Foster Wheeler Enviresponse, Inc. v. Franklin County Convention Facilities Authority

• Decision Date: 14 May 1997
• Docket Number: No. 95-2467,95-2467
• Citation: 678 N.E.2d 519,78 Ohio St.3d 353
• Parties: FOSTER WHEELER ENVIRESPONSE, INC., Appellee and Cross-Appellant, v. FRANKLIN COUNTY CONVENTION FACILITIES AUTHORITY, Appellant; Lawhon & Associates, Inc., Cross-Appellee.
• Court: Ohio Supreme Court

Page 353

78 Ohio St.3d 353

678 N.E.2d 519

FOSTER WHEELER ENVIRESPONSE, INC., Appellee and Cross-Appellant, v.FRANKLIN COUNTY CONVENTION FACILITIES AUTHORITY, Appellant; Lawhon & Associates, Inc., Cross-Appellee.

No. 95-2467.

Supreme Court of Ohio.

Submitted Jan. 7, 1997.

Decided May 14, 1997.

Vorys, Sater, Seymour & Pease, Michael W. Donaldson and John C. Elam, Columbus, for appellee and cross-appellant.

Chester, Willcox & Saxbe, Richard A. Frye, John J. Chester, Columbus, and Karen H. Penley, for appellant.

Taft, Stettinius & Hollister, and Michael A. Byers, Columbus, for cross-appelleeLawhon & Associates.

Janet E. Jackson, City Attorney, and Daniel W. Drake, First Assistant City Attorney, urging reversal for amicus curiae, city of Columbus, Ohio.

John E. Gotherman, Columbus, urging reversal for amici curiae, Ohio Municipal League and Ohio Municipal Attorneys Association.

Calfee, Halter & Griswold, Stanley J. Dobrowski and Albert J. Lucas, Columbus, urging reversal for amicus curiae, Ohio Building Authority.

ALICE ROBIE RESNICK, Justice.

The broad issue in this case is whether Enviresponse may recover from CFA, or alternatively from Lawhon, for the contaminated material in excess of one hundred forty cubic yards that Enviresponse excavated and transported from the construction site of the Greater Columbus Convention Center.Since the cause comes to the court upon an appeal from summary judgment, our inquiry is circumscribed by the standard set forth in Civ.R. 56(C).

ICFA'S APPEAL

It is universally recognized that where a building or construction contract, public or private, stipulates that additional, altered, or extra work must be ordered in writing, the stipulation is valid and binding upon the parties, and no recovery can be had for such work without a written directive therefor in compliance with the terms of the contract, unless waived by the owner or employer.Lathrop Co. v. Toledo(1966), 5 Ohio St.2d 165, 34 O.O.2d 278, 214 N.E.2d 408;Portsmouth v. Nicola Bldg. Co.(1922), 106 Ohio St. 550, 140 N.E. 174;Expanded Metal Fireproofing Co. v. Noel Constr. Co.(1913), 87 Ohio St. 428, 101 N.E. 348;Carthage v. Diekmeier(1909), 79 Ohio St. 323, 87 N.E. 178;Baltimore & Ohio RR. Co. v. Jolly Bros. & Co.(1904), 71 Ohio St. 92, 72 N.E. 888;Ashley v. Henahan(1897), 56 Ohio St. 559, 47 N.E. 573;Cincinnati v Cameron(1878), 33 Ohio St. 336; 65 American Jurisprudence 2d (1972) 75-87, Public Works and Contracts, Sections 189-198;Annotation, Effect of Stipulation, In Private Building or Construction Contract, That Alterations or Extras Must Be Ordered In Writing(1965), 2 A.L.R.3d 620, 631, 1965 WL 13274, Section 3;Annotation, Effect of Stipulation, In Public Building or Construction Contract, That Alterations or Extras Must Be Ordered In Writing(1965), 1 A.L.R.3d 1273, 1281-1282, 1965 WL 13222, Section 3;7 P.O.F.2d(1975) 239, 247-248, Authorization for Extra Work Under Building Contract, Section 2;25 P.O.F.2d(1981) 561, 571, 573-574, Building and Construction Contracts--Waiver of Provision Requiring Written Change Orders, Sections 2and3.

The pivotal question in this case is whether the contract between CFA and Enviresponse should be interpreted to contain a requirement for written authorization where more than the base amount of one hundred forty cubic yards of contaminated material is found to be present at the site.

Despite the parties' attempts to correlate this case with others, our review of the innumerable cases and commentary on the subject leads us to the inescapable conclusion that the meaning of any particular construction contract is to be determined on a case-by-case and contract-by-contract basis, pursuant to the usual rules for interpreting written instruments.SeeCameron, supra, 33 Ohio St. at 374.

The cardinal purpose for judicial examination of any written instrument is to ascertain and give effect to the intent of the parties.Aultman Hosp. Assn. v. Community Mut. Ins. Co.(1989), 46 Ohio St.3d 51, 53, 544 N.E.2d 920, 923."The intent of the parties to a contract is presumed to reside in the language they chose to employ in the agreement."Kelly v. Med. Life Ins. Co.(1987), 31 Ohio St.3d 130, 31 OBR 289, 509 N.E.2d 411, paragraph one of the syllabus.

