Picadio Sneath Miller & Norton, P.C.

Attorneys at Law

412-288-4000 888-288-4028
Business Litigation.Pittsburgh Strong.®
Main Menu

President of Contracting Company Has No Individual Liability Under CASPA

Jeff web photo.jpg

The Superior Court recently affirmed a trial court grant of summary judgment in favor of an individual president/owner of a company, finding that an individual officer has no liability for payments to a general contractor for work performed under a contract between the general contractor and the developer pursuant to the Pennsylvania Contractor and Subcontractor Payment Act ("CASPA").

In Scungio Borst & Assocs. v. 710 Shurs Lane Dvlps., No. 2493 EDA 2012 (Pa. Super. 2014), http://caselaw.findlaw.com/pa-superior-court/1684635.html four members of a seven judge panel of the Superior Court held that the 50% owner/president of the company developing a project had no individual liability under CASPA to the general contractor for unpaid work. A majority of the panel made this finding even though the individual signed the contract between the parties, individually orally authorized additional work, functioned as the corporate decision maker for the developer and was the person with whom the general contractor exclusively dealt.

The developer entered into a construction contract with Scungio Borst & Associates ("SBA") to perform work on the project. SBA began work and while on the job received several oral change orders from the developer, through its president, to complete almost $2 million worth of additional work. Eventually the developer stopped making payments and terminated the contract. SBA brought suit against the developer as well as against its president individually, to collect approximately $1.5 million in unpaid invoices and sought remedies under CASPA. SBA asserted that the definition of "owner" in CASPA included "agents" of the owner, thereby subjecting the president/50% owner of the developer with whom they dealt to individual liability.

The Superior Court held that CASPA did not supplant traditional breach of contract remedies, but merely added remedies available to contractors and subcontractors. The court stated that liability lay against contracting parties only. Because the parties to the contract at issue were only the developer and SBA, and not the developer's individual owners or officers, summary judgment dismissing SBA's claims against those individuals was proper.

It is noteworthy that three of the seven judges of the panel dissented and found SBA's argument based on CASPA's definition of "owner" to be compelling.

No Comments

Leave a comment
Comment Information

Office Location And Contact Information

Picadio Sneath Miller & Norton, P.C.
Four Gateway Center 444 Liberty Avenue, Suite 1105
Pittsburgh, PA 15222

Toll Free: 888-288-4028
Phone: 412-288-4000
Fax: 412-288-2405
Map & Directions

Super Lawyers Listed in | Best Lawyers | The world's premier guide US Law | Network, inc DRI | TM | The voice of defense Bar