The Town of Plainfield v. Paden Eng'g Co. Inc.
| Citation | 943 N.E.2d 904 |
| Decision Date | 29 June 2011 |
| Docket Number | No. 32A04–1005–PL–280.,32A04–1005–PL–280. |
| Parties | The TOWN OF PLAINFIELD, Indiana, Appellant,v.PADEN ENGINEERING CO., INC., Merchants Bonding Company (Mutual), and Everest Reinsurance Company, Appellees. |
| Court | Court of Appeals of Indiana |
OPINION TEXT STARTS HERE
Melvin R. Daniel, William L. O'Connor, James B. Chapman II, Benesch, Friedlander, Coplan & Aronoff, LLP, Indianapolis, IN, Attorneys for Appellant.David J. Theising, Harrison & Moberly, LLP, Indianapolis, IN, James L. Lowry, Kendall Wood Lowry & Kessinger, Danville, IN, Attorneys for Appellees.
The Town of Plainfield (“Plainfield”) appeals two orders of the Hendricks Superior Court, one granting partial summary judgment to Paden Engineering Co., Inc. (“Paden”), and one granting partial summary judgment to Merchants Bonding Company and Everest Reinsurance Company (collectively, “the Sureties”), upon Plainfield's claims for damages for breach of contract and for payment upon a performance bond, respectively.1 We affirm.
Plainfield presents for review the following consolidated and restated issues: 2
I. Whether the trial court erroneously granted partial summary judgment to Paden; and
II. Whether the trial court erroneously granted partial summary judgment to the Sureties.
On July 19, 2002, Plainfield and Paden entered into a Standard Form of Agreement between Owner [Plainfield] and Contractor [Paden] (“the Contract”) 3 whereby Paden would provide a “steel package” 4 for the Plainfield Recreation/Aquatic Center (“the Project”), in exchange for payment of $939,000.00. Paden delivered to Plainfield an AIA Document A312 Performance Bond dated July 22, 2002 issued by Paden as Contractor and Merchants and Everest as Sureties, in the amount of $ 1,173,750.00. The Performance Bond expressly incorporates by reference the terms of the Contract.
Article 8 of the Contract provides that “[t]he Contract may be terminated by the Owner or the Contractor as provided in Article 14 of the General Conditions.” (App.106.) As amended by Supplementary Conditions, Article 14.2.1 of the General Conditions, titled “Termination by Owner for Cause,” provides:
The Owner may terminate the Contract if the Contractor: (1) persistently or repeatedly refuses or fails to supply enough properly skilled workers or proper materials; (2) fails to make payment to Subcontractors for materials or labor in accordance with the respective agreements between the Contractor and the Subcontractors; (3) persistently disregards laws, ordinances, or rules, regulations or orders of a public authority having jurisdiction; or (4) otherwise is guilty of breach of a provision of the Contract Documents.
(App.155–56.) Article 14.2.2 of the General Conditions provides that the Owner is obligated to consult with the Construction Manager and obtain certification by the Architect that sufficient cause exists to justify termination.
Section 3 of the Performance Bond provides that, where there is no Owner default, the Sureties' obligations arise after notice that declaration of contractor default was under consideration, a conference request, a lapse of twenty days, a declaration of default and formal termination, and the Owner's agreement to pay the Contract balance to the Sureties or a selected contractor. Also, the Performance Bond having incorporated the Contract terms, seven days written notice to the Sureties was required. Upon the Owner's exercise of termination procedures, the Sureties were to be afforded options: finance the principal (with Owner consent), takeover completion of the construction contract, tender damages payment to Owner, agree to completion by Owner, or deny liability.
Plainfield also contracted with Sebree & Associates, Inc. to act as Architect on the Project.5 Among other duties, the Architect was to issue a Certificate for Payment or Project Certificate for Payment (indicating that the work had progressed to the point indicated and was of adequate quality) before any installment payment could be made to the contractor.
The working relationship between Plainfield and Paden was contentious, with each contending that the other caused delays. On October 9, 2003, Plainfield issued a Notice of Termination to Paden, stating that the letter constituted Paden's seven-day written notice of termination of the Contract. Written notice was not contemporaneously provided to the Sureties. However, on October 24, 2003, Plainfield issued a letter to the Sureties stating in relevant part:
The Town of Plainfield has been forced to take action to terminate the contract of Paden Engineering Company in regards to the above referenced bonded project. You can expect further information and requests in regards to the above referenced bonds.
