Wayne Knorr, Inc. v. Department of Transp.

973 A.2d 1061

WAYNE KNORR, INC., Petitioner v. DEPARTMENT OF TRANSPORTATION, Respondent.

Department of Transportation, Petitioner v. Wayne Knorr, Inc., Respondent.

No. 1593 C.D. 2008.

No. 1598 C.D. 2008.

Commonwealth Court of Pennsylvania.

Submitted on Briefs December 26, 2008.

Decided May 14, 2009.

Christopher F. Wilson, Asst. Counsel and Andrew S. Gordon, Chief Counsel, Harrisburg, for designated petitioner, Department of Transportation.

R. James Reynolds, Jr., Harrisburg, for respondent, Wayne Knorr, Inc.

BEFORE: McGINLEY, Judge, and SIMPSON, Judge, and KELLEY, Senior Judge.

OPINION BY Judge SIMPSON.

I. Introduction

Table of Contents
  I. Introduction                                                                            1066
 II. Board's Findings                                                                        1066
     A. Project Background                                                                   1066
     B. D-476 Contract Schedule                                                              1067
     C. Knorr's Modification to the D-476 Schedule                                           1068
     D. Missing or Incorrect Grades/Elevations in PennDOT's Plans                            1069
     E. Suspension of Work Due to Slope Instability                                          1070
     F. PennDOT's Changes to the Roadway Shoulder from Stations 1820 to 1844                 1071
     G. PennDOT's Delay in Supplying Missing Roadway Grades/Elevations in the Vicinity of
          the Box Culvert                                                                    1073
     H. "Semi-Final Inspection"                                                              1073
     I. Knorr's Self-inflicted Problems                                                      1074
     J. Knorr's Claimed Damages                                                              1074
     K. Knorr's Delay Damages                                                                1075
     L. Knorr's Claimed Disruption-Related Damages                                           1076
     M. Summary of Damages                                                                   1077
     N. PennDOT's Counterclaim for Construction Engineering Liquidated Damages               1077
III. PennDOT's Appeal                                                                        1078
     A. Project Schedule                                                                     1078
     B. Apportionment of Delay                                                               1080
     C. Calculation of Period of Delay                                                       1084
        1. Knorr's Paving Equipment                                                          1084
        2. Delay in Providing Box Culvert Grades                                             1085
     D. Statute of Limitations                                                               1087
     E. Construction Engineering Liquidated Damages                                          1090
        1. November 8 to December 7                                                          1093
        2. After December 7                                                                  1094
 IV. Knorr's Appeal                                                                          1096
     A. MPT Disruption Claim                                                                 1096
     B. Computation of Delay Damages                                                         1098
     C. Extended Home Office Overhead                                                        1099
        1. Section 110.03(d)(7)                                                              1099
        2. Section 110.03(a)                                                                 1100
 V. Conclusion                                                                               1101

This matter presents cross-appeals of the Pennsylvania Department of Transportation (PennDOT) and Wayne Knorr, Inc. (Knorr) from a decision of the Board of Claims (Board). The parties' claims primarily arise out of various delays and disruptions encountered during a road improvement project on a state road in Armstrong County, Pennsylvania. The parties raise numerous contentions. Upon review, we affirm.

This case arises out of a contract between Knorr, a Pennsylvania highway contractor, and PennDOT for renovation of a 2.033 mile stretch of State Road 28 (SR-28) in Armstrong County between the boroughs of Distant and South Bethlehem.

In the spring of 1999, PennDOT solicited bids for the project. Knorr was the successful bidder for the contract. The primary elements of the project involved: addition of a third, truck-climbing lane to the existing two-lane road; renovation and widening of the roadway shoulder along SR-28's northbound lane; and, demolition and replacement of an existing bridge. The contract called for Knorr to complete the project within 368 days of PennDOT's Notice to Proceed for a base contract price of $3,963,884.40.

