Pioneer Roofing Co. v. Mardian Const. Co., s. 1
| Citation | 733 P.2d 652,152 Ariz. 455 |
| Decision Date | 25 November 1986 |
| Docket Number | CA-CIV,Nos. 1,s. 1 |
| Court | Court of Appeals of Arizona |
| Parties | , 38 Ed. Law Rep. 331 PIONEER ROOFING COMPANY, an Arizona corporation, Plaintiff-Appellee, v. MARDIAN CONSTRUCTION COMPANY, an Arizona corporation, Defendant- Appellant/Third-Party Plaintiff-Appellee/Third-Party Plaintiff-Cross Appellee, v. WESTERN WOOD STRUCTURES, INC., an Oregon corporation, Third-Party Defendant- Appellee/Third-Party Defendant-Cross Appellant, Rossman & Partners, an Arizona general partnership, Third-Party Defendant- Appellee, Board of Regents, Third-Party Defendant-Appellant. 7872, 1 7950. |
I. FACTS
In 1975, the Arizona Board of Regents (the Board) entered into a contract with Mardian Construction Company (Mardian) for the construction of a multipurpose facility called the "Ensphere" to be located on the Northern Arizona University campus in Flagstaff, Arizona. The facility, a sports, cultural, and recreational stadium, features a glue-laminated dome constructed primarily of wood. The contract between the Board and Mardian is composed of standard agreement forms issued by The American Institute of Architects and numerous addenda. These forms and addenda will be collectively referred to as "general contract documents" throughout this opinion. Mardian, as a result of these general contract documents, entered into various subcontract agreements. Two of the subcontractors were Western Wood Structures, Inc. (Western Wood) and Pioneer Roofing Company (Pioneer).
Western Wood agreed to provide the structural design and complete installation of the dome's glue-laminated structural system and its wood decking. Pioneer's subcontract with Mardian stated that it would provide all of the labor and materials necessary to construct the entire roofing application for the dome. Pursuant to express provisions of the subcontract agreement, Pioneer was to install the roofing application in strict accordance with the directions of the Flintkote Company (Flintkote), the manufacturer of the monoform roofing material used on the dome.
Rossman & Partners (Rossman), another party to this appeal, was the architectural firm retained by the Board to provide the working drawings and specifications for the facility and general administration of the construction contract. The parameters of Rossman's duties as project architect were set forth in Article 2 of the Board's contract with Mardian, and in a separate contract entered into by the Board and Rossman.
During the construction of the facility, problems arose and Pioneer incurred work and expenses which were not contemplated in the original subcontract agreement.
Only two items of extra work, reroofing the dome's cupola and perimeter, which will be discussed in detail later in this opinion, are relevant to the resolution of particular issues raised in this appeal.
Most of Pioneer's claims for extra work were submitted to Mardian by letter dated June 30, 1979 and denominated as Pioneer's final billing. Mardian claims that it did not receive this letter until November 1979. Mardian submitted Pioneer's claims to Rossman in November 1979 for the issuance of a change order increasing the contract price to an amount sufficient to cover the claims. Rossman declined to issue the change order. Pursuant to the procedures outlined in A.R.S. § 12-821, Mardian then presented Pioneer's claims for extra compensation to the Board, which disallowed the claims.
Meanwhile, Pioneer had filed a complaint against Mardian alleging negligence and breach of contract. Pioneer claimed that it had performed extra work (emergency and corrective repair work) at Mardian's direction for which it was entitled to additional compensation.
Mardian filed its answer and a third-party complaint naming Western Wood and Rossman as third-party defendants. Mardian later filed an amended third-party complaint that named the Board as an additional third-party defendant. Mardian's amended third-party complaint alleged that Rossman and the Board were negligent, that the Board was obligated by contract to increase the contract price, and that Western Wood was negligent, breached its contract, and was liable to Mardian for indemnification.
