307 P.3d 449
Or. Ct. App.2013Background
- Catamount Constructors, Inc. (general contractor) contracted Steelwood Construction, Inc. (subcontractor) to supply materials and perform steel and roofing work for a Salem Home Depot project.
- Catamount terminated the subcontract for convenience under paragraph 18 after Steelwood delivered materials and began work; Steelwood and its suppliers filed liens for unpaid amounts.
- Catamount paid some suppliers after liens were filed but refused to pay Steelwood for materials and pre-termination work; Steelwood recorded a lien for $369,679.30.
- Catamount cleaned site debris, hired Panelized Structures to finish the work, and incurred costs toward cleanup and repairs, including locksmith and coordination costs.
- Contractual documents included a subcontract, purchase order (total $300,000 for materials/work), and a joint check agreement to pay Steelwood and its suppliers jointly.
- Steelwood sought summary judgment for payment of costs under the contract and the full cost of work performed to termination; the trial court granted summary judgment to Steelwood.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of Steelwood's cost evidence | Catamount argued cost substantiation was insufficient; Steelwood relied on Exhibit C and an affidavit. | Steelwood contends Exhibit C and affidavits prove actual costs with reasonable certainty; Catamount failed to preserve its challenge. | Not addressed on appeal due to preservation failure. |
| Overhead recovery for Steelwood | Catamount argued Steelwood failed to segregate profit and overhead and overruled by lack of certainty. | Steelwood claimed overhead was part of actual costs and sufficiently evidenced; preservation issues foreclose review. | Not addressed; issue not preserved for review. |
| Right to offset for defective work after convenience termination | Catamount claimed offset for costs to repair Steelwood's alleged defective work was allowed by the contract despite convenience termination. | Steelwood denied; termination for convenience forecloses inspection/cure and offsets for defective work. | Catamount not entitled to offset for alleged defective work after convenience termination. |
| Liens and offset under paragraph 32 | Catamount argued it could offset lien-related discharge costs under paragraph 32 because liens arose from Steelwood's acts/omissions. | Court held liens arose from Catamount's act/omission (nonpayment) and Catamount must bear costs; offset not available. | Court correctly refused offset under paragraph 32; Catamount liable for lien-related costs. |
Key Cases Cited
- Yogman v. Parrott, 325 Or 358 (1997) (interpret contracts by examining text in context; ambiguity resolved with extrinsic evidence if needed)
- Paragon Restoration Group, Inc. v. Cambridge Sq. Condominiums, 839 NYS2d 658 (2007) (emphasizes that no opportunity to correct defects defeats offset after convenience termination)
- Tishman Contr. Corp. v. City of New York, 643 NYS2d 589 (1996) (discusses conditions under which offsets for defective work may be denied after convenience termination)
- Lisbon Contractors, Inc. v. United States, 828 F2d 759 (Fed. Cir. 1987) (addresses government termination for convenience and deductions for defective work)