APAC-Georgia, Inc. v. Department of Transp.

• Decision Date: 13 May 1996
• Docket Number: INC,APAC-GEORGI,No. A96A0593,A96A0593
• Citation: 472 S.E.2d 97,221 Ga.App. 604
• Parties: v. DEPARTMENT OF TRANSPORTATION.
• Court: Georgia Court of Appeals

Page 97

472 S.E.2d 97

221 Ga.App. 604

APAC-GEORGIA, INC. v. DEPARTMENT OF TRANSPORTATION.

No. A96A0593.

Court of Appeals of Georgia.

May 13, 1996.

Reconsideration Denied June 3, 1996.

Certiorari Denied Sept. 20, 1996.

Smith, Currie & Hancock, Robert B. Ansley, Jr., Fredric W. Stearns, Joseph P. Henner, Frederick L. Wright, II, Atlanta, for appellant.

Michael J. Bowers, Atty. Gen., George P. Shingler, Deputy Atty. Gen., Cathy A. Cox-Brakefield, Asst. Atty. Gen., Lawson, Davis & Pickren, G. Thomas Davis, Alison H. Price, Greenfield, Bost & Kliros, John W. Greenfield, Sutherland, Asbill & Brennan, William R. Wildman, Atlanta, for appellee.

RUFFIN, Judge.

This complex suit over construction of Atlanta's downtown connector comes before us a second time. In its first appearance, Dept. of Transp. v. APAC-Georgia, 217 Ga.App. 103, 456 S.E.2d 668 (1995), we held that special contract specification 105.07 imposed on the Department of Transportation ("DOT") a duty to coordinate and control the work of its prime contractors, which included APAC-Georgia ("APAC"), and that material questions of fact remained as to whether DOT had breached that duty. Id. at 105(1), 456 S.E.2d 668.

On remand the trial court granted DOT partial summary judgment, holding that APAC could claim no damages for delays on numerous specific components of its work, including designated walls and ramps. Regarding these items, the trial court determined that APAC had not complied with two sections of the contract requiring written notice of delay (§ 108.07) and of claims for additional compensation (§ 105.13), and it considered such notice a condition precedent to APAC's claims. The trial court also rejected any claims APAC had for delay damages resulting from design errors and omissions.

We reverse the trial court's rulings on the issue of notice. Section 105.13 is inapplicable to this case, and a jury should decide whether APAC complied with § 108.07 or, in the alternative, whether DOT waived that notice requirement. Although the trial court correctly rejected any claims resulting from design errors and omissions, we remand that ruling with instruction to clarify the scope of damages which APAC may seek.

1. The trial court erroneously found APAC's compliance with provision 105.13 to be a condition precedent to the contractor's claims for delay damages. That provision reads in relevant part: "Claims for Adjustments and Disputes: In any case where the Contractor believes that extra compensation is due him, the Contractor shall notify the Engineer in writing of his intention to claim such extra compensation before beginning The Work on which said claim is based. If such notification is not given, in writing, before such work is begun, then the Contractor hereby agrees that no extra compensation is due and waives all rights to claim extra compensation for said Work.... If the claim ... is found to be just, it will be paid as Extra Work, as provided in 109.05 for Force Account Work." (Emphasis supplied.) Section 109.05 describes the procedures for payment of materials, labor, and some overhead used in additional work and requires written authorization for this extra work before the Contractor begins it.

This particular contract provision does not expressly apply to damages for delay. Its language requires a contractor to give notice that he will seek extra compensation for extra work before beginning that work. APAC's claim stems from its inability to do the work called for in the contract because of DOT's acts and omissions. This provision mirrors a specification found in a manual entitled "Guide Specifications for Highway Construction," published by the American Association of State Highway and Transportation Officials. An article discussing this standard provision makes clear it is intended to address compensation for unforeseen "change orders" in highway contracts, not damages for delay. Vance, 3 Selected Studies in Highway Law, "Enforceability of the Requirement of Notice in Highway Construction Contracts," 1524-N1.

As urged by DOT, APAC's failure to comply with this clause would cause APAC to forfeit any claim for damages caused by DOT's own breach of its duty to coordinate this project. But "[t]he settled public policy of this state is that forfeitures are not favored. While forfeitures are not unlawful, the law does not favor them, and all ambiguities in a contract are to be resolved against their existence. [Cit.]" (Punctuation omitted.) A.L. Williams & Assoc. v. Faircloth, 259 Ga. 767(1)(b), 768, 386 S.E.2d 151 (1989). An alternate legitimate construction, limiting this requirement of notice to claims for extra work, prevents the forfeiture. Roland Well Drilling v. Murawski, 193 Ga.App. 38, 40, 386 S.E.2d 872 (1989).

2. The notice requirement of provision 108.07 does apply to APAC's claims for delay damages. Holloway Constr. Co. v. Dept. of Transp., 218 Ga.App. 243, 247(8), 461 S.E.2d 257 (1995). The trial court erred, however, in finding as a matter of law that APAC failed to comply with this provision, which reads in part: "E. Extension of Contract Time: ... If the normal progress of The Work is delayed for reasons beyond his control, the Contractor shall, with (sic) fifteen days after the start of such a delay, file a written request to the Engineer for an extension of time setting forth therein the reasons and providing complete documentation for the delay which he believes will justify the granting of his request.... If the Engineer finds that The Work was delayed because of conditions beyond the control and without the fault of the Contractor, he may extend the time for completion in such amount as the conditions justify."

In support of its motion on this issue, DOT personnel averred they had received no request for an extension of time on 90 specific items of work, including such items as "Wall Q," "Tie-back Wall 15C," and "Mainline Cleveland to Fair including Lakewood Interchange." In response, APAC produced over 50 letters between its personnel and DOT supervisory personnel, written between 1984 and 1988, giving notice of delays and the need for extensions.

Although these letters may contain no specific mention of the 90 listed items, many of the letters indicated that the specified delays would cause "domino-effect" delays on the entire project. In a letter dated March 25, 1985, for example, APAC requested an extension of time on the entire project and informed DOT that current delays would directly affect other intermediate completion dates and the final completion date. DOT acknowledged this letter and responded, "[w]hen all problems are resolved in this area ... please re-evaluate your delay and submit your request specif[y]ing what delays you had, and any time extension or other compensation you feel is justified by these delays."

APAC also presented the affidavit of its president, who stated that APAC wrote DOT monthly with updates showing every delay to the project and the amount of delay. "It is undisputed that APAC received time extensions from DOT through the actual completion date, and no contractual liquidated damages were charged to APAC for failure to complete the project on time." APAC, 217 Ga.App. at 104, 456 S.E.2d 668. This evidence creates material questions of fact both as to whether APAC complied with the notice provision and whether DOT waived the requirement.

Notice requirements must be reasonably construed. Batson-Cook Co. v. Loden & Co., 129 Ga.App. 376, 378(1), 199 S.E.2d 591 (1973). The key issue is whether DOT had actual notice of the delays for which APAC seeks damages. State Hwy. Dept. v. Hall Paving Co., 127 Ga.App. 625, 629, 194 S.E.2d 493 (1972). The evidence APAC presented...