Moore Const. Co., Inc. v. Clarksville Dept. of Electricity
| Decision Date | 26 February 1985 |
| Docket Number | No. APP,APP |
| Citation | 707 S.W.2d 1 |
| Parties | MOORE CONSTRUCTION CO., INC., Plaintiff/Appellant, v. CLARKSVILLE DEPARTMENT OF ELECTRICITY, Kennon Construction Company, and Cincinnati Insurance Company, Defendants/Appellees. 84-23-II 707 S.W.2d 1 |
| Court | Tennessee Court of Appeals |
Robert Clive Marks, Albert P. Marks, Marks, Marks, & Shell, Clarksville, for plaintiff/appellant.
A. Scott Derrick, Dodson, Harris, Robinson & Aden, Nashville, for defendants/appellees.
This case involves a contractor's claim for delay damages arising out of the construction of the Clarksville Department of Electricity's new office building and warehouse. Moore Construction Company filed this action in the Law and Equity Court for Montgomery County based alternatively on contract and quasi-contract theories against the Clarksville Department of Electricity, the Kennon Construction Company (a co-prime contractor), and the Cincinnati Insurance Company (Kennon's bonding company). Following a trial without a jury, the trial court entered a judgment on January 9, 1984, wherein it awarded Moore Construction Company $2,719.75 in damages against the Clarksville Department of Electricity and dismissed its actions against the Kennon Construction Company and the Cincinnati Insurance Company. Moore Construction Company has duly perfected this appeal. For the reasons stated herein, we modify the judgment of the trial court.
In 1980, the Clarksville Department of Electricity [hereinafter referred to as the "Department"] embarked upon a project to construct a new office building and general warehouse on Highway 79-N in the St. Bethlehem community of Clarksville. The Department proceeded to retain two separate design firms to develop plans for the project. On November 20, 1980, it hired Clarksville Engineering Services, Inc. [hereinafter referred to as "Clarksville Engineering"] to prepare the plans and specifications for the site preparation and other exterior work. It also retained Rufus Johnson and Associates to design the office building and warehouse.
Once both sets of plans were completed, the Department decided to proceed by hiring two different prime contractors, one to perform the site preparation and other exterior work and the other to construct the office building and warehouse. On March 17, 1981, it entered into a standard form contract 1 in the amount of $469,747.55 with the Moore Construction Company of Clarksville [hereinafter referred to as "Moore"] to perform the site preparation and other exterior work. The Department gave Moore its notice to proceed immediately because a portion of the site preparation work was required to be completed before the other prime contractor could begin constructing the office building and warehouse. Moore began to work as soon as it received the notice to proceed.
On May 29, 1981, the Department entered into a second standard form contract 2 in the amount of $1,132,477 with the Kennon Construction Company of Nashville [hereinafter referred to as "Kennon"] to construct the office building and general warehouse. Following the accepted practice of the construction industry and pursuant to Tenn.Code Ann. Sec. 12-4-201 et seq., Kennon furnished the Department with a standard form performance bond and a standard form labor and material payment bond 3 each issued by the Cincinnati Insurance Company [hereinafter referred to by name or as the "bonding company"] to assure Kennon's complete and satisfactory performance of its contractual obligations to the Department.
Following the execution of Kennon's contract, all parties, including the Department, both general contractors, and both design firms, held a preconstruction conference at the job site to discuss the sequence of the work. In general terms, they agreed upon the work Moore would complete before Kennon started its work and upon the manner in which the two contractors would coordinate their work. After this meeting, all parties understood that Moore would be able to complete only part of its work before Kennon started construction and that Moore would be able to complete the remainder of its work only after Kennon had constructed most of the office building and warehouse. The parties also agreed upon the areas at the job site where Kennon and its subcontractors would store their equipment and materials in order to avoid interfering with the work that Moore was doing. Based upon this meeting and the terms of its contract, 4 Moore expected that its work would be substantially complete on October 26, 1981.
