Scoccolo Const. v. City of Renton
| Decision Date | 26 October 2006 |
| Docket Number | No. 77459-5.,77459-5. |
| Citation | 145 P.3d 371,158 Wn.2d 506 |
| Court | Washington Supreme Court |
| Parties | SCOCCOLO CONSTRUCTION, INC., a Washington corporation, for the use and benefit of CURB ONE, INC., a Washington corporation, Petitioner, v. CITY OF RENTON, a municipal corporation, Respondent. |
John Stephen Riper, Robert Scott Marconi, Stanislaw Ashbaugh LLP, Seattle, WA, for Petitioner.
Roger Allen Myklebust, Robert Richard King, Ryan Swanson & Cleveland PLLC, Seattle, WA, Lawrence J. Warren, Renton, WA, for Respondent.
John P. Ahlers, Leslie C. Clark, Short Cressman & Burgess, PLLC, Seattle, WA, for Amicus Curiae on behalf of Associated General Contractors of Washington and Utility Contractors of Washington.
¶ 1 RCW 4.24.360 invalidates as against public policy "no-damages-for-delay" clauses in construction contracts where the delay is caused by the contractee or "persons acting for" the contractee. Scoccolo Construction, Inc. (Scoccolo) sued the city of Renton (City) for damages stemming from delays in the completion of a street-widening project, including delays caused by utility companies operating under franchise agreements with the City.
¶ 2 The trial court awarded Scoccolo over $1,000,000 in damages and attorney fees. Both parties appealed to the Court of Appeals which affirmed in part and reversed in part.
¶ 3 The primary issue before us concerns a contract between the parties which includes a "no-damages-for-delay" clause pertaining to delays caused by utility companies. Our inquiry is threefold: (1) whether the utilities were "persons acting for" the City under RCW 4.24.360, (2) whether Scoccolo is entitled to recover prejudgment interest on its award for delay damages, and (3) whether Scoccolo is entitled to an award for attorney fees and costs.
¶ 4 We hold Puget Sound Power and Light (Puget) and TCI Cable (TCI) were "acting for" the City under RCW 4.24.360, and therefore Scoccolo is entitled to recover damages for the delays attributable to the utilities. We also hold the trial court properly awarded Scoccolo prejudgment interest on its damage award. Finally, we hold Scoccolo is entitled to attorney fees and costs. Accordingly, the Court of Appeals is affirmed in part and reversed in part.
¶ 5 The City awarded Scoccolo a contract to widen Park Avenue North from two to four lanes. The project necessitated relocating existing utility lines and power poles operated by Puget, TCI, and U S WEST Communications, Inc. (U S West). The contract between the City and Scoccolo provided:
The Contractor shall be entirely responsible for coordination with the utility companies and arranging for the movement or adjustment, either temporary or permanent, of their facilities within the project limits.
Existing utilities for telephone, power, gas, and television cable facilities shall be adjusted by the appropriate utility company unless otherwise noted in the Plans....
No additional compensation will be made to the Contractor for reason of delay caused by the actions of any utility company and the Contractor shall consider such costs to be incidental to the other items of the contract.
¶ 6 Puget and TCI were operating under franchise agreements with the City, which reserved to the City the power to require the utilities to relocate their facilities at their expense in order to accommodate construction projects undertaken by the City. The City's franchise agreement with Puget stated:
Grantee agrees and covenants, at its cost and expense, to protect, support, temporarily disconnect, relocate or remove from any street any of its installations when so required by the City of Renton by reason of traffic conditions, public safety, street vacations, dedications of new rights of way and the establishment and improvement thereof, freeway construction, change or establishment of street grade, or the construction of any public improvement or structure by any Governmental agency acting in a Governmental capacity.
....
In addition to other remedies provided herein, the City reserves and has the right to pursue any remedy to compel and force Grantee ... to comply with the terms hereof and to furnish the services herein called for ....
¶ 7 The City's franchise agreement with TCI stated:
5-17-13: CONSTRUCTION IN RIGHT OF WAY: Whenever, in the sole opinion of the City, any of a franchisee's facilities or equipment need to be relocated or altered due to a construction or repair project by the City in a public way, a franchisee shall move or relocate said facilities or equipment within thirty (30) days from receiving written notice from the City .... Any relocation or alteration of a franchisee's facilities or equipment required under this Section shall be at the sole expense of a franchisee....
