Litigation: Latest Legal Blogs and News

The Pennsylvania Superior Court’s March 27, 2026 decision in Tedesco Excavating & Paving, Inc. v. FWH Development, LLC, 356 A.3d 219 (Pa. Super. Ct.) interprets the Contractor and Subcontractor Payment Act (CASPA). The decision clarifies when contractors are entitled to statutory remedies—such as interest and attorneys’ fees—even if construction work was never fully completed. The decision emphasizes that CASPA protections extend beyond situations involving finished physical work and apply in cases of anticipatory breach.

FWH Development hired Tedesco Excavating in 2015 to perform roadwork for a development project in Butler County. The contract was worth approximately $1.26 million and included a provision allowing termination “for convenience,” with payment owed only for completed work.

Although Tedesco took several preparatory steps—such as hiring subcontractors, preparing engineering documents, securing insurance, and reserving time in its schedule—FWH never moved forward with construction. Instead, after years of delay and requests for revised pricing, FWH ultimately decided in 2019 to use a different contractor.

Tedesco sued for breach of contract as FWH refused to remit payment for overhead and anticipated profits. A jury found in favor of Tedesco and awarded damages. The trial court then added interest, attorneys’ fees, and costs under CASPA, resulting in a total judgment of about $678,000.

The key legal issue on appeal was whether CASPA applies when a contractor has not completed physical construction work but has nevertheless performed under the contract.

CASPA and Its Purpose

CASPA is a Pennsylvania statute enacted to ensure prompt payment and fair dealing in the construction industry. It allows contractors and subcontractors to recover interest, penalties, and attorneys’ fees when they are improperly denied payment.

The statute provides that “[p]erformance by a contractor…in accordance with the provisions of a contract shall entitle [them] to payment.”

The dispute in this case centered on what “performance” means. FWH argued that only completed physical work qualifies, while Tedesco contended that partial or preparatory performance should also trigger CASPA protections.

The Court’s Interpretation of “Performance”

The Superior Court rejected FWH’s narrow interpretation. It concluded that the word “performance” in CASPA is ambiguous because the statute does not define it and the term has multiple possible meanings.

Instead of limiting the term to completed construction work, the court adopted a broader definition consistent with contract law—one that includes partial performance.

Under this interpretation, Tedesco’s actions—such as entering subcontracts, preparing submissions, attending pre-construction meetings, and reserving time to complete the project—were sufficient to constitute performance under CASPA.

Because CASPA is a remedial statute designed to protect contractors, the court emphasized that it must be interpreted liberally to promote fairness and justice.

Role of Anticipatory Repudiation

A critical aspect of the court’s reasoning involved anticipatory repudiation. This occurs when one party clearly indicates it will not perform under the contract.

Here, FWH effectively repudiated the agreement by hiring another contractor and refusing to proceed. The court held that once this happened, Tedesco’s obligations under the contract ended.

This meant that even if “full performance” were required, Tedesco’s partial work became legally sufficient because FWH’s breach prevented further performance.

The court emphasized that allowing owners to avoid CASPA liability by repudiating contracts before work is completed would undermine the statute and lead to unfair results.

Application of CASPA Remedies

The court ultimately affirmed the award of interest and attorneys’ fees to Tedesco. It found that:

1. FWH anticipatorily breached the contract,
2. Tedesco demanded payment for its losses, and
3. FWH failed to pay in accordance with the contract.

Under these circumstances, CASPA applied, and the statutory remedies were appropriate.

Conclusion

The Tedesco decision reinforces CASPA’s role as a protective statute for contractors and subcontractors in Pennsylvania. By interpreting “performance” broadly and recognizing the impact of anticipatory breach, the Superior Court ensured that contractors are not deprived of statutory remedies simply because a project never reaches the construction phase.

Houston Harbaugh’s  legal team can help you when:

• A project stalled or was cancelled after work had already started (even non-physical work)
• Payment is being withheld or disputed
• You were wrongfully terminated

Whether you are a contractor owed payment for preparatory work or an owner reassessing your termination clause, the Tedesco decision should be considered in your analysis of a strategy moving forward. 

Contact attorney Matthew Lautman for a review of your situation This was written and edited by Pittsburgh, Attorney Matthew J Lautman, and authored with research and organizational assistance by Microsoft Copilot.