City of Atlanta v. Hogan Construction Group, LLC
341 Ga. App. 620
| Ga. Ct. App. | 2017Background
- Hogan Construction contracted with City of Atlanta to build Fire Station 28; original “not to exceed” authorization totaled $3,198,525 after an amendment.
- Hogan performed work starting in 2011, encountered site issues (waterway, transmission pole, unsuitable soils) and submitted change order proposals (including proposals 16, 57, 58) and claims for additional items totaling $90,063.66.
- The City paid Hogan $3,506,805.02 (about $308,280.02 over the not-to-exceed amount), leaving disputed amounts Hogan seeks to recover.
- City moved for summary judgment arguing (1) Atlanta Code § 2-1292(b) required City Council and Mayor approval for modifications exceeding 10% of the not-to-exceed amount, and unapproved excesses are not payable, and (2) the Prompt Pay Act was waived by contract provisions.
- Trial court denied the City’s motion in full; on interlocutory appeal, the Court of Appeals reviewed whether (a) § 2-1292(b) barred recovery and (b) the Prompt Pay Act claims were waived.
Issues
| Issue | Hogan's Argument | City of Atlanta's Argument | Held |
|---|---|---|---|
| Whether § 2-1292(b) (approval for contract modifications >10%) bars Hogan’s breach of contract recovery for amounts exceeding the not-to-exceed authorization | Hogan: Ordinance does not preclude recovery because it does not specify timing of approval; City failed to act in good faith on claims | City: Unapproved modifications exceeding 10% are not payable; absence of required approvals defeats breach claim | Court: Denied summary judgment for City; ordinance requires approval but does not specify when, and City’s failure to act raises factual issues (good faith) for trial |
| Whether the Agreement waives Hogan’s Prompt Pay Act claims for late payment and interest | Hogan: Prompt Pay Act applies | City: Agreement contractually supersedes Prompt Pay Act timing and interest provisions | Court: Reversed denial of summary judgment as to Prompt Pay Act payment/interest claims — contractual terms control and supersede the Act |
| Whether the Agreement bars Prompt Pay Act attorney fees | Hogan: Seeks attorney fees under the Act | City: Argues Prompt Pay Act entirely waived | Court: Agreement does not address attorney fees; Prompt Pay Act attorney fees claim survives — summary judgment denied on fees |
Key Cases Cited
- H. G. Brown Family Ltd. Partnership v. City of Villa Rica, 278 Ga. 819 (2005) (municipal contracts entered in excess of delegated authority are ultra vires and void)
- City of Baldwin v. Woodard & Curran, Inc., 293 Ga. 19 (2013) (city charter approval requirement can render unapproved obligations unenforceable)
- Daniel Corp. v. Reed, 291 Ga. 596 (2012) (statutory/ordinance interpretation follows plain meaning of text)
- Great West Cas. Co. v. Bloomfield, 303 Ga. App. 26 (2010) (courts must apply ordinances as written and not add conditions)
- Pipe Sols., Inc. v. Inglis, 291 Ga. App. 328 (2008) (Prompt Pay Act can be displaced by clear contractual provisions)