80, N.T. Day 2 at 20.
6
basement excavation completed prior to PC’s first scheduled date for the pouring of the footers
which was October 11, 2005.
A question arose as to who was responsible to backfill the foundation. Seig states that
SBC told him they would backfill the foundation free of charge. Later, after the basement walls
were finished, he says M. Strickland told him that SBC’s excavator was unable to do the job.
23
Seig immediately arranged for and paid Neidig to backfill the foundation. Backfilling was
24
completed on December 19, 2005. This Court finds that Seig was responsible for
“excavation.” In this type of construction, excavation includes not only digging the hole but
backfilling the foundation. However, this dispute is of little moment in this case. SBC always
charged Seig for anything done in the construction of this home. There is no evidence
whatsoever that SBC would have gratuitously done the backfilling of this foundation for free.
Accordingly, whether Seig paid to backfill the foundation or would have been charged by SBC
for backfilling, the money still would have come out of the account created by the Commerce
Bank construction loan.
The Court does find that in the construction industry, it is customary to allow the concrete
basement walls to cure before backfilling and framing begins. Again backfilling was completed
on December 19, 2005, and that was the date that SBC had the lumber for the framing delivered
to the site and set the steel I-beam and lolly columns necessary to support the deck. Thus the
period of time between December 1 and December 19, 2005, was not a period of unexplained
25
delay which can be attributed to SBC.
26
Snowfall prevented SBC from pouring the concrete floor in the basement. Instead SBC
27
proceeded with the construction of the deck and the exterior and interior walls. The Court
23
N.T. Day 2 at 11, 24 – 26.
24
N.T. Day 2 at 25.
25
Plaintiff’s Ex. 3, 4, and 15, N.T. Day 1 at 22.
26
N.T. Day 2 at 27-28.
7
finds that SBC proceeded with constructing the deck and the walls so that the roof could be
completed thereby making the rough framing watertight and allowing all the inside work to
proceed. Pouring the final concrete basement floor was definitely something that could have
been completed at a later date and did not in any way delay construction of this home. In
essence, Seig’s shoveling and melting of the snow between Christmas and New Year 2005 was
totally unnecessary.
28
On January 20, 2006, the walls were complete and ready for SBC set the roof trusses.
This Court finds that SBC provided insufficient temporary bracing for the roof truss system, and
did not meet industry standards regarding the type of bracing that was required for these
29
trusses. Per industry standards, a complete temporary bracing system for the roof truss system
should have secured the first truss with adequate ground bracing. As additional trusses are set
30
longitudinal and diagonal bracing are required. This Court finds that SBC failed to provide
sufficient ground bracing of the sheathed gable end trusses and clearly insufficient longitudinal
and diagonal bracing for this roof truss system. Given the size of the gable end trusses, and the
fact that they were delivered to the home site with the external plywood sheeting already
installed, they presented a very large solid surface (similar to a giant sail) which would be
31
especially vulnerable to high winds.
As a direct result of this insufficient bracing by SBC, the roof truss system collapsed on
32
January 21, 2006, during a period of wind gusts which may have reached 32-45 miles per hour.
Had the bracing on the truss system been correctly installed, the trusses would have been able to
27
N.T. Day 2 at 28.
28
Stip. of Facts at 1.
29
N.T. Day 2 at 170.
30
N.T. Day 2 at 170-171.
.
31
Def. Ex, 26, N.T. Day 2 at 178
32
Def. Ex. 23
8
33
withstand such wind force. Clearly, SBC as an experienced construction firm should have
anticipated that bad weather in the winter often comes with higher winds requiring more than
minimal bracing.
The sheathed front gable end truss toppled inward, the sheathed rear truss and the
34
sheathed left end truss toppled out away from the home. The trusses between both gable ends
35
collapsed in a similar orientation as the gable ends. The collapse caused damage to both the
36
roof trusses and some framed walls. The Court finds that the trusses shown in Defendant’s
37
Exhibit No. 11 were damaged such that they were not suitable for reuse. Accordingly, an
entire new set of trusses was ordered and installed by Fulmer Construction Services. R. J.
