Roberts & Schaefer Co. v. Hardaway Co., 97-2664
| Citation | 152 F.3d 1283 |
| Decision Date | 31 August 1998 |
| Docket Number | No. 97-2664,97-2664 |
| Parties | 12 Fla. L. Weekly Fed. C 15 ROBERTS & SCHAEFER CO., Plaintiff-Counter-Defendant-Appellee, Cross-Appellant, v. HARDAWAY CO., a Georgia corporation, Defendant-Counter-Claimant, Appellant-Cross-Appellee. HARDAWAY CO., a foreign corporation, Plaintiff-Appellant, Cross-Appellee, v. ROBERTS & SCHAEFER COMPANY, a foreign corporation, Defendant-Appellee, Cross-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (11th Circuit) |
John H. Rains, III, Annis, Mithcell, Cockey, Edwards & Roehn, P.A., Tampa, FL, Richard T. Earle, Jr., Earle & Earle, St. Petersburg, FL, Joseph B. Haynes, John C. Richter, Robert R. Ambler, Jr., King & Spalding, Atlanta, GA, for Hardaway Co.
Stephen O. Decker, Charles Thomas Davidson, McWhirter, Reeves, McGlothlin, Davidson, Riff & Bakas, P.A., Tampa, FL, for Roberts & Schaefer Co.
Appeals from the United States District Court for the Middle District of Florida.
Before DUBINA and MARCUS, Circuit Judges, and CLARK, Senior Circuit Judge.
This diversity case arises out of three contracts between Roberts & Schaefer Company ("R & S"), a general contractor, and The Hardaway Company ("Hardaway"), a subcontractor, concerning construction of a phosphate beneficiation plant for Mobil Mining & Minerals Co. ("Mobil"). Following a jury trial before the magistrate judge, the court entered judgment for Hardaway on two of the contracts, and judgment for R & S on the third. On appeal, Hardaway contends that the magistrate judge erred in permitting R & S to take advantage of the unilateral mistake doctrine with respect to one of the contracts and further asserts that the trial court incorrectly applied the doctrine in this case. R & S, meanwhile, cross-appeals and challenges the damages awarded to Hardaway on one of the other contracts. We find that the magistrate judge acted within his discretion when he applied the unilateral mistake doctrine in this case. We also conclude that the damages award to Hardaway is not in error. Accordingly, we affirm the judgment.
A detailed review of the facts is necessary to understand our holding. Mobil engaged R & S to design and build a phosphate beneficiation plant for an initial lump sum of approximately $44,300,000. In accordance with Mobil's arrangement with R & S, construction was to proceed on a "fast track." In the construction business, this means that construction commences under a schedule of simultaneous design, building, and construction. In other words, in this case, R & S was to begin construction before it completed the design and finalized a set of fully coordinated plans.
Consistent with fast-track construction, prior to finishing the design of the plant, R & S awarded three subcontracts to Hardaway. Specifically, and in the order of award, R & S and Hardaway entered into subcontracts for (1) structural steel/mechanical erection ("703 Contract"), (2) underground piping ("707 Contract"), and (3) above-ground piping ("712 Contract"). Although only the 712 and 703 Contracts are at issue on appeal, we review formation of all three contracts to establish the parties' pattern of doing business.
Each of the three Contracts awarded contained engineering plans and specifications comprising hundreds of pages. The substance of the agreement between the parties, however, was contained within the Construction Agreement, which was nearly identical in all three Contracts. Among other relevant provisions, the Construction Agreements provided as follows:
ARTICLE II: PERFORMANCE OF THE WORK BY CONTRACTOR
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2.3 Contractor shall employ sufficient labor and supervision to work as many shifts per week as necessary to complete the various components of the work by the interim completion dates specified in the agreed upon Schedule....
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5.1 Contractor shall submit to Company a proposed Work Schedule for the Work set out in a form in conformance with the Specifications.
5.2 After review and approval of the proposed Work Schedule by Company, the Schedule shall be binding on both parties, and shall be changed only in conformance with the provisions of this Agreement.
