Greenwich Northeast, Inc. v. E.W. Burman, Inc.
| Decision Date | 20 January 2011 |
| Docket Number | C.A. PC-08-0570 |
| Parties | GREENWICH NORTHEAST, INC. v. E.W. BURMAN, INC. |
| Court | Rhode Island Superior Court |
DECISION
Before this Court is a Motion in Limine filed by the Defendant, E.W Burman, Inc., ("Burman") regarding the admissibility of evidence relating to certain labor costs allegedly incurred by Plaintiff, Greenwich Northeast, Inc. ("GNI") during a construction project. Burman primarily seeks to exclude such evidence based on the doctrine of collateral estoppel. For the reasons set forth herein, this Court grants Burman's motion.
This matter arises from the construction of a new chapel and mausoleum at the Swan Point Cemetery located at 585 Blackstone Boulevard in Providence, Rhode Island (the "Project"). (Compl. ¶ 4.) Pursuant to a written construction management agreement (the "Prime Contract") with The Proprietors of Swan Point Cemetery (the "Owner"), Burman acted as the general contractor for the Project. (Pl.'s Pre-Trial Mem. ¶ 3.) The Prime Contract stated a contract price of $5, 242 549.00. Id. at ¶ 5. In December of 2005, Burman entered into a subcontract with GNI with respect to the masonry block work on the Project (the "Subcontract"). (Def.'s Pre-Trial Mem. Ex. B Subcontract.) The Subcontract stated a contract price of $103, 000.00 for the construction of the chapel and mausoleum "skeletons." Id. This Subcontract price equaled the Scheduled Value of the Concrete Masonry Unit Work in the Prime Contract. (Pl.'s Pre-Trial Mem. ¶ 8.)
After commencing the masonry work, the parties subsequently modified the Subcontract by change order dated March 16, 2006 ("Change Order No. One") to expand GNI's scope of stonework to include the furnishing and installation of a granite veneer over the exterior walls per architectural specifications (the "Specifications").1[] (Def.'s Pre-Trial Mem. Ex. C: Change Order No. One.) Change Order No. One, drafted by Burman, detailed the Specifications for the exterior stonework and increased the Subcontract by $385, 000.00 to a total Subcontract price of $488, 000.00. Id. The Specifications required the use of a special type of granite previously placed on hold at a nearby quarry and the implementation of certain dimensions, cuts and joints during installation. Id. The type of granite placed on hold was known as "Rustic Rubble, " which was supplied by the quarry in random shapes, thus requiring hand-trimming in the field to effectuate installation pursuant to the Specifications. (Def.'s Pre-Trial Mem. ¶ 15.)
Not long after the execution of Change Order No. One, the parties made the decision to incorporate another type of granite called "Ashlar, " which was saw-cut at the quarry and produced in larger pieces. (Pl.'s Pre-Trial Mem. ¶ 16.) While the Ashlar granite was more expensive, it generally required less trimming in the field. Id.; Def.'s Pre-Trial Mem. ¶¶ 18-19. The Architect ultimately approved GNI's mock-up granite veneer that included both Rustic Rubble and Ashlar stone in early April of 2006, subject to certain conditions (the "Approval"). (Def.'s Pre-Trial Mem. ¶¶ 16-17.) GNI contends, however, that considerable hand-trimming and cutting of the Ashlar stone in the field was nonetheless necessary to fulfill the conditions set forth in the Approval and to achieve the final appearance of the stone envisioned by the Architect. (Pl.'s Pre-Trial Mem. ¶¶ 18-20.) It is undisputed that as a result of the decision to use Ashlar granite, GNI requested that Burman issue another change order to account for expected increases in purchasing and labor costs. (Def.'s Pre-Trial Mem. ¶ 20; Pl.'s Pre-Trial Mem. ¶¶ 22-24.) It is also undisputed that before reaching any agreement concerning a price adjustment to the Subcontract, GNI commenced installation of the exterior stonework by the end of April of 2006. (Def.'s Pre-Trial Mem. ¶ 21; Pl.'s Pre-Trial Mem. ¶¶ 25-26.)
Over the following months, Burman and GNI communicated regarding an appropriate price adjustment to the Subcontract to account for the use of Ashlar stone. (Def.'s Pre-Trial Mem. ¶ 22; Pl.'s Pre-Trial Mem. ¶¶ 25, 27.) The parties, however, dispute the extent and substance of these negotiations. The record reflects that on September 25, 2006, Burman issued a second change order to the Subcontract, increasing the Subcontract price by $100, 000.00 for the "[a]dded cost for using cut granite and any additional labor required to meet [the] architect's approved installation" ("Change Order No. Two"). (Def.'s Pre-Trial Mem. Ex. D: Change Order No. Two.) Change Order No. Two also provided a completion date of October 31, 2006 and stipulated that liquated damages in the amount of $5000.00 per day applied to any delays in completion past that date. Id. Upon issuance of Change Order No. Two, the Subcontract price increased to $588, 000.00.