38
Potteiger Construction Services Inc. removed the first set of damaged trusses. Westfield was
the insurance company Seig selected to insure the construction project as required by Commerce
39
Bank as a condition of their granting Seig the construction loan. All told, Westfield paid Craig
Seig $18,569.61 as settlement for the claim associated with the collapsed damaged trusses.
Additionally, Craig Seig had a $500.00 deductible on this policy for a total damage claim of
40
$19,069.61.
After collapse of the trusses, uncertainty reigned with regard to completion of the project.
According to J. Strickland, SBC contacted Seig and advised him to call his insurance company in
order to determine how to proceed. SBC did tell Seig that they would reset the trusses that
weren’t damaged, order new ones to replace the damaged trusses and proceed with the project.
33
Def. Ex. 26, N.T. Day 2 at 181.
34
Def. Ex. 26.
32
Def. Ex. 26.
36
Def. Ex. 11, N.T. Day 2 at 46.
.
37
Def. Ex. 11, N.T. Day 2 at 187-188
38
Def. Ex. 16, N.T. Day 2 at 46.
39
Def. Ex. 4, N.T. Day 2 at 148-149.
40
Def. Ex. 15
9
41
SBC indicated that they could “fix it” and that it would take about a week. Seig never returned
any of SBC’s calls after January 21, 2006.
Having viewed the damage to his home, Seig naturally lost confidence in the construction
ability of SBC. On January 26, 2006, Seig’s attorney sent SBC a letter terminating the
construction contract with SBC. Seig claimed untimely performance and defective
workmanship. Seig requested an accounting of the first $37,000.00 draw made on the
construction loan, and advised SBC if they wanted payment beyond the initial $37,000.00 draw
42
they would be required to provide documentation of all materials and manpower used. The
Court finds that Seig did legitimately terminate the construction contract based on SBC’s
defective workmanship in setting and bracing the roof trusses. Seig has not proven his claim of
untimely performance.
Westfield, as the insurer, paid for all materials, to include a new set of trusses and the
43
labor to remove the old trusses and set new trusses. Again, the total payment was $19,069.61
which included Seig’s $500.00 deductible. SBC was not invited back on site and did not
44
perform any work after the January 26, 2006, notice of termination. Interestingly, an
examination of the invoices relating to the damaged trusses provides the Court with some insight
on how long it took to repair the damage. The new trusses from PBS Truss, Inc. were scheduled
for delivery to the site on February 2, 2006. Fulmer Construction Services’ invoice which
includes the labor for resetting the trusses is dated 2/16/06. R.J. Potteiger Construction Services
provided “roof materials” for Seig’s home by invoice dated February 7, 2006. While R.J.
Potteiger Construction Services final invoice for removal of the first set of damaged roof trusses
is not dated until April 6, 2006, it is apparent to this Court that having the damaged roof trusses
41
N.T. Day 2 at 41.
42
Def. Ex. 14
43
N.T. Day 2 at 157-158.
44
Stip. of Facts, Para. #12.
10
on the home site would not have in any way delayed the project. Accordingly, the Court finds
that the roof on Seig’s home was completed on or about February 16, 2006, approximately 27
45
days from the collapse of the first set of trusses.
After terminating SBC from the project, Seig proceeded finishing the house on his own.
As he has maintained throughout the course of this proceeding, he did in fact become the general
contractor of this construction project. Seig testified that he had no agreement with Commerce
46
Bank which allowed them to control who would be the builder after he terminated SBC. Seig
indicated that he along with this father, brother-in-law and a friend of his father’s did a lot of the
47
work. Additionally, Seig hired other subcontractors to complete the home and they were paid
48
from the Commerce Bank draw schedule.
49
Seig maintains that he did not complete the house by March 26, 2006. Gethen Wilson,
mortgage originator with Commerce Bank, attempted to explain the March 26 date as the date
the house was to be completed. She stated April 26, 2006 was simply a date which represented
an additional 30 day grace period which she always included in construction agreements. Be that
as it may, this Court finds that the only stated “completion date” contained in the construction
50
loan agreement was April 26, 2006. Based on this, Seig, as general contractor, had a period of
three months from January 26, 2006, to April 26, 2006, to complete his home.
All of this has significance for only one purpose, that being Craig Seig’s claim that he is
owed damages in excess of $70,000.00 as a result of additional interest payments he will have to
pay as a result of Commerce Bank increasing his locked in mortgage rate from 5.375% to
45
Def. Ex. 16.
