Haren Construction Company, Inc. v. Metropolitan Government of Nashville and Davidson County
| Decision Date | 09 July 2003 |
| Docket Number | No. M2002-01135-COA-R3-CV.,M2002-01135-COA-R3-CV. |
| Parties | HAREN CONSTRUCTION COMPANY, INC. v. THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY. |
| Court | Tennessee Court of Appeals |
Appeal from the Chancery Court for Davidson County, No. 01-1053-III, Ellen Hobbs Lyle, Chancellor.
Judgment of the Chancery Court Affirmed.
Philip E. Beck and William L. Barrett, Jr., Atlanta, Georgia, for the appellant, Haren Construction Company, Inc.
Thomas G. Cross and Jennifer C. Surber, Nashville, Tennessee, for the appellee, The Metropolitan Government of Nashville and Davidson County.
WILLIAM B. CAIN, J., delivered the opinion of the court, in which BEN H. CANTRELL, P.J., M.S., and ROYCE TAYLOR, SP. J., joined.
This appeal involves a contract between the Appellant Haren Construction Company, Inc. (HCCI) and the Appellee Metropolitan Government (Metro). The construction company brought suit claiming Metro breached its contract with HCCI in "constructive suspension" of work. In addition the construction company claimed that Metro interfered with the company's contract for equipment supply from a third party. The trial court granted Metro's two motions for summary judgment, the first concerning Metro's alleged liability under the Governmental Tort Liability Act, the second concerning the action for breach of contract. HCCI appeals the grant of summary judgment. We affirm.
On May 28, 1998, Haren Construction Company, Inc. (HCCI) and the Metropolitan Government of Nashville and Davidson County (Metro) executed a contract for the construction of the Bonnafair Sewage Pumping Station. This contract contained the following two paragraphs, which are of particular interest in this appeal:
17. CLAIMS BY THE CONTRACTOR
Claims by the Contractor against the Metropolitan Government are subject to the following terms and conditions:
(F) In the event the Contractor should be delayed in performing any task which at the time of the delay is then critical, or which during the delay becomes critical, as the sole result of any act or omission of the Metropolitan Government or someone acting in the Metropolitan Government's behalf, or by Metropolitan Governmentauthorized Change Orders, unusually bad weather not reasonably anticipated, fire or other Acts of God, the date for achieving Substantial Completion, or, as applicable, Final Completion, shall be appropriately adjusted by the Metropolitan Government upon the written claim of the Contractor to the Metropolitan Government and the Architect/Engineer. A task is critical within the meaning of this Subparagraph 17(F) if, and only if, said task is on the critical path of the Project Schedule so that a delay in performing such task will delay the ultimate completion of the Project. Any claim for an extension of time by the Contractor shall strictly comply with the requirements of Subparagraph 17(A) above. If the Contractor fails to make such claim as required in this Subparagraph 17(F), any claim for an extension of time shall be waived. Further, extensions of time shall be Contractor's sole remedy for any and all delays. No payment or compensation of any kind shall be made to Contractor for damages because of hindrance in the orderly progress of the Work or delay from any cause in the progress of the Work, whether such hindrances or delays be avoidable or unavoidable. Contractor expressly agrees not to make, and hereby waives, any claim for damages on account of any delay, obstruction or hindrance attributable to any cause whatsoever and agrees that Contractor's sole right and remedy in the case of any delay, obstruction or hindrance, shall be an extension of the time fixed for completion of the Contract.
. . .
23. TERMINATION BY THE CONTRACTOR
(A) The Metropolitan Government shall have the right at any time to direct the Contractor to suspend the performance, or any designated part thereof, for any reason whatsoever, or without reason. If any such suspension is directed by the Metropolitan Government, the Contractor shall immediately comply with same and shall demobilize as directed by the Metropolitan Government.
(B) In the event the Metropolitan Government directs a suspension of performance under this Paragraph 23, through no fault of the Contractor, the Metropolitan Government shall pay the Contractor as full compensation for such suspension the Contractor's reasonable costs, actually incurred and paid, of:
(4) performing in a later or during a longer, time frame than that contemplated by this Contract.
