Broadway Concrete Invs., L.L.C. v. Masonry Contracting Corp.
| Citation | 185 N.E.3d 612 |
| Decision Date | 24 February 2022 |
| Docket Number | 110420 |
| Parties | BROADWAY CONCRETE INVESTMENTS, L.L.C., Plaintiff-Appellee, v. MASONRY CONTRACTING CORP., et al., Defendants-Appellants. |
| Court | United States Court of Appeals (Ohio) |
Stark & Knoll Co., L.P.A., Michael L. Fortney, Akron, Alexandra N. Nienaber, and Richard P. Schroeter, Jr., Akron, for appellee.
The Law Offices of David M. Leneghan, David M. Leneghan, Broadview Heights, K. Scott Carter, and Catana Chrostowski, for appellants.
JOURNAL ENTRY AND OPINION
ON RECONSIDERATION1
{¶ 1} Defendants-appellants, Masonry Contracting Corp. ("MCC") and Western Surety Company ("Western Surety"), appeal the trial court's judgment, rendered after a bench trial, that found in favor of plaintiff-appellee, Broadway Concrete Investments L.L.C. d.b.a. Pompili Precast Concrete ("Pompili") on Pompili's claims for breach of contract and violation of Ohio's Prompt Payment Act and awarded Pompili $82,388.51 in damages, plus $21,230.86 in interest and $101,945.05 in attorney fees. For the reasons that follow, we affirm in part and reverse and remand in part for further proceedings consistent with this opinion.
{¶ 2} This case arises out of the Nord Family Greenway construction project on the Case Western Reserve University campus. The prime contractor for the project was Gilbane Building Company. Gilbane subcontracted with Platform Cements, Inc. d.b.a. Platform Contracting ("Platform") for Platform to perform excavation, site concrete, and hard cast (including precast concrete) for the project. Platform subcontracted the precast concrete work to MCC, which in turn subcontracted the supply of the precast concrete to Pompili by way of a purchase order in the amount of $366,830.75 executed on October 26, 2016.
{¶ 3} The evidence at trial demonstrated that prior to receiving the purchase order from MCC, Pompili submitted a written quote for the precast work directly to Platform. A copy of Pompili's quote, which included various contract terms, was attached to the signed purchase order between MCC and Pompili, and a handwritten note on the purchase order stated, "Note: see Broadway Concrete LLC Terms & Conditions – Attached as Information Only." Likewise, the written terms of the purchase order stated, "Special Conditions: See attached Quotation #0209-001 for reference only." Each page of the attached quotation from Pompili was marked "INFORMATION ONLY."
{¶ 4} With respect to payment of Pompili's invoices by MCC, the purchase order required all invoices to be submitted to MCC by the 25th of the month The contract stated further that MCC "will issue checks within 5 banking days after we receive payment."
{¶ 5} MCC submitted three pay applications to Platform in 2016: the first in September, another in November, and the third in December. Pompili had not yet submitted any invoices to MCC and accordingly, none of these pay applications included any Pompili invoices. Matthew Birch, owner and president of MCC, testified at trial that MCC's first pay application to Platform, in the amount of $50,000, was the result of an agreement with Platform that he would reduce his quote by $50,000 and Platform would give him an up front payment to help his start-up company. Birch testified that when he submitted his original bid to Platform, he met with Jason Klar, the owner of Platform, who told him that his bid was high. Birch told Jason that he could reduce his bid if Platform paid him $50,000 to help start his newly formed company. Birch testified that Jason agreed, paid him the agreed-upon $50,000, and told him to invoice Platform.
{¶ 6} Jeremy Kler, the project manager for Platform on the project, was called as a witness by Pompili. Kler testified that Jason negotiated Platform's contract with MCC and agreed to pay MCC $50,000 up front for its first pay application. Kler testified that he reviewed the pay application and approved it, even though none of the billed items had been completed at that point. Kler likewise confirmed that MCC's initial quote to Platform was for $674,980, but the contract executed between Platform and MCC was for $624,980. Platform paid MCC's first pay application of $50,000 on October 13, 2016 — the same day it executed its contract with MCC and 13 days before MCC and Pompili executed their subcontract.
{¶ 7} Pompili submitted its first invoice in the amount of $3,500 to MCC on January 31, 2017. MCC included Pompili's invoice on its fourth pay application to Platform on January 25, 2017.2 Platform paid MCC's fourth pay application on May 4, 2017; MCC paid Pompili's invoice on April 20, 2017, 14 days before it received payment from Platform.
