Mid Am. Constr., L.L.C. v. Univ. of Akron
2019 Ohio 3863
Ohio Ct. App.2019Background
- MAC contracted with the University of Akron (Dec. 2014) as general trades contractor for the Zook Hall Renovation Phase 2B; project was multi‑prime with CM Thomarios and architect Stantec.
- Project suffered repeated delays; many RFIs went unanswered or CCDs were issued unsigned, and the CM’s schedule contained logic defects and poor coordination among primes.
- University stopped paying MAC (~Sep. 2015), issued a 5‑day termination notice and then a Notice of Termination (Jan. 2016), claiming MAC was in default; Fidelity (MAC’s surety) executed a takeover agreement but the University withheld contract funds.
- Fidelity appointed MAC to continue work under a takeover agreement; MAC self‑funded work, then demobilized May 27, 2016 due to continued nonpayment; project finally completed Aug. 16, 2016.
- Court of Claims awarded MAC and Fidelity $2,258,700, finding the University breached the original and takeover agreements (termination was effectively for convenience and University failed to pay); this decision was affirmed on appeal.
Issues
| Issue | Plaintiff's Argument (MAC/Fidelity) | Defendant's Argument (University) | Held |
|---|---|---|---|
| Was termination for cause or for convenience? | University lacked cause because delays were caused or contributed to by Stantec and Thomarios (unanswered RFIs, unsigned CCDs, schedule/coordination failures). | MAC alone caused delays (83 days behind), failed to provide required recovery plan, so termination for cause was justified. | Termination was for convenience; Court of Claims’ weighing of scheduling, RFI/CCD and CM failures supported finding University lacked cause. |
| Can MAC recover under takeover agreement via Fidelity’s assignment? | Fidelity assigned its rights to MAC; MAC performed under takeover and was entitled to funds. | Assignment or contract language (e.g., anti‑assignment clause) precludes MAC recovery; no consideration from Fidelity to MAC. | Assignment was valid: MAC substantially performed and relieved Fidelity; University breached by withholding funds; MAC/Fidelity may recover. |
| Did the award improperly include payment for work not performed (contract alternatives) or overcompensate? | Award reflects work performed, change orders, and deductions for alternatives; MAC did not claim payment for certain alternatives. | Award equals full contract price less prior payments and thus must have paid for unperformed alternative work (G‑1, G‑5). | Appellate court: University failed to show the award included payment for unperformed alternatives; damage amount was a factual finding not against manifest weight. |
| Is University entitled to setoff or liquidated (statutory) delay damages? | University sought setoff for cost to complete and liquidated damages under contract. | MAC argued University’s breaches (nonpayment, CM/A/E delays) excused MAC’s noncompletion and precluded liquidated damages. | Court denied University setoff and liquidated damages: University materially breached and contributed to delays; liquidated damages not available where owner’s actions contributed to delay. |
Key Cases Cited
- Eastley v. Volkman, 132 Ohio St.3d 328 (Ohio 2012) (explains manifest‑weight standard of review for factual findings)
- State v. Thompkins, 78 Ohio St.3d 380 (Ohio 1997) (on the meaning and application of weight of the evidence)
- Travelers' Ins. Co. v. Gath, 118 Ohio St. 257 (Ohio 1928) (defines preponderance as greater weight of the evidence)
- Arbino v. Johnson & Johnson, 116 Ohio St.3d 468 (Ohio 2007) (damages are a factfinder province)
- In re Interstate Bakeries Corp., 751 F.3d 955 (8th Cir. 2014) (discusses relationship between substantial performance and material breach)