216 A.3d 526
Pa. Commw. Ct.2019Background
- Lobar Associates contracted with the Pennsylvania Turnpike Commission to build a material testing lab (Somerset Project) and completed work in June 2016.
- Lobar submitted a supplemental job order on July 27, 2016 seeking $150,925.19 for extra work; the Commission responded on September 21, 2016 that it would pay $35,233.05 and attached a line-by-line "pay"/"no pay" spreadsheet.
- Lobar asked for further review on October 6, 2016; the Commission responded October 17, 2016 reiterating its prior analysis. Lobar filed an administrative claim March 27, 2017 seeking $418,767.42 (including delay damages).
- The Commission rejected the administrative claim as untimely under the Procurement Code’s six-month filing rule (62 Pa. C.S. §1712.1(b)), asserting the claim accrued on September 21, 2016; the Board sustained preliminary objections and dismissed for lack of jurisdiction.
- On appeal, Lobar challenged (1) whether Kleimenhagen was the Commission’s authorized contract representative, (2) whether the September 21 email was a final denial (i.e., accrual), (3) whether subsequent Commission conduct (including Oct. 17 email and Jan. 5 counsel letter) changed the accrual date.
- The Commonwealth Court affirmed: Kleimenhagen had authority; the September 21, 2016 email constituted a denial that satisfied accrual standards; Lobar’s claim was untimely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kleimenhagen was the Commission’s authorized contract representative | Kleimenhagen had no written appointment; Madey was identified in writing as representative, so Sept. 21 email lacked authority | Kleimenhagen was appointed by his director, performed representative functions, and sent the relevant emails | Kleimenhagen was the authorized representative; Board’s factual finding supported by evidence |
| Whether the claim accrued on Sept. 21, 2016 (i.e., whether that email was a final denial) | Lobar reasonably read Sept. 21 email as an initial step in a collaborative review process; Oct. 17 email evidenced continuing review | Sept. 21 email completed review, attached itemized "pay"/"no pay" spreadsheet, and stated the amount Commission would pay | Sept. 21, 2016 was accrual: email met Darien two-prong test (able to state amount and affirmatively notified of nonpayment) |
| Whether the contract’s collaborative job-order process required further meeting/discussion before a final determination | The contract requires meeting/discussion for job-order development, so supplemental job orders must follow that collaborative process before accrual | The collaborative procedure applies to developing prospective job orders; it is inapplicable to after-the-fact charges for work already performed | Court agreed with Commission: collaborative process applies to new job orders, not to post-performance supplemental claims; Sept. 21 denial was effective |
| Whether the Jan. 5, 2017 letter from Commission counsel altered accrual or was too confusing to be dispositive | The letter was ambiguous and did not clearly say Sept. 21 was the accrual date; it created confusion about deadlines | Counsel’s letter expressly disagreed with Lobar’s April 17, 2017 accrual theory and stated Sept. 21 triggered the six-month period | The Jan. 5 letter reinforced that accrual was Sept. 21, 2016; Board correctly relied on it as clarification and Lobar ignored the warning |
Key Cases Cited
- Darien Capital Mgmt., Inc. v. Pub. Sch. Emps.’ Ret. Sys., 700 A.2d 395 (Pa. 1997) (two-prong accrual test: claimant can state amount and is affirmatively notified of nonpayment)
- Ferguson Elec. Co. v. Dep’t of Gen. Servs., 3 A.3d 681 (Pa. Cmwlth. 2010) (claim accrues when a refusal to pay communicates that payment will not be made; specific words not required)