3720 - Board of Claims

244. The Tilcon letter, Exhibit P-58, was admitted into evidence without objection
from PennDOT. (N.T. 664).
245. The parties do not dispute that the amount of asphalt used on the Project from
August 2, 2002 to June 17, 2003, the delayed, actual completion date of the Project, was 28,989
tons. (N.T. 806, 858-859; Ex. P-85 (12)).
246. On August 8, 2002, Mr. Lizza notified PennDOT that Intercounty had incurred
financial injury due to the construction delays including material escalations and that “asphalt
prices are now increasing $4 a ton, when the work should have been long ago performed.” He
requested additional payment for the asphalt under the Contract. (N.T. 602; Exs. P-44, P-58).
247. In August 2002, PennDOT refused Intercounty’s request to pay for the material
escalation cost of the asphalt. (N.T. 602-603).
248. Mr. Lizza testified that after he received the Exhibit P-58 letter, he contacted
Tilcon and reached a verbal agreement with Tilcon regarding payment. (N.T. 603-607).
249. Mr. Lizza testified that, because Intercounty was experiencing losses in mid-2002
due to the utility obstructions on the Project, Tilcon agreed it would supply the asphalt but would
not invoice Intercounty for the material escalation at that time. They further agreed that
Intercounty would pursue its legal remedies against PennDOT to recover its damages on the
Project (including the subject amount for material escalation) and, when recovered, whether by
judgment or settlement, Intercounty would then pay Tilcon the additional $4.00 per ton owed for
the asphalt material. If there was any deficit between the amount recovered and the amount
owed to Tilcon, that amount would remain a liability of Intercounty to Tilcon. (N.T. 603-607).
250. At the hearing, the Board asked Mr. Lizza whether or not there was any written
evidence of this oral agreement between Intercounty and Tilcon. (N.T. 652-653).
251. At the next day’s hearing, Intercounty produced a Liquidating Agreement,
marked as Exhibit P-86, that had been executed the previous evening by Tilcon and Intercounty.
(N.T. 665-666; Ex. P-86).
252. Mr. Lizza identified Exhibit P-86, explained that it was intended to document the
original verbal agreement between Intercounty and Tilcon and testified that Exhibit P-86
accurately reflected the terms of that agreement. (N.T. 665-666, 675-679).
253. PennDOT objected to the admission of Exhibit P-86 into evidence on the grounds
that the document did not previously exist, that PennDOT had not been told of the alleged verbal
agreement between Tilcon until Mr. Lizza’s testimony the day before, that PennDOT had been
told by Intercounty that the escalation amount had been paid, and that, as a result of the
foregoing, PennDOT had been deprived of adequate discovery on this issue prior to the hearing.
(N.T. 667-670, 673).
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