.
46
N.T. Day 2 at 73
47
N.T. Day 2 at 70.
48
N.T. Day 2 at 73-74.
49
N.T. Day 2 at 20.
50
Plaintiff’s Ex. 2, N.T. Day 1 at 165.
11
51
6.375% by their letter dated May 12, 2006. Two points are of interest here. First, Commerce
Bank obviously didn’t consider the completion date to be March 26, 2006, or they would have
advised Seig of the new interest rate much earlier. Second, Seig specifically testified that after
the roof truss system collapsed, he talked with Commerce Bank the next morning and “the bank
52
told me to terminate the Strickland Brothers.” The Court notes that unlike the negotiations that
preceded approval for the construction loan, Commerce Bank no longer required Seig to have a
separate general contractor to complete his home. Clearly Commerce Bank’s interest in
completing Seig’s home was nil. Their motive for this attitude is obvious. They were the ones
who would benefit from the increased interest rate if completion of the home was delayed.
The Court finds that SBC will not be held responsible for the final delay, and accordingly
SBC will not be required to pay damages for the extra interest the Defendant claims he now has
to pay. Seig’s own delay in completing the excavation caused at least one month delay in the
construction. This delay dictated that the roof truss system would have to be installed in January.
Accordingly, subtracting one month from the final completion date would have brought the
project’s completion within the final April 26, 2006, deadline. This Court finds that this home
could have been completed by April 26, 2006, even given the truss collapse and that the final
delay is not attributable to SBC.
SBC received the first construction draw from Commerce Bank in the amount of
53
$37,500.00. SBC used $31,282.77 to pay its subcontractors and retained the remaining
54
$6,217.23. SBC also claimed $540.00 for the rental of a trash pump to Seig which he utilized
in pumping out his basement. SBC owned the pump and allowed Seig to use it. It wasn’t until
after Seig terminated SBC, that SBC decided to charge Seig for the pump rental. Accordingly,
51
Def. Ex. 5.
52
N.T. Day 2 at 43.
53
Stip. of Facts at 12.
54
Stip. of Facts at 2.
12
the Court finds that Seig never agreed to pay for the rental of the pump nor was payment for use
of this pump ever anticipated by either party. Accordingly, the $540.00 claim for the pump
rental is denied.
At issue then is the legitimate amount of money owed to SBC for its framing of the home
prior to the roof truss collapse. Clearly from the record, SBC was not keeping a daily log of its
man hours expended on this project. J. Strickland admits that he did not keep a daily log and
only created the compilation of hours after being terminated and told by Seig’s attorney to
provide such an accounting. SBC claims that they spent 505 man hours on the project. In
examining Plaintiff’s Exhibit No. 4, this amount of hours includes 50 hours for setting the trusses
which eventually collapsed. Obviously, given SBC’s defective workmanship in setting the
trusses they cannot claim reimbursement for these hours. Accordingly, SBC’s total claim for
hours is 455 hours.
Seig on the other hand utilizing a construction program on his computer calculated that
given the amount of work done, SBC would have only expended 348 hours. SBC claims labor
costs at $45 an hour based on the rate they normally charge other people for odd jobs that are
55
done on an hourly basis. Seig maintains that the labor costs should be $33 an hour because
SBC is a nonunion firm and he claims that only union builders would get $45 an hour. Seig’s
approach is not persuasive. In essence he admits “builders” do get $45 an hour and since there
was no agreed upon hourly rate, the Court finds that SBC’s use of the rate they normally charge
people for hourly projects is reasonable. Accordingly, the Court will compute the labor costs at
$45 an hour.
55
N.T. Day 1 at 41.
13
Again, SBC admits that its written logs of the hours found in Plaintiff’s Exhibit No. 4
56
“weren’t meant to be the gospel truth of every day.” In examining Plaintiff’s Exhibit No. 4, the
Court finds that SBC’s claim of 60 man hours to set the I-beams and lolly columns and laying
out the sill plate is exaggerated. The Court finds that this work should have been completed in
no more than 30 man hours. The remainder of the time allocated to lay the floor joists, sheet the
deck, frame the exterior and interior walls, and sheet the outside walls does appear reasonable.
