A recent trial in Delaware County, Pennsylvania resulted in a $24.3 million verdict in favor of the construction company Utility Line Services. The award, handed down by an 8 person jury panel, was arrived at by finding a breach of contract, violation of the Pennsylvania Contractor and Subcontractor Payment Act (“CASPA”), and wrongful termination of the contract.
According to news accounts, Utility Line Services entered into a contract with PVR Marcellus Gas Gathering to build a natural gas pipeline in Lycoming County, Pennsylvania. Utility Line Services is a builder of natural gas pipelines and PVR is a company that brings gas from well sites to refineries and, eventually, market.
Utility Line Services, as the Plaintiff, alleged that PVR failed to pay it approximately $16.7 million for work between late 2011 and early 2012. It also alleged that PVR wrongfully terminated the contract when work appeared to be carrying over until after the projected termination date for the contract on December 31, 2011. At the time of termination, PVR already owed Utility Line Services approximately $12 million and was raising “questions” about outstanding invoices. An accounting firm was brought in to try to justify PVR’s actions, but no supportable conclusion was offered.
After Utility Line Services made efforts to try to resolve the dispute, the matter went to trial in the Delaware County Court of Common Pleas before the Honorable Charles Burr. The trial lasted 17 days and a verdict was entered for the Plaintiff Utility Line Services. Specifically, the jury found that PVR breached the contract by refusing to pay $16.5 million. It also awarded an additional $7.8 million for wrongful termination and found that PVR violated CASPA.
It is unclear from the news reports as to whether the overall verdict included CASPA damages. Given the similarity between the amounts claimed for breach of contract and wrongful termination as compared to the amounts awarded, damages under CASPA are not included in the reported verdict. This is significant, as the violation of CASPA means that Plaintiff will also be entitled to recover 1% interest per month, 1% penalty per month, and its attorneys fees’ incurred to collect the $16.5 million unpaid contract balance. It is sufficient to say this will add substantially to the size of the jury’s verdict.
This is one of the largest awards in a construction case in recent memory.