United States v. Turner Construction Company

• Decision Date: 26 December 2019
• Docket Number: No. 18-1703,18-1703
• Citation: 946 F.3d 201
• Parties: The UNITED STATES of America for the Use and Benefit of Modern Mosaic, Ltd., a foreign business corporation, Plaintiff – Appellant, v. TURNER CONSTRUCTION COMPANY, a New York corporation; Travelers Casualty and Surety Company of America; Federal Insurance Company; Fidelity & Deposit Company of Maryland; Zurich American Insurance Company; Liberty Mutual Insurance Company; the Continental Insurance Company, Defendants – Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

946 F.3d 201

The UNITED STATES of America for the Use and Benefit of Modern Mosaic, Ltd., a foreign business corporation, Plaintiff – Appellant,

v.TURNER CONSTRUCTION COMPANY, a New York corporation; Travelers Casualty and Surety Company of America; Federal Insurance Company; Fidelity & Deposit Company of Maryland; Zurich American Insurance Company; Liberty Mutual Insurance Company; the Continental Insurance Company, Defendants – Appellees.

No. 18-1703

United States Court of Appeals, Fourth Circuit.

Argued: October 31, 2019

Decided: December 26, 2019

ARGUED: Edward J. Sheats, SHEATS & BAILEY, PLLC, Liverpool, New York, for Appellant. Michael David Griffith, Jr., THOMAS COMBS & SPANN, PLLC, Charleston, West Virginia; Douglas Leo Patin, BRADLEY ARANT BOULT CUMMINGS, Washington, D.C., for Appellees. ON BRIEF: Jeffrey D. Van Volkenburg, Allison S. McClure, MCNEER HIGHLAND MCMUNN & VARNER, Clarksburg, West Virginia, for Appellant. Michael S. Koplan, BRADLEY ARANT BOULT CUMMINGS, Washington, D.C., for Appellees.

Before WYNN, QUATTLEBAUM, and RUSHING, Circuit Judges.

Affirmed by published opinion. Judge Quattlebaum wrote the opinion, in which Judge Wynn and Judge Rushing joined.

QUATTLEBAUM, Circuit Judge:

One of our country’s bedrock principles is the freedom of individuals and entities to enter into contracts and rely that their terms will be enforced.¹ Consistent with that principle, the Federal Bureau of Investigation (the "FBI") entered into a contract (the "Prime Contract") with Turner Construction Company ("Turner"), a large general contractor, to build a major FBI facility in West Virginia. Turner then retained various subcontractors to handle particular parts of the project. One of those subcontractors was Modern Mosaic Ltd. ("Modern"), a firm specializing in precast concrete. Turner and Modern entered into a subcontract (the "Subcontract") outlining Modern’s role in the construction of the FBI facility.

During and after Modern’s work on this project, disputes between it and Turner arose. After attempts to resolve the disputes failed, Modern sued Turner in the United States District Court for the Northern District of West Virginia.

Modern asserts four main claims: (1) it incurred increased costs because Turner improperly failed to "field verify" the existing garage; (2) it was improperly required to incur the cost of a full-time engineer or licensed surveyor on site; (3) it incurred increased costs because of the deficient soil remediation work of another subcontractor; and (4) Turner should be estopped from denying Modern’s claims because of its improper conduct regarding a mediation between the FBI and Turner.

Properly applying West Virginia law,² the district court rejected all of Modern’s claims based on the plain language of the Subcontract. First, it granted Turner summary judgment on the field verification claim. Then, after a bench trial, it ruled in favor of Turner on the remaining claims. We agree with the district court. These two sophisticated businesses entered into a detailed contract spelling out their rights and responsibilities in the construction of the FBI facility. The provisions of that contract directly address the very issues raised in this appeal. They also compel the result reached by the district court. Thus, we affirm.

I. Field Verification

The bulk of Modern’s contractual responsibilities consisted of fabricating and installing precast concrete panels on an existing parking garage at the FBI facility. Modern prepared the panels in accordance with the dimensions called for in the engineering drawings. During its work, however, Modern discovered that the parking garage was not built to the specified dimensions. As a result, the panels did not fit to the garage. To correct this problem, Modern performed remedial work on the panels costing an additional $975,072.31.

Modern argues that Turner was contractually required to field verify that the parking garage was built to the dimensions of the engineering drawings. If done properly, Modern claims, this would have identified the discrepancy between the as-built dimensions and the contractual dimensions before Modern prepared the panels. According to Modern, proper verification would also have prevented the remedial costs it incurred. The district court rejected this claim finding the contractual documents required Modern, not Turner, to conduct field verification.

A.

