ERNEST BOCK & SONS, INC. V. CITY OF PHILADELPHIA, ET AL
MEMORANDUM AND/OR OPINION SETTING FORTH THE REASONS WHY THE COURT IS DENYING DEFENDANT ERNEST BOCK & SONS,INC.'S MOTION FOR SUMMARY JUDGMENT (DOCKET NO. 29). AN APPROPRIATE ORDER FOLLOWS. BY HONORABLE GENE E.K. PRATTER ON 5/7/13. 5/7/13 ENTERED AND COPIES E-MAILED.(rab, ).
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
LYDON MILLWRIGHT SERVICES,
ERNEST BOCK & SONS, INC.,
GENE E.K. PRATTER, J.
MAY 7, 2013
In this unfortunate construction project melee, Lydon Millwright Services, Inc.
(“Lydon”) has sued Ernest Bock & Sons, Inc. (“Bock”) for breach of contract and unjust
enrichment. In response, Bock moves for summary judgment. Bock asks the Court to rule as a
matter of law that Lydon’s claims are barred by releases that Lydon, as Bock’s subcontractor,
signed and by a “pay-if-paid” provision in the parties’ contract. For the following reasons, the
Court denies the motion.
I. Factual Background 1
The Philadelphia International Airport currently is undertaking a construction project that
includes the installation of a baggage handling system. When this lawsuit commenced, Bock
was the general contractor for the project. In March 2008, Lydon had contracted with Bock and
agreed to install the mechanical portion of the baggage handling system.
Lydon and Bock signed a Purchase Order that required Lydon to submit a “monthly
release of liens and claims” with its monthly applications for payments. Over the course of the
project, Lydon submitted 54 such applications with releases to Bock. The parties dispute
The facts set forth in this section are undisputed by the parties.
whether these releases preclude Lydon from suing Bock. The Purchase Order also contained a
“pay-if-paid” clause that provides:
“Payment by Owner to the General Contractor for the work/materials invoiced by
the Subcontractor . . . shall be a condition precedent to General Contractor’s
obligation to pay Subcontractor. . . . Accordingly, Subcontractor . . . agrees and
understands that it shall bear the risk of non-payment by the Owner and shall be
entitled to no compensation from the General Contractor in the event of nonpayment by the Owner for its work/materials.”
The relationship between the City and Bock has deteriorated to the point of heated litigation
between them in the Court of Common Pleas. Bock is no longer working on the project. For the
foreseeable future, amicable resolution of the myriad of disputes and claims is not expected to
take off any time soon.
The baggage handling system portion of the project was segmented into five phases. For
each phase, third-party defendant G&T Conveyor Company was expected to deliver baggage
handling system equipment to Lydon. Following these deliveries, Lydon was to install the
baggage handling system, other subcontractors hired by Bock were to connect electrical power to
the system, and Lydon was then to perform a mechanical check of the system.
The airport project was originally scheduled for completion on November 20, 2009.
However, the project has suffered numerous delays, and the project has not been completed. In
January 2009, Bock and G&T met to discuss the delays in the project. Bock attributed the delays
to the City of Philadelphia and G&T’s failures to make timely deliveries of equipment. G&T,
however, stated that Bock was at least partially responsible for the delays because Bock failed to
effectively manage and coordinate the project. Neither Bock nor G&T attributed the delays to
Around this same time in early 2009, Lydon and Bock also discussed the delays in the
project. Lydon told Bock that it was preparing a detailed schedule analysis that would document
the delays caused by others on the project, as well as Lydon’s efforts to mitigate those delays. In
response, Bock stated that such analysis was unnecessary, and that Bock simply wanted Lydon to
provide a list of issues that had delayed and/or were delaying Lydon’s work on the project. Bock
explained that it would incorporate Lydon’s delays into own schedule analysis.
Lydon continued to work on the project in 2009 and 2010. Significant delays occurred
during those years, but there is no allegation that Lydon was responsible for these delays. On
November 18, 2009, G&T filed a complaint in state court seeking a declaration that Bock was
responsible for the delays in the project. Bock filed a counterclaim against G&T for breach of
contract on August 12, 2010.
