Nicholas Malfitano Oct. 29, 2015, 2:50pm


PHILADELPHIA – Plaintiff counsel in construction contract litigation wants one of the case’s defendants found in contempt for disobeying a court order and to be responsible for paying sanctions.

Matthew R. Skolnik filed the motion for sanctions on June 1, against defendant Merrill D. Miller Jr. of Selinsgrove for allegedly violating an April 15 order from the Philadelphia County Court of Common Pleas, compelling his cooperation with the discovery process.

Skolnik seeks Miller pay sanctions of $5,000 for costs and attorney’s fees associated with a motion to compel Miller’s cooperation, and for three depositions for which Miller allegedly failed to appear for on Dec. 2, Feb. 27 and May 28.

Skolnik’s motion stated Miller must provide the necessary documents and be deposed, or else a bench warrant would be issued for Miller’s arrest.

A hearing in this matter was set for Tuesday at Philadelphia City Hall, in Court chambers.

On Aug. 9, 2012, Iron Hill Construction Management of Bethlehem and Arcon Group, Inc. of Selinsgrove (owned by Miller) entered into a contract for modular building design services on five buildings, including complete architectural, structural, mechanical, electrical and plumbing work, and “to do so while conforming to and exceeding industry standards.”

Arcon agreed to bill Iron Hill monthly, and Iron Hill agreed to compensate Arcon for their work, which Arcon agreed to complete by Oct. 2, 2012, the suit says.

On Nov. 29, 2012, Arcon and Iron Hill entered into a modular building sub-contract agreement, whereby Arcon agreed to provide all equipment tools and manpower for a 100 percent turnkey construction, for the price of $13,972,000, the suit says.

Also, Arcon submitted an application accompanied by a release of claims and labor certificate in which it released Iron Hill and its owner from all claims, between Dec. 1, 2012 and Dec. 31, 2013, the suit says. Arcon allegedly further agreed to waive the right to file mechanics liens against the building or owner.

Iron Hill alleges Arcon failed to perform the work in a quality manner or a timely fashion, failed to pay its suppliers, failed to prevent its own sub-contractors from filing mechanics liens on the property, failed to receive government approvals and adhere to federal, state and local laws.

On Jan. 28, 2014, to avoid terminating Arcon’s contract and incurring additional costs of replacing them, Iron Hill agreed to advance $626,386.62 to pay Arcon’s suppliers – Dale Construction and Sun Light Electrical Contracting Company – directly, the suit says.

Also, this letter stipulated Iron Hill would advance an additional $125,000, in order for Arcon to meet their own payroll, the suit says. However, within months, allegedly 20 of Arcon’s suppliers claimed they still had not been paid by the company. 

Due to these violations, Iron Hill terminated the building sub-contract on March 10, 2014, it says. Due to Arcon’s alleged breaches, Iron Hill was forced to hire other sub-contractors and do work itself in Arcon’s place, which Iron Hill says cost it $4,300,000. Iron Hill sued for breach of contract, failure to settle the mechanics liens, breach of the Jan. 28, 2014, funds letter and fraud.

The plaintiff is seeking the following sums in damages: 

- For breach of the building sub-contract, the plaintiff is seeking a sum in excess of $13,000,000, plus pre- and post-judgment interest and costs;

- For failure to settle mechanics liens, the plaintiff is seeking a sum in excess of $50,000, plus pre-and post-judgment interest and costs;

- For breach of the Jan. 28, 2014, letter, the plaintiff is seeking $626,386.62, plus pre- and post-judgment interest and costs; and

- For fraud, the plaintiff is seeking $626,386.62, plus pre- and post-judgment interest and costs, plus punitive damages for not paying their suppliers and sub-contractors, and absconding with the funds (something the plaintiff referred to as “wanton and outrageous conduct”).

The plaintiff is represented by Daniel S. Bernheim III and Matthew R. Skolnik of Wilentz Goldman & Spitzer, in Philadelphia.

The defendants have no legal representation, according to court records.

Philadelphia County Court of Common Pleas case 140802256

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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