{¶ 8} Pompili submitted its second invoice in the amount of $20,000 on April 20, 2017. MCC included Pompili's invoice on its seventh pay application to Platform on April 25, 2017. MCC received a partial payment of its total pay application from Platform on June 17, 2017, and tendered the full amount of Pompili's invoice to Pompili on June 21, 2017.
{¶ 9} Pompili's third invoice, dated May 19, 2017, was for $30,000 and included on MCC's eighth pay application to Platform on May 25, 2017. MCC received payment from Platform on August 1, 2017, and paid Pompili on August 3, 2017.
{¶ 10} Pompili's fourth invoice, dated June 29, 2017, in the amount of $5,000, was included on MCC's ninth pay application to Platform dated June 25, 2017. MCC paid Pompili on August 31, 2017, even though it did not receive payment from Platform on this application until September 27, 2017.
{¶ 11} Pompili's fifth invoice, dated August 15, 2017, in the amount of $70,000, was included on MCC's 11th pay application submitted to Platform on August 25, 2017. MCC paid Pompili on November 27, 2017, 17 days before it received payment from Platform on December 4, 2017.
{¶ 12} Pompili's sixth invoice, dated September 18, 2017, for $36,500, was included on MCC's 12th pay application to Platform on September 25, 2017. MCC paid Pompili on November 27, 2017, 17 days before receiving payment from Platform on December 14, 2017.
{¶ 13} On October 14, 2017, Pompili submitted its seventh invoice for $110,000. MCC included the invoice on its 13th pay application to Platform. Platform rejected the application, however, and informed MCC the owner had decided it would no longer pay for material that was stored off-site and would pay only for material that was installed or on-site. Platform advised Birch to revise his pay application. Birch conducted an on-site survey and concluded that Pompili's invoices were overstated as compared to what material was on-site or installed. Platform agreed with Birch's conclusion. Birch then revised Pompili's invoice downward to reflects its overbilling and submitted a revised 13th pay application to Platform. Platform paid this pay application on January 18, 2018, but MCC made no payment to Pompili because of its overbilling credit.
{¶ 14} In November 2017, Pompili issued MCC a credit in the amount of $56,102.31 for its overbilling. Pompili did not submit any invoices to MCC for November 2017, December 2017, and January 2018. Birch testified that during these months, he resubmitted Pompili's October invoice, as adjusted, to Platform on MCC's 14th, 15th, and 16th pay applications. MCC included $12,500 for Pompili on pay application 14, which was submitted to Platform on November 25, 2017, and paid by Platform on January 18, 2018. MCC did not pay Pompili upon receipt of Platform's payment because the $12,500 invoiced for Pompili on pay application 14 was offset by a $12,500 credit on pay application 13. MCC invoiced $5,000 for Pompili on pay application 15, which it submitted to Platform on December 25, 2017. MCC paid Pompili on January 31, 2018, before Platform paid the application on March 14, 2018. MCC included $30,122.60 for Pompili on pay application 16, which was submitted to Platform on January 25, 2018. Platform paid MCC on March 14, 2018; MCC had already paid Pompili on January 31, 2018.
{¶ 15} Pompili's next invoice in the amount of $88,000 was submitted to MCC on February 28, 2018. MCC included the invoice on payment application 17 to Platform, who tendered payment to MCC on April 24, 2018. MCC sent a check to Pompili on April 30, 2018.
{¶ 16} On March 30, 2018, Pompili invoiced MCC $15,000. On April 23, 2018, it invoiced MCC $8,867.81, and on May 24, 2018, it invoiced MCC $2,500 as its final billing on the project.
{¶ 17} Birch testified that the last invoice he submitted to Platform for Pompili was its March 30th invoice because Pompili had already invoiced $303,000 and been paid $260,000 on its contract, so it was a good time to "hold off on payment and invoicing" to close out the contract — meaning to finalize what changes had been made to the contract requirements due to change orders or work authorizations that would affect the contract price. However, on April 30, 2018, the same day Birch sent Pompili a check for its February 28, 2018 invoice, Pompili filed a mechanic's lien on the project. MCC stopped payment on the check and escrowed the money with Platform, who ultimately paid Pompili $80,000.
{¶ 18} Pompili filed suit against MCC, Platform, Case Western Reserve University, and Travelers Casualty and Surety Company of America. Pompili subsequently amended its complaint, which omitted Case Western Reserve University but added Western Surety as a defendant. Pompili later dismissed all its claims against Platform and Travelers. MCC later substituted a bond with Western Surety for the mechanic's lien.
{¶ 19} In its amended complaint, Pompili asserted a breach-of-contract claim against MCC, contending that MCC had breached the contract by failing to pay it $82,388.51 still owing pursuant to the terms of the contract. Pompili also asserted a claim against MCC for violation of...
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