The Blakley Corp. v. Efco Corp.

• Decision Date: 31 August 2006
• Docket Number: No. 49A05-0512-CV-697.,49A05-0512-CV-697.
• Citation: 853 N.E.2d 998
• Parties: THE BLAKLEY CORPORATION, Appellant-Defendant, v. EFCO CORPORATION, Appellee-Plaintiff.
• Court: Indiana Appellate Court

853 N.E.2d 998

THE BLAKLEY CORPORATION, Appellant-Defendant, v. EFCO CORPORATION, Appellee-Plaintiff.

No. 49A05-0512-CV-697.

Court of Appeals of Indiana.

August 31, 2006.

Sydney L. Steele, Reynolds B. Brissenden, Kroger Gardis & Regas, LLP, Indianapolis, IN, Attorneys for Appellant.

Robert S. Schein, Libby Y. Mote, Matthew R. Strzynski, Krieg DeVault LLP, Indianapolis, IN, Attorneys for Appellee.

OPINION

ROBB, Judge.

Case Summary¹

The Blakley Corporation ("Blakley") appeals from the trial court's denial of its motion to correct error in a breach of contract case. Blakley requested that the trial court amend its findings of fact and conclusions thereon by addition of an award to Blakley of markup damages against EFCO Corporation ("EFCO") totaling $76,755.00. By way of cross-appeal, EFCO calls into question the trial court's determination that it was liable for breach of contract, resulting in damages to Blakley in the amount of $307,020.00. We conclude that EFCO has failed its burden of establishing that the evidence does not support the trial court's determination of liability. We also conclude that the trial court sufficiently addressed markup damages when it twice rejected Blakley's claim to them. We therefore affirm.

Issues

Blakley raises two issues for review, which we consolidate and restate as whether the trial court sufficiently addressed the matter of Blakley's entitlement to a twenty-five percent markup on damages awarded by the trial court due to EFCO's breach of contract. EFCO cross-appeals on the issue of its liability for damages.

Facts and Procedural History²

Blakley and EFCO entered into a purchase order agreement during the construction of the Indiana State Museum. Blakley, a subcontractor responsible for the installation and erection of exterior curtain wall,³ windows, and interior storefront glass, ordered the fabrication and delivery of aluminum curtain wall and window frame materials from EFCO. On February 24, 2000, prior to any agreement between the parties, structural drawings were sent to EFCO regarding the curtain wall. On or about March 27, 2000, EFCO submitted a bid to Blakley for this portion of the project based on a standard curtain wall product fabricated by EFCO. Prior to submitting its proposal, EFCO did not review the project's structural drawings, which included deflection requirements.⁴

Several months later, in August of 2000, EFCO's engineering department first reviewed the deflection requirements in the structural drawings in order to produce shop drawings for a deadline of August 29, 2000. It became clear to EFCO that the deflection requirements in the structural drawings far exceeded the capabilities of the standard product EFCO had bid to Blakley. EFCO also claims to have discovered a conflict between the architectural and structural drawings at this time. EFCO failed to notify Blakley of either issue. Because the shop drawings were incomplete and contained incorrect details, aside from the issue of deflection requirements, EFCO missed the deadline for the shop drawings.

EFCO communicated with Blakley regarding the deflection requirements by a letter dated September 14, 2000, which requested clarification of an up/down arrow placed in front of deflection values in the structural drawings. EFCO did not apprise Blakley of any apparent conflict between the requirements and its standard product, or between the architectural and structural drawings. Blakley responded by a letter dated September 18, 2000, in which it also offered to coordinate a meeting between EFCO and the architect to discuss outstanding issues. EFCO declined, and later submitted shop drawings on September 29, 2000, one month late. Blakley, EFCO, and the architect met to review the shop drawings, which accommodated the deflection requirements. Deflection was not discussed during the meeting, and the shop drawings were returned to EFCO in early December for revision.

EFCO did not follow the contractual procedure for requesting a change in the structural or aesthetic requirements of the curtain wall system. On January 19, 2001 EFCO made its first mention to Blakley that its standard system would deviate from the project's aesthetic requirements. EFCO considered this letter a request for modification of aesthetic and/or structural specifications. The project architect responded on January 25, 2001, requesting further details on the proposed modifications, and offering to hold a phone conference. EFCO did not pursue the phone conference, and made no attempt to contact the architect before submitting the revised shop drawings on February 9, 2001. Without explanation, EFCO included proposed modifications to the structural and aesthetic requirements. The architect replied on February 26, 2001, again telling EFCO that it needed to explain the proposed modifications, or else he could not respond to EFCO's suggestion that the museum's structural frame be redesigned to support EFCO's standard product, which did not meet the deflection requirements in the project specifications. Blakley and the architect requested that EFCO meet with them to discuss the deflection issues and finalize the shop drawings. EFCO did not do so.

