Town of Plainfield v. Paden Engineering Co.
2011 Ind. App. LEXIS 235
| Ind. Ct. App. | 2011Background
- On July 19, 2002 Plainfield and Paden entered a Standard Form construction contract for a steel package for the Plainfield Recreation/Aquatic Center at $939,000, with Paden providing a performance bond issued by Merchants and Everest in the amount of $1,173,750.
- The contract required seven days’ written notice and an architect’s certification before termination for cause under Article 14.2.2, and an Architect (Sebree & Associates) to issue payment certificates as a condition precedent to payments.
- Sebree & Associates, identified as the Project Architect, was to certify project progress and quality; the contract expressly incorporated that certification into termination and payment rights.
- Plainfield terminated Paden on October 9, 2003, but did not contemporaneously notify the Sureties; Plainfield sent a separate notice to the Sureties on October 24, 2003 stating termination actions with bonds involved.
- Hoosier Steel, Inc. filed a complaint against Paden and the Sureties on November 12, 2004; Paden counterclaimed, Plainfield counterclaimed, and Hoosier Steel’s complaint was later dismissed.
- In 2010 the trial court granted partial summary judgment for the Sureties (no obligation under the bond due to lack of notice and opportunity to mitigate) and for Paden (no breach due to absence of architect’s certification), with Plainfield’s motion for summary judgment denied; this Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plainfield correctly pursued breach against Paden despite alleged condition precedent failure | Plainfield contends a common-law breach claim remains viable despite lack of architect’s certification. | Paden argues the contract’s notice and architect-certification conditions precedent foreclose breach liability. | Affirmed partial judgment for Paden; lack of architect’s certification bars breach claim. |
| Whether Plainfield’s claim against the Sureties is enforceable given notice/mitigation prerequisites | Plainfield asserts the Sureties are liable under the performance bond despite notice failures. | Sureties contend the bond creates strict conditions precedent and applies prejudice rules. | Affirmed partial judgment for the Sureties; conditions precedent barred recovery. |
Key Cases Cited
- White v. Mitchell, 65 N.E. 1061 (Ind. 1903) (architect certificate as a condition precedent to termination; strict construction)
- Korbly v. Loomis, 88 N.E. 698 (Ind. 1909) (contractual architect certificate required; preserve common-law remedies)
- Ingrassia Constr. Co. v. Vernon Township Bd. of Educ., 784 A.2d 73 (N.J. Super. 2001) (contract termination rights; architect certificate not sole determinant of breach)
- Oden Const. Co. v. Helton, 65 So.2d 442 (Miss. 1953) (architect’s certification required to justify termination; strict standard)
- American-Hawaiian Eng'g & Const. Co. v. Butler, 133 P. at 286 (Cal. 1913) (architect certification necessity in termination and takeover)
- Tri-Etch, Inc. v. Cincinnati Ins. Co., 909 N.E.2d 997 (Ind. 2009) (presumption of prejudice for late notice in insurance-like contracts; burdens on insured)