Allgood Elec. Co. v. Martin K. Eby Const. Co., Inc.

Citation85 F.3d 1547
Decision Date25 June 1996
Docket NumberNo. 95-8572,95-8572
PartiesALLGOOD ELECTRIC COMPANY, Plaintiff-Appellant, v. MARTIN K. EBY CONSTRUCTION COMPANY, INC., Federal Insurance Company, Fidelity and Deposit Company of Maryland, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)

William H. Hughes, Jr., Robert Lee Crewdson, Atlanta, GA, Charles W. Byrd, John Douglas Christy, Perry, GA, for Plaintiff-Appellant.

Ronald G. Robey, Atlanta, GA, for Defendants-Appellees.

Appeal from the United States District Court for the Middle District of Georgia.

Before ANDERSON and BLACK, Circuit Judges, and HENDERSON, Senior Circuit Judge.

PER CURIAM:

This appeal arises out of a construction contract dispute between Allgood Electric Company ("Allgood") and Martin K. Eby Construction Company, Inc. ("Eby"). On March 12, 1993, Allgood, an electrical subcontractor for a building project, filed suit in the Superior Court of Dooly County, Georgia against Eby, the contractor, and Eby's sureties, Federal Insurance Company ("FIC") and Fidelity & Deposit Company of Maryland ("FDCM"). 1 The defendants subsequently removed the case to the United States District Court for the Middle District of Georgia predicating jurisdiction on diversity of citizenship. See 28 U.S.C. §§ 1332, 1441. Thereafter, on April 13, 1994, the district court granted summary judgment in part in favor of the defendants. Allgood then appealed. This court dismissed the appeal for lack of jurisdiction because the order granting partial summary judgment did not dispose of all of the issues raised in the complaint and it had not been certified for immediate review in accordance with Fed.R.Civ.P. 54(b). 2 Later, the district court directed that a Rule 54(b) judgment be entered and Allgood appealed again. For the reasons that follow, we reverse the district court's grant of summary judgment and remand for further proceedings.

I. BACKGROUND

On January 10, 1990, Eby entered into a contract with the Georgia Building Authority (Penal) ("GBA") to build the Dooly Correctional Institution in Unadilla, Georgia. Pursuant to a subcontract dated January 29, 1990, Allgood then agreed to perform certain electrical work for the project at a stipulated price. After its work was completed, Allgood filed this action alleging, inter alia, that Eby failed to properly coordinate the various phases of the prison's construction and that Eby's mismanagement in that respect caused delays which resulted in increased expense to Allgood. Allgood sought to recover these alleged additional costs from Eby and also claimed entitlement to certain sums of money which had been retained in accordance with the prime and subcontracts 3 pending the completion of construction. 4

Eby subsequently moved for summary judgment. It contended that, during the course of construction, Allgood executed certain form documents that either waived or released all of its demands against Eby. The forms included approximately twenty-four applications for payment and a completion certificate. In support of the motion, Eby submitted, in addition to other evidence, what appears to be photocopies of these documents.

The payment applications identified the project and were addressed to Eby. Each application specified that it was for work performed by Allgood for a certain period of time and stated that,

in consideration of the payment received, and upon receipt of the amount of this request, the undersigned does hereby waive, release, and relinquish all claim or rights of lien which the undersign [sic] may now have upon the premises above described except for claims for right of lien for contract and/or change order work performed to extent [sic] that payment is being retained or will subsequently become due.

(R1-35, Deposition of Gloria A. Alday, Exhibit 6). The sworn, notarized signatures of Allgood's President, Gloria A. Alday, or its Vice-President and Project Manager, Timothy A. Morgan, appeared on the applications.

The completion certificate made a part of the record by Eby was addressed to the Georgia State Financing and Investment Commission ("GSFIC"), which was responsible for discharging the state's administrative duties with respect to the construction. This form also identified the project and stated that it was a "Certificate Regarding Subcontractor's Completed Work and Retainage Release." (R1-33, Affidavit of Charles Schultz, Attachment). 5 The body of the document contained the following language: 6

1. This is to certify that our work is one hundred percent complete for our subcontract number S28328-21804 and request that our retainage be released in accordance with the contract documents. Our scope of work included the Division 16 Electrical material and installation. The total amount of retainage due is $138,949.06.

