26 F.3d 1057 (11th Cir. 1994), 92-2981, Marriott Corp. v. Dasta Const. Co.

Docket Nº:92-2981.
Citation:26 F.3d 1057
Party Name:MARRIOTT CORPORATION, Plaintiff-Counter-Defendant-Appellee, v. DASTA CONSTRUCTION COMPANY, Defendant-Counter-Claimant-Appellant.
Case Date:July 22, 1994
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 1057

26 F.3d 1057 (11th Cir. 1994)

MARRIOTT CORPORATION, Plaintiff-Counter-Defendant-Appellee,

v.

DASTA CONSTRUCTION COMPANY, Defendant-Counter-Claimant-Appellant.

No. 92-2981.

United States Court of Appeals, Eleventh Circuit

July 22, 1994

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[Copyrighted Material Omitted]

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Herman M. Braude, Braude & Margulies, Roger C. Jones, Washington, DC, for appellant.

Mary Applegate Lau, Lau, Lane, Pieper, & Asti, Tampa, FL, for appellee.

Appeal from the United States District Court Middle District of Florida.

Before TJOFLAT, Chief Judge, DUBINA, Circuit Judge, and PAINE [*], Senior District Judge.

TJOFLAT, Chief Judge:

This case arises out of the construction of a Marriott Corporation hotel in Orlando, Florida. Marriott, the appellee, acted as both the owner and general manager of the project. In that capacity, Marriott contracted with Dasta Construction Company, the appellant, to perform certain portions of the work. After the hotel was built, Marriott brought this suit in the district court to recover payments it had made on Dasta's behalf to Dasta subcontractors and suppliers. Dasta counterclaimed, contending that Marriott not only had failed to carry out its contractual obligations, but also had interfered with Dasta's performance. A jury found for Marriott on its claims and awarded Marriott the sums it had paid Dasta subcontractors and suppliers. On the counterclaim, the jury found for Dasta and awarded it $4,659,390.90. The district court subsequently granted Marriott's motion for judgment notwithstanding the verdict, dismissing Dasta's counterclaim on the merits and limiting Marriott's award to its costs of action. Dasta now appeals, seeking reinstatement of the jury's verdict. Finding no merit in any of Dasta's arguments, we affirm.

I.

In early 1982, Marriott began construction on an elaborate resort complex, or "mega hotel," in Orlando, Florida. 1 The Marriott Orlando World Resort ("Resort") was to contain fourteen different building segments, including a twenty-eight story guest tower; numerous convention rooms, restaurants, and ballrooms; and several outbuildings for swimming pools, golf courses, and tennis courts. Due to the size and complexity of Marriott's undertaking--at the time of completion, the Resort was the largest building in terms of square footage in the state of Florida--construction was divided into several distinct projects requiring the coordination of numerous contractors and subcontractors.

Dasta became involved with the Resort in 1983, approximately one year after construction began. At that time, Dasta was one of the five largest building contractors in Kansas City, Missouri, specializing in all types of commercial and industrial construction and handling an average annual contract volume of between $20 and $30 million. Vincent

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Dasta, the company's president and chairman of the board, possessed advanced degrees in civil engineering and business administration as well as more than twenty-five years of experience in the construction business.

Dasta first learned of the Marriott Resort project through William Hall, the owner of another Kansas City contracting company, Hall-Missouri. Although Dasta had never performed any work for Marriott, 2 Hall-Missouri had worked on three Marriott hotel construction projects and was familiar with Marriott's building practices. 3 Hall approached Dasta and suggested that the two contractors join forces to solicit work on the Resort. The combination was advantageous for both companies as Dasta possessed the size and experience to handle the large-scale Resort contracts, while Hall-Missouri offered a history of successful working relations with Marriott. In fact, it appeared doubtful that either company would have been capable of winning a contract for the Resort on its own.

On May 4, 1984, Marriott invited Dasta and Hall-Missouri to submit competitive bids for the exterior skin and drywall work on the Resort's guest tower. The majority of the exterior skin work consisted of affixing layers of stucco, plaster, and water-proofing onto the cement block walls of the guest tower. The drywall work consisted of the application of drywall boards and finishing materials to the guest tower's ceilings and inner walls. Case Concrete Contractors had already begun to construct the concrete walls that would provide the basis for the exterior skin at the time that Dasta and Hall-Missouri became involved in the Resort bidding process.

