Law Co., Inc. v. Mohawk Const. and Supply Co.

• Decision Date: 17 August 2009
• Docket Number: No. 08-3076.,08-3076.
• Citation: 577 F.3d 1164
• Parties: The LAW COMPANY, INC., a Kansas corporation, Plaintiff/Counter-Defendant-Appellee, v. MOHAWK CONSTRUCTION AND SUPPLY COMPANY, INC., a Pennsylvania corporation, Defendant/Counter-Claimant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

577 F.3d 1164

The LAW COMPANY, INC., a Kansas corporation, Plaintiff/Counter-Defendant-Appellee, v. MOHAWK CONSTRUCTION AND SUPPLY COMPANY, INC., a Pennsylvania corporation, Defendant/Counter-Claimant-Appellant.

No. 08-3076.

United States Court of Appeals, Tenth Circuit.

August 17, 2009.

David E. White (Joshua C. Dickinson and Barry L. Pickens, Spencer Fane Britt & Browne LLP; and Richard W. Saxe, Jr.,

Babst, Calland, Clements & Zomnir, P.C., with him on briefs), Babst, Calland, Clements & Zomnir, P.C., Pittsburgh, PA, for Defendant/Counter-Claimant-Appellant.

Ron Campbell (Lyndon W. Vix with him on the briefs), Fleeson, Gooing, Coulson & Kitch, L.L.C., Wichita, KS, for Plaintiff/Counter-Defendant-Appellee.

Before BRISCOE, SEYMOUR, and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

The Law Company, Inc. ("Law"), a general contractor, sought a declaratory judgment that one of its subcontractors, Mohawk Construction and Supply Company, Inc. ("Mohawk"), is barred from collecting delay damages under the parties' subcontract. Mohawk counterclaimed for breach of contract. On summary judgment, the district court refused to consider two affidavits and numerous documents submitted by Mohawk and declined to address several of Mohawk's legal arguments. After excluding these submissions, the district court granted summary judgment in favor of Law.

For the reasons that follow, we conclude that the district court erred by refusing to consider discovery documents produced by Law in its initial disclosures that were printed on Law letterhead. The court also erred by categorically refusing to consider other exhibits. We leave for the district court to determine on remand which documents should be excluded under a non-categorical approach.

We further conclude that the district court committed an error of law when it discounted two affidavits submitted by Mohawk without first analyzing their admissibility under the sham affidavit rule. Lastly, we hold that the district court erred in relying on the pretrial order to exclude legal theories relevant to the central issue in the case—whether the subcontract barred Mohawk from obtaining delay damages.

Because the district court has not yet determined what evidence is properly submitted and has not yet considered all relevant arguments, we cannot determine at this stage whether a disputed issue of material fact exists. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse the grant of summary judgment and remand to the district court for further proceedings consistent with this opinion.

I

A

Law served as the general contractor for construction of a Cessna Aircraft Company C-10 Citation Service Center in Wichita, Kansas ("the Project"), and in that capacity subcontracted with Mohawk for installation of metal wall panels. Mohawk was originally scheduled to begin its work on October 9, 2003, and to complete its portion of the Project on February 9, 2004. As a result of disruptions beyond its control, Mohawk could not complete work on the Project until November 2004. Mohawk claims that it spent more than a year on a four-month job, in part because of Law's failure to properly coordinate other subcontractors on the Project.

On October 29, 2003, Mohawk notified Law that the Project was well behind schedule and Mohawk could not begin most of its work as anticipated. Mohawk noted that "[a]ny delays will require additional compensation." According to the affidavit of Mark Cybulski, Mohawk's project manager, Law did not respond to this letter or address Mohawk's assertion that delays would have to be compensated. Yet, Law was not completely silent. Cybulski testified that Doug Kimple, the project manager for Law, told him that Mohawk would "definitely" be paid for additional costs and expenses. Law representatives informed Cybulski that another subcontractor, Steel Service Corporation, would be held accountable for all costs incurred by Mohawk as a result of Project delays. Law acknowledged to Mohawk that "we initiated the idea of expediting your work and offered and will compensate for premium costs of this.... I agree the [sic] will be some additional costs and we will be fair about this."

On November 17, 2004, as Mohawk's portion of the Project neared completion, Mohawk notified Law by letter that it sought a revised total of $255,753 in damages caused by delay. Law did not invoke the contractual provisions purporting to bar delay damages in response. Law did not mention these provisions until the current litigation commenced.