Thus subtracting the time spent on setting the trusses (50 hours), and the over estimated time for
setting the I-beams and laying the sill plates (30 hours) reduces SBC’s claimed labor hours to
525. In essence, this is within 77 hours of Seig’s own estimate. Again, basically considering a 5
man crew which generally worked 10 hour days brings the 2 estimates to within a difference of
only 1 ½ days.
The Court does find from its examination of the photographs and video tapes of the
project (Defendant’s Exhibits 11, 12, 17) that SBC did frame the home in a workmanlike
manner. Thus the value of the labor expended by SBC up to the setting of the trusses is 425
hours at $45 an hour for a total of $19,125.00. It is interesting to note that SBC’s attorney in his
proposed settlement letter dated February 1, 2006, requested $23,265.00 for “design and framing
labor.” Equally important is the fact that the fax from Seig’s attorney to Seig dated February 2,
2006, indicates “the amount requested is probably pretty close to what you thought SBC was
57
owed.” (emphasis added)
DISCUSSION
This case presents the not uncommon scenario of a property owner with some
construction experience choosing to serve as his own general contractor in the construction of his
personal home. Having made the decision to serve as his own general contractor, he needed to
56
N.T. Day 1 at 35.
57
Plaintiff’s Ex. 15.
14
find another contractor to do what in the trade is referred to as the “rough framing.” This
basically consists of laying the foundation, putting on the floor deck, framing the outside and
inside walls, and putting on the roof. Seig then wanted to control the completion of the inside
work such as dry walling, plumbing, heating, painting, flooring, and carpeting etc. In seeking
such a contractor he found that most contractors did not want to perform just rough framing and
58
preferred to build the entire home themselves.
SBC maintains that it was the “General Contractor,” and that it was simply going to
utilize the subcontractors named by Seig to perform the tasks necessary to finish the house. This
appears unlikely in that nothing in the record suggests that SBC even talked to any of the
subcontractors for electric, plumbing, HVAC, insulation, etc. Without such bids and agreements,
it would be impossible for SBC to know the final cost of the project. However, resolution of the
issue as to who really was the “General Contractor” is not necessary to resolve this case given
the fact that SBC was legitimately terminated as Seig’s contractor even before the “rough
framing” was complete.
In any regard, the various causes of action to be decided by the Court in this case are as
follows:
1. SBC’s claim of breach of contract by Seig (Plaintiff’s Complaint, Count I).
2. SBC’s claim of unjust enrichment (Plaintiff’s Complaint, Count II).
3. Seig’s claim of breach of contract (Defendant’s Counterclaim, Count I).
4. Seig’s claim of violation § 201-2(4)(xvi) of The Unfair Practices and Consumer
Protection Law (UPCPL) (Defendant’s Counterclaim, Count II).
5. Westfield’s claim of breach of contract (Westfield’s Complaint, Count I).
6. Westfield’s claim of breach of warranty (Westfield’s Complaint, Count II).
58
N.T. Day 2 at 8, 9.
15
7. Westfield’s claim of negligence (Westfield’s Complaint, Count III).
Based on these causes of action, each party claims damages against the other. The Court
will now discuss the causes of action seriatim.
I. Breach of Contract
All parties have claimed in essence that the other breached the construction contract. “A
breach of contract claim in Pennsylvania requires three elements: (1) the existence of a contract
(2) a breach of a duty imposed by the contract and (3) resulting damages.” J.F. Walker Co., Inc.
v. Excalibur Oil Group, Inc., 792 A.2d 1269, 1272 (Pa. Super. 2002), citing Williams v.
Nationwide Mut. Ins. Co., 750 A.2d 881, 884 (Pa. Super. 2000). Contrary to SBC’s pleadings,
the Court agrees with Defendant Seig that there never was a written construction contract agreed
to by the parties.
This, however, is not fatal to a breach of contract claim. “In cases involving contracts
wholly or partially composed of oral communications, the precise content of which are not of
record, Courts must look to the surrounding circumstance and course of dealing between the
parties in order to ascertain their intent”. Refuge Mgmt. Sys. v. Consol. Recycl. Sys., 671 A.2D
1140 (Pa. Super. 1996). An agreement is a valid and binding contract if the parties have
manifested intent to be bound by the agreement’s terms, the terms are sufficiently definite, and
there is consideration. Johnston the Florist, Inc. v. TEDCO Const. Corp., 657 A.2d 511 (Pa.
