Plaintiff, local business owner had a dispute with another business owner in Philadelphia. Plaintiff hired business lawyers Thomas D. Kenny and Eileen T. Burns of Kenny, Burns & McGill to help them. KBM sued Defendant for Breach of contract, Fraud, Unjust Enrichment, and Construction Lien Foreclosure for $127,458.48 plus other fees and costs. The parties agreed to have the matter heard at the American Arbitration Association located at 230 S. Broad Street, Philadelphia PA.
Pennsylvania law makes clear that even where a construction contract “prohibits non-written modification [it] may be modified by subsequent oral agreement if the parties’ conduct clearly shows the intent to waive the requirement that the amendments be made in writing.” Somerset Community Hosp. v. Mitchell & Assocs., Inc., 454 Pa. Super. 188, 685 A.2d 141, 146 (Pa. Super. Ct. 1996); see also Universal Builders, 244 A.2d at 15. Universal Builders noted that courts have frequently held that owners must pay for extra work done at owners’ oral direction. Universal Builders, 244 A.2d at 15. In Universal Builders, the Pennsylvania Supreme Court held that the Chancellor had correctly found that the defendant was liable and had to pay for the extra work in spite of the lack of a written change order because the evidence showed that an agent of the defendant had requested many changes, was informed that they would involve extra cost, and promised to pay for them. Universal Builders, 244 A.2d at 15. Thus, we must determine whether an agent of Ka… requested the extra work, was informed that the extra work would involve extra cost, and then promised to pay for it.
After a two day arbitration and many legal filings, the arbitrator sided with KBM for the full amount requested and additional fees.