Department of General Services v. Limbach Co.

• Decision Date: 06 December 2004
• Citation: 862 A.2d 713
• Parties: DEPARTMENT OF GENERAL SERVICES, Petitioner v. LIMBACH COMPANY and Penn Transportation Services, Inc., Respondents. Department of General Services, Petitioner v. Cast & Baker Corporation and Penn Transportation Services, Inc., Respondents. Commonwealth of Pennsylvania, Department of General Services, Petitioner v. The Farfield Company and Penn Transportation Services, Inc., Respondents.
• Court: Pennsylvania Commonwealth Court

862 A.2d 713

DEPARTMENT OF GENERAL SERVICES, Petitioner v. LIMBACH COMPANY and Penn Transportation Services, Inc., Respondents.

Department of General Services, Petitioner v. Cast & Baker Corporation and Penn Transportation Services, Inc., Respondents.

Commonwealth of Pennsylvania, Department of General Services, Petitioner v. The Farfield Company and Penn Transportation Services, Inc., Respondents.

Commonwealth Court of Pennsylvania.

Argued October 5, 2004.

Decided December 6, 2004.

Elizabeth A. O'Reilly, Harrisburg, for petitioner.

Jeffrey S. Proden, Uniontown, for respondents.

BEFORE: FRIEDMAN, Judge, LEAVITT, Judge, and FLAHERTY, Senior Judge.

OPINION BY Judge FRIEDMAN.

Before this court are the consolidated interlocutory appeals of Commonwealth of Pennsylvania, Department of General Services (DGS) from three orders of the Board of Claims (Board), at Docket Nos. 3501, 3568, and 3630, granting the motions of Penn Transportation Services, Inc. (Penn Transportation) to join P.J. Dick, Inc. (P.J. Dick) as an additional defendant in each docket's breach of contract action before the Board. We reverse and remand.

DGS and P.J. Dick entered into a contract (DGS/PJD Contract) under which P.J. Dick was to perform as construction manager for DGS on a new maximum security prison in Fayette County, Pennsylvania (the Project). DGS awarded a prime contract to Penn Transportation (DGS/PT Contract) to perform site excavation work and final grading of the Project site, one of the earliest phases of work on the Project. DGS also bid and awarded prime contracts to the Respondent Plaintiffs in this case (hereafter, Plaintiffs): Limbach Company (mechanical construction work); Cast & Baker Corporation (site utilities); and The Fairfield Company (electrical construction work).¹

Plaintiffs each filed a complaint against DGS with the Board, seeking damages resulting from DGS's breach of its respective contracts with Plaintiffs. Plaintiffs alleged that DGS did not disclose, or timely prepare, the Project site conditions as set forth in the contract documents and at the pre-bid meeting. Further, Plaintiffs alleged that DGS's failure to provide the agreed upon site excavation and grading adversely impacted Plaintiffs' productivity and increased their costs when they encountered conditions on the Project site that differed substantially from those represented by DGS, upon which Plaintiffs relied prior to bidding on the contracts.²

The Board granted original defendant DGS's subsequent motions for permission to untimely join Penn Transportation as an additional defendant in all three cases. In its complaints against Penn Transportation, DGS alleges, inter alia, that Penn Transportation's actions and/or inactions in performing its site excavation and grading under the DGS/PT Contract caused the damages allegedly incurred by Plaintiffs in that Penn Transportation did not rough grade the site properly, did not timely complete its work, did not remove the bedrock and did not work in sequence.

Penn Transportation then sought permission to join P.J. Dick as an additional defendant in all three cases,³ alleging that if the allegations set forth in DGS's complaint against Penn Transportation are proven in whole or in part, then P.J. Dick has breached the terms of the DGS/PJD Contract in that it failed to satisfactorily perform its contractual and supervisory obligations as construction manager with respect to the Project's site excavation work. Using virtually identical language in all three motions, Penn Transportation alleged that P.J. Dick was responsible for overseeing and guaranteeing all the work performed to ensure that DGS's Project specifications were met, and P.J. Dick supervised and fully approved Penn Transportation's work. Therefore, according to Penn Transportation, any nonconformity in Penn Transportation's excavation work claimed or proven by Plaintiffs and/or DGS was the direct and proximate result of P.J. Dick's breach of contract, its negligent failures and its misrepresentations. Penn Transportation thus asks that P.J. Dick be held: (1) solely liable to Plaintiffs and/or DGS for any damages awarded; (2) liable over to Penn Transportation for contract damages, indemnification and/or contribution; (3) jointly and severally liable with Penn Transportation on DGS's cause of action; and/or (4) liable to Penn Transportation on any cause of action arising out of the transactions, events or occurrences upon which Plaintiffs' or DGS's causes of action are based.

