Glenn Constr. Co. Llc v. Bell Aerospace Serv. Inc.

Decision Date19 May 2011
Docket NumberCase No. 1:09–cv–250–MEF.
Citation785 F.Supp.2d 1258
PartiesGLENN CONSTRUCTION COMPANY, LLC, Plaintiff,v.BELL AEROSPACE SERVICES, INC., et al., Defendants.
CourtU.S. District Court — Middle District of Alabama

OPINION TEXT STARTS HERE

Dennis Ray Bailey, John Evans Bailey, R. Austin Huffaker, Jr., Rushton Stakely Johnston & Garrett PC, Montgomery, AL, for Plaintiff.Christopher Stanley Rodgers, Hugh Cannon Lawley, Huie Fernambucq Stewart LLP, Forrest L. Adams, II, John Malcolm Laney, Jr., Laney & Foster, PC, Birmingham, AL, for Defendant.

MEMORANDUM OPINION AND ORDER

MARK E. FULLER, District Judge.

This action arises out of the construction of a helicopter hangar at Defendant Bell Aerospace Services, Inc.'s (Bell Aero) facilities in Ozark, Alabama (“the Project”). Bell Aero was the owner of the Project and Defendant Barge, Waggoner, Summer & Cannon, Inc. (“BWSC”) was the project engineer (collectively, Defendants). Plaintiff Glenn Construction Company, LLC (Glenn Construction) was hired as the general contractor for the Project on February 2, 2007. Mike Wolfe (“Wolfe”) is the co-owner and president of Glenn Construction. Glenn Construction brings claims for breach of contract, 1 negligence, wantonness, fraud, and intentional interference with contractual relations.2 This cause is now before the Court on seven motions. Three are motions for summary judgment: (1) Bell Aero's first motion for summary judgment, (Doc. # 32), filed on November 9, 2010; (2) Bell Aero's alternative motion for summary judgment, (Doc. # 54), filed on January 14, 2011; and (3) BWSC's motion for summary judgment, (Doc. # 49), filed on January 14, 2011. Glenn Construction has filed two additional motions: a motion to strike two affidavits by BWSC's non-retained experts, (Doc. # 80), filed on February 28, 2011 and a motion to supplement its evidentiary submissions, (Doc. # 78), filed on February 16, 2011. On February 28, 2011, BWSC opposed the motion to supplement and moved to strike it. (Doc. # 82). Finally, BWSC filed a motion to strike the affidavit of Mac Brittingham (“Brittingham”)—Glenn Construction's previously undisclosed retained expert witness—on February 14, 2011. (Doc. # 75).

JURISDICTION AND VENUE

This Court has subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1332 (diversity).3 Venue is proper in this district pursuant to § 1391(a)(2). The parties do not dispute personal jurisdiction.

FACTS AND PROCEDURAL HISTORY
I. Facts

This action arises out of a $6,000,000 contract (“the Contract”) between Glenn Construction and Bell Aero for the construction of the helicopter hangar at Bell Aero's facilities in Ozark, Alabama.

A. The Formation of the Contract and Relevant Provisions

In 2005, Bell Aero contacted BWSC regarding the Project and began preparing for the bidding process. Bell Aero selected BWSC to serve as the engineer on the Project. According to Bell Aero, prior to submission of its bid, Glenn Construction had a complete copy of the Project Manual. (Doc. # 55, at 2 (citing Doc. # 56 Ex. 2, Wolfe Dep. 92:11–17)). The Instruction to Bidders section of the Project Manual permitted bidders to “access the site to conduct such investigations and tests as each [b]idder deems necessary for submission of his bid with prior approval of OWNER or ENGINEER.” (Doc. # 57 Ex. 41). Glenn Construction did not do any such investigations or tests prior to bidding on the Project. (Doc. # 56 Ex. B, Wolfe Dep. 95:11–96:23). The Instruction to Bidders section also stated that [t]he submission of a bid will constitute an incontrovertible representation by the Bidder ... that the Contract Documents are sufficient in scope and detail to indicate and convey understanding of all terms and conditions for performance of the work.” (Doc. # 57 Ex. 41).

