Downingtown Area Sch. Dist. v. International Fid. Ins. Co.

Downingtown Area Sch. Dist. v. International Fid. Ins. Co.

Opinion

 [*560]  OPINION BY JUDGE FRIEDMAN

This case concerns the Downingtown Area School District's (Downingtown) attempt to recover monies from the International Fidelity Insurance Company (IFIC) under a performance bond that IFIC issued to Kern Structural Enterprises (Kern) in connection with a contract between Downingtown and Kern. Kern had defaulted on the contract resulting in damages to Downingtown.

 [*561]  This is the second time this case comes before this court. Previously, we considered, and denied, IFIC's appeal from an amended order of the Court of Common Pleas of Chester County [**2]  (trial court) denying IFIC's Motion for Partial Summary Judgment. See Downingtown Area School District v. International Fidelity Insurance Company, 671 A.2d 782 (Pa. Cmwlth. 1996). The matter subsequently was tried in November 1998, and the trial court issued its verdict on March 18, 1999. Presently before us are Downingtown and IFIC's cross appeals from the trial court's June 30, 2000 order denying Downingtown's post-trial motion and modifying the verdict.

The underlying facts of the case are largely undisputed. On February 8, 1989, Downingtown entered into a structural steel contract (Contract) with Kern for the construction of the Shamona Creek Elementary School Project (Project). Under the Contract, Kern agreed to provide labor, materials, equipment and services necessary for the Project, and Kern was required to substantially complete its work by August 15, 1989. ¹ (Trial ct. Findings of Fact, Nos. 3-4, 22; R.R. at 322a.) In the event that the work was not completed by this date, the Contract provided that Kern would be liable for liquidated damages for delay in addition to any other consequential losses that Downingtown might incur because of the delay.  [**3]  (Contract section 1.07, Modification of Article 8, Time, subparagraph 8.4.2; R.R. at 330a.) ²

 [**4]  As contractor for the Project, Kern, pursuant to its obligation under the Contract and under the Public Works Contractors' Bond Law of 1967 (Bond Law), ³ [**5]  furnished  [*562]  Downingtown with a Performance Bond provided by its surety, IFIC. In its first paragraph, the Performance Bond bound Kern and IFIC to Downingtown for the Contract amount of $ 513,929.00. The Performance Bond also contained a statement incorporating by reference the Contract between Kern and Downingtown. ⁴ (R.R. at 331a.) Directly following this statement, the Performance Bond provided:

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