Jurgensen Co. v. Fairborn
2015 Ohio 5478
Ohio Ct. App.2015Background
- Fairborn solicited bids in 2006 for a multi-street road-improvement project; Jurgensen submitted the successful low bid for $1,106,881.80 and performed asphalt work Aug–Nov 2006.
- Fairborn’s contract documents included its own Construction and Material Specification Item 400 and incorporated by reference ODOT construction and material specifications when Fairborn’s specs did not cover an item; 2005 ODOT Specs were in effect.
- ODOT Item 401.20 contains an asphalt-binder price-adjustment mechanism that can adjust contract prices if binder prices change; Fairborn’s documents referenced ODOT Item 401 only in the context of material/specification requirements for asphalt work.
- After completion, asphalt prices rose and Jurgensen submitted a claim for $92,395.66 under an asphalt-binder price adjustment; Fairborn refused to pay and withheld retained-interest disputed separately.
- Jurgensen sued for breach and declaratory relief; both parties moved for summary judgment. The trial court denied Jurgensen’s motion and granted Fairborn’s on the price-adjustment claim; Jurgensen appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ODOT Item 401.20 (asphalt-binder price adjustment) was incorporated into the parties' contract | Jurgensen: Fairborn Item 400 and the general incorporation clause brought in ODOT Item 401 (including 401.20), so the price-adjustment applies | Fairborn: References to ODOT items govern construction/specifications only and do not modify express pricing/payment terms elsewhere in the contract | Held: Not incorporated as an obligation to pay; Item 400 only incorporated material/specification requirements, not payment adjustments |
| Whether, even if incorporated, ODOT Item 401.20 imposed a duty on the owner (Fairborn) to pay the adjustment | Jurgensen: Item 401.20 makes asphalt items eligible for adjustment and thus creates an entitlement | Fairborn: Item 401.20’s language applies to the Department and describes eligibility and computation; it does not impose an owner-payment obligation | Held: Even if incorporated, Item 401.20 does not impose an express obligation on the owner to pay; it speaks to eligibility and Department procedures only |
| Whether custom/usage of trade made the price-adjustment term part of the contract | Jurgensen: Industry custom and past practice with public entities using ODOT specs led Jurgensen to reasonably expect price adjustments | Fairborn: The express contract terms control; Jurgensen failed to present admissible evidence of a binding usage known to Fairborn | Held: Usage-of-trade evidence insufficient in the summary-judgment record; express contract terms prevail |
| Appropriateness of summary judgment on contract interpretation | Jurgensen: No genuine issue of material fact and contract interpretation is a question of law | Fairborn: Same; cross-motions show parties agreed legal resolution appropriate | Held: De novo review appropriate; contract language was clear and summary judgment for Fairborn on the price-adjustment claim was correct |
Key Cases Cited
- Comer v. Risko, 833 N.E.2d 712 (Ohio 2005) (standard of review for summary-judgment rulings: de novo)
- Danis Clarkco Landfill Co. v. Clark Cty. Solid Waste Mgt. Dist., 653 N.E.2d 646 (Ohio 1995) (use of specifications and contract interpretation principles)
- Skivolocki v. E. Ohio Gas Co., 313 N.E.2d 374 (Ohio 1974) (contract interpretation focused on parties’ intent as evidenced by language)
- S. A. Ruebel & Co. v. Morr, 120 N.E.2d 605 (Ohio App. 1953) (definition of ‘‘specification’’ in road-improvement contracts)
- Camargo Cadillac Co. v. Garfield Ent., Inc., 445 N.E.2d 1141 (Ohio App. 1982) (express contract terms prevail over custom or usage of trade)