Quinn Constr., Inc. v. Skanska U.S. Bldg., Inc.

• Decision Date: 03 August 2010
• Docket Number: Civil Action No. 07-406
• Citation: 730 F.Supp.2d 401
• Parties: QUINN CONSTRUCTION, INC. v. SKANSKA USA BUILDING, INC., et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

730 F.Supp.2d 401

QUINN CONSTRUCTION, INC.
v.
SKANSKA USA BUILDING, INC., et al.

Civil Action No. 07-406.

United States District Court,
E.D. Pennsylvania.

Aug. 3, 2010.

730 F.Supp.2d 403

B. Christopher Lee, Christopher I. McCabe, Jacoby Donner PC, Philadelphia, PA, Cary L. Flitter, Lundy Flitter Beldecos & Berger PC, Narberth, PA, for Plaintiff.

Alan Winkler, Bruce D. Meller, Peckar & Abramson, P.C., River Edge, NJ, Robert D. Banfield, Peckar & Abramson, Washington, DC, George T. Reynolds, Steven G. Bardsley, Powell Trachtman Logan Carrle Bowman, King of Prussia, PA, for Defendants.

MEMORANDUM

McLAUGHLIN, District Judge.

This is a dispute over the construction of Skirkanich Hall, a bioengineering building owned by the University of Pennsylvania ("Penn"). Quinn Construction, Inc. ("Quinn") has sued the architect Tod Williams Billie Tsien Architects ("TWBTA") and the general contractor Skanska USA Building, Inc. ("Skanska"). Against TWBTA, Quinn claims damages resulting from allegedly incomplete plans and specifications. Against Skanska, Quinn claims unpaid contract balance, unpaid change orders, and damages resulting from delays and disruptions to its work. Skanska has cross-claimed against Quinn for damages resulting from delay to the completion of the project. Skanska has also filed a third-party complaint against Harleysville Mutual Insurance Company ("Harleysville"), seeking payment of two surety bonds that Harleysville issued for Quinn's performance.

Each of these four parties has now filed a motion for summary judgment. The Court herein addresses Harleysville's motion, Quinn's motion, and Skanska's motion.

Harleysville moves for summary judgment on Skanska's claims for payment of the surety bonds. Quinn moves for partial summary judgment, on Skanska's claims for damages related to delays that occurred

730 F.Supp.2d 404

after October 25, 2005. Skanska also moves for partial summary judgment, on Quinn's delay and disruption damages claims and 25 of Quinn's change order claims.

The Court will deny Harleysville's motion for summary judgment, deny Quinn's motion for partial summary judgment, and grant in part Skanska's motion for partial summary judgment.

I. Factual Background

This action concerns the construction of Skirkanich Hall, a bioengineering research building at Penn. Penn, the owner, hired TWBTA as architect for the project. In a separate agreement, Penn hired Skanska as construction manager for the project. Skanska in turn hired Quinn to perform concrete work on the project, under two separate contracts ("the subcontracts"). Harleysville issued two surety bonds for Quinn's performance under the subcontracts.

Construction of Skirkanich Hall began in August 2004 and was substantially complete by June 2006. Facts surrounding the construction process are complex and disputed. The Court will address these facts as part of its summary judgment analysis.

A. The Terms of the Subcontracts

The parties do not dispute the terms of the two agreements between Skanska and Quinn. Under the first agreement (the "Foundation Subcontract"), Quinn agreed to perform concrete work on Skirkanich Hall's foundation for $913,920 payment from Skanska. Under the second agreement (the "Building Subcontract"), Quinn agreed to perform concrete work on the building's superstructure for $5,903,760 payment from Skanska. The Foundation Subcontract and the Building Subcontract were both drafted by Skanska, and are substantially similar. The subcontracts cover (among other matters) the scope of the work, scheduling and acceleration, liability for delays and disruptions to the project, and payment for change orders.

Both of the subcontracts are in 31 articles, each article divided into several sections. The subcontracts' first article is a brief "Description of Work." Section 1.2 provides that Quinn, in exchange for payment from Skanska, "shall perform the Work in strict compliance with the drawings, specifications, addenda and bulletins thereto" prepared by TWBTA. Section 1.4 provides that the drawings "may not be fully developed," and that Quinn nevertheless "agrees to perform all work not specifically mentioned in the aforementioned documents but which is required to make the Work complete" according to Skanska, TWBTA, and Penn.

Article 3 of the subcontracts gives Skanska absolute and exclusive control over the project's schedule. Under section 3.4, "[t]he scheduling of all construction operations at the Project, including the Schedule, shall be at the option of Skanska," and under section 3.2 "[t]he Schedule may only be modified by Skanska, at its sole discretion, and [Quinn] agrees to comply with such modification."