The bid invitation packages for the Resort's exterior skin and drywall projects each contained a set of architectural drawings, a set of plans and specifications, and a list of general conditions that defined the nature of the potential relationship between Marriott and Dasta. The drawings and specifications included in the Resort bids were only between 50 and 80 percent complete, 4 however, because the Resort was being built on a "fast track" basis. Under the fast track method, construction on a building begins before a final set of fully coordinated plans is completed. Rather, the architectural plans and specifications are designed and modified as the building's actual construction progresses. The advantage of the fast track method, as opposed to building from plans completed at the outset, is that it enables construction to begin at a much earlier stage in the project. The method's disadvantage results from increased difficulty in scheduling and coordinating the project since the construction progress schedule must be modified to account for constant plan changes. Notwithstanding these difficulties, however, Marriott had employed fast track construction in a number of prior, albeit smaller, hotel construction projects, including the three on which Hall-Missouri had been involved.

In May 1984, after reviewing the bid documents, Vincent Dasta and William Hall conducted pre-bid investigations of the project site in Orlando. During their visit, both men inspected the work in progress, reviewed the project paperwork, and engaged in "fairly lengthy discussion and specific discussion about the sequencing and scheduling of the work" to be done by Dasta. William Hall also participated in a critical series of special planning sessions hosted by Marriott. At these meetings, which lasted several days and which all of the contractors then working on the Resort attended, Marriott and the contractors engaged in detailed discussions about the current state of the Resort construction and the projected construction schedule. At the conclusion of these sessions, an outside planning consultant (who also attended the meetings) converted the

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information from the meetings into the Resort's Critical Path Method ("CPM").

According to the trial testimony of both Dasta and Marriott, a CPM is a standard construction device used to "plan the activities of a construction project in a logical orderly sequencing manner citing durations for the different activities from the beginning of the job to the end." A CPM is created by dividing the entire project into discrete and quantifiable steps; in turn, each step is allotted an estimated time for completion. Ultimately, each step is arranged into a chronological sequence, thus revealing the anticipated length and structure of the entire construction schedule. In addition to serving as a roadmap for the contractors to determine when and where their work fits into the overall construction sequence, the CPM also assists contractors in assessing their hiring and material purchasing needs.

On June 1, 1984, Dasta and Hall-Missouri (hereinafter referred to jointly as "Dasta") submitted bids under the Dasta moniker for both the exterior skin and drywall contracts. Dasta priced the exterior skin contract on enough "manpower to accomplish that work on an eight-hour day 40-hour basis and be done on time," and submitted the successful low bid price. Dasta was awarded that contract, but failed to win the drywall contract.

Shortly after submitting its bids, Dasta received a copy of the CPM developed at the planning meetings. The CPM essentially restated the scheduling information that Dasta had received during the site visit; Dasta anticipated that the exterior skin work would commence in mid-July 1984 and continue in a logical fashion for fifteen months before concluding in September 1985. The CPM also stated that it was "for [Dasta's] use in scheduling and determining crew sizes and work areas as per General Conditions of the Specifications item 6A [and 6]C, page 5." 5

According to Vincent Dasta, the company concluded that the CPM "was a good schedule and adequate to accomplish the exterior skin work in an efficient, production-type manner, working normal hours with optimum crew sizes." On July 2, 1984, Dasta formally contracted with Marriott to perform the exterior skin work for a lump sum price of $3,109,850. All of the documents from the original bid package--including the drawings, specifications, and general conditions--were incorporated into the final contract.

In mid-July, Dasta's construction team arrived at the project site and learned that construction was operating at least five months behind schedule. The delay was caused by the "extremely poor quality" of Case's concrete work, which contributed to a concrete collapse in the Resort's tower area in mid-May. The defective concrete work was of particular concern to Dasta since much of its exterior skin work had to be placed directly onto Case's concrete work, such that any problems with the concrete would translate directly into problems with the exterior skin. Although Dasta had planned "to be working full force" immediately upon arrival at the construction site, the defective concrete prevented it from doing so. Dasta related these...

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