In early 2011, Lydon and Bock met in Philadelphia to discuss their claims for delay
damages related to the project. At the meeting, Bock proposed that Lydon join it in suing the
City of Philadelphia and other entities involved in the project. On May 4, 2011, Bock sued
Lydon, G&T, and the City of Philadelphia in state court. Bock’s suit sought a declaratory
judgment with respect to the liability and indemnification obligations of G&T, the City of
Philadelphia, and Lydon. The state court subsequently dismissed Bock’s claims against G&T as
duplicative of its pending counterclaim, and dismissed Bock’s claims against Lydon on ripeness
On September 15, 2011, Lydon submitted a Request for Equitable Adjustment (“REA”)
to Bock. The REA sought to increase the Purchase Order by $1,961,775 because of impacts on
Lydon’s costs incurred during the project. Bock has yet to receive any payment from the City of
Philadelphia for Lydon’s delay damages.
II. Procedural Background
On November 9, 2011, Lydon filed the original complaint in this action, invoking the
Court’s diversity jurisdiction. The complaint alleged that Bock breached its contract with Lydon
by causing delays in Lydon’s work. Count 1 of Lydon’s complaint is for breach of contract and
Count 2 is for unjust enrichment.
On January 24, 2012, Bock filed a third-party complaint against the City of Philadelphia,
G&T Conveyor Company, and Mulhern Electric Company. The third-party complaint includes
allegations that all three third-party defendants breached their respective contracts with Bock by
causing delays in the airport contract. On March 2, 2012, G&T filed a motion to stay the thirdparty litigation, on the grounds that in the Philadelphia Court of Common Pleas it was already
litigating the issues newly alleged in the federal court third-party complaint. The Court
subsequently granted the motion, which was joined by the other third-party defendants, and, for
the time-being, stayed the third-party litigation.
Bock has moved for summary judgment against Lydon’s claims. Bock argues that: (i)
Lydon’s claims are barred by a release; and (ii) a “pay-if-paid” provision bars Lydon from
recovering damages against Bock. The Court permitted supplemental discovery on issues related
to Bock’s motion for summary judgment. The parties recently submitted supplemental briefing
based on their additional discovery, as well as another round of briefing based on the Court’s
questions during the recent oral argument.
III. Standard of Review
A court shall grant a motion for summary judgment “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). An issue is “genuine” if there is a sufficient evidentiary basis on
which a reasonable jury could return a verdict for the non-moving party. Kaucher v. Cnty. of
Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986)). A factual dispute is “material” if it might affect the outcome of the case under
governing law. Id. (citing Anderson, 477 U.S. at 248). Under Rule 56, the Court must view the
evidence presented in the motion in the light most favorable to the non-moving party. See
Anderson, 477 U.S. at 255. However, “[u]nsupported assertions, conclusory allegations, or mere
suspicions are insufficient to overcome a motion for summary judgment.” Betts v. New Castle
Youth Dev. Ctr., 621 F.3d 249, 252 (3d Cir. 2010).
The movant bears the initial responsibility for informing the Court of the basis for the
motion for summary judgment and identifying those portions of the record believed to
demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). Where the non-moving party bears the burden of proof on a particular issue,
the moving party’s initial burden can be met simply by “pointing out to the district court that
there is an absence of evidence to support the nonmoving party’s case.” Id. at 325. After the
moving party has met the initial burden, the non-moving party must set forth specific facts
showing that there is a genuinely disputed factual issue for trial by “citing to particular parts of
materials in the record, including depositions, documents, electronically stored information,
affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials”
or by “showing that the materials cited do not establish the absence or presence of a genuine
dispute.” Fed. R. Civ. P. 56(c). Summary judgment is appropriate if the non-moving party fails
to rebut by making a factual showing “sufficient to establish the existence of an element essential
to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477
U.S. at 322.
A. The Parties’ Release
1. Relevant Law
In Pennsylvania, a release is a contract, and its interpretation is “governed by the rules of
contract construction.” See G.R. Sponaugle & Sons, Inc. v. Hunt Constr. Grp., Inc., 366 F. Supp.
