Denying Payment to a Contractor for Work Done Outside the Scope of the Contract Despite Promising to Do So
In A.G. Cullen Constr., Inc. v. State System of Higher Education, 898 A.2d 1145, 1155 (Pa. Cmwlth. 2006), this Court elaborated on the meaning of arbitrary and vexatious in Section 3935 because the Procurement Code does not define these terms.
Borrowing the Pennsylvania Supreme Court's definition in a case involving an award of attorney fees under Section 2503 of the Judicial Code, 42 Pa. C.S. 2503, the Court defined the word "arbitrary," for purposes of Section 3935, as "based on random or convenient selection or choice rather than on reason or nature." A.G. Cullen, 898 A.2d at 1164-65 (citing Cummins v. Atlas R.R. Constr. Co., 2002 PA Super 418, 814 A.2d 742, 747 (Pa Super. 2002) (quoting Thunberg v. Strause, 545 Pa. 607, 615, 682 A.2d 295, 299 (1996))). Further, we defined the words "vexatious conduct" as "that which is committed without sufficient ground in either law or in fact with the purpose of causing annoyance." Id.
Applying these principles, this Court determined the Board's findings in A.G.
Cullen supported a legal finding of vexatious conduct.
The governmental agency denied the contractor's request for payment when it performed lead paint abatement work outside the scope of the contract, even when the governmental agency knew of the existence of lead paint at the site and failed to address the issue despite promising to do so. A.G. Cullen, 898 A.2d at 1166.
Also, the governmental agency slowly responded to the contactor's communications and, as the Board found, acted in a generally unhelpful manner. Id.
Based on these findings, the Court remanded the matter to the Board for an award of attorney fees. Id.