Boone Coleman Construction, Inc. v. Village of Piketon

Timothy McGinty, Cuyahoga County Prosecuting Attorney, J. and Brian R. Gutkoski, Prosecuting Attorney, appellant. Assistant O’Shea, Annotico,

Lipson Legal Group, O’Shea Michael J. and Ronald A. appellee. Construction, Inc., Appellee,

Boone Coleman Appellant. Village Piketon, The Constr., Piketon, [Cite as Boone Coleman 450, 2016-Ohio-628.] 145 Ohio St.3d (No. 2016.) 2014-0978 Submitted June February 2015 Decided O’Connor, C.J. In this appeal arising public-road-construction we

consider our on contractual precedent liquidated-damages provisions. We ex- pressly precedent contracts, extend that to public-works vacate the judgment the court of appeals, and remand this cause to that court for reconsideration light opinion. of our Background

Relevant Piketon, appellant, village Hill solicited bids for the “Pike Roadway Improvements” project. and Related The project included the installa- tion of a traffic light the intersection of U.S. Route 23 and Market Street Piketon and improvements roadway. Construction, Inc., the lowest bid submitted Boone Coleman Appellee, into a contract which entered project. for the was hired $683,300 the work. The complete Coleman Boone agreed

Piketon was “of the project that the time for expressly provided days within 120 substantially completed had to be project that the and essence”1 A liquidated-damages of the project. date of commencement of the day for each after to Piketon pay would clear that Boone Coleman $700 made substantially completed. was not the contract date completion specified 30, 2007. July for was set project commencement of The date of {¶ 4} days substantially completed that the Thus, project contract required request first Boone Coleman’s granted 2007. Piketon on November later 30, 2008. But when May date to extension, completion which moved it and notified extension, grant refused to another Piketon sought Boone Coleman dam- contractually liquidated specified assess the that it would Boone Coleman 30, 2008. Boone by May completed if was not day project ages per of $700 7, 2008, Piketon informed July and on by then project not finish the Coleman did day May as of assessing damages that it was $700 Boone Coleman project. of the completion until the 2, 2009—well over July until complete not Boone Coleman did 30, 2008. (397 May date of completion extended parties’ after the year days) the contract stated: The relevant TIMES ARTICLE 4—CONTRACT 4.01. Time the Essence Milestones, Completion, completion and any, if limits for Substantial A. All time are of the essence payment in the Contract Documents final as stated

readiness for Contract. Payment Completion Final Days to Achieve Substantial 4.02 days substantially completed after the date when within 120 A. The Work will be Conditions, and provided paragraph 2.03 of the General run as Times commence to Contract paragraph payment 14.07 of General ready in accordance with completed for final run. commence to days the Contract Times after the date when within Conditions Damages Liquidated 4.03 Agreement recognize essence of this that time is of the and OWNER A. CONTRACTOR time(s) completed within financial loss if the Work is will suffer and that OWNER above, with plus any allowed accordance paragraph extensions thereof specified in 4.02 delays, expense, recognize parties also The Article 12 of the General Conditions. [proceeding] loss suffered legal the actual proving in a or arbitration involved in difficulties Accordingly, requiring such completed on time. instead if is not OWNER the Work not as proof, that as and CONTRACTOR OWNER Gout day expires after the time pay $700.00 for each penalty), shall OWNER CONTRACTOR substantially complete. Completion until the Work is paragraph specified in 4.02 for Substantial sic.) (Boldface, underlining, capitalization brought against Boone Coleman suit Piketon the Pike County Common

Pleas Court. other Among things, alleged that Piketon had improperly faded $147,477 price the contract for the construction.2 Piketon counter- liquidated damages. claimed for summary Piketon moved for judgment. The trial court granted Piketon’s favor,

motion and entered judgment awarding $277,900 Piketon in liqui- dated damages. Boone appealed, asserting Coleman that the trial court erred in awarding

Piketon damages. court agreed. Citing our decision Sales, Inc., Samson Honeywell, Ohio St.3d 465 N.E.2d 392 held, we view the contract as a “[W]hen whole in its application, we conclude the amount of damages manifestly is so unreasonable and disproportionate that it is added.) plainly unrealistic and inequitable.” (Emphasis 2014-Ohio-2377, 13 ¶ N.E.3d It 40. concluded that because the “resulting amount [of liquidated damages] manifestly unrealistic, inequitable and justified courts are ¶ in determining the penalty.” unenforceable Id. at Samson Sales 28. It reversed that portion of the trial court’s judgment and remanded for further proceedings. granted We Piketon’s request for discretionary review and agreed

address two related propositions of law:

When evaluating the enforceability liquidated of a damages provision in contract, a construction the court must conduct analysis prospectively, based on diem amount of liquidated damages at the time the executed, contract is and not retrospectively, based the total liquidated damages ultimately accrue. complaint,

