Delay Damages and Breach of

Contract for Construction

Engineering Court Cases

VS
VS
TEMPLE UNIVERSITY COLLEGE OF
ENGINEERING DEPARTMENT OF CIVIL AND
ENVIRONMENTAL
ENGINEERING CEE 3311 - CONSTRUCTION
ENGINEERING
Professor: Philip D. Udo-Inyang
Due: October 20, 2015
By: Mary Bradley

Table of Contents

Contents
Case Number 1........................................................................................................... 3
Case Number and Title............................................................................................ 3
Parties Involved....................................................................................................... 3
Project Requirements (Project Name, Type, Contract Amount, and Location of
project).................................................................................................................... 3
Place and Date of Case........................................................................................... 3
Summary................................................................................................................. 3
Court Decision......................................................................................................... 5
Further Actions........................................................................................................ 5
Commentary........................................................................................................... 5
Case Number 2........................................................................................................... 7
Case Number and Title............................................................................................ 7
Parties Involved....................................................................................................... 7
Project Requirements (Project Name, Type, Contract Amount, and Location of
project).................................................................................................................... 7
Place and Date of Case........................................................................................... 7
Summary................................................................................................................. 7
Conclusion............................................................................................................... 9
Further actions........................................................................................................ 9
Commentary........................................................................................................... 9
Bibliography............................................................................................................. 11
Appendix A............................................................................................................... 12

Case Number 1
Case Number and Title
The Court of Common Pleas of Philadelphia County First Judicial District
of Pennsylvania, NO.1215
Mattiola Construction Corp. Vs Commercial Union Insurance Co.

Parties Involved

Mattiola Construction Corp., Plaintif

Commercial Union Insurance Co., Defendant
Subcontract: IA Construction Cooperation
Project Requirements (Project Name, Type, Contract
Amount, and Location of project)

Project name: Bridge on the Pennsylvania Turnpike

Type: saw-cutting
Contract Amount: N/A
Location of project: Pennsylvania Turnpike
Place and Date of Case

Place: Philadelphia, Pennsylvania

Date: April, 2001
Summary
Mattiola entered into a written subcontract with IA Construction
Corporation and Mattiola agreed to perform concrete saw cutting on a bridge
owned by the Pennsylvania Turnpike Commission. However, one of the
Mattiolas employees accidentally cut a certain structural steel member on
the bridge which resulted in the Delay of the project. Since the project was
delayed, the commission withheld $75,900.00 from IA construction which
was then withheld from Mattiola. At this time Mattiola was insured by
Commercial Union Insurance Company and this insurance company refused

to compensate Mattiola for the liquidation damages so Matilla brought a suit

against the insurance company.
Under the policy, Commercial Union must pay Mattiola because of
property damage or bodily injury. But the Commercial Union argues that the
damage committed by Mattiola was not considered property damage.
Although property damages includes liquidated damages, Commercial Union
tries to fight that by defining property damage as physical injury to tangible
property including a loss of that property and loss of use of tangible property.
Mattiola then argues that the delay in the project is considered a loss of use
and any resultant damages, including liquidated damages, are attributable to
the accident.
Overall, Mattiola is the one who caused the accident and thus
resulting in property damage and delay of project. The liquidated damages
then arose due to the property damage because the damages caused the
delay and the delay causes liquidated damages. Since property damage is
covered under the policy between Mattiola and the Commercial Union
Insurance Company, Commercial Union should be responsible. However,
Commercial Union has many objections to this statement. First, Commercial
Union points out that the subcontract imposed liability on Mattiola for the
damages from the delay so this creates contractual obligation and Mattiola is
now responsible for the Liquidated damages. The second objection is that
the liquidated damages are set in advance by the IA construction and the

Commission so the liquidated damages are a liability arising from the

contract.
The obligation made by the Commercial Union Insurance Company
included liquidation damages. Although Commercial Union, brought up cases
to try and back up there situation but none of the cases were relevant to this
case. Mattilolas accident that caused the damages caused neither a breach
of obligation nor the liquidated damages provision. Since Mattilola is entitled
for coverage of the liquidated damages under policy they are also entitled to
summary of judgement on its claim for Commercial Unions breach of the
policy.

Court Decision
On May 8th, 2002, a decision was made that the defendant Commercial Union
Insurance Company was ordered to pay back the liquidated damages to the
plaintif Mattiola Construction Corporation. Commercial Union Insurance
Company has to pay the amount of $ 75,000.00 together with pre-judgement
and post-judgement interest with the rate of six percent annually. The
interest runs from April 10, 2001 to the date the plaintif is paid in full. The
defendant was charged with breaching their insurance contract for not
paying the plaintif the liquidated damages.

Further Actions
In this particular case there were no further actions by the parties because Mattiola
got what they wanted and Commercial Union was forced to pay. The only reason
there would have to be further actions taken is if Commercial Union never paid
5

Mattiola the money they owed them, but in this particular case no information
indicated that they money was never paid.

Commentary
In this case Commercial Union Insurance Company should have known
they had to pay Mattiola the liquidated damages. The Insurance company
had to probably pay liquidated damages in to past so they should have not
been surprised when they lost they case and had to pay Mattiola the
liquidated damages. Commercial Union would have saved themselves a lot of
time and money if they just did the right thing in the first place instead of
trying to argue a case against Mattiola.
The two contract issues involved in this case is liquidated damages and
breach of contract. A contract is a binding agreement between two or more
parties. Liquidated damages are a cash compensation for a break in a
contract from one party who damaged the project in a way thus the contract
as well. In this case Mattiola created damages in the project by accidentally
sawing the wrong spot on the bridge and this caused delay. Therefore
Mattiola owed IA Construction Company a certain amount of money for the
liquidated damages. A break of contract occurs when one or more of the
parties do not abide by the agreement made previously made between the
two parties. In this particular case the insurance company breached a
contract with Mattiola for not paying them the money for they had to pay IA
Construction for liquidated damages.

