International Management Consultants v. Sea-z
International Management Consultants v. Sea-z No. 704 EDA 2016
| Pa. Super. Ct. | Aug 4, 2017Background
- IMC contracted with Sea-Z in April 2010 to renovate Sea‑Z’s facility for a lump sum (~$1.51M) with progress payments and 10% retainage; substantial completion was required within 208 days but was delayed.
- IMC submitted final invoices (Feb & Apr 2011) and sued Sea‑Z in Aug 2011 for breach, CASPA violations, and unjust enrichment, claiming a contract balance (~$123,897.70).
- Sea‑Z counterclaimed for breach, liquidated damages for delay, and related relief, alleging IMC abandoned or failed to complete work; jury ultimately awarded Sea‑Z $58,000 on its counterclaim.
- Jury verdict (Nov 2015): IMC prevailed on breach and CASPA claim (Sea‑Z lacked good‑faith basis to withhold payment) and was awarded $124,280.95; Sea‑Z prevailed on its breach counterclaim for $58,000.
- Trial court (Feb 2016) molded verdict under CASPA to add prejudgment interest, statutory penalties (1%/month), and attorneys’ fees, increasing IMC’s recovery to $404,036.89; Sea‑Z appealed challenging molding, calculation base, prevailing‑party finding, and fee scope.
Issues
| Issue | Plaintiff's Argument (IMC) | Defendant's Argument (Sea‑Z) | Held |
|---|---|---|---|
| 1. Jury inconsistency/good‑faith finding | IMC: jury properly found Sea‑Z lacked good faith; award should stand | Sea‑Z: inconsistency between CASPA bad‑faith finding and Sea‑Z’s $58k breach recovery; trial court should set aside or new trial | Waived (no timely objection); alternatively, verdict supported by evidence; no abuse of discretion denying new trial |
| 2. Molding verdict to add CASPA interest/penalties without jury apportionment | IMC: court may mold verdict and calculate CASPA interest/penalties on amount wrongfully withheld | Sea‑Z: court lacked basis because jury did not specify amount "due and owing," retained, or wrongfully withheld; must offset Sea‑Z’s $58k award | Court may mold verdict to add interest/penalties; molding on IMC’s claimed contract balance was appropriate; no offset for Sea‑Z’s counterclaim award |
| 3. Calculation base for interest/penalties (set‑off for counterclaim) | IMC: interest/penalties apply to the amount wrongfully withheld; counterclaim award cannot reduce CASPA recovery when withholding was not in good faith | Sea‑Z: CASPA calculations should be net of Sea‑Z’s breach damages ($58k) | Court affirmed using IMC’s claimed balance as base; set‑off would undermine CASPA’s remedial purpose |
| 4. Attorneys’ fees: entitlement and scope (including fees for defending counterclaim) | IMC: as substantially prevailing party under CASPA, entitled to reasonable fees for CASPA litigation (and seeks all fees incurred) | Sea‑Z: IMC should not get fees for defending Sea‑Z’s independent counterclaim where IMC did not prevail on that claim | IMC is substantially prevailing for CASPA claim and entitled to CASPA fees; but fees attributable to defending Sea‑Z’s counterclaim must be excluded or offset. Trial court’s award reversed in part and remanded to determine reasonable fees for CASPA litigation only |
Key Cases Cited
- Pittsburgh Constr. Co. v. Griffith, 834 A.2d 572 (Pa. Super. 2003) (trial court may mold a jury verdict to include interest)
- Zimmerman v. Harrisburg Fudd I, L.P., 984 A.2d 497 (Pa. Super. 2009) (CASPA fee/interest remedial purpose; post‑award interest continues absent good‑faith withholding)
- Zavatchen v. RJF Holdings, Inc., 907 A.2d 607 (Pa. Super. 2006) (definition and approach to "prevailing party" for fee awards)
- Ruthrauff, Inc. v. Ravin, Inc., 914 A.2d 880 (Pa. Super. 2006) (remand appropriate to determine correct amount of fees when CASPA violation found)
- Tyus v. Resta, 476 A.2d 427 (Pa. Super. 1984) (failure to object to jury instruction/verdict before dismissal waives appellate challenge)
- Criswell v. King, 834 A.2d 505 (Pa. 2003) (failure to object to inconsistent jury verdict before discharge waives issue)
- Lomas v. Kravitz, 130 A.3d 107 (Pa. Super. 2015) (contractor entitled to recover attorneys’ fees under CASPA when substantially prevailing)