B

In the United States District Court for the District of Kansas, Law sought a declaration that Mohawk was not entitled to delay damages. This claim rests on several clauses in the parties' subcontract, which on their face appear to bar Mohawk from recovering such damages. The subcontract provides:

Subcontractor specifically acknowledges that extension of time shall be Subcontractor's sole remedy for delay unless the same shall have been caused by Owner's or Contractor's intentional interference with the Subcontract Work, and then only after Subcontractor has provided timely notice to Contractor and Owner has approved such request for extension.

A separate clause states: "Subcontractor agrees to make no claims against Contractor or Owner should the Schedule not be strictly adhered to, it being understood that Contractor will endeavor to expedite completion of the Project as rapidly as possible." Yet another clause provides that "Subcontractor recognizes that revisions will be made to the Schedule and agrees to comply with such revisions without additional compensation." Mohawk's answer to Law's complaint raises several affirmative defenses, including waiver, and Mohawk counterclaimed for breach of contract. Also included in the answer is a list of damages Mohawk incurred, including additional equipment and overhead costs.

After the close of discovery, Law moved for summary judgment on both its declaratory judgment claim and Mohawk's counterclaim. Relying primarily on the above-cited provisions of the parties' subcontract, Law also argued that Mohawk could not recover because the claimed damages were actually incurred by one of Mohawk's subcontractors, Viking Erectors Corporation ("Viking").¹ To support the latter contention, Law cites to the deposition of Dominick DeSalvo, a damages expert designated by Mohawk, to the effect that "in reality, most of the damages are associated with Viking." DeSalvo nevertheless acknowledged that overhead and profit were properly attributed to Mohawk.

Attached to Mohawk's summary judgment response are numerous documents Mohawk obtained through disclosures and discovery, including deposition testimony and affidavits from Cybulski and Kowcheck. Mohawk contends the "no damages for delay" provisions are unenforceable under Kansas law and had been waived by Law. Mohawk also argues the extensive delay at issue fell outside the scope of the provisions. Law replies that the Cybulski and Kowcheck affidavits partially contradicted prior deposition testimony and thus should be disregarded and that Mohawk's documentary submissions should be stricken because they were not authenticated. Before the district court ruled, Mohawk moved to file a surreply brief and affidavit from one of its attorneys indicating that all of the correspondence attached to Mohawk's opposition was provided by Law in its Rule 26 initial disclosures. The request was denied.

In its memorandum opinion and order, the district court found that "no damages for delay" provisions are generally enforceable. It refused to consider Mohawk's argument that the delay at issue falls outside the scope of the provisions because the only defenses identified in the pretrial order were waiver and estoppel. Seemingly conflating waiver and modification, the district court determined that the contractual provisions precluding oral modification barred Mohawk's waiver and estoppel defenses. The court further concluded that modification was invalid without consideration and there was no genuine issue of material fact regarding modification. Finally, the district court found that most of Mohawk's alleged damages had accrued to Viking rather than Mohawk. Based on these rulings, the court granted summary judgment to Law.

In reaching its conclusions, the district court refused to consider many of the documents submitted by Mohawk because the documents were not supported by an authenticating affidavit. These documents had been provided to Mohawk by Law under Rule 26, and many of them were written on Law letterhead. Further, the district court refused to consider the Cybulski and Kowcheck affidavits because they "advance[d] factual positions different from those reflected in their depositions." Law Co. v. Mohawk Const. & Supply Co., 523 F.Supp.2d 1276, 1283 (D.Kan.2007). It neither explained how the affidavits differed from the earlier depositions, nor did it find that the affidavits created sham issues of fact. Several months later, by stipulation of the parties, the district court dismissed Mohawk's remaining counterclaim with prejudice and entered final judgment. Mohawk appeals.

II

We review a district court's grant of summary judgment de novo, viewing the evidence in the light most favorable to the nonmoving party. Howard v. Waide, 534 F.3d 1227, 1235 (10th Cir.2008). Summary judgment is appropriate when the "pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c).²

At the outset, the parties dispute whether the district court erred by refusing to consider certain attachments to Mohawk's summary judgment opposition. Mohawk asks us to conclude that the district court impermissibly excluded the Cybulski and Kowcheck affidavits. Mohawk also contends that the district court impermissibly excluded...