Collins/Snoops Associates, Inc. v. Cjf, LLC

• Decision Date: 27 January 2010
• Docket Number: No. 2273, September Term, 2007.,2273, September Term, 2007.
• Parties: COLLINS/SNOOPS ASSOCIATES, INC. v. CJF, LLC, et. al.
• Court: Court of Special Appeals of Maryland

988 A.2d 49

190 Md. App. 146

COLLINS/SNOOPS ASSOCIATES, INC. v. CJF, LLC, et. al.

No. 2273, September Term, 2007.

Court of Special Appeals of Maryland.

January 27, 2010.

Jeffrey L. Forman (Bruce E. Kauffman, Kauffman and Forman, on brief), Towson, for Appellant.

Joseph C. Kovars (Jeffrey A. Regner, Ober, Kaler, Grimes & Shriver, on brief), Baltimore, for Appellee.

Panel: HOLLANDER, MEREDITH, RAYMOND G. THIEME, JR., (Retired, specially assigned), JJ.

MEREDITH, J.

This appeal presents the question of whether a judge who hears a bench trial in a case in which two parties each claim the other breached a contract may deny both claims on the ground that neither party carried its burden of persuading the court that the other party breached the contract. Under the peculiar circumstances of this case, we shall affirm a judgment that denied relief to both the plaintiff and the counterplaintiff.

The case arose from a dispute between a contractor and its subcontractor on a project that involved renovations to three Baltimore County school buildings. The general contractor that won the bid for the project was CJF, LLC (hereinafter "Contractor"), the appellee/cross-appellant. It engaged Collins/Snoops Associates, Inc. (hereinafter "Subcontractor"), appellant/cross-appellee, as a subcontractor to perform over $2.69 million worth of plumbing, heating and air conditioning mechanical work as part of the renovations. After Subcontractor had completed only a portion of the specified mechanical work, Contractor asserted that Subcontractor was not making acceptable progress in order to meet the strict deadlines required by the County. Contractor terminated Subcontractor and engaged a replacement firm to take over the mechanical work on the schools. Subsequently, Contractor itself was terminated by the County because the County was not satisfied with Contractor's progress.

Subcontractor sued Contractor, its president, and its bonding company, in the Circuit Court for Baltimore County, claiming that Subcontractor was owed $409,720 for the work and materials it had provided prior to the time it was terminated. Contractor filed a counterclaim against Subcontractor, claiming damages that Contractor alleged it had incurred as a consequence of Subcontractor's failure to properly perform the obligations under the subcontract. After a bench trial on the merits, the trial court filed a written opinion in which it stated that "the court finds itself in equipoise as to each party's claim for breach of contract against the other." The trial court continued: "In brief, this court concludes that neither has [Contractor] proved by a preponderance of the evidence that [Subcontractor] failed to perform nor has [Subcontractor] proved by a preponderance of the evidence that it was wrongfully terminated from the school renovation project by [Contractor]." Accordingly, the trial court granted judgment in favor of the defendants — i.e., Contractor, its president, and its bonding company — "for all claims brought against [them] by [Subcontractor]," and the court granted judgment in favor of the counterdefendant, the Subcontractor, "for all claims brought against it by [Contractor]."

Subcontractor and Contractor have both appealed, each seeking to overturn the trial court's denial of their respective claims for damages. As appellant, Subcontractor raises the following questions:

I. Having found that [Subcontractor] provided $409,720 in labor and materials to [Contractor] on the County project, and having further found that [Subcontractor] had not "failed to perform," was it error for the trial judge not to have awarded [Subcontractor] at least the $409,720 for the labor and materials it provided?

II. Having found that [Contractor] did not prove [Subcontractor] had failed to perform, did the trial judge impermissibly shift the burden to [Subcontractor] to show that its termination was "wrongful"?

III. Having found that [Contractor] did not prove [Subcontractor] had failed to perform, was it error for the trial judge not to have awarded [Subcontractor] its lost profits on the job?

As appellee, Contractor rephrases the appellant's questions as one issue Whether the trial court sitting as finder of fact correctly held that [Subcontractor] failed to meet its burden of proving breach of contract where the court found the evidence to be in equipoise.

Additionally, as cross-appellee, Contractor raises the following issue:

Whether the trial court erred in finding that [Contractor] failed to prove its damages.

We conclude that the trial court did not err in entering judgment for the respective defendants as to all claims and counterclaims. Accordingly, we shall affirm the judgments entered by the circuit court.