2d 236, 242 (M.D. Pa. 2004). Here, the parties dispute whether Pennsylvania contract law
permits the Court to rely on their course of conduct to interpret Lydon’s release. Although the
parties did not cite it in their initial briefs, the case that, for this Court, authoritatively sets forth
the law on this point is Bohler-Uddeholm America, Inc. v. Ellwood Group, Inc., 247 F.3d 79 (3d
In Bohler-Uddeholm, the Third Circuit Court of Appeals acknowledged that
“Pennsylvania law on contract interpretation and ambiguity is somewhat complicated[.]” Id. at
92. Despite this complexity, courts agree that “[t]he fundamental rule in contract interpretation
is to ascertain the intent of the contracting parties,” Ins. Adjustment Bureau, Inc. v. Allstate Ins.
Co., 905 A.2d 462, 468 (Pa. 2006), and “Pennsylvania contract law begins with the firmly settled
point that the intent of the parties to a written contract is contained in the writing itself,” BohlerUddeholm, 247 F.3d at 92 (citations and quotations omitted). Therefore, “a contract that is
unambiguous on its face must be interpreted according to the natural meaning of its terms, unless
the contract contains a latent ambiguity, whereupon extrinsic evidence may be admitted to
establish the correct interpretation.” Id. at 96.
Bohler-Uddeholm also notes that restrictions exist as to when a party may argue
that a contract contains a latent ambiguity. In particular, “a claim of latent ambiguity
must be based on a ‘contractual hook’: the proffered extrinsic evidence must support an
alternative meaning of a specific term or terms contained in the contract, rather than
simply support a general claim that the parties meant something other than what the
contract says on its face.” Id. (emphasis supplied). In other words, a party arguing that
an unambiguous release contains a latent ambiguity must “offer a reasonable alternate
interpretation of [the release],” see id. at 100, and its extrinsic evidence “must be about
the parties’ linguistic reference rather than about their expectations,” see id. at 96
(internal quotations omitted).
2. Relevant Facts
During the course of the airport project, Lydon submitted 54 releases to Bock with its
monthly payment applications. For example, on May 12, 2011, Lydon signed one of these
releases, which stated:
1. In consideration of the sum of $27,667.51 and other good and valuable
consideration described herein, the undersigned does hereby release all . . . claims
as against the Contractor . . . resulting or arising from labor . . . and/or materials,
subcontract work, equipment or other work, rentals, services or supplies
heretofore furnished by or on behalf of the undersigned in and for the
construction, design, improvement, alteration, additions to or repair of the above
described Project including but not limited to any claims arising from delay . . .
incurred by the undersigned on the Project from the beginning of time thru the
period ending March 31, 2011. 2
6. In addition to the foregoing, this instrument shall constitute a complete
release of all . . . claims. . . of the undersigned against the Contractor . . . in law or
in equity arising out of or pertaining to the above referenced Project that the
undersigned may have, whether known or unknown, through the date of this
release (which includes the period above). To the extent that there are claims that
the undersigned wishes to reserve and except out of this release, they are detailed
with specificity on the reverse side of this release.
In its complaint, Lydon only seeks to recover delay damages that accrued through
February 28, 2011.
Bock paid, and Lydon accepted, the $27,667.51 consideration set forth in the release.
Moreover, Lydon did not “except out” any claims from the release in accordance with
Although the language of the release is unambiguous, Lydon argues extensively
that the parties’ conduct vis-à-vis each other demonstrates that they did not intend for the
release to bar Lydon’s claims. To cite a few examples, Lydon’s President, James E.
Lydon, Jr., has stated in an affidavit that Bock personnel suggested to him that Bock
believed Lydon’s claims had merit and that Mr. Lydon should document the delays
suffered by Lydon during the project. Understandably, Lydon argues that such
conversations and requests would make little sense if Lydon periodically was releasing its
claims. Mr. Lydon also claims that he was told in March 2011 by George Pallas, Bock’s
attorney, that Bock would “take care” of his company if it entered a “liquidating
agreement” and released its claims against Bock. Again, this alleged conversation would
make little sense if Lydon had already released its claims. Furthermore, Lydon notes that
Bock’s May 4, 2011 state court complaint did not seek a declaration that Lydon had
released its claims but did seek indemnification from G&T and the City of Philadelphia
for Bock’s exposure to Lydon.