5.3 It is further agreed that time is of the essence of each and every portion of this Agreement and of the Specifications wherein a definite and certain length of time is fixed for the performance of any act whatsoever; and, where an additional time is allowed for the completion of any Work, the new time limit fixed by such extension shall be of the essence of this Agreement. If Contractor fails to meet any deadline set forth in the Contract Documents, Contractor shall be liable to Company for any excess costs incurred which are attributed to Contractor's failure.
* * *
7.1 Company may, at any time, make additions, deletions, or changes in the Work of either a major or a minor nature. All such modifications shall be authorized by written change orders.
* * *
7.9 If any dispute shall arise under this Agreement, Contractor shall continue to execute the work pending determination thereof unless requested by the Construction Manager or Company to suspend or terminate the Work or any portion thereof.
12.1 Company may, without limitation or exclusion of any other remedy, terminate Contractor's right to perform the Work, if:
(a) Contractor shall fail to:
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12.5 If the Company terminates Contractor's right to perform the Work asserting one of the grounds set out in Paragraph 12.1 and those grounds are subsequently determined to be inapplicable, Company's action shall then be deemed to be a termination pursuant to Article XIII.
13.1 Company may terminate this Agreement for its convenience on giving written notice to Contractor. Contractor shall stop all Work on the date specified in the notice, and Company shall pay Contractor for:
(a) All Work satisfactorily performed to date of termination, and
(b) All actual and reasonable costs incurred by Contractor as a consequence of the termination.
Company shall [ ] not be liable to pay any bonus, damage or other claim asserted by Contractor for its expected profit on the uncompleted portion of the Work.
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When R & S invited Hardaway to bid on the 703 Contract, Hardaway responded with a written, signed bid and a form showing exceptions or clarifications to the bid drawings and specifications. A post-bid/pre-award meeting occurred between R & S and Hardaway. On March 9, 1994, R & S awarded the 703 Contract to Hardaway by signed letter accepting a bid of $2,497,000, and stating that a formal contract would be signed later. Hardaway began work on March 9. On April 6, 1994, it submitted a pay application seeking $152,550. The parties signed a formal contract the same day, with an "effective" date of March 8, 1994, corresponding to the date of oral notification of the award.
The 703 Contract was bid and accepted on a lump-sum basis. For a lump sum, Hardaway was to employ all sufficient labor and supervision to work as many shifts as necessary to complete the work by the interim completion dates. Hardaway agreed to submit a critical path method ("CPM") schedule. A CPM is a standard construction device used to plan the activities of a construction project in a logical, orderly sequencing manner citing durations for the different activities from the beginning of the job to the end. A CPM is created by dividing the entire project into discrete and quantifiable steps; in turn, each step is allotted an estimated time for completion. Ultimately, each step is arranged into a chronological sequence, thus revealing the anticipated length and structure of the entire construction schedule. In addition to serving as a road map for the contractors to determine when and where their work fits into the overall construction sequence, the CPM also assists contractors in assessing their hiring and material purchasing needs. All milestones and deadlines set for the 703 Contract were to have been set and maintained in Hardaway's CPM schedule. If the work fell behind, R & S had the right to direct Hardaway to take all remedial action necessary, including increasing Hardaway's manpower and requiring extra shifts, to bring the work back on schedule at no additional cost to R & S.
Under the terms of the 703 Contract, R & S had the right to terminate Hardaway's performance on the project for cause or for convenience. If R & S elected to terminate Hardaway for cause and the grounds for termination were later determined to be inapplicable, the wrongful termination of Hardaway for cause automatically became one of convenience under Article XIII of the 703 Contract. Under such circumstances, Hardaway was entitled to receive compensation for all work satisfactorily completed, plus all actual and reasonable costs incurred as a consequence of the termination.
For the 707 Contract, Hardaway submitted its written, signed bid for $922,000 on April 11, 1994. Within the bid, Hardaway set out its written exceptions to the bid drawings and specifications. R & S and Hardaway held a post-bid/pre-award meeting, and, by signed letter dated April 27, 1994, R & S awarded the 707 Contract to Hardaway. The letter indicated that a formal letter would follow. Hardaway commenced work before signing the formal construction agreement, filing a pay application for $200,000 for work through May 31. On June 6, 1994, Hardaway signed the formal 707 Contract. The effective date of the agreement was April 27, 1994, the same date of the 707 Contract award letter.
The parties employed the same pattern for reaching...
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