Scungio Borst v. 410 Shurs Lane Developers, LLC
106 A.3d 103
Pa. Super. Ct.2014Background
- 410 Shurs Lane Developers, LLC (410 SLD) hired Scungio Borst & Associates (SBA) as general contractor for a condominium project; SBA performed contract work plus approximately $2.6 million in additional work directed by 410 SLD and its president/50% owner Robert DeBolt.
- SBA was not paid about $1.5 million for the additional work and sued 410 SLD, DeBolt, and others for breach of contract, unjust enrichment, fraud, and violations of the Contractor and Subcontractor Payment Act (CASPA).
- The trial court entered judgment for SBA against 410 SLD and Kenworth II, LLC for $1,979,341; SBA appealed only the grant of summary judgment dismissing CASPA (and related) claims against DeBolt individually.
- SBA’s theory: DeBolt acted as an “agent of the owner acting with their authority” under CASPA and thus is personally liable when the owner fails to pay contractors.
- The trial court granted summary judgment for DeBolt; the Superior Court majority affirmed, holding CASPA’s remedies apply to contracting parties, not to every authorized agent of an owner, and DeBolt had no independent contractual liability alleged.
Issues
| Issue | Plaintiff's Argument (SBA) | Defendant's Argument (DeBolt) | Held |
|---|---|---|---|
| Whether an owner’s "agent acting with their authority" is personally liable under CASPA when owner (410 SLD) fails to pay | CASPA definition of "owner" includes agents; DeBolt authorized change orders and so is an "owner" liable for CASPA penalties | CASPA governs contracting parties; the statute’s payment obligations attach to the party with whom the contractor contracted (410 SLD), not every agent | Held: No — CASPA remedies apply to contracting parties; reference to agents imputes their acts to owner but does not make agents individually liable absent contract, veil-piercing, or other basis |
| Whether CASPA should be construed analogously to the WPCL to impose personal liability on corporate agents | WPCL courts impose liability on agents/officers who exercised decision-making authority; CASPA’s "agent" language should be read similarly | CASPA differs in language and purpose; no persuasive authority that legislature intended parallel treatment | Held: Rejected — WPCL analogy unpersuasive; different statutory purposes and language |
| Whether verbal change orders can create enforceable obligations despite written-change-order clause | Oral authorizations by DeBolt created modification/payment obligations; equitable doctrines and precedent allow oral mods | Contract required written change orders; SBA’s claims treated as part of contract with 410 SLD, not DeBolt personally | Held: Oral change orders may bind the owner in equity, but SBA alleged they were part of the contract with 410 SLD; that does not create personal CASPA liability for DeBolt absent other facts |
| Whether summary judgment proper given factual disputes about DeBolt’s authority and conduct | DeBolt exercised active decision-making and gave oral authorizations — factual disputes preclude summary judgment | No evidence alleged that DeBolt agreed to be personally liable or that corporate veil should be pierced; SBA did not plead a new contract with DeBolt | Held: Summary judgment affirmed — on CASPA claim DeBolt not individually liable; SBA failed to plead/pr offer basis for personal liability (alter ego/piercing or distinct personal contract) |
Key Cases Cited
- Summers v. Certainteed Corp., 997 A.2d 1152 (Pa. 2010) (summary judgment standard and appellate review principles)
- LJL Transp., Inc. v. Pilot Air Freight Corp., 962 A.2d 639 (Pa. 2009) (record components for summary judgment; construing record in nonmoving party’s favor)
- Prieto Corp. v. Gambone Constr. Co., 106 A.3d 103 (Pa. Super. 2014) (CASPA applies to construction contracts, written or oral)
- Ruthrauff, Inc. v. Ravin, Inc., 914 A.2d 880 (Pa. Super. 2006) (CASPA’s purpose: protect contractors and encourage fair dealing)
- Universal Builders, Inc. v. Moon Motor Lodge, Inc., 244 A.2d 10 (Pa. 1968) (oral modification/enforcement of written-change-order clauses under equitable principles)
- Belcufine v. Aloe, 112 F.3d 633 (3d Cir. 1997) (purpose of WPCL to impose liability on corporate managers to deter diversion of funds)