FACTS AND PROCEDURAL HISTORY

In 2001, the County entered into a contract with Contractor to renovate three public elementary schools: Chase, Victory Villa, and Hawthorne Elementary. Appellee Carolina Casualty Insurance Company ("Carolina") issued a payment bond to guarantee that Contractor's subcontractors would be paid in the event Contractor wrongfully failed to pay amounts due the subcontractors for supplying labor and materials on the project.

Contractor engaged Subcontractor to perform plumbing and mechanical work on the heating and air-conditioning systems at the three schools. Contractor asked Subcontractor to sign Contractor's "standard" form subcontract agreement, but Subcontractor refused to sign. Nevertheless, the trial court found that Subcontractor, by its conduct, adopted or assented to the terms in the document that it refused to sign. Citing Porter v. General Boiler Casing Co., 284 Md. 402, 410-12, 396 A.2d 1090 (1979), the trial court concluded that the Contractor's form subcontract agreement "constitutes the contract between [Contractor] and [Subcontractor]," despite not being signed by Subcontractor. That finding is not challenged by either party on appeal.

The subcontract agreement contains numerous references to the Contractor's need for timely performance, including a statement that "[i]t is UNDERSTOOD AND AGREED by and between the parties that time is and shall be considered the essence of the contract on the part of the said Sub-contractor. . . ." The subcontract further required Subcontractor to "promptly begin said work" and "complete said work as rapidly as said Contractor may judge that the progress of the structure will permit." Similarly, the subcontract called for diligent and uninterrupted performance by Subcontractor:

The Subcontractor agrees to cooperate with the Contractor and with other Subcontractors in the diligent performance of the work and to prosecute regularly, diligently and uninterruptedly at such rate of progress in such a manner as to enable the Contractor to complete the entire structure within the time specified.

The subcontract called for Contractor to compensate Subcontractor as follows:

IN CONSIDERATION WHEREOF, the said Contractor agrees that he will pay to the said Sub-contractor, in monthly payments, the sum of TWO MILLION SIX HUNDRED NINETY SIX THOUSAND EIGHT HUNDRED SIXTY DOLLARS. PRICE FIRM — NOT SUBJECT TO ESCALATION

$2,696,860.00 DOLLARS for said materials and work, said amount to be paid as follows: Ninety per cent. (90%) of all labor and materials which has been placed in position and for which payment has been made by [the County] to said Contractor, to be paid on or about the 7th (approx. 5 weeks) of the following month, except the last payment which the said Contractor shall pay to said Sub-contractor immediately after said materials and labor installed by said Sub-contractor have been completed and approved by the said Architect. It is specifically understood and agreed that the payment to the Subcontractor is dependent, as a condition precedent, upon the Contractor receiving contract payments, including retainer, from the Owner. Subcontractor will only receive retainage after completion of all outstanding punch list items and having furnished warranties and as-built required by the Contract Documents.

On April 30, 2001, Contractor instructed Subcontractor to begin work the next day. From the beginning, Subcontractor's progress was characterized by delays. The cause of Subcontractor's delays was the major point of contention at trial. There was evidence that Subcontractor was slowed because the County failed to timely reply to Subcontractor's requests for information, that the County hindered Subcontractor's work by allowing public access to the schools during potential work hours, and that the Subcontractor's unexpected discovery of asbestos in the school required Subcontractor to suspend work until the asbestos was abated.

On the other hand, there was evidence that Subcontractor itself was unduly slow in performing its work, largely because it failed to provide enough qualified manpower and to secure necessary equipment and materials. Furthermore, Subcontractor's subcontractors caused several mishaps at the work site.

On May 22, 2001, Subcontractor sent Contractor a payment application for work Subcontractor had completed at Hawthorne. On June 22, 2001, Subcontractor sent a second payment application for work done at Hawthorne in the previous month, as well as first payment applications for work done so far at Victory Villa and Chase.

In July 2001, representatives of the County met with principals of Contractor and Subcontractor and threatened to terminate Contractor if progress on the project did not pick up. On July 24, 2001, Contractor sent a termination letter to Subcontractor, stating: "By reason of your persistent failure to properly man the projects and your failure to progress with the work . . . your right to proceed under the Subcontract Agreement is terminated" effective that day.

The next day, Subcontractor sent to Contractor three payment applications (one for each school), requesting payment for all of its work through July 24, 2001. In those ...