Instead, on March 7, 2001, EFCO sent Blakley a letter including a detailed explanation of its concerns over the deflection requirements as well as proposed modifications. As a result, the architect requested that the project engineer recalculate the deflection requirements. Although not all deflection requirements were reduced to accommodate EFCO's product, the project engineer relaxed some of the deflection criteria of the original structural drawings because EFCO's standard curtain wall system would not meet the specified requirements, and not because these criteria were shown to be incorrect. By early April of 2001, the deflection concerns were resolved.

On April 11, 2001, EFCO signed the purchase order with Blakley, which included delivery dates in May and July of 2001. By May of 2001, the project had progressed to the point where Blakley could begin installing curtain wall. Despite the commitment it had made a month earlier by signing the purchase order, EFCO failed to deliver materials in May of 2001. Blakley reduced the scope of EFCO's responsibilities by taking on aspects of the project itself, hoping to expedite delivery of curtain wall materials. In June of 2001, Blakley was instructed to obtain expedited delivery from EFCO to keep the project on schedule. Blakley demanded firm delivery dates. On June 8, 2001, EFCO faxed a handwritten page including delivery dates later than those previously agreed upon, ranging from July to September of 2001. EFCO later testified that its scheduling department had committed to those dates. Blakley relied on these delivery dates in providing an erection schedule for the curtain wall portion of the project.

EFCO missed all the delivery dates as revised in the June 8 fax, although two of the deliveries were made close to the scheduled dates. Of those materials shipped close to the delivery dates, the entire first delivery contained misfabricated pieces, requiring Blakley to perform modifications in order to use them on the project. EFCO gave Blakley notice in late August of 2001 that it would not meet the revised delivery dates. Without explaining further, EFCO pushed late August and early September deliveries back to October, and was unable to provide shipment dates for other portions of the curtain wall. On September 10, 2001, EFCO's president sent Blakley's president a revised shipment schedule providing that all curtain wall materials would be delivered in October of 2001. Blakley received all remaining materials within a four-week period beginning in mid-October of 2001. Due to the manner of EFCO's performance, Blakley incurred additional expenses for fabrication, field installation, and equipment. Blakley also incurred additional labor expenses due to compression of the curtain wall installation timeframe in order to mitigate the impact upon the larger project's schedule.

In July of 2002, EFCO filed suit against Blakley to recover the unpaid balance of the purchase order price, stipulated by the parties to be $229,879.80. Blakley counterclaimed that EFCO breached the purchase order by failing to timely deliver materials and by providing defective materials, thereby causing Blakley to incur damages exceeding the unpaid balance of the purchase order price.

Prior to a bench trial, the parties requested that the trial court issue written findings of fact and conclusions upon its judgment. Both parties filed proposed special findings. The trial court adopted in large part Blakley's proposed findings and conclusions, but omitted its proposals on Blakley's damages relating to a twenty-five percent markup on costs representing overhead and profit. Concluding EFCO's late deliveries and fabrication errors resulted in a failure to meet its obligations under the purchase agreement, which caused Blakley to incur unanticipated costs, the trial court entered judgment in favor of Blakley in the amount of $307,020.00, offset by the outstanding amount due under the purchase agreement.

Blakley filed a timely motion to correct error, asking the trial court to amend its findings and conclusions to address Blakley's claimed markup damages, an amount totaling an additional $76,755.00. The trial court summarily denied Blakley's motion, and Blakley now appeals. EFCO cross-appeals on the issue of its liability for breach of the purchase agreement.

Discussion and Decision

Because the issue of liability for damages raised by EFCO on cross-appeal may preclude consideration of Blakley's claim for markup damages, we first consider EFCO's argument. When the trial court enters specific findings and conclusions with respect to a final judgment, we apply a two-tiered standard of review. S.C. Nestel, Inc. v. Future Constr., Inc., 836 N.E.2d 445, 449 (Ind.Ct.App.200...