(App.247) On October 12, 2004, subcontractor Hoosier Steel, Inc. filed a complaint against Paden and the Sureties.6 Paden filed a third-party complaint against Plainfield. In turn, Plainfield filed a counterclaim against Paden and a third-party complaint against the Sureties. On June 16, 2008, the trial court dismissed Hoosier Steel's complaint.
On November 25, 2008, the Sureties filed a motion for partial summary judgment in their favor. On the same day, Paden and the Sureties jointly filed a separate motion for partial summary judgment. Plainfield filed a cross-motion for summary judgment as to all its claims. The trial court conducted a hearing at which argument of counsel was heard on all pending summary judgment motions.
On March 10, 2010, the trial court entered three orders on the summary judgment motions. The trial court granted the Sureties' motion for partial summary judgment, concluding that they had no obligation under the Performance Bond due to failure of conditions precedent, more specifically, notice and opportunity to mitigate damages. The trial court also granted Paden's motion for partial summary judgment, concluding that Plainfield had not complied with a condition precedent, specifically, obtaining an architect's certification of good cause for termination. Finally, the trial court denied Plainfield's motion for summary judgment. As to each of the partial summary judgment orders, the trial court directed the entry of a final judgment upon an express determination of no just reason for delay, pursuant to Indiana Trial Rule 54(B).
On April 9, 2010, Plainfield filed a motion to correct error. The motion was summarily denied. Plainfield appealed. On motion by Paden and the Sureties, this Court dismissed the portion of the appeal challenging the denial of Plainfield's motion for summary judgment because there was no entry of final judgment. The appeal of the partial summary judgment orders proceeded.
Plainfield is appealing the denial of a motion to correct error, which alleged that the trial court erred in granting Paden and the Sureties' motions for partial summary judgment. We review a trial court's ruling on a motion to correct error for an abuse of discretion. Newland Resources, LLC v. Branham Corp., 918 N.E.2d 763, 772 (Ind.Ct.App.2009).
Summary judgment is appropriate only if the pleadings and designated materials considered by the trial court show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Yates v. Johnson County Bd. of Comm'rs, 888 N.E.2d 842, 846 (Ind.Ct.App.2008). We must construe all evidence in favor of the party opposing summary judgment, and all doubts as to the existence of a material issue must be resolved against the moving party. Id. at 847. We carefully review a grant of summary judgment in order to ensure that a party was not improperly denied his or her day in court. Reeder v. Harper, 788 N.E.2d 1236, 1240 (Ind.2003). The fact that the parties made cross motions for summary judgment does not alter this standard of review. Decker v. Zengler, 883 N.E.2d 839, 842 (Ind.Ct.App.2008), trans. denied.
Finally, we do not owe deference to the findings and conclusions entered by the trial court in a summary judgment order. Myers v. Yoder, 921 N.E.2d 880, 885 (Ind.Ct.App.2010). Although such findings and conclusions may assist our review, we will affirm if the trial court's grant of summary judgment can be sustained on any theory or basis in the record. Id. Summary judgment is especially appropriate in the context of contract interpretation because the construction of a written contract presents a question of law. Von Hor v. Doe, 867 N.E.2d 276, 278 (Ind.Ct.App.2007), trans. denied.
Our Indiana Supreme Court has expressed its commitment to advancing the public policy in favor of enforcing contracts. See Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1129 (Ind.1995). It is in the best interest of the public not to unnecessarily restrict persons' freedom to contract. Id. Accordingly, as a general rule, the law will allow persons of full age and competent understanding the utmost liberty in contracts. Barrington Mgm't Co. v. Paul E. Draper Family Ltd. Partnership, 695 N.E.2d 135, 140 (Ind.Ct.App.1998). Contracts entered into freely and voluntarily will be enforced by the courts. Id.
Our standard of review is de novo. Id. If a contract is ambiguous or uncertain and its meaning must be determined by extrinsic evidence, its construction is a matter for the fact finder. Id. On the other hand, if an ambiguity arises because of the language used in the contract rather than extrinsic facts, its construction is purely a question of law. Id. Reading the contract as a whole, we attempt to determine the intent of the parties at the time the contract was made. Id. We construe the language so as not to render any words, phrases, or terms ineffective or meaningless. Id. Finally, we accept an interpretation of the contract which harmonizes its provisions as opposed to one which causes the provisions to be conflicting. Id.
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