3720 - Board of Claims

(through no fault of Intercounty), Tilcon would have to increase the price of asphalt by $4.00 per
ton starting on August 2, 2002. (Ex. P-58). 21
The parties do not dispute that the amount of
asphalt used on the project from August 2, 2002 to June 17, 2003, the actual completion of the
Project, was 28,989 tons.
Mr. Lizza testified that after he received the Exhibit P-58 letter, he contacted Tilcon and
reached a verbal agreement with Tilcon regarding payment. Mr. Lizza testified further 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. Instead, Intercounty and Tilcon 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 asphalt material. If
there was any deficit between the amount recovered from PennDOT and the amount owed to
Tilcon, that amount would remain a liability of Intercounty to Tilcon. (N.T. 604-605).
At the time of Mr. Lizza's testimony at hearing regarding this alleged arrangement with
Tilcon, the Board asked whether or not there was any written evidence of this oral agreement.
(N.T. 652-653). At the next day's hearing, Intercounty produced Exhibit P-86, a Liquidating
Agreement, that had been executed the previous evening by Tilcon and Intercounty. Mr. Lizza
identified the document, explained its last minute creation and testified that Exhibit P-86
accurately reflected the earlier verbal agreement reached between Tilcon and Intercounty. (N.T.
603-607, 675-679). Intercounty contended Exhibit P-86 supported its claim and moved to admit
it. PennDOT objected to the admission of the document.
21 Intercounty had planned to complete the Project by August of 2002 so its initial asphalt supply contract expired in
August 2002.
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