Article 3 also covers overtime work. Section 3.7 provides that "should Skanska judge that [Quinn] is delaying the process of the Work or not complying with the Schedule," Quinn must "employ additional workmen, equipment and supplies, as required, so as to bring the Work into conformity with the Schedule or as required by Skanska." Section 3.7 gives Skanska the right to accelerate Quinn's work, at Quinn's "sole expense," if Skanska determines that such acceleration "is necessary to comply with the Schedule" given delays caused by Quinn or simply Quinn's failure

730 F.Supp.2d 405

"to be in conformity with the Schedule." Section 3.9 states that "[i]f the progress of the Work or of the Project is delayed not because of any fault or neglect" of Quinn, or "for any other reason Skanska deems appropriate," Skanska "may direct [Quinn] to work overtime and if so directed [Quinn] shall work said overtime and Skanska will pay [Quinn] for such overtime in an amount equal to the actual additional wages paid, if any, at rates which have been approved in writing by Skanska."

Article 4 covers "Price and Payments" and, in relevant part, entitles Skanska to withhold payment from Quinn for departing from the contract terms. Section 4.6 states that if Quinn "fails to perform," Skanska has the right to "retain from any payment" an amount it deems sufficient to compensate itself and Penn for "any and all losses, liability, damages, costs and expenses" sustained "in connection therewith."

The subcontracts go on to provide that Skanska is not liable to Quinn for damages caused by delays or disruptions to Quinn's work on the project. Under section 5.2, Quinn agrees not to "seek compensation or damages from Skanska" for delay to or interference with its work "by any other subcontractor or material supplier on the Project." Under section 5.5, Quinn accepts "any and all risks of increase in the price of labor and materials," and agrees not to claim any such price increases against Skanska. Finally under section 5.4, Quinn agrees that Skanska and Penn are "not liable, absent actual fraud, for any damages or costs due to delays, accelerations, impact, nonperformance, interferences with performance, suspension or changes in the performance or sequence of" Quinn's work. Section 5.4 also provides that Skanska "shall have the right, at any time, to delay, accelerate, or suspend the commencement or execution of the whole or any part of the Work, or vary the sequence or performance thereof, without compensation to [Quinn]" other than a time extension "for a period equal to such delay or suspension."

Article 9 of the subcontracts is devoted to "Change in the Work," and covers Quinn's right to payment for extra work items, or change orders. Section 9.5 provides that Skanska may submit disputed change orders to Penn for payment, and Quinn is then bound both "by the determination of [Penn]" and to "accept such payment, if any, as specified by [Penn] as full and final payment for all claims submitted." Section 9.5 specifies that if Penn determines "the work is not an extra, or awards no payment for such," Quinn must "accept said determination and payment as payment in full." Section 4.8 states generally that "Skanska shall be under no obligation to pay [Quinn] for any work done on this Project, until and unless Skanska has been paid therefor by [Penn]," and that Quinn "expressly accepts the risk that it will not be paid for work performed by it in the event that Skanska, for whatever reason, is not paid by [Penn] for such Work."

B. The Terms of the Surety Bonds

The Foundation Subcontract and the Building Subcontract are each the subject of a performance bond issued by Harleysville Mutual Insurance Company. These two performance bonds were also drafted by Skanska and are, like the subcontracts, substantially similar. Each bond incorporates the terms of the subcontract it insures.

The bonds first create an obligation owed by Quinn and Harleysville to Skanska and Penn. Each bond states that Quinn, as principal, and Harleysville, as surety, are "jointly and severally bound" unto Skanska and Penn in a sum equal to the

730 F.Supp.2d 406

value of the underlying subcontract ($913,920 for the bond insuring the Foundation Subcontract, and $5,903,760 for the bond insuring the Building Subcontract).

The bonds then set out conditions relieving Quinn and Harleysville of their obligation to Skanska and Penn. Each bond states that if Quinn (1) performs "every and all of the provisions of the Contract" with Skanska "in the manner and within the time therein set forth," (2) holds Skanska and Penn harmless from "any loss or damage occasioned to any person or property" in the course of performance, and (3) indemnifies Skanska and Penn against "any loss, liability, cost, damage or expense, including attorney's fees, by reason of the failure of performance," then Quinn and Harleysville's obligation "shall be void." Otherwise, their obligation "shall be and remain in full force and effect."

The last provision of the bonds is that "[i]t is understood and agreed that a Dual Obligee Rider is attached." Each Dual Obligee Rider conditions Harleysville and Quinn's indemnity obligations on Penn and Skanska's adherence to the terms of the subcontracts. The Riders provide "there shall be no...