959 N.E.2d 369
Ind. Ct. App.2012Background
- Feb 9, 2004, City accepted bids for McGrew Sanitation Area project; Dave's Excavating was lowest bidder and contract executed March 5, 2004 with Liberty Mutual as performance bond guarantor.
- Dave's requested change orders; June 17, 2004 Dave's notified differing subsurface conditions per section 4.03; June 22 sought price increase; engineer began review.
- July 6, 2004 engineer advised Dave's to resume work and reviewed claim under 4.03; Dave's refused to recommence pending resolution, alleging breach by City.
- July 15, 2004 engineer notified City considering default; August 9, 2004 City declared Dave's in default and terminated; August 16, 2004 City awarded completion contract to Eagle Valley, finishing December 16, 2004.
- March 25, 2005 City demanded payment under performance bond; January 6, 2006 City filed suit against Dave's and Liberty Mutual; Eagle Valley completed project ahead of schedule; City mitigated damages by replacing contractor.
- After litigation, trial court granted partial summary judgment for City on liability and damages; this appeal followed, with issues on contract liability, bond liability, and attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contract liability for Dave's breach | Dave's breached 4.03 by not resuming work after notice | City breached by failing to investigate/adjust or misapplied 4.03 | Dave's breached; City not liable under 4.03; summary judgment for City affirmed |
| Bond liability for Liberty Mutual | City improperly constrained Liberty Mutual's mitigation rights under bond | City timely mitigated; Liberty Mutual failed to mitigate promptly | Liberty Mutual liable as surety; City properly mitigated and asserted bond rights; trial court affirmed |
| Attorneys' fees under contract | City failed to submit fees as a 'claim' to engineer under 15.02 | Attorney's fees not subject to claim/change-order procedures | City entitled to attorney's fees; contract procedures do not apply to fee requests; affirmed |
| Precedent defenses (waiver/condition precedent) | Paden barrier applies to failure to satisfy condition precedent | No preservation of such defenses; factual distinctions | Court rejected as to merits; distinguishing Paden; no reversal based on that defense |
Key Cases Cited
- Rogier v. American Testing & Eng'g Corp., 734 N.E.2d 606 (Ind. Ct. App. 2000) (breach and subsequent remedies interplay under contract terms)
- Whitaker v. Brunner, 814 N.E.2d 288 (Ind. Ct. App. 2004) (contract interpretation when unambiguous; intent from four corners)
- Weigand Constr. Co. v. Stephens Fabrication, Inc., 929 N.E.2d 220 (Ind. Ct. App. 2010) (timeliness of claims; cessation-of-work provisions vs. fee claims)
- Town of Plainfield v. Paden Eng'g Co., 943 N.E.2d 904 (Ind. Ct. App. 2011) (condition precedent and contract termination impact; waiver analysis)