Super. 1995).
There is no doubt that there was an oral contract between SBC and Craig Seig that at a
minimum SBC would construct the rough frame of a ranch home pursuant to house plan No.
9812 entitled “The Brownstone” on Seig’s property on Longs Gap Road. This would include
building the basement walls, the floor deck, the outside and inside stud walls and the roof,
complete with shingles. Here SBC had completed the foundation for the house and was
16
performing the framing. Seig was adequately satisfied with SBC’s performance such that he did
not object to SBC taking the initial draw of $37,500.00.
This Court finds that SBC did breach this contract to frame the home. SBC had a duty
imposed by the contract to install in a workmanlike manner a safe and secure roof truss system.
SBC breached this duty by not installing sufficient temporary bracing during installation of the
roof trusses. As a direct result of this breach, the roof truss system collapsed during a period of
wind gusts. This collapse caused damage to Seig’s property. The damage consisted of the
broken roof trusses and some additional, relatively minor damage to the framed walls of the
home. Damages for defective performance of a building contract are determined by the
reasonable cost of correcting the defects. Fetzer v. Vishneski, 582 A.2d 23 (Pa.Super. 1990).
Here the damage cost $19,069.61 to repair and equals the sum paid by Westfield on the
insurance claim ($18,569.61) plus Seig’s $500.00 deductible.
In regard to Seig’s additional claims of SBC’s supposedly deficient work, we find for
SBC. Basically, Seig claims that SBC improperly framed the rough openings for certain
windows and doors, improperly framed the tub space in the small bathroom, and failed to align
the knockout holes in the floor truss joists. Additionally, Seig complained about the way the sill
plate was attached to the steel I-beam and some additional concrete work that was needed to
complete the front porch. In examining Defendant’s Exhibit Number 22, Seig claims these
various “deficiencies” resulted in damages amounting to $8,824.54. In a bench trial it is the duty
of the trial Judge to judge credibility of witnesses and to weigh their testimony. Weir by Gasper
v. Estate of Ciao, 556 A.2d 819 (Pa. 1989). In any case, the finder of fact is entitled to weigh the
evidence presented and assess its credibility. The finder of fact is free to believe all, part or none
of the evidence presented. Smith v. Smith, 904 A.2d 15 (Pa.Super. 2006). Here, the Court finds
that the defects claimed by Seig are typical minor problems that a contractor would routinely
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correct. This Court finds as fact that the additional damages claimed by Seig are not supported
by the evidence and in any regard, did not require $8,824.54 worth of repairs. See, Pittsburgh
Const. Co. v. Griffith, 834 A.2d 572 (Pa.Super. 2003). Accordingly, this claim is denied.
Although SBC made statements to Seig at settlement that the house would be under roof
by Christmas of 2005, SBC is not responsible for the delay in the construction and failure to
meet that date. Seig was responsible for scheduling the excavation. Seig was aware when hiring
SBC, that J. and M. Strickland would both be taking vacation during November. The delay of
the excavation by Seig resulted in the rescheduling and a subsequent delay in the pouring of the
footers and walls. That delay coupled with the agreed upon vacation of J. and M. Strickland,
caused the delay in the construction of the house and meant that it could not be under roof by
Christmas of 2005 as previously planned. The failure to meet the April 26, 2006 date set by the
Construction Loan Agreement that resulted in a higher end loan rate must be born by Seig.
II. Unfair Trade Practices and Consumer Protection Law
Seig has filed a counterclaim against SBC for violation of the Unfair Trade Practices and
Consumer Protection Law. Specifically Seig maintains that SBC violated §201-2(4)(xvi) of the
UTPCPL. That section reads as follows:
(xvi) Making repairs, improvements or replacements on
tangible real or personal property, of a nature or quality inferior
to or below the standard of that agreed to in writing; (emphasis added)
73 Pa.C.S.A. §201-2(4)(xvi).
Interestingly, in his answer to SBC’s complaint, Seig basically maintains that there never
was any written agreement with SBC. However, for the purposes of satisfying the writing
requirement for his UTPCPL violation counterclaim, he maintains that Plaintiff’s Exhibit #1 is
the writing in which SBC agreed to construct the home in a manner which would not be inferior
to or below the standard normally expected in such work.