Thus were the five parties drawn into the vortex of extensive discovery and a month-long jury trial, involving claims of $109,805.96, or approximately 1.4% of the $7,800,000 contract price. It is readily apparent that with the five parties protecting their interests, the expenditures of attorneys' fees would quickly escalate and render the case impossible to settle. Although various arbitration clauses are in the contract documents, the parties eschewed arbitration to resolve this case.
The trial court granted directed verdicts for Mardian as to the negligence claims in Pioneer's complaint and for Rossman, the Board and Western Wood as to Mardian's claims of negligence. Rossman was dismissed from the lawsuit. The jury verdicts are as follows: (1) $63,015.69 for Pioneer and against Mardian; (2) $51,261.37 for Mardian and against the Board; and (3) $3,292.00 for Mardian and against Western Wood. The net result is that less than $64,000 is changing hands. 1
The trial court, expressly to aid appellate review, wrote a lengthy, detailed minute entry on March 30, 1984 awarding costs and attorneys' fees, and set forth its method for determining and allocating these awards. The court, accepting as reasonable the amounts submitted for attorneys' fees, applied a "percentage of success" formula for awarding fees and costs in accord with A.R.S. §§ 12-341 and -341.01, which permit the court to award fees and costs to "the successful party" or parties. The awards coincide with the percent of claimed damages awarded by the jury. For example, Pioneer requested approximately $86,500.00 from Mardian; the jury verdict was for $63,015.69, a 73% recovery against Mardian. Pioneer's percentage of success against Mardian was 73%, so Pioneer was awarded 73% of its attorneys' fees and costs. Since Pioneer requested attorneys' fees from Mardian in the amount of $100,624.50 and costs of $4,004.85, the court awarded Pioneer 73% of each sum respectively, or $78,455.88 and $2,923.54.
Mardian was allowed to pass some of the awards against it through to the Board and to Western Wood. For example, as to the Board, Mardian requested that the same relief obtained by Pioneer against Mardian be granted to Mardian against the Board. Since the trial court determined that Mardian was 85.8% successful against the Board, it awarded Mardian 85.8% of $146,674.63 (the total of $73,455.88 which Mardian had to pay Pioneer and $73,218.75 incurred by Mardian to its own attorneys), or $125,846.83. The same allocation was made regarding costs.
The results of the court's method of allocation are summarized as follows:
I. Attorneys' Fees
---------------
TO FEES SUCCESS FEES FROM
REQUESTED % AWARDED
-------------------------------------------------------------------------------
1. Pioneer $ 100,624.50 73 $ 73,455.88 Mardian
*
2. Western Wood 51,330.00 93.6 48,044.88 Mardian
3. Rossman 18,970.00 100 18,970.00 Mardian
4. Mardian a) 73,218.75 (requested by Mardian against
Western Wood and the Board)
+ 73,455.88 (fees awarded to Pioneer against
* Mardian)
----------
$ 146,674.63 6.4 9,387.18 Western
Wood
b) 146,674.63 85.8 125,846.83 The Board
II. Costs
----
TO COSTS SUCCESS COSTS FROM
REQUESTED % AWARDED
-------------------------------------------------------------------------------
1. Pioneer $ 4,004.85 73 $ 2,923.54 Mardian
**
2. Western Wood 2,876.15 93.6 2,692.08 Mardian
3. Rossman 2,644.20 100 2,644.20 Mardian
4. Mardian 4,476.75 (requested by Mardian against
Western Wood and the Board)
+ 2,923.54 (costs awarded to Pioneer against
** Mardian)
$ 7,400.29 6.4 473.62 Western
Wood
b) 7,400.29 85.8 6,349.45 The Board
* The same $73,455.88 in attorney's fees awarded to Pioneer against Mardian
is "passed through" and awarded to Mardian against the Board.
** The same $2,923.54 in costs awarded to Pioneer against Mardian is "passed
through" and awarded to Mardian against the Board.
The Board's appeal (1 CA-CIV 7872) is taken from the judgment, jury awards and the awards of attorneys' fees and costs against the Board and in favor of Mardian. Mardian...
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