Atlanta Bd. of Ed. v. Oxford Bldg. Services

• Decision Date: 17 October 1975
• Docket Number: No. 2,No. 50475,50475,2
• Citation: 220 S.E.2d 485,136 Ga.App. 168
• Parties: ATLANTA BOARD OF EDUCATION et al. v. OXFORD BUILDING SERVICES, etc
• Court: Georgia Court of Appeals

Page 485

220 S.E.2d 485

136 Ga.App. 168

ATLANTA BOARD OF EDUCATION et al. v. OXFORD BUILDING SERVICES, etc.

No. 50475.

Court of Appeals of Georgia, Division No. 2.

Oct. 17, 1975.

[136 Ga.App. 176] Lenwood A. Jackson, Atlanta, for appellants.

Clein & Babush, Harvey A. Clein, Atlanta, for appellee.

PANNELL, Presiding Judge.

Oxford Building Services, Inc., brought an action against the Atlanta Board of Education seeking recovery of an alleged balance due for janitorial services and supplies from 'on or about July 24, 1968, through on or about August 27, 1971.' By stipulation of the parties, the amount, the buildings and the contracts involved were agreed upon as hereinafter shown in the trial judge's order to whom the case was submitted for trial without a jury. The controversy arises out of three types of contracts between the parties referred to as the five percent contract, the two percent contract, and the 'formula' contract. We are not concerned with the formula contracts on the present appeal.

The question is whether these contract, in providing a method of arriving at damages for a breach by the appellee was a provision for liquidated damages, which are recoverable by the appellant, or was a penalty, which is not recoverable by the appellant as against the appellee's claim for janitorial services and supplies. See generally Sanders & Ables v. Carter, 91 Ga. 450, 17 S.E. 345; Tuten v. Morgan, 160 Ga. 91, 127 S.E. 143; Muller Bank Fixture Co. v. Georgia Railway and Electric Co., 145 Ga. 484, 89 S.E. 615; Sanders v. Carney, 118 Ga.App. 576, 164 S.E.2d 856; Mayor and Council of Washington v. Potomac Engineering & Construction Co., 132 Ga. 849, 65 S.E. 80; Heard v. Dooley County, 101 Ga. 619, 28 S.E. 986; Mayor and Council of Brunswick v. Aetna Indemnity Co., 4 Ga.App. 722, 62 S.E. 475; Miazza v. Western Union Telegraph Co., 50 Ga.App. 521, 178 S.E. 764; Ocmulgee Building and Loan Assoc. v. Thomson, 52 Ga. 427.

The five percent contracts under 'Reports and Payments' read: 'The Contractor 'Upon receipt of the certified chart and invoice, a representative of the Supervisor, in company with the contractor or an authorized representative, shall make thorough inspection of the buildings involved, and if it is found that the contractor has failed to carry out any provisions of the contract, the contractor will be notified of such failure and be given 24 hours from the time of notice to make the necessary corrections. If work found to be in default under this contract is not corrected to the satisfaction of the Supervisor within 24 hours, the Atlanta Board of Education shall charge against the contractor damages in an amount equal to 5 per cent of the amount invoiced for monthly services for each additional 24 hours that the contractor fails to perform the work required.

shall maintain a Performance Chart in duplicate, listing by room all of the periodic work required under this contract, and this chart shall be posted daily showing the work performed and the date of performance. The Performance Chart shall be subject to an inspection by the Supervisor at any time. At the end of each calendar month a duplicate of the completed Performance Chart shall be certified to by the foreman and Chief Officer of the contractor with a statement that, 'I certify the above to be true and correct.' The certified Performance Chart shall be submitted to the Supervisor, together with an invoice for payment for work performed during the month.

'No payment shall be made to the contractor on the invoice submitted for service for the previous month until all terms of this contract have been complied with, and then such payment shall be limited to the amount remanining as due on the invoice after the deduction of damages provided herein.

'Payment on the invoice shall also be subject to cancellation provisions set forth elsewhere in these specifications.'

The two percent contracts under 'Reports and Payments' read: 'The Contractor shall maintain a negative Performance Chart in duplicate, supplied by the Operations Department, listing by general areas all of the periodic work required under this contract, and this chart shall be posted daily showing the work performed and the date of performance. The Performance Chart shall be subject to an inspection by the supervisor at any time. At the end of each calendar month a duplicate of the completed Performance Chart shall be certified to by the Foreman and Chief Officer of the contractor with a statement that 'I certify the above to be true and correct.' The certified Performance Chart shall be submitted to the Supervisor, together with an invoice for payment for work performed during the month.

'Whenever a representative of the Department of Operations of the Atlanta Board of Education shall make a thorough monthly inspection of the buildings involved, and if it is found that the contractor has failed to carry out any provisions of the contract, the contractor will be notified of such failure and be given 24 hours from the time of notice to make the necessary corrections. If work found to be in default under this contract is not corrected to the satisfaction of the Director of Operations within 24 hours, the Atlanta Board of Education shall charge against the contractor damages in an amount equal to two (2) percent of the amount invoiced for monthly services for each additional 24 hours that the contractor fails to perform the work required.

'When it is determined that the contractor has omitted or failed to perform any daily scheduled work in accordance with these specifications the Director of Operations will immediately notify the contractor of the condition and location of the deficiency. Contractor will then be allowed three (3) hours to make the correction. Should the contractor fail to complete all work or respond to the notification within the time allowed then the Director of Operations may have said work performed by Atlanta Board of Education personnel and 'No payment shall be made to the Contractor on the invoice submitted for service for the previous month until all terms of this contract have been complied with, and then such payment shall be limited to the amount remaining, as due on the invoice after the deduction of damages provided herein.

charge back to the contractor all costs incurred.

'Payment on the invoice shall also be subject to cancellation provisions set forth elsewhere in these specifications.'

After hearing evidence on the circumstances surrounding the provisions of the contracts, which development received input from the bidders when the original contracts (five percent) were bid, as well as when the two percent contracts were substituted for the five percent contracts, and after considering numerous letters of default written to the appellee, and that where a notice of default was given and not corrected in twenty-four hours another notice was sent, and was sent each day thereafter until full compliance with the defects pointed out in the default letter had been met, the trial judge entered the following Order:

'The above and foregoing case having come on for a trial before the Court, without a jury, evidence was introduced and argument made by attorneys for both parties and the Court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

'1. That the parties and the subject matter of this law suit are subject to the jurisdiction of this Court.

'2. That beginning in July, 1968, the Plaintiff entered in several contracts with Defendant agreeing to provide specified janitorial services in certain public schools operated by Defendant for a fixed price payable monthly. The contracts covered a three-year period and school buildings involved in this law suit are Therrell High School, Douglass High School, Southwest High School, Kimberly Elementary School, Miles Elementary School, Adamsville Elementary School, and Walden Middle School.

'3. All of the contracts contained a provision under heading 'Reports and Payments' authorizing the Defendant to assess damages in particular amounts for each 24-hour period. That work of the Plaintiff was found to be in default and not corrected after a 24-hour notice.

'4. That the contracts contained the following procedure for the assessment of damages:

"Upon receipt of the certified chart and invoice, a representative of the Supervisor, in company with the contractor or an authorized representative, shall make a thorough inspection of the buildings involved, and if it is found that the...