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As previously stated the work that SBC did on Seig’s home up to the point of setting the
roof truss system was satisfactory and done in a good and workmanlike manner. As discussed in
other portions of this opinion, SBC was under a duty and did warrant that it would construct
Seig’s home in a reasonable workmanlike manner which would be fit for habitation as a
residential dwelling. However with regard to this counterclaim, under the UTPCPL, the
“standard” must be agreed to in writing. Goldstein v. Bison Bede Ltd., 2009 WL 2710235 (E.D.
Pa. 2009). See also, Com. v. Burns, 663 A.2d 308 at 311 (Pa.Cmwlth. 1995).
An examination of Plaintiff’s Exhibit #1 does have a section designated “Design
specifications and standards.” Close examination of this portion of the exhibit however says
absolutely nothing about the roof truss system. The only thing mentioned which even applies to
the roof is that SBC would utilize “Elk 30-year architectural shingles.”
This Court finds that to prove a violation of §201-2(4)(xvi) of the UTPCPL utilizing
Plaintiff’s Exhibit #1 as the “writing,” would require, for example that SBC used 2 x 4 lumber in
the exterior construction, rather than the standard stated in the document which called for 2 x 6
lumber for exterior construction. In any regard, the Court finds there was no “standard” agreed
to in writing, and accordingly, Defendant Seig cannot recover for this counterclaim under the
UTPCPL.
III. Breach of Warranty
Westfield, who insured this construction project and is the subrogee of Seig, maintains
that SBC breached their warranty that they would construct the roof truss system in a
workmanlike, merchantable manner, and that the truss system would be fit for the purpose of
supporting the finished roof. In Pennsylvania, the Courts have recognized that a builder, when
contracting with a landowner to construct a residential home on the owner’s land, impliedly
warrants that the structure will be erected in workmanlike manner. Groff v. Pete Kingsley Bldg.,
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Inc., 543 A.2d 128 (Pa. Super. 1988), In re Gordon Urmson Builder & Sons, Inc., 295 B.R. 546
(US Bkrtcy. W.D. Pa. 2003).
The Court finds that SBC, at a minimum, impliedly warranted that their construction
work, including construction of the roof truss system, would be done in a workmanlike manner
and fit for the purpose for which it was intended. SBC, as a home construction company, knew
the particular purpose for which the roof truss system was intended. Seig, as the buyer, relied on
the skill and judgment of SBC to construct the roof truss system, in a manner such that it would
support the home’s roof and not fall down.
SBC breached this warranty. The temporary bracing was clearly insufficient and did not
meet with industry standards. Due to this insufficient bracing, the roof truss system collapsed.
Without question this truss system was not constructed in a workmanlike manner. The breach of
this warranty resulted in a loss to Westfield in the amount of $18,569.61.
IV. Negligence
Westfield has filed a claim for negligence. “The prima facie elements of a negligence
cause of action are: (1) a duty or obligation recognized by law; (2) a breach of the duty; (3)
causal connection between the actor's breach of the duty and the resulting injury; and (4) actual
loss or damage suffered by complainant.” Cooper v. Frankford Health Care System, Inc., 960
A.2d 134 (Pa. Super. 2008). This Court finds that SBC acted negligently in that they failed to
properly install a safe roof truss system for Seig. SBC had both a duty and an obligation during
the construction phase to properly brace the roof truss system in an adequate manner. SBC
breached that duty by disregarding the industry standards and using clearly insufficient bracing
for this roof truss system especially given that it was constructed during the winter season. As a
direct result of this insufficient bracing, the roof truss system collapsed during a period of wind
gusts. This collapse caused damage to Seig’s property, which included the fallen and broken
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roof trusses and some minor damage to the framed walls of the home. This damage resulted in
an actual financial loss to Westfield in the amount of $18,569.61. Therefore, this Court finds
that SBC acted negligently because they had a duty to properly brace and construct the roof truss
system, they breached that duty by providing insufficient bracing, and the breach of the duty
resulted in damage to Seig’s property, and an actual financial loss to both Seig and Westfield.