It appears at least some of the facts set forth in the preceding paragraph are disputed. For
instance, Mr. Pallas has stated in an affidavit that he does not recall discussing the issue of
releases with Lydon, and Anthony DePascale, Bock’s Vice President, testified at his deposition
that he believed Lydon was planning on seeking delay damages from parties other than Bock.
More to the point, the relevancy of these disputed facts hinges on whether Bohler-Uddeholm
permits the Court to consider the parties’ course of conduct in the first place.
The language of the release that Lydon signed on May 12, 2011 unambiguously
relinquishes all the claims that accrued against Bock through March 31, 2011. Notably, Lydon’s
briefs do not identify a “contractual hook” or proffer an alternative interpretation for the release
language. Instead, Lydon attempts to use the parties’ course of conduct to “claim that the parties
meant something other than what the [release] says on its face.” See id. at 96. In such a
situation, Bohler-Uddeholm precludes the Court from considering Lydon’s extrinsic evidence in
order to ignore the plain language of the release. See id. Therefore, in the absence of waiver or
estoppel to block Bock’s argument here, Lydon’s release bars it from pursuing its claims against
Bock. 3 See Sauer Inc. v. Honeywell Bldg. Solutions SES Corp., 742 F. Supp. 2d 709, 719 (W.D.
Pa. 2010) (“[T]he releases . . . submitted . . . in connection with [the subcontractor’s] progress
payment applications contained unambiguous language, and . . . such language purports to bar
[the subcontractor’s] claims against [the contractor]. For this reason, the Court need not look
beyond the language of the releases in determining the intent of the contracting parties at the
time that the releases were executed.”) (emphasis supplied); G.R. Sponaugle, 366 F. Supp. 2d at
242 n.6 (holding same); Taylor v. Solberg, 778 A.2d 664, 667 (Pa. 2001) (“In Pennsylvania, it is
At oral argument, Lydon disclaimed the view that interpreting the releases according to
their plain language would lead to an absurd result. See Transcript of Oral Argument
(“Transcript”) at 42:16-19 (Q: “You are not saying that the plain language interpretation of these
documents, or these releases, is absurd, are you? A: No.”). After the Court identified BohlerUddeholm for the parties, Lydon attempted to backtrack from this position in its post-argument
brief. See Docket No. 49 at 8; see also Bohler-Uddeholm, 247 F.3d at 96 (“[A] court can
consider an alternative interpretation of a facially unambiguous contract term when the plain
meaning interpretation of the contract would lead to an absurd and unreasonable outcome.”).
Regardless of the inconsistency of Lydon’s positions, the Court finds that interpreting the
releases according to their plain language would not create an absurd result even though it might
lead to a result quite undeserved by one party to the agreement.
well settled that the effect of a release is to be determined by the ordinary meaning of its
B. Waiver of the Release
1. Relevant Law
Under Pennsylvania law, “waiver is a voluntary and intentional abandonment or
relinquishment of a known right. Waiver may be established by a party’s express declaration or
by a party’s undisputed acts or language so inconsistent with a purpose to stand on the contract
provisions as to leave no opportunity for a reasonable inference to the contrary.” Sabatini v. ITS
Amore Corp., 455 F. App’x 251, 256 (3d Cir. 2011) (citations and quotations omitted); see also
Brown v. City of Pittsburgh, 186 A.2d 399, 401 (Pa. 1962) (noting that waiver requires “a clear,
unequivocal and decisive act” that evidences a “purpose to surrender” a right). A party claiming
the benefit of an implied waiver must show that he was “misled, to his prejudice, into the honest
belief that such waiver was intended[.]” Id. (emphasis in original). In determining whether a
waiver occurred, courts focus on the conduct of the party that allegedly waived its right. See id.
at 401 n.3. The Third Circuit Court of Appeals has stated that “[o]rdinarily, the question of
waiver is a question of fact for a jury.” See Sabatini, 455 F. App’x at 256.