In addition to these provisions, the contract also included the following integration clause:
6. INTENT AND INTERPRETATION
With respect to the intent and interpretation of this Contract, the Metropolitan Government and the Contractor agree as follows:
(A) This Contract, which includes the documents listed in Paragraph 1 (Documents Incorporated By Reference), constitutes the entire and exclusive agreement between the parties with reference to the Project, and said Contact supersedes any and all prior discussions, communications, representations, understandings, negotiations or agreements. This Contract also supersedes any bid documents (unless incorporated herein in Paragraph 1);
The original bid, which was incorporated by reference in page 1 of the contract, provided that substantial completion of the construction project was to be achieved within 240 days of the issuance of the Notice to Proceed, and final completion within thirty days after that substantial completion date. Throughout the time of construction, Metro made several design changes, some with HCCI's approval, some without. Initial surveys were corrected. Certain pump motor specifications were changed in a meeting between Metro, the project architect Hart-Freeland-Roberts, Inc. (HFR), and HCCI's major supplier on the project, Southern Sales Company, Inc. (Southern), and in the absence of representatives of HCCI. As a result, the project which was originally to take 270 days from the Notice to Proceed was finally complete on May 13, 2000, 713 calendar days after inception. It is undisputed in the record that throughout this period HCCI submitted 18 written applications for payment during and after completion of the Bonnafair Sewage Pump Station in which it stated "contractor waives all claims and the right to make any future claims for additional compensation relating in any way to work performed or delays, hindrances or difficulties experienced to date."
On April 4, 2001, HCCI filed its Complaint for Breach of Contract alleging "constructive suspension" in violation of paragraph 23 of the contract, and seeking damages for that breach. In addition, HCCI sought damages for Metro's alleged tortious interference with its contractual relationship with Southern. Metro answered and on January 10, 2002, filed its Motion for Summary Judgment as to Plaintiffs' claims in their entirety. As grounds therefor, Metro argued that it was immune from suit for inducement to breach and HCCI's claim was essentially a claim for delay damages, barred as a result of the plain language of paragraph 17 of the contract as interpreted pursuant to Tennessee Code Annotated section 47-50-112. That statute provides the appropriate method for interpreting written contracts.
(a) All contracts, including, but not limited to, notes, security agreements, deeds of trust, and installment sales contracts, in writing and signed by the party to be bound, including endorsements thereon, shall be prima facie evidence that the contract contains the true intention of the parties, and shall be enforced as written; provided, that nothing herein shall limit the right of any party to contest the agreement on the basis it was procured by fraud or limit the right of any party to assert any other rights or defense provided by common law or statutory law in regard to contracts.
Tenn. Code Ann. § 47-50-112(a).
On March 5, 2002, the trial court granted Metro's Motion for Summary Judgment on the claim for interference with contractual rights, taking under advisement the defendant's Motion for Summary Judgment on the "no damages for delay" clause in the contract. On April 9, 2002, the court entered its Memorandum and Order granting the remainder of Metro's Motion for Summary Judgment. From those orders HCCI appeals, arguing first that the trial court erred as a matter of law in determining that paragraph 17 governs the actions of the parties rather than paragraph 23, and that the trial court erred in holding that the claim of inducement to breach is barred by Tennessee Code Annotated section 29-20-205.
HCCI claims that Metro, by changing the design requirements, failure to timely provide a construction permit, and otherwise delaying construction, on the project "constructively suspended" work causing damage to HCCI. HCCI argues that the delays thus caused were so lengthy as to be outside the contemplation of the parties. Nonetheless, HCCI finished its performance and was paid its contract price of one million, one hundred thousand, twenty three dollars.
It seeks recovery of what it claims is owed under paragraph 23 if the actions of Metro can be construed as a suspension of work pursuant to that paragraph. In arguing its point HCCI claims that its intent was not expressed in the contract. The company relies upon the general rule posited by the Court in Real Estate Management, Inc. v. Giles, 41 Tenn. App. 347, 293 S.W.2d 596 (1956). This case concerned three offers to purchase real estate, which were contingent upon the purchaser's "being able to purchase" three contiguous tracts of real property. The offers were drawn by Real Estate Management, Inc. at...
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