2. The Subcontractor hereby certifies that all work required under the above contract has been performed in accordance with the terms thereof, that all materialmen, subcontractors, mechanics, and laborers have been paid and satisfied in full, and that there are no outstanding claims of any character (including disputed claims or any claims to which the subcontractor has or will assert any defense) arising out of the performance of the contract which have not been paid and satisfied in full except as listed hereinbelow:

[Enter "None" or List]

3. The Subcontractor further certifies that to the best of his knowledge and belief there are no unsatisfied claims for damages resulting from injury or death to any employees, subcontractors, or the public at large arising out of the performance of the contract, or any suits or claims for any other damage of any kind, nature, or description which might constitute a lien upon the property of the Owner.

4. The Subcontractor makes this certificate for the purpose of receiving final payment in full settlement of all claims against the Owner arising under or by virtue the [sic] contract, and acceptance of such payment is acknowledged as a release of the Owner from any and all claims arising under or by virtue of the contract.

5. Payments pursuant to this certificate shall in no way diminish, change, alter or affect the rights of the Owner under the contract documents.

(Id.) ("Enter 'None' or List" in the original). 7 The bottom of the form contained spaces for the signatures of representatives of Allgood, Eby and the architect for the project, Rosser Fabrap International. A notice printed below the signature spaces stated "GEORGIA STATE FINANCING AND INVESTMENT COMMISSION MUST RECEIVE A COPY WITH ALL ORIGINAL SIGNATURES." (Id.). The signatures of Allgood's President, dated June 8, 1992, and Eby's Operations Manager, dated June 16, 1992, were affixed to the certificate, but the space for the architect was left blank. 8 Attached to the copy of the form was a photocopy of a letter dated June 10, 1992, addressed to Eby and signed by Lynne Crutchfield, an Allgood secretary. It stated, in pertinent part, "[e]nclosed please find our signed release of retained funds, for work performed by our company on the subject project." (Deposition of Gloria A. Alday, Exhibit 7).

It its brief in support of the motion for summary judgment, Eby urged that the quoted language from the payment applications waived and released all of Allgood's demands for further payment except for contract and change order work to be performed in the future. Eby also contended that all of Allgood's claims, except for retainage, were barred by the completion certificate.

In response, Allgood argued, inter alia, that the waiver and release language in the payment applications referred only to lien rights against the premises and not to any indebtedness owed by Eby under the subcontract which became due subsequent thereto. It contended that its delay claims "matured" only after its performance under the subcontract was finally completed. (R2-38, Brief in Support of Plaintiff's Opposition to Defendant's Motion for Summary Judgment at 7). In the alternative, Allgood maintained that the waiver provision created an ambiguity which should be construed against the drafter, Eby, or resolved by a jury. The completion certificate, Allgood asserted, could not operate to bar the delay claims because it was not a valid document relied upon by Eby. In support of this contention, Allgood alleged that, at the time the completion certificate was signed, its work on the project was not in fact complete and it continued thereafter to render services and be paid by Eby for performance under the subcontract. 9 It also relied on the deposition testimony of Allgood's President, Alday, who stated that, although she apparently executed the document, she did not remember doing so and would not have signed it if she had been aware of its contents because Allgood's work was not completed at that time. In addition, Allgood pointed out that Eby never processed the completion certificate by obtaining all of the necessary signatures and submitting it to the GSFIC for final payment and that final payment was never made.

Before the district court ruled on the motion for summary judgment, Eby submitted a second motion for summary judgment in which it asserted that Allgood's delay claims were foreclosed because it failed to provide timely notice of them as required by the prime and subcontracts. Eby alleged also that certain of Allgood's purported additional costs were traceable to decisions made by the architect and were not actionable because Allgood failed to protest those decisions in accordance with the provisions of the contract documents. To these arguments, Allgood countered that it did comply with the contractual notice requirements and that the delay demands could not have been made until after the projected completion date for the project expired because no delay occurred until then. Finally, it disputed Eby's charge that certain conflicts should have been taken up with the architect.

Thereafter, the...

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