V. Unjust Enrichment
“To sustain a claim of unjust enrichment, a claimant must show that the party against
whom recovery is sought either “wrongfully secured or passively received a benefit that it would
be unconscionable for her to retain.” Roman Mosaic & Tile Co., Inc. v. Vollrath, 313 A.2d 305,
307 (Pa. Super. 1973). “In order to recover, there must be both (1) an enrichment, and (2) an
injustice resulting if recovery for the enrichment is denied.” Torchia on Behalf of Torchia v.
Torchia, 499 A.2d 581, 582-83 (Pa. Super. 1985). SBC contends that Seig was unjustly enriched
by the labor SBC expended in framing Seig’s home before Seig terminated the contract. This
Court finds that Seig was unjustly enriched. Seig has passively received a benefit that would be
unconscionable for him to retain.
Generally speaking the doctrine of unjust enrichment is inapplicable when the
relationship between the parties is founded on a written agreement or express contract. Roman
Mosaic & Tile Co., Inc. v. Vollrath, 313 A.2d 305, at 307 (Pa. Super. 1973). In this case, the
Court has found that initially there was an express oral agreement between Seig and SBC.
However the law does recognize that “where a party justifiably refuses to perform on the ground
that his remaining duties of performance have been discharged by the other party’s breach, the
party in breach is entitled to restitution for any benefit that he has conferred by way of part
performance or reliance in excess of the loss that he caused by his own breach.” Restatement,
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nd
2, contracts §374. The illustrations provided in §374 of the restatement are remarkably similar
to the fact scenario presented here.
In this case, SBC orally agreed to frame Seig’s house. Seig agreed to pay for this work.
Because SBC breached the contract by failing to properly brace the roof trusses causing their
collapse and damage, Seig was justified in terminating the construction contract. SBC has been
held responsible for the loss caused by his own breach in that it must pay Westfield $18,569.61
and Craig Seig his $500.00 deductible on the Westfield policy for the total damages caused by
SBC of $19,069.61.
This Court has determined that SBC expended 425 hours of labor at a value of
$19,125.00. From this sum, the amount of $6,217.23, the amount SBC retained from the initial
$37,500.00 construction draw, must be deducted. Accordingly, the Court awards SBC the sum
of $12,907.77 on its unjust enrichment claim.
Accordingly the following order is entered:
ORDER OF COURT
st
AND NOW
, this 1 day of April, 2010, after nonjury trial in the above captioned matter,
the verdict of the Court is as follows:
1. On Strickland Brothers Construction, LLC’s claim of breach of contract by Seig
(Plaintiff’s Complaint, Count I) the Court finds in favor of Seig and against Strickland Brothers
Construction, LLC.
2. On Strickland Brothers Construction, LLC’s claim of unjust enrichment (Plaintiff’s
Complaint, Count II) the Court finds in favor of Strickland Brothers Construction, LLC and
against Seig and awards the amount of $12,907.77.
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3. On Seig’s claim of breach of contract by Strickland Brothers Construction, LLC,
(Defendant’s Counterclaim, Count I) the Court finds in favor of Seig and against Strickland
Brothers Construction, LLC, and awards damages in the amount of $500.00.
4. On Seig’s claim of the violation 73 Pa.C.S.A. §201-2(4)(xvi) of the Unfair Trade
Practices and Consumer Protection Law, (Defendant’s Counterclaim Count II), the Court finds in
favor of Strickland Brothers Construction, LLC, and against Seig.
5. On Westfield’s claims of (1) breach of contract, (Westfield’s Complaint, Count I), (2)
breach of warranty, (Westfield’s Complaint, Count II), and (3) negligence (Westfield’s
Complaint, Count III), the Court finds in favor of Westfield and against Strickland Brothers
Construction, LLC, and awards damages in the amount of $18,569.61.
By the Court,
__________________________
M. L. Ebert, Jr., J.
Mark W. Allshouse, Esq.
Attorney for Strickland Brothers Construction, LLC
Paul M. Schofield, Jr., Esq.
Paul F. D’Emilio, Esq.
Attorneys for Westfield Insurance Company as Subrogee of Craig Seig
John Pietrzak, Esquire
Attorney for Craig Seig
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