"Common words appearing in a written instrument will be given their ordinary meaning unless manifest absurdity results, or unless some other meaning is clearly evidenced from the face or overall contents of the instrument."Alexander v. Buckeye Pipe Line Co.(1978), 53 Ohio St.2d 241, 7 O.O.3d 403, 374 N.E.2d 146, paragraph two of the syllabus.Technical terms will be given their technical meaning, unless a different intention is clearly expressed.Cincinnati Ins. Co. v. Duffield(1856), 6 Ohio St. 200, paragraph one of the syllabus.

Most important to this case, a writing, or writings executed as part of the same transaction, will be read as a whole, and the intent of each part will be gathered from a consideration of the whole.Legler v. United States Fid. & Guar. Co.(1913), 88 Ohio St. 336, 103 N.E. 897;Kelly v. Carthage Wheel Co.(1900), 62 Ohio St. 598, 610, 57 N.E. 984, 986;Lesher v. Karshner(1890), 47 Ohio St. 302, 305, 24 N.E. 882;Miller v. Ratterman(1890), 47 Ohio St. 141, 156, 24 N.E. 496, 499;Cincinnati, Sandusky & Cleveland RR. Co. v. Indiana, Bloomington & W. Ry Co.(1886), 44 Ohio St. 287, 7 N.E. 139;Dodd v. Bartholomew(1886), 44 Ohio St. 171, 175, 5 N.E. 866, 867.See, also, New York Coal Co. v. New Pittsburgh Coal Co.(1912), 86 Ohio St. 140, 167, 174, 99 N.E. 198, 204, 206(recognizing the maxim noscitur a sociis, that the meaning of words or provisions in a contract may be indicated or controlled by those with which they are associated).

Both CFA and Enviresponse agree upon the rule as expressed in Farmers Natl. Bank v. Delaware Ins. Co.(1911), 83 Ohio St. 309, 94 N.E. 834, paragraph six of the syllabus:

"In the construction of a contract courts should give effect, if possible, to every provision therein contained, and if one construction of a doubtful condition written in a contract would make that condition meaningless, and it is possible to give it another construction that would give it meaning and purpose, then the latter construction must obtain."

Although these rules contain a measure of flexibility in their application, they are designed only to ascertain the parties' intent.It is not the responsibility or function of this court to rewrite the parties' contract in order to provide for a more equitable result.A contract "does not become ambiguous by reason of the fact that in its operation it will work a hardship upon one of the parties thereto."Ohio Crane Co. v. Hicks(1924), 110 Ohio St. 168, 172, 143 N.E. 388, 389.See, also, Aultman Hosp. Assn., supra, 46 Ohio St.3d at 54-55, 544 N.E.2d at 924.

The parties and the courts below all agree that Enviresponse was required under its contract with CFA to obtain written authorization for any changes in the "scope of work."However, the court of appeals took the view that written authorization was required only for changes in the "scope of work."Accordingly, it saw the determinative issue as being whether the removal and disposal of contaminated waste in excess of the base bid amount of one hundred forty cubic yards could properly be characterized as an "increase * * * in the scope of work stated."The appellate court concluded that no change in the scope of work occurred when Enviresponse excavated and transported more than the estimated one hundred forty cubic yards and, therefore, no written authorization was required.We disagree.

Article 3 of the contract provides that "[n]o alterations shall be made in the work shown or described by the plans and specifications, except upon the written order of the Owner."(Emphasis added.)Only after the alteration is made pursuant to a written order is the "value of the work added * * * [to] be computed * * *, and the amount so ascertained [to] be added to * * * the base bid amount."(Emphasis added.)Article 7, Section b of the general conditions makes clear that the term "alterations" is intended to encompass "increases * * * in the quantity of work."Whatever legal significance there may be in other contexts of defining "scope of work," and regardless of whether the removal of excess contaminated waste falls within that definition, such work constitutes an "alteration," as that term is used in this contract, for which a written order is required.

Enviresponse argues that such an interpretation fails to give meaning and purpose to "the final paragraph of [i.e., the footnote in] the Unit Prices Attachment A."According to Enviresponse, we must "establish[ ] constructions of the second and final paragraphs of the Unit Prices Attachment A that [give]'meaning and purpose' * * * to both paragraphs."The construction urged is that "CFA obligated itself to pay Enviresponse for each cubic yard of hazardous waste beyond the 140 cu. yd. estimate.* * * [T]he mechanism for obligating itself was not by written change order but instead by contractor measurements observed by the consultant."

If the Unit Price Attachment constituted the entire agreement between CFA and Enviresponse, we might find some merit in Enviresponse's interpretation of the footnote thereto.However, the point to reading the contract as a whole is to avoid this very kind of abstract interpretation.In construing the agreement, we must attempt to give effect to each and every part of it, not just "the second and final paragraphs of the Unit Price Attachment A," and avoid any interpretation of one part which will annul another part.Legler, supra, 88 Ohio St. 336, 103 N.E. 897;Farmers Natl. Bank, supra, 83 Ohio St. 309, 94 N.E. 834, at paragraph six of the syllabus.

Construing the agreement as a whole, we find that the parties' intent in inserting the footnote was to set forth a prenegotiated unit price for...