In this case there could have been alternative solutions to do before

deciding to go to court because court should be the last decision. Matiloa
could have taken a non-boring approach with the insurance company first to
see if they can come to an agreement first. Some non-boding approaches
they could have taken includes a mediation, dispute review board and
partnering. However, in this case it seemed that the Insurance Company
thought they were really correct in not paying Mattiola for the liquidated
damages so the non-bonding actions might not have helped. In order to help
future problems like this to happen in the future the Insurance Companies
might have to be more educated on the particular contact they are agreeing
to.

Case Number 2
Case Number and Title
The Court of Common Pleas of Philadelphia County First Judicial District
of Pennsylvania, NO.00498
LVI Environmental Services, Inc. Vs Duane Morris ,LLP

Parties Involved

LVI Environmetal Services., Plaintif

Duane Morris., Defendant
Subcontract: Delta

Project Requirements (Project Name, Type, Contract Amount,

and Location of project)

Project name: 1500 Spring Garden Street

Type: Demolition
Contract Amount: N/A
Location of project: 1500 Spring Garden Street
Place and Date of Case

Place: Philadelphia, Pennsylvania

Date: April, 2008
Summary
The overview of this project is that LVI Environmental Services was a
sub-sub-contractor on this particular construction project. LVI entered into a
contract with Delta/B.J.D.S., Inc. under witch LVI had to perform certain
demolition work on the project. Delta was the sub- contractor responsible for
the asbestos removal on the project. The contract between LVI and Delta was
that if the subcontractor is delayed, disrupted or interfered by unavoidable
causes then an agreement time should be extended by a change order. No
time adjustments to time or compensation should be done unless under
extreme circumstances. So both delta and LVI agreed that more time rather
than more money was there preferred method.
As part of the contract LVI and Delta agreed that Delta would first do
the asbestos removal and then LVI would perform the construction removal.
However, this did not happened as planned according to LVI Delta fell behind
the original time which then did not allow LVI to start on time. As a result, LVI
was expected to complete their project in less time and less efficient manner.
So LVI then hired Duane Morris (DM) who filed claims against delta for a
8

breach in contract and a violation of the Contractor and Subcontractor

Payment Act on LVIs behalf. At the first trial Delta moved for a summary
judgment based on no damages and no breach in contract and the judge
grated Deltas motion and dismissed LVIs claims.
Then DM filed an appeal on the case claiming that LVI was owed 1.7
million in the delay of damaged but they could not come up with the proper
paper work so the case was dismissed. Now LVI takes matters into their own
hands and filed action against DM for legal malpractice. LVI claims that the
appeal would have one if DM would have proved the proper paperwork to
prove the damages of delay. But when looking through the original file for
breach of contract and delay of damages there is no evidence for this.
Instead, the evidence showed that Delta did fall behind its work but planned
to work simultaneously with LVI to get their work done.
Showing that overall Delta did not break the contract or create a delay,
the evidence just proved that LVIs claims were incorrect. Therefore, the
ruling that there were no damages that had to be paid by Delta to LVI. So the
Current case of LVI vs DM was dismissed because there was no case
anymore. Therefore, LVI sufered no damages as a result of DMs
malpractice.

Conclusion
For all the reasons previously stated it can be seen that LVI did not have a
case against DM. So therefore the DMs motion for summary was granted,
and LVIs claims against for DM for malpractice are dismissed.
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Further actions
There were no rather actions that took place past the actions stated in this
construction court case due to the fact that LVI had no case against DM after finding
out that Delta had not breached the contract and there was no delay of damages.

Commentary
In this particular case it seemed that LVI was just looking for someone to
blame so that they could get some money. If LVI really had a case against Delta they
would have went to court the first time with the proper paper work and evidence
showing how Delta delayed and breached contract but they did not. This just shows
that LVI did not have any evidence against Delta and should have never made a
claim against DM in legal malpractice. It was LVIs fault they lost the case not DMs.
The contract issues introduced in this case were breach of contract and delay
of damages. A contract is a binding agreement between two or more parties. A
break of contract occurs when one or more of the parties do not abide by the
agreement made previously made between the two parties. In this case LVI was
trying to claim that Delta made a breach in the contact by not sticking to the
timeline they agreed on. A Delay of damages is when one party does not comply
with their part of the project by a certain date previously set and makes the
projected to become delayed. Delays on a project can depend on many obstacles
throughout the project but depending on how the delay occurred depends on if a
party will have to pay for the delay. In this case LVI was calming that Delta caused a
delay due to their own conditions therefore caused LVI delay and therefore caused
damage on the project and the deadline.
Going to court is always a last option when trying to have an agreement in a
project. In this case court was not necessary. The first step that should have been
taken if LVI was having an issue was to use a non- binding agreement approach with
10

allowed them to come up with an agreement with the assistants of other people.
The approaches that can be used is a mediation, discussion board, or a partnering.
To avoid this issue LVI should have talked to Delta first and told them that they
thought they would not have enough time to complete the project. It seems in this
case that LVI did not communicate properly with Delta and just went to court to see
if they could get some money out of their own wrong doings. In the further for this
case it seems that communication is key throughout the whole project not just
before and after the project.

11

Bibliography
Courts.phila.gov,. 'Court Of Common Pleas Trial Division - Criminal @ The
Philadelphia Courts
First Judicial District Of Pennsylvania'. N.p., 2015. Web. 19 Oct. 2015.

Appendix A
12