On January 4, 2007, Glenn Construction submitted its bid for the Project. (Doc. # 66 Ex. 12). On February 2, 2007, Bell Aero awarded the $ 6,000,000 Contract for the Project to Glenn Construction and a notice to proceed was prepared that same day. (Doc. # 66 Ex. 13). Glenn Construction received the notice to proceed and began work on February 7, 2007. (Doc. # 66 Ex. 14). Pursuant to the notice to proceed, Glenn Construction was to complete the Project within 226 days making September 21, 2007 the date of completion. (Doc. # 57 Ex. 4). Additionally, the Contract contained General Conditions, drawings, and Specifications, which were also found in the Project Manual.

i. BWSC's Responsibilities as Engineer

The Contract described the engineer as the owner's “representative” on the Project, (Doc. # 57 Ex. 1, General Conditions § 9.01), and the owner was to communicate with the contractor through the engineer. ( Id. § 8.01). Under the Contract, the engineer had several responsibilities related to supervising the Project and rendering impartial, binding decisions on various matters. For example, the engineer was to make site visits at “intervals appropriate to the various stages of construction as [it] deems necessary,” ( Id. § 9.02(A)). The engineer's responsibilities also included issuing, “with reasonable promptness,” written clarifications or interpretations of the requirements of the Contract as it “may determine necessary.” ( Id. § 9.04). Such decisions were binding on both the owner and the contractor. ( Id.). The engineer was also permitted to “authorize minor variations” in the Project and such decisions were again binding on both the owner and the contractor. ( Id. § 9.05). The engineer could recommend change orders 4 which the parties “shall execute.” ( Id. § 10.03). Furthermore, the engineer was to act as an impartial “interpreter and judge” on disputes—referred to as “claims” under the Contract—about the Contract's price or time limits. ( Id. § 9.09(B)). Its decisions on such claims were “final and binding upon OWNER and CONTRACTOR” unless the decision was appealed or a party provided written notice within thirty days and filed suit within sixty days. ( Id. § 10.05(B)). Finally, the engineer was also responsible for reviewing applications for payment and either “indicat[ing] in writing a recommendation of payment and present[ing] the application to OWNER or return[ing] the [a]pplication to CONTRACTOR indicating in writing” why the application was rejected. (§ 14.02(B)(2)).

ii. Provisions for Making Changes to the Project

Section 3.04 explains that “the Contract documents may be amended to provide for additions, deletions and revisions in the Work or to modify the terms and conditions thereof in one or more of the following ways: (i) a Written Amendment; (ii) a Change Order[;] or (iii) a Work Change Directive.” ( Id. § 3.04(A)). Engineering or technical changes are to be made by a change order or a work change directive.5 ( Id. §§ 1.01(9), 1.01(49)). However, § 9.5 states that the engineer “may authorize minor variations in the Work from the requirements of the Contract Documents which do not involve an adjustment in the Contract Price or the Contract Times and are compatible with the design concept of the completed Project as a functioning whole as indicated by the Contract Documents.” ( Id. § 9.05(A) (emphasis added)). Such minor variations may be made by a field order, ( id.), which is defined as [a] written order issued by ENGINEER which requires minor changes in the Work but which does not involve a change in the Contract Price or the Contract Times.” ( Id. § 1.01(21)).

iii. Provisions Regarding Unforeseen Conditions

Furthermore, it was “the intent of the Contract Documents to describe a functionally complete Project (or part thereof) to be constructed in accordance with the Contract Documents.” ( Id. § 3.01(B)). At the same time, § 4.03 explained what the contractor is to do upon discovering a subsurface or physical condition that “is of an unusual nature, and differs materially from conditions ordinarily encountered and generally recognized as inherent in work of the character provided for in the Contract Documents.” ( Id. § 4.03(A)). If the contractor discovered such a condition, it was required to notify the owner and engineer “before further disturbing the subsurface or physical conditions or performing any Work in connection therewith.” ( Id.).

iv. Provisions Regarding Closeout Procedures for Final Payment

Once the contractor provided notice that the Project was complete, the engineer had to make a final inspection and notify the contractor in writing of all deficiencies. ( Id. § 14.06). The parties refer to this written notice as a “punch list”i.e. a list of things that the engineer determines needs to be fixed. The contractor was to fix the items on the punch list prior to seeking final payment. Section 14.07 provided that—once the contractor had completed the items on the punch list to the engineer's satisfaction and had provided certain documents—the contractor could apply for final payment.6 Similarly, the application for final payment must be accompanied by all documentation called for by the Contract Documents, consent of the surety to final payment, and either lien waivers from the subcontractors or an all-bills-paid affidavit from the contractor. ( Id. § 14.07(A)(2), (3)). Once the engineer was satisfied that the work was completed and all of the contractor's obligations under the Contract were fulfilled, it would either recommend that the owner make final payment or it would return the application to the contractor with its reasons for refusal. ( Id. § 14.07(B)). In the latter situation, the contractor was to make “the necessary corrections” and resubmit the application. ( Id.). The owner had to make final payment within 30 days of receiving the engineer's recommendation for payment.

B. BWSC's Alleged Prior Knowledge of Problems with the Foundation
i. The Underground Stream

One of the major problems during the Project involved an underground stream located on the property. Soon after construction began, the site work contractor discovered underground water,...

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