In Sabatini, a restaurant leased a parking lot from two plaintiffs, and the lease obligated
the restaurant to not modify the lot without prior written permission from the plaintiffs. See 455
At oral argument, Lydon could not proffer a reasonable alternative interpretation of the
release, and its attempt to do so in its post-argument brief is not credible. See Transcript at 40:28 (Q: “So what are you saying I can find in this document to conclude that it’s [not] a release?
A: Well, we maintain, I guess, Judge, that you are not – in forming a judgment as to what the
release said, you are not confined to the four corners of the instrument.”). Moreover, Lydon’s
reliance on Bethlehem Steel Corp. v. United States, 270 F.3d 135 (3d Cir. 2001), and Pioneer
Construction Co. v. Pride Enterprises, Inc., No. 07-994, 2009 WL 4429802 (M.D. Pa. Nov. 27,
2009) (Vanaskie, J.), fails because Bethlehem was decided under federal contract law rather than
Pennsylvania law, while Pioneer relied on Bethlehem without discussing Bohler-Uddeholm. See
Bethlehem, 270 F.3d at 139; Pioneer, 2009 WL 4429802, at *7.
F. App’x at 253. The restaurant proceeded to modify the parking lot without obtaining such
permission, at which point the plaintiffs brought suit for ejectment. See id. at 254. The Third
Circuit Court of Appeals denied the plaintiffs’ motion for summary judgment because an issue of
fact existed as to whether the plaintiffs waived their right to terminate the lease. Id. at 256. In
particular, the court noted that the parties disputed whether the plaintiffs knew and approved of
the restaurant’s modifications to the parking lot. See id.
Additionally, one court within this district has addressed the issue of implied waiver in a
dispute between a contractor and a subcontractor. See Quinn Constr., Inc. v. Skanska USA Bldg.,
Inc., 730 F. Supp. 2d 401 (E.D. Pa. 2010). In Quinn, a subcontractor signed releases “each time
it requested payment from [a general contractor],” but then sued that general contractor for
overtime wages. See id. at 418. The court held that “the plain language of the releases bars [the
subcontractor’s] claims for overtime wages,” but also held that “the releases do not entitle [the
general contractor] to summary judgment . . . because a genuine issue of fact exists as to whether
[the general contractor] waived enforcement of the release language[.]” See id. The court found
that a jury should decide the issue of waiver because the subcontractor’s evidence showed that:
(i) when presented with the overtime claims, the general contractor did not assert that those
claims were barred by the releases; (ii) the general contractor’s spreadsheet did not indicate the
overtime claims were released; and (iii) “most significantly,” the contractor tried to secure
payment for the subcontractor’s claims from the project owner. See id. at 418 n.9.
2. Relevant Facts
Here, Lydon asserts that the litany of evidence it has presented creates an issue of fact as
to whether Bock impliedly waived its right to rely on the releases. This evidence is summarized
Lydon submitted its first signed release to Bock on March 21, 2008. This release
contains language identical to that in the May 12, 2011 release on which Bock relies.
After Lydon began submitting its releases, Bock told James Lydon that it wanted to
“team up” with his company and “pursue claims jointly” against other entities involved in
the project. Bock also “promised to incorporate” Lydon’s delay damages into the claims
Bock would be making against the City of Philadelphia and other entities.
On January 27, 2009, Anthony DePascale, Bock’s Vice President, told James Lydon that
Bock was preparing a “comprehensive schedule analysis” that would document the
delays suffered by “both Lydon and Bock.”
During 2009 and 2010, Bock’s representatives told James Lydon that Bock would “take
care” of Lydon with respect to its claim for delay damages.
In early 2011, James Lydon met with senior personnel at Bock and informed them that
his company was considering suing Bock for delay damages. Bock responded by
proposing that Lydon “liquidate” its claims against Bock and formally “join forces” to
sue the other entities involved in the project.