....
5-17-33: REVOCATION FOR CAUSE:
A. Default; Plan of Action: If a franchisee wilfully violates or fails to comply with any of the material provisions of this franchise, the City shall give written notice to a franchisee of the alleged noncompliance of its franchise. A franchisee shall have forty five (45) days from the date of notice of noncompliance to cure such alleged default or, if such default cannot be cured within forty five (45) days, to present to the City a plan of action whereby such default can be promptly cured.
B. Revocation; Recovery of Costs: If such default continues beyond the applicable dates agreed to for such cure, the City shall give a franchisee written notice that all rights conferred under this Chapter and its franchise may be revoked or terminated by the Council after a public hearing. A franchisee shall be entitled to not less than thirty (30) days' prior notice of the date, time and place of the public hearing. The City may elect, in lieu of the above and without any prejudice to any of its other legal rights and remedies, to obtain an order from the superior court having jurisdiction compelling a franchisee to comply with the provisions of the franchise and recover damages and costs incurred by the City by reason of a franchisee's failure to comply.
¶ 8 After completing the project, Scoccolo sued the City for breach of contract and delays caused by the utilities. Relying on the contractual language providing "no additional compensation will be made to the contractor for reason of delay caused by the actions of any utility,"1 the City moved for partial summary judgment to dismiss all of Scoccolo's claims based on delays caused by utilities. Scoccolo argued the "no-damages-for-delay" clause was rendered unenforceable by RCW 4.24.360 and asserted the City had breached express and implied duties owed Scoccolo under the contract. The trial court granted the City's motion for partial summary judgment and dismissed with prejudice Scoccolo's claims based on delays caused by the utilities. The parties then moved to dismiss without prejudice their remaining claims under CR 41(a), and Scoccolo appealed the grant of the partial summary judgment directly to this court. The City cross-appealed the trial court's award of $10,000 in attorney fees.2 We transferred the case to the Court of Appeals.
¶ 9 In a published opinion, Division One reversed and remanded. Scoccolo Constr., Inc. v. City of Renton, 102 Wash.App. 611, 9 P.3d 886 (2000) (Scoccolo I). The court concluded that because "[a]s pleaded, these theories are based upon the acts, or failures to act, of the City" the fact the delays were partially attributable to the utility companies "does not shield Renton from potential liability based on its own contractual breaches." Id. at 616, 9 P.3d 886. The court declined to determine whether RCW 4.24.360 invalidated the "no-damages-for-delay" clause, stating such a clause regarding utility companies, even if valid, "does not preclude a contractor from recovering damages from a contractee that are caused by the contractee — whether or not those damages are somehow related to a utility's actions or lack thereof." Id. at 619, 9 P.3d 886.
¶ 10 On remand the City again moved for summary judgment, requesting "an order determining that Renton is not liable for the acts or omissions of either [Puget], [U.S. West], or [TCI] that may have caused delay to [Scoccolo]."3 The City argued the contract placed the burden and risk of any delays caused by utilities on Scoccolo and stated this provision was not invalidated by RCW 4.24.360 because the utilities were not owned by, were not acting for, and were not agents of the City. Scoccolo argued summary judgment was inappropriate because (1) the Court of Appeals held Scoccolo could recover against the City, (2) the utilities were contractors acting for the City, (3) RCW 4.24.360 voided the contractual provision limiting delay damages, and (4) material issues of fact remained. The trial court denied the City's motion for summary judgment and its motion for reconsideration, ruled Puget was "acting for" the City for purposes of RCW 4.24.360, and consequently voided the contractual "no-damages-for-delay" provision as to Puget.
¶ 11 Subsequently the City moved for partial summary judgment declaring U S West and TCI were not "acting for" the City for the purposes of the statute. Scoccolo argued the two utilities were "acting for" the City under the same theories which applied to Puget. Following the disclosure of a franchise agreement between the City and TCI, the City withdrew the part of its motion pertaining to TCI, and the trial court determined TCI was acting for the City. The trial court then denied the City's motion.
¶ 12 At trial, the court instructed the jury:
The Court has determined that Puget Power and TCI were "acting for" the City of Renton on the Park Avenue Project. It is your duty to determine if U.S. West was "acting for" the City of Renton on the Park Avenue Project. US West was acting for the City of Renton if it...
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