November 2011

With the contract for the Dilworth Plaza renovation now awarded, the City has notified the Occupy Philly crybabies protestors that they must vacate Dilworth Plaza immediately.  However, the happy campers do not seem eager to move.  It begs the question: how long can they stay before the encampment begins to seriously impact the construction schedule for the Dilworth Plaza project and ultimately costs the taxpayers more money?

Construction schedules carefully sequence work in order to bring a project in on time and on budget.  If one sequence of the work is disrupted, the overall project schedule can be delayed resulting in additional labor costs for the contractors working on the project.  The contractors who have been impacted by the delay will look to the general contractor for additional compensation because of the delay.  The general contractor will likely pass those claims along to the owner.  This claims often end up in litigation compounding the already increased cost.

Any potential delay to an outdoor project is even more troubling.  Certain work on the Dilworth Plaza project will certain involve “weather sentitive” finishes.  As the name suggests, weather sentitive work is work that can only be performed in certain a certain climate.  For example, concrete work is a weather sentitive finish.  If the tempature is too hot or too cold, a contractor cannot pour concrete.  Therefore, if there is weather sensitive work on the Dilworth Plaza project , that is scheduled to be performed before the coldest Philadelphia weather sets in, that cannot be performed because of the Occupy Philly encampment that work will have to wait until the Spring.  Moreover, if that work is “predecessor work” meaning work must be performed before other work can begin – such as a foundation – the project schedule can quickly unravel. 

If the delay in commencing is not too long, there is no doubt that the general contractor on the Dilworth Plaza project, an experienced contractor familiar with this type of work, will be able to make up any delay caused by the protestors without much impact.  However, if the City fails to move the protestors soon and further delay ensues, the taxpayers could be left holding the bag when delayed contractors come looking for compensation.

Construction lawyers representing owners frequently defend claims brought by subcontractors for unjust enrichment.  Lacking the privity necessary to bring a breach of contract claim, subcontractors allege that the owner has benefited (or been enriched by) the unpaid subcontractors work and under an unjust enrichment theory of liability should compensate the subcontractor for this work.  The law is Pennsylvania is well settled on the issue.  A subcontractor lacking privity of contract with the owner may not bring an unjust enrichment claim against the owner unless (a) the owner promised the subcontractor payment, or (b) otherwise misled the subcontractor into believing the owner would pay it directly.  Ira G. Steffy & Sons, Inc. v. Citizens Bank of Pennsylvania, 7 A.2d 278 (Pa.Super. 2010)

This apparently well settled legal theory makes a recent ruling in Lackawanna County curious.  As reported by Erin Nissley in the Times Tribune, there a unpaid concrete subcontractor’s unjust enrichment claim against Clark Summit Borough survived preliminary objections, despite the Borough not being a party to any agreement.  The project in question was apparently developed by the County’s Department of Planning and Economic Development and was simply located in the Borough.  After the general contractor allegedly failed to pay the subcontractor responsible for the concrete sidewalk portion of the project, the subcontractor sued the Borough for unjust enrichment claiming “Clarks Summit “has appreciated the benefits” of the sidewalk and driveways Valvano built and it would be inequitable for the borough to “retain the benefits of the work performed … without making payment” to the construction company for the value of the work.”

The Judge did indicate that if the subcontractor did not produce evidence that “Clarks Summit either requested the improvements … or misled” then the claims would ultimately be dismissed.  While this would seem to indicate that well settled law will ultimately prevail, it is of no solace to Clarks Summit who until then will have to spend tax payer money on attorneys fees to defend an action that fails squarely within the types of claims that Pennsylvania Law prohibits.