In March 2011, James Lydon spoke with George Pallas, Bock’s attorney. Mr. Pallas
proposed that Lydon release its claims against Bock and enter a “liquidating agreement”
with Bock by which the two companies would proceed together against the other entities.
Bock’s 2011 state court complaint sought a declaration that the City and G&T are liable
to Bock for any claims that Lydon has against it.
Bock attempted to settle with Lydon after Lydon filed its Request for Equitable
Adjustment and the complaint in this action.
Prior to this lawsuit, Bock never informed Lydon that its releases precluded it from
pursuing claims against Bock.
Given the aforementioned evidence, and bearing in mind that the Third Circuit Court of
Appeals has held that “[o]rdinarily, the question of waiver is a question of fact for a jury,” see
Sabatini, 455 F. App’x at 256, the Court finds that an issue of fact exists as to whether Bock
impliedly waived its right to rely on the releases. A jury could reasonably find that Bock’s
actions in promising to help Lydon pursue its claims, and in trying to reach a settlement with
Lydon, are inconsistent with an intent to rely on the releases, and that Bock thus waived the
benefit of those releases. The Court notes that a factfinder could determine that Mr. Pallas’s
alleged request for Lydon to relinquish its claims implied that Bock would not use the releases to
bar those claims. Similarly, by repeatedly promising to help Lydon pursue its claims, Bock
arguably indicated that it would not rely on the releases to preclude those claims. Whether such
actions rise to the level of implied waiver is an issue for a jury to determine. See Quinn, 730 F.
Supp. 2d at 418 n.9 (holding that a jury should determine whether a contractor waived the
benefits of a release by attempting to secure payment for its subcontractor’s claims).
Nonetheless, Bock advances several arguments as to why a jury could not find that it
impliedly waived the benefits of the releases. First, Bock asserts that “[t]he parties agree that
when a ‘waiver’ defense is raised, the courts’ review is limited to an analysis of the ‘waiving’
party’s conduct after the relevant . . . release has been executed.” In other words, Bock’s theory
is that the Court may only consider its post-May 12, 2011 conduct in deciding whether it waived
its rights, because Lydon signed the last relevant release in this matter on May 12, 2011.
However, this argument makes little sense under the facts of this case, since the releases signed
prior to May 12, 2011 contained the exact same language as the May 12, 2011 release.
Second, Bock argues that almost all of Lydon’s evidence pertaining to the parties’ 2011
communications is barred by Federal Rule of Evidence 408, which precludes the use of “conduct
or a statement made during compromise negotiations” in order to “prove or disprove the validity
. . . of a disputed claim.” Rule 408’s strictures apply if two parties have “a mere difference of
opinion,” even if their dispute has “not crystallize[d] to the point of threatened litigation.”
ECEM European Chem. Mktg. B.V. v. Purolite Co., 451 F. App’x 73, 77 (3d Cir. 2011) (citations
and quotations omitted); see also id. (“[W]hen in doubt, the district court should err on the side
of excluding compromise negotiations.”). Courts may admit evidence of settlement
communications “for another purpose, such as proving a witness’s bias or prejudice, [or]
negating a contention of undue delay[.]” Fed. R. Evid. 408(b).
Bock’s briefing fails to identify any cases in which a court excluded evidence of
settlement discussions in a situation analogous to this case. However, the Second Circuit Court
of Appeals addressed Rule 408 in PRL USA Holdings, Inc. v. U.S. Polo Ass’n, 520 F.3d 109 (2d
Cir. 2008). PRL was a trademark infringement suit in which the defendants asserted the
affirmative defense of estoppel by acquiescence, and supported this defense by proffering
evidence that the plaintiff agreed to their use of the contested marks during settlement
discussions. See id. at 111-12. The Second Circuit Court of Appeals held that Rule 408 did not
bar such evidence, because the evidence related “to the affirmative defense of estoppel by
acquiescence, which depend[s] on issues distinct from the elements of the claim of
infringement.” See id. at 115. Similarly, Lydon is offering evidence of settlement discussions to
negate Bock’s defense of release, not to directly support the underlying breach of contract claim.
