Alabama Dept. of Transp. v. Harbert Intern.
| Decision Date | 07 March 2008 |
| Docket Number | 1050271. |
| Citation | 990 So.2d 831 |
| Parties | ALABAMA DEPARTMENT OF TRANSPORTATION; Joe McInnes, director of the Alabama Department of Transportation; and Governor Bob Riley v. HARBERT INTERNATIONAL, INC. |
| Court | Alabama Supreme Court |
Steven L. Nicholas of Olen, Nicholas & Copeland, P.C., Mobile; and Douglas L. Patin of Bradley Arant Rose & White, Washington, D.C., for appellee.
The Alabama Department of Transportation ("ALDOT"); Governor Bob Riley; and the director of ALDOT, Joe McInnes ("the director"), appeal from the judgment of the trial court in favor of Harbert International, Inc. ("Harbert"), in Harbert's action seeking declaratory and mandamus relief. We affirm in part, reverse in part, dismiss in part, and remand with directions.
In the early 1980s, ALDOT determined that the existing Cochrane Bridge over the Mobile River in Mobile needed to be replaced. A contract for the construction of a new bridge was awarded by ALDOT to S.J. Groves and Sons ("Groves"), and construction of the new bridge began in 1985. However, Groves ultimately defaulted in performing the contract, and ALDOT terminated the contract in 1988.
In 1989, ALDOT sought bids for contracts to finish the bridge. Harbert was awarded two contracts—one for the completion of the main span of the bridge and a separate one for the completion of the elevated roadway approach spans (hereinafter referred to collectively as "the contract").
The main span of the bridge was designed as a "cable-stayed cantilever structure." The construction of such a bridge required segments of the span, called cantilevers, to be built out from opposite sides of vertical towers. These cantilevers are supported from the towers by "stay cables" that are placed under a predetermined amount of tension. The contract specified a procedure to install the stay cables and cantilevers called "balanced stay stressing," in which cables attached to opposing cantilevers on either side of the towers are put under tension simultaneously.
Special provision 398 of the contract provided that the balanced-stay-stressing procedure presented in the contact (referred to as an "erection sequence") was "not mandatory" and that Harbert could present a "totally different erection sequence" to be reviewed by ALDOT's "engineer." Harbert wanted to use a different erection-sequence procedure called "out-of-balance stay stressing" that was purportedly cheaper and more efficient. Harbert thus requested ALDOT to approve this alternative erection-sequence procedure.
In a letter dated November 14, 1989, ALDOT's bridge engineer, William Conway, notified Harbert that "the proposed construction scheme" for the main span was denied. Specifically, Conway indicated that the proposed procedure "violate[d] the contract requirement of Special Provision No. 396 and contract plans requirement that the ... stays be simultaneously stressed ...." (Emphasis added.)2 Construction of the bridge proceeded using the balanced-stay-stressing erection sequence.
The contract contained a provision that allowed ALDOT to assess liquidated damages for each day Harbert exceeded the time specified by the contract in which to complete the bridge. In early 1991, ALDOT began assessing liquidated damages at the rate of $2,000 per day for each contract, totaling $4,000 per day. Although the construction work was not yet completed, in August 1991 the bridge opened for traffic, and ALDOT suspended the imposition of liquidated damages. However, on October 14, 1991, ALDOT again began imposing liquidated damages while Harbert finished the project. ALDOT ultimately stopped assessing these damages in February 1992.
During the course of the project, ALDOT made periodic payments to Harbert. Pursuant to a provision in the contract, ALDOT retained a portion of each payment, which is referred to in the record as "retainage." According to Harbert, ALDOT was required to pay this retainage to Harbert at the end of the project. However, ALDOT purportedly had not paid $291,750 of the retainage at the time of trial.3
Harbert alleges that during the project it was required to perform "extra work," i.e., work that was outside the scope of the project. The contract incorporated by reference certain procedures by which Harbert could request compensation for the extra work and also resolve any contract disputes with ALDOT. These procedures were specified in, among other places, a document referred to in the record as the "Standard Specifications," specifically, section 109.10 of the 1989 version of the Standard Specifications. That section provided, among other things, that claims by the contractor—Harbert—would be initially evaluated by a "construction bureau"; if the contractor was unsatisfied with the construction bureau's evaluation, it could request a hearing before a "claims committee" made up of certain ALDOT employees who were not involved in the project. The claims committee would review the claims and issue a recommendation to the director regarding payment. If the contractor was still dissatisfied, it could request, at the discretion of the director, the formation of an advisory board to review the claims and to make another recommendation to the director, who would ultimately decide how much should be paid.
In 1992, Harbert submitted a claim under these procedures both for the "extra work" performed and also for expenses Harbert claimed it incurred based on the allegedly improper rejection by ALDOT's employee of the out-of-balance-stay-stressing erection procedure. Harbert maintained at trial that ALDOT and its director "disregarded" the claims-review process and instituted new procedures that were advantageous to ALDOT, including: appointing a person who had been involved in the project as a member of the claims committee; creating a second, "shadow claims committee" that supplied ex parte communications to the claims committee; denying Harbert the ability to rebut ALDOT's position before the claims committee; delaying resolution of Harbert's claims; failing to conduct a hearing on a "claim supplement" Harbert was required to provide; and failing to review "major aspects" of Harbert's claims, including whether the imposition of liquidated damages was wrongful and whether ALDOT failed to give proper consideration to the out-of-balance-stay-stressing erection sequence. Additionally, Harbert further contended that an advisory board was formed but disbanded before it could hear the claims and that the director made his decision regarding Harbert's claims without reviewing a recommendation by an advisory board.
In May 1995, Harbert sued ALDOT and others in federal court. Those proceedings were ultimately dismissed. In November 2001, Harbert sued ALDOT and numerous employees of ALDOT, as well as the Governor and the director of ALDOT.4 The complaint, which was subsequently amended, sought declarations that the defendants erroneously and unreasonably construed the contract to preclude out-of-balance stay stressing, that the liquidated damages constituted an unlawful penalty, that the defendants were under a legal duty to return all unlawful liquidated damages as well as the "retainage," and that Harbert was entitled to compensation for extra work performed under the contract. The complaint further alleged that the defendants violated Harbert's due-process rights in wrongfully administering both the contract and Harbert's claim for compensation for the extra work, that ALDOT officers misrepresented that Harbert could request alternate erection-sequence procedures and that the request would receive a good-faith review, and that the defendants engaged in an unlawful condemnation of Harbert's property. The complaint thus sought mandamus relief directing payment of the liquidated damages, the retainage, and compensation for the extra work Harbert performed. Alternately, the complaint sought a writ of mandamus to compel the defendants to give it a fair and impartial forum for Harbert to submit its claim for extra compensation.5
The case went to trial in August 2005. At the close of the evidence, Harbert moved for a judgment as a matter of law ("JML") as to counts II and III of the amended complaint, which sought payment of the retainage and liquidated damages. In an order dated September 14, 2005, the trial court granted the motion, stating:
The trial court then submitted the remaining claims to the jury. A verdict form with 18 special interrogatories was submitted to the jury. The trial court's final judgment, entered on the jury's verdict, held:
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