The Department gave Kennon its notice to proceed on June 22, 1981. Kennon began to work soon thereafter; however, its work began to bog down several months later when it experienced problems on the job. These problems were not due to the manner in which Moore was performing its work but rather were caused by the defective work of Kennon's masonry subcontractor and by the installation of a defective roof on the warehouse portion of the project. The delay caused by these problems as well as delays caused by the weather put Kennon substantially behind schedule, and, therefore, it was unable to complete enough of its work to permit Moore to finish the remainder of its work within the time allowed by Moore's contract with the Department.
Beginning in September, 1981, Moore began to make a series of complaints that it could not complete its work because of Kennon's delay in performing its work and because Kennon and its subcontractors were not using the areas designated for storage of materials and equipment but rather were storing their equipment and materials adjacent to the building. This, coupled with the construction trash being strewn in the construction area, prevented Moore from completing its work.
As a result of Moore's concerns, the parties conducted a meeting on the job site on September 14, 1981, to discuss a revised schedule for completing the work. As a result of this meeting, the parties agreed to adjust the schedule to allow for the delays they had already experienced. While no written change order altering the time for performance 5 appears to have been prepared, the project manager prepared a memorandum of this meeting on September 15, 1981, stating that the parties had agreed to extend Moore's time to complete the paving portion of its work until the end of November, 1981.
Kennon continued to experience delays caused by its own subcontractors following this meeting, and Moore continued to be prevented from completing its work even in accordance with the revised schedule. At Moore's request, another meeting was held at the job site on December 15, 1981, to discuss this problem. At that meeting, like other meetings, Kennon assured Moore that the project would be ready for them to return to work "within a few days." It was not.
During the period of delay commencing approximately in September, 1981, when Moore was unable to work, it was required to maintain certain of its supervisory employees on the project on a part-time basis to make sure that the work it had already done was protected. On several occasions, Moore moved its workers back onto the project based upon Kennon's assurances that it could begin work only to find that it could not proceed. Because of Kennon's repeated assurances that it would be able to begin work again in short order and in order to be able to resume its work on short notice, Moore was also required to leave certain pieces of equipment at the job site and was prevented from moving them to other job sites where they could be used while Kennon was completing its work.
Finally, in the Spring of 1982, Clarksville Engineering, 6 on behalf of the Department, instructed Moore to go back to work and also directed it to perform certain extra work consisting of cleaning up and removing trash that Kennon had refused to remove. 7 This was necessary before Moore could complete its work, and Moore performed this extra work with all the parties' knowledge and without the preparation of a formal change order. With regard to payment for this extra work, Moore's president testified:
And this is the bill that we kept up with under instructions from Vic Albright [the owner of Clarksville Engineering] with the Department of Electricity to keep up with our time and go on and get the job done.
Moore completed this extra work as well as the other work it was required to perform in July, 1982. 8
Following the completion of its work, Moore prepared its final monthly estimate of work completed covering the period through August 31, 1982 [hereinafter referred to as "Estimate No. 10"]. While a portion of this estimate dealt with work completed pursuant to the contract, it also contained Moore's request for the payment of $21,991.25 which represented the cost of the extra work it was requested to do as well as the increased costs it had incurred as a result of Kennon's delays. 9 Clarksville Engineering approved Estimate No. 10 for payment in its entirety. 10
Moore, by letter dated September 29, 1982, transmitted this estimate to the Department. The letter said, in part:
We were delayed as you know by the contractors you employed to construct the building. Because they did not meet the proposed building schedule, we were delayed approximately ten months.
As we had no control of the building contractor or his work and our contract is with the Department of Electricity, it is therefore necessary for us to make this request for payment of you.
The Department received this request for payment and prepared its response which was contained in a letter to Moore dated September 29, 1982. This letter, in part, stated:
After having let our attorney review both the estimate for billing and your contract with the CDE, we are backing out of estimate No. 10, the items listed below, and giving you the status of each.
Item No. 1. ($2...
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