After a brief initial delay (which is not at issue here), PennDOT issued the Notice to Proceed on August 12, 1999, resulting in a planned contract completion date of August 13, 2000. As a result of various delays and disruptions, however, Knorr did not complete the project as scheduled. Rather, the project was considered substantially complete as of December 7, 2000. Knorr continued to perform a small amount of contract and force-account¹ work intermittently until August 2001.

Knorr subsequently filed a complaint with the Board seeking $825,273, plus interest for alleged acts and omissions by PennDOT that caused Knorr to incur delay and disruption damages. Hearings ensued before the Board.

Following 10 days of hearings, about 2100 pages of testimony, and more than 200 exhibits, the Board issued a comprehensive opinion, consisting of 305 findings of fact, 85 conclusions of law and more than 50 pages of discussion. A summary of the Board's findings follows.

II. Board's Findings

A. Project Background

Knorr is a corporation with offices at 7925 Old Berwick Road, Bloomsburg, Pennsylvania. During the period relevant to this litigation, James Knorr, son of Wayne Knorr, served as president of Wayne Knorr, Inc.

On August 3, 1999, PennDOT and Knorr executed Contract No. 101131 (Contract), for the rehabilitation and expansion of a roughly two-mile portion of SR-28. The project involved the expansion, renovation and repaving of the roadway between Stations² 1776 + 49 and 1883 + 80.

Moving generally in a southerly-to-northerly direction, the proposed roadway renovation and lane expansion was to begin at Station 1776 + 49, near the Borough of Distant, and terminate in the Borough of South Bethlehem at Station 1883 + 80. At Station 1780, the plans called for new construction of a third lane on the west side of the roadway to be used as a truck-climbing lane. The proposed three-lane stretch of roadway continued for approximately 1.12 miles, where the highway transitioned from three lanes back to two lanes.

The area to be widened to create the truck-climbing lane was located primarily on the west side of the project, adjacent to the southbound travel lane, but it also included a portion of the east side of the project between Stations 1780 and 1813. On the side opposite the new truck-climbing lane and elsewhere along the project, the plans called for renovation of the roadway shoulder. Renovation of the roadway shoulder was to be done, for the most part, by removing (milling) the top of the shoulder material and replacing it with four inches of paving material. In some areas, however, the plans called for "full-depth widening" of the roadway shoulder (excavating down 19 inches and laying new sub-base and paving materials). On the side opposite the new truck-climbing lane between Stations 1820 and 1834, the plans called for renovation of the shoulder by the four-inch milling method. On the side opposite the truck-climbing lane between Stations 1834 and 1844, the plans called for a combination of the four-inch milling method and full-depth widening of the shoulder.

In addition, slightly north of the new truck-climbing lane, between Stations 1851 and 1852, SR-28 crosses a small creek called Bostonia Run. The Contract plans called for demolition and replacement of the existing bridge over Bostonia Run, with construction to be phased in such a way as to allow simultaneous installation of new bridging while maintaining one travel lane for traffic at all times. The new bridging was to be fabricated from matching "box culvert" sections.

The Contract plans provided for the roadway renovation work to be constructed in accordance with PennDOT's project specifications, plans and schedule. Among other things, the Contract utilized PennDOT's "1994 Publication 408 Specifications" (408 Specifications). Board of Claims Op., 7/25/08, Finding of Fact (F.F.) No. 6.

B. D-476 Contract Schedule

As to the schedule to be used for construction activities on the project, Section 108.03 of the 408 Specifications, relating to performance and progress on a construction project, states, in relevant part, "if no schedule is presented for approval [by the contractor] at the preconstruction meeting, the schedule contained in the contract will be the official schedule for all purposes ...." F.F. No. 16. Included in PennDOT's bid package for the project was a Form "D-476 Distribution of Contract Time," which is a "straight line diagram of construction sequence and activities." F.F. No. 15.

On July 30, 1999, representatives of PennDOT and Knorr attended a preconstruction meeting, at which a PennDOT representative noted Knorr would submit a critical-path-method (CPM) schedule. About a week later, however, John Fry, PennDOT's Engineering District 10-0 Assistant Engineer for Construction, issued the Notice to Proceed...