Over DGS's objections,⁴ the Board, in three separate orders, granted Penn Transportation's motion for permission to join P.J. Dick as an additional defendant in each of the Plaintiffs' breach of contract cases against original defendant DGS and additional defendant Penn Transportation. The Board certified that these interlocutory orders involved a controlling question of law, and, subsequently, this court granted and consolidated DGS's three petitions for permission to immediately appeal the Board's decision.⁵ In doing so, we restricted our consideration to the sole issued posed by DGS, i.e., whether Penn Transportation may join P.J. Dick as an additional defendant in Plaintiffs' actions before the Board. We now hold that the answer to this question is no.

Under its enabling statute, the Board has been given "exclusive jurisdiction to hear and determine all claims against the Commonwealth arising from contracts hereafter entered into with the Commonwealth, where the amount in controversy amounts to $300.00 or more." Section 3 of the Board of Claims Act (Act),⁶ 72 P.S. § 4651-4. Courts have interpreted this language to prohibit the Board's exercise of jurisdiction over claims sounding in tort. Vartan v. Commonwealth, 151 Pa.Cmwlth. 86, 616 A.2d 160 (1992),appeal denied, 535 Pa. 627, 629 A.2d 1386 (1993); Miller v. Department of Environmental Resources, 133 Pa.Cmwlth. 327, 578 A.2d 550, 553,appeal denied, 526 Pa. 643, 584 A.2d 324 (1990).

DGS argues that, because the Board lacks subject matter jurisdiction over claims sounding in trespass, joinder would be permissible only if Penn Transportation stated an independent and viable contractual claim against P.J. Dick, and the Board erred by allowing Penn Transportation to join P.J. Dick based upon allegations that P.J. Dick breached the DGS/PJD Contract. DGS relies on State Public School Building Authority v. Noble C. Quandel Co., 137 Pa.Cmwlth. 252, 585 A.2d 1136 (1991), and Kinback Corporation v. Quaker Construction Management, Inc., 2001 WL 1231716 (M.D.Pa.), as standing for the proposition that one party cannot be sued by another in contract absent privity of contract between the parties unless the plaintiff is a third party beneficiary under the contract. According to DGS, Penn Transportation's failure to establish privity of contract with P.J. Dick, or intended third party beneficiary standing with respect to the DGS/PJD Contract, should have compelled the Board to deny Penn Transportation's motion for joinder. Indeed, DGS maintains that only DGS may assert a claim against P.J. Dick for breach of the DGS/PJD Contract, and DGS chose not to do so.

Penn Transportation counters that, while both Quandel and Kinback concern the standard for filing a breach of contract action against a person who is not a party to the contract, the cases do not discuss the principle of joinder. Penn Transportation reminds us that it is not asserting a tort claim against DGS but, rather, raises its tort claims against P.J. Dick. Penn Transportation insists that, because the Board clearly has jurisdiction to hear Plaintiffs' claims against DGS arising out of breach of contract, the Board also has jurisdiction to hear all ancillary claims arising as a result of Plaintiffs' suits. As support for this position, Penn Transportation relies on Derry Township School District v. Day & Zimmerman, Inc., 345 Pa.Super. 487, 498 A.2d 928 (1985), in which the superior court held that joinder of a third-party defendant was proper under Pa. R.C.P. No. 2252(a)(4),⁷even absent privity of contract, where the third-party complaint was predicated on the same series of occurrences as those underlying the plaintiff's claim for relief. Penn Transportation maintains that, similar to the situation in Derry Township, Penn Transportation's complaint against P.J. Dick is predicated on the same series of occurrences as those underlying Plaintiffs' claim for relief — the disputed set of circumstances whose result was to leave Plaintiffs with conditions on the Project that allegedly differed substantially from those represented by DGS.⁸ Therefore, Penn Transportation argues that the reasoning in Derry Township controls and requires that we affirm the Board's order permitting joinder. We disagree.

Although Derry Township provides an accurate interpretation of Pa. R.C.P. No. 2252(a)(4), we remind Penn Transportation that this case was considered by the superior court, which has jurisdiction over both trespass and assumpsit matters; the case did not deal with the exclusive jurisdiction of the Board. It is axiomatic that a rule of procedure cannot operate to confer jurisdiction. Department of Transportation v. Joseph Bucheit & Sons Co., 506 Pa. 1, 483 A.2d 848 (1984); Smaha v. Landy, 162 Pa.Cmwlth. 136, 638 A.2d 392, appeal denied, 539 Pa. 660, 651 A.2d 546 (1994) (stating that rules of civil procedure cannot abridge, enlarge or modify substantive rights and jurisdiction established by statute). Thus, we reject Penn Transportation's argument that Pa. R.C.P. No. 2252(a)(4) applies to vest the Board with jurisdiction over its tort claim against P.J. Dick.

Moreover, we are not persuaded by Penn Transportation's assertion that the Board must hear its claims in the interest of judicial economy, to avoid repetitious litigation in a separate venue and to obtain all the facts necessary to make an appropriate and just ruling.⁹ In United Brokers Mortgage Company v....