C&C Plumbing and Heating, LLP v. Williams County
2014 ND 128
| N.D. | 2014Background
- Williams County hired a construction manager (later Parsons) to build a law enforcement center; AGC won multiple prime contracts and subcontracted masonry to Davis.
- The contract documents included a milestone schedule (start April 2, 2007; enclosure Aug 15, 2007; substantial completion June 30, 2008) and an AIA-style "no damages for delay" clause plus provisions acknowledging delays inherent in construction.
- The project was delayed ~7.5 months (building enclosure reached Feb 15, 2008; substantial completion Feb 19, 2009). The court found ~4 months of delay were "inherent in the construction industry" and ~3.5 months due to the County/Parsons’ conduct.
- Parsons directed a subcontractor (Arnco) to change steel-erection methods (outside-in), which the court found amounted to "active interference" that caused part of the delay.
- Davis performed winter heating/shelter work after AGC refused to provide winterization; Davis settled with the County for $530,000 and sought the remaining $119,000 (plus interest) from AGC.
- The district court apportioned delay-related costs based on the two delay periods (53% to AGC for the industry-inherent portion, 47% to the County for the active-interference portion), awarded damages to C&C, AGC, and Davis accordingly, and denied AGC’s challenges; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of no-damages-for-delay clause | AGC: clause conflicts with milestone schedule and §6.2.3 (costs borne by responsible party); County should bear delay costs | County: clause unambiguously bars delay damages for uncontemplated delays and is consistent with contract as a whole | Court: no-damages-for-delay applies to the ~4 months of industry-inherent delay; Markwed controls and clause is enforceable as written |
| Active-interference exception to no-damages-for-delay | AGC: County not liable because no causal delay by AGC | County: Parsons’ directives did not rise to active interference | Court: Parsons’ instructions to Arnco (outside-in erection) usurped subcontractor means/methods and constituted active interference for ~3.5 months, making County partially liable |
| Allocation of responsibility for winter heating/shelter costs | AGC: should not pay portion because it did not cause the County’s delay and could not exclude heat/shelter from bids | County/Davis: AGC contractually agreed to provide heat/shelter (or at least did not exclude it); AGC’s refusal forced County to contract with Davis | Court: apportionment (53% AGC / 47% County) is supported — AGC had contractual responsibility and is liable for its share of delay-related shelter/heat costs |
| Liability for prompt-payment interest tied to Davis settlement | AGC: court erred to assess prompt-payment interest against AGC | County/Davis: interest flowed from damages caused by AGC’s breach and settlement; interest is part of proximate damages | Court: did not directly order AGC to pay statutory prompt-payment interest, but its share of damages includes amounts that cover interest as proximate consequences of AGC’s breach; damages findings not clearly erroneous |
Key Cases Cited
- Markwed Excavating, Inc. v. City of Mandan, 791 N.W.2d 22 (N.D. 2010) (no-damages-for-delay clause unambiguous and enforceable against contractor for uncontemplated delays)
- United States Steel Corp. v. Missouri Pac. R.R. Co., 668 F.2d 435 (8th Cir. 1982) (describing implied obligation not to unreasonably interfere with contractor performance; active-interference doctrine)
- Tricon Kent Co. v. Lafarge N. Am., Inc., 186 P.3d 155 (Colo. Ct. App. 2008) (active interference requires an affirmative, willful act that unreasonably interferes with performance; bad faith not required)
- Cavendish Farms, Inc. v. Mathiason Farms, Inc., 792 N.W.2d 500 (N.D. 2010) (measure of damages for contract breach is proximate detriment; damages findings are factual and reviewed for clear error)