GNI maintains that it substantially completed its work on the Project sometime in October of 2006 but for minor punch list items. Burman avers, however, that the Owner did not accept the work on the Project as substantially complete until December 15, 2006. (Pl's. Pre-Trial Mem. ¶ 42; Def.'s Pre-Trial Mem. ¶ 27.)
Burman contends that the $588, 000.00 Subcontract price, indicated as "New Subcontract Amount" on Change Order No. Two, is the final agreed-upon fixed contract price encompassing the entire scope of GNI's work. Burman asserts that is has paid GNI $558, 600.00 of the Subcontract price after accounting for what Burman deems to be appropriate back charges against GNI in the amount of $29, 400.00. (Def.'s Answer ¶ 12.) GNI, however, presents this Court with a differing set of facts concerning the negotiation and formation of Change Order No. Two. GNI contends that it continued to work on the Project from April through August of 2006 while its requests for a Subcontract price adjustment were met by less than favorable responses from Burman. (Pl.'s Pre-Trial Mem. ¶¶ 22-31.) While GNI does not dispute that it signed Change Order No. Two, GNI maintains that the $100, 000.00 increase of the Subcontract price was an agreed-upon partial payment that in no way constituted a final price adjustment. (Compl. ¶ 13; Pl.'s Pre-Trial Mem. ¶ 45.)
In support of this contention, GNI relies on a document entitled "Addendum to Change Order No. One to Subcontract, " signed by GNI principal, John Abatecola, and allegedly sent by facsimile to Burman on September 22, 2006 (the "Addendum"), three days prior to executing Change Order No. Two. The facsimile cover sheet states in part: "[p]er our telephone conversation…we have attached an addendum to C.O. #1 in which we are willing to accept the additional $100, 000.00 as discussed, only with the terms herein stated in the inclosed [sic] addendum." Id. The Addendum itself identifies the dispute between GNI and Burman concerning the price adjustment and indicates that GNI accepts $100, 000.00 as an "additional payment, " without prejudice, reserving all rights to resolve by agreement or arbitration whether monies beyond the $100, 000.00 are owed by Burman at the conclusion of the Project. Id. The Addendum is not signed by Burman, and Burman disclaims ever receiving the facsimile. (Def.'s Mem. in Support of Motion at p. 3.) On September 25, 2006, the parties executed Change Order No. Two without reference to the Addendum. (Pl. Opp. Ex. B: Addendum.)
GNI filed its Complaint against Burman on January 29, 2008, and its Amended Complaint on February 14, 2008, seeking damages based on alleged breaches of the Subcontract and the agreement purportedly set forth in the Addendum. GNI seeks payment of the $29, 400.00 remainder of the stated $588, 000.00 Subcontract price, as well as $32, 618.00 of "extra costs" resulting from the use and shaping of the Ashlar, and $104, 031.19 in labor costs incurred in connection with the Ashlar stonework. (Pl.'s Pre-Trial Mem. ¶¶ 44-46.) On March 6, 2008, Burman answered the Amended Complaint and filed a multi-count Verified Counterclaim against GNI.2[]
This case was reached for trial with a date certain of November 30, 2010. Burman filed its motion in limine on that same date. This Court deferred trial after conference until January 21, 2011, based on its view that resolution of legal issues connected with the motion in limine potentially could obviate the need for a trial or shorten any trial. The parties have submitted memoranda in accordance with an agreed upon briefing schedule.
Upon first glance, certain evidence GNI intends to present in its case-in-chief seemingly creates an issue of material fact as to the extent, substance, and intention behind the negotiations and agreement relative to the $100, 000.000 payment under Change Order No. Two. Burman seeks to exclude this evidence, however, based on findings of fact and law in prior litigation involving Burman and the Project. A deeper look into this past litigation, and the parties involved, reveals a new layer of factual circumstances not readily apparent from the face of the pleadings in the instant matter.
In early 2007, an entity known as Alpha Omega Construction, Inc. ("Alpha Omega") instituted a mechanics' lien action against the Owner of the Project for nonpayment on an alleged masonry subcontract. This action, captioned Alpha Omega Construction, Inc. v. The Proprietors of Swan Point Cemetery and E.W. Burman, C.A. No. 07-1220 (R.I. Super Ct. 2007) (the "Alpha Omega Litigation"), centered on Alpha Omega's claim for $104, 000.00 in labor costs (the "Labor Costs") incurred while allegedly working as a subcontractor for GNI on the Project. In response, Burman, on behalf of itself and the Owner, filed a verified complaint seeking to dismiss and discharge the...
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