Therefore, Rule 408 does not preclude Lydon from introducing settlement communications. See
Bankcard Am., Inc. v. Universal Bancard Sys., Inc., 203 F.3d 477, 484 (7th Cir. 2000) (“It would
be an abuse of Rule 408 to allow one party during compromise negotiations to lead his opponent
to believe that he will not enforce applicable time limitations and then object when the opponent
attempts to prove the waiver of time limitations.”); 23 Charles Alan Wright & Kenneth W.
Graham, Jr., Federal Practice & Procedure § 5314 (noting that use of compromise evidence is
permissible in “cases in which the compromise activities result in a waiver of or an estoppel to
assert some procedural or substantive right”).
Third, Bock argues that, prior to 2011, it believed Lydon wanted to make claims against
the other parties involved in the project, rather than against Bock itself. Therefore, Bock argues
that it had no notice of Lydon’s claims prior to 2011, and that it could not have waived its rights
prior to receiving such notice. The problem with this position is that Lydon was in privity of
contract with Bock, not some other entity. Therefore, Bock was always on notice that Lydon’s
claims were directed against it, rather than against another party for whom privity did not exist.
See Sheller, Ludwig, & Sheller P.C. v. Equitrac, No. 07-2310, 2008 U.S. Dist. LEXIS 44691, at
*8-9 (E.D. Pa. June 9, 2008) (“Generally, privity of contract is necessary for a party to bring a
breach of contract claim.”). Given such notice, a jury could find that Bock waived its right to
assert the releases by indicating that Lydon’s claims had merit despite those releases.
Finally, Bock claims that Lydon is judicially estopped from making its waiver argument.
The parties agree that for judicial estoppel to apply, “the party to be estopped must have taken
two positions that are irreconcilably inconsistent.” See Docket No. 31 at 26; Docket No. 33 at
14. Bock’s argument centers on Lydon’s preliminary objections to the state court complaint that
Bock filed on May 4, 2011. In those objections, Lydon noted that Bock’s complaint failed to
allege that Lydon had formally submitted a claim against Bock, and therefore argued that Bock’s
action was not yet ripe.
Bock appears to believe that Lydon’s prior ripeness argument is “irreconcilably
inconsistent” with Lydon’s current waiver argument. However, Lydon’s preliminary objections
addressed the allegations (or lack thereof) in Bock’s state court complaint, whereas Lydon’s
current argument addresses actual evidence of Bock’s conduct. It is not “irreconcilably
inconsistent” for Lydon to (i) point out the insufficiency of Bock’s factual allegations; and (ii) in
a subsequent case, identify evidence that it notified Bock of its claim for delay damages.
Therefore, Bock’s arguments regarding implied waiver fail, and the Court finds that an issue of
fact exists as to whether the releases bar Lydon’s claims. 5
For the foregoing reasons, the Court denies Bock’s motion for summary judgment. An
Order consistent with this Memorandum follows.
BY THE COURT:
S/Gene E.K. Pratter
GENE E.K. PRATTER
United States District Judge
At oral argument, the parties agreed that the Court’s decision as to whether Bock is
equitably estopped from asserting the releases should follow its decision regarding implied
waiver. See Transcript at 26:17-27:4, 48:9-18, 52:18-22. Therefore, the Court will also deny
summary judgment based on Lydon’s equitable estoppel argument, and will not address the
parties’ contentions regarding whether Bock is judicially estopped from asserting the releases.
As for the pay-if-paid provision in the parties’ contract, Bock’s counsel admitted at oral
argument that his client cannot win summary judgment based on this provision until the state
court determines whether his client caused Lydon’s delays. See Transcript at 31:17-32:12,
32:22-33:3. However, the Court does note that, contrary to Lydon’s assertion in its briefing, the
vast majority of Lydon’s delay claim is encompassed by the pay-if-paid provision. The pay-ifpaid clause pertains to “work/materials invoiced by [Lydon],” and more than $1.7 million of
Lydon’s claim is based on labor productivity impacts.
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