Modern first challenges the district court’s grant of summary judgment to Turner based on its conclusion that the contracts unambiguously required Modern to field verify the structure. Modern claims that the contracts are ambiguous regarding the responsibility for field verification and that extrinsic evidence supports its interpretation.

This Court reviews a district court’s grant of summary judgment de novo. Variety Stores, Inc. v. Wal-Mart Stores, Inc. , 888 F.3d 651, 659 (4th Cir. 2018). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id . (quoting Fed. R. Civ. P. 56(a) ). In making this determination, "courts must view the evidence in the light most favorable to the nonmoving party and refrain from weigh[ing] the evidence or mak[ing] credibility determinations." Id. (internal quotation marks omitted) (quoting Lee v. Town of Seaboard , 863 F.3d 323, 327 (4th Cir. 2017) ).

In challenging the district court’s summary judgment decision regarding field verification, Modern points to the Prime Contract. Section 010100 of the Prime Contract required Turner to verify and accept the work of previous contractors and compare the contract documents and the as-built conditions for discrepancies. Further, section 010400 required Turner to verify all existing structures and dimensions as shown on the documents. Relying on these provisions, Modern argues Turner was responsible for field verification.

However, Modern ignores the way these two provisions relate to the rest of the contracts. As the district court properly noted, the Prime Contract contains a "flow down" clause. That provision provides that Modern agreed to be bound by "each and all of the terms and provisions" of the Prime Contract and to assume all of the duties, obligations and responsibilities that Turner assumed toward the FBI. (J.A. 22). Based on this language, Modern was responsible for Turner’s obligations under sections 010100 and 010400 of the Prime Contract.

But beyond the flow down provision in the Prime Contract, the Subcontract expressly placed the responsibility of field verification on Modern. Section AP-1 of the Subcontract specifies that the parking garage was existing construction for which Modern was "required to verify and accept [the] existing conditions" in accordance with the contract documents. (J.A. 85). Further, under section AP-5 of the Subcontract, Turner was not required to guarantee dimensions for Modern. Instead, Modern was "responsible for taking field measurements as may be necessary to establish or verify dimensions prior to production of fabricated items." (J.A. 91). Sections AP-1 and AP-5 make clear that Modern was required to field verify the dimensions of the existing parking garage.

But if somehow there is still any question about Modern’s responsibility for field verification, Articles XI and XIII of the Subcontract eliminate any doubt. Article XI provides that, "[n]otwithstanding the dimension on the Plans, Specifications and other Contract Documents, it shall be the obligation and responsibility of [Modern] to take such measurements as will insure the proper matching and fitting of the Work covered by this Agreement with contiguous work." (J.A. 24). Additionally, Article XIII required Modern, where performance of its work relied on the proper and accurate performance by another subcontractor, to "carefully examine such other work, determine whether it is in fit, ready and suitable condition for the proper and accurate performance of" Modern’s work, and report any defects in such work to Turner. (J.A. 25).

"If a court properly determines that the contract is unambiguous on the dispositive issue, it may then properly interpret the contract as a matter of law and grant summary judgment because no interpretive facts are in genuine issue." World-Wide Rights Ltd. P’ship v. Combe Inc. , 955 F.2d 242, 245 (4th Cir. 1992).

Applying that well-settled principle here, the contractual provisions are clear. As the district court determined, Modern, not Turner, was responsible for field verification. To accept Modern’s position, we would need to rewrite the rights and responsibilities that these two sophisticated businesses agreed to in the Subcontract. That is not our job. See ACA Fin. Guar. Corp. v. City of Buena Vista, Va. , 917 F.3d 206, 216 (4th Cir. 2019) (declining to impose new terms to a contract to save a party from the express terms of its agreement); United States v. Race , 632 F.2d 1114, 1119 (4th Cir. 1980) ("But courts do not write the contracts of parties retroactively, but merely construe the terms of the contract the parties have previously signed."); Kanawha Banking & Tr. Co. v. Gilbert , 46 S.E.2d 225, 236 (W. Va. 1947) ("It is not the province of the court to alter, pervert or destroy the clear meaning and intent of the parties as plainly expressed in the written contract, or to make a new contract for them, by judicial construction of the instrument."). Likewise, in the face of these clear contractual provisions, the district court correctly refused to consider the extrinsic evidence Modern proffered. Modern, after agreeing to the Subcontract, cannot use extrinsic evidence to avoid its unambiguous terms.

B.

Modern also challenges an alternative basis on which the district court rejected Modern’s claim for $975,072.31. Modern contends the district court improperly concluded that Modern breached the Subcontract by beginning the fabrication of the panels before Turner...