2. In its Boone liquidated-damages provision Coleman asserted that the penalty was a argued also that it compensation should have been awarded performed additional based on work it problems to correct perform subsurface road retaining and to revisions on the wall and traffic signal. affirmed, The trial court denied that relief and the holding that “Boone parties’ Coleman unambiguous did not follow the notice compensation. to claim additional explicitly precluded recovery And the contract for additional costs related to subsurface conditions ¶ 2014-Ohio-2377,13 Nevertheless, encountered Boone Coleman.” dissenting N.E.3d 4. asserts, opinion already “Boone Coleman performing suffered a loss from additional work for which paid” seemingly gives was not credence to provided Boone Coleman’s claim that Piketon ¶ Dissenting (Pfeifer, J., inaccurate Opinion seems, then, site information. dissenting). It conclusion, adhering the dissent’s regard insistence on to its own without to the facts of this it, controlling justice” event, case or the law play. is where “frontier comes into Boone Coleman did not holdings paid seek this court’s review of the properly, that it had been and it is opinion. therefore not discussed further in this a

Liquidated damages penalty simply are not deemed because a consists of new construction of an improvement previous- did exist ly proof damages liquidated and no of actual to enforce required damages pursuant such contract. 1451, 2014-Ohio-4414, 17 140 Ohio

See St.3d N.E.3d 598.

Analysis Liquidated-Damages Standard of Review for Contractual Provisions contract, law, interpretation We review the de novo. question ¶ Arnott, 401, 2012-Ohio-3208, Arnott v. 132 Ohio St.3d N.E.2d Similarly, question a contract provides liquidated clause or an damages penalty question unenforceable of law that we also review de novo. Lake Ridge Academy Carney, 66 Ohio St.3d 613 N.E.2d 183 (1993). Liquidated Damages

Substantive Law on stated, Simply damages are that the to a to, or upon, stipulate as the actual that will result from a future breach of the contract. Sheffield-King Milling Co. v. Domestic Science 180, 183, 115 Baking 95 Ohio St. N.E. 1014 “ ‘The effect of a stipulated clause for in a contract is to

substitute the amount agreed upon actual resulting breach thereby prevents controversy [sic] ” between the parties as to the amount of damages.’ Dave Inc. Gustafson Dakota, 160, 164, (1968), v. South 83 S.D. 156 22 quoting N.W.2d 185 American “ 2d, (1965). 235, Jurisprudence Damages, at ‘If a provision Section 321 is forms, construed to be one for damages, stipulated general, the sum breach, measure of case of a recovery and the must be for that larger amount. No or smaller sum can though be awarded even the actual loss ” Id., may greater or less.’ quoting way, Section 235 at 321. Put another “a liquidated damages clause in a contract an anticipat- is advance settlement of the Co., ed actual damages arising from a future breach.” Carrothers Constr. L.L.C. Hutchinson, (2009). 743, 754, v. S. Kan. 288 207 P.3d 231 The common law viewed liquidated-damages provisions gimlet “with a eye,” Bassin, 714, Dist. Partnership Cablevision Ltd. v. 828 A.2d 723 (D.C.App. 2003), contracts, but that historical antipathy dissipated as parties attorneys, and the recognized courts that such provisions purposes. serve valuable law “Today upon damages’ does not look with disfavor ‘liquidated provisions in contracts. they attempts just When are fair and reasonable to fix 454 contract, they of are en- by for loss caused breach anticipated

compensation States, 123, Sons, v. 332 U.S. S.Ct. forced.” Priebe & Inc. United candor, (1947). upon if not with favor” is “to look with L.Ed. 32 The modern rule were “deliber- provisions in contracts when those provisions for under- equality opportunity who have ately parties entered into between States, v. 249 U.S. standing insisting upon rights.” and their Wise United at quoting See also Bassin 63 L.Ed. Mexico, C.V., 215, 218 F.Supp. v. Aerovias de S.A. de Wilmington Trust Co. (S.D.N.Y.1995) (“ and inquiry sophistication ‘Relevant to this is the negotiated counsel who the contract represented by both sides were able ”). ability to overreach the other side’ length at arms without allow provisions appeal Part of the 15} {¶ against difficulty, uncertainty, themselves contracting parties “protect judicial trying to ascertain necessarily proceedings follow expenses Kan. at 207 P.3d 231. This benefit is Carrothers Constr. damages.” quantify to be difficult to likely valuable when “actual are particularly Liquidated-damages event that the contract is breached.” Bassin 723. “adjust[ contracts” and thereby prompt performance ] provisions “promot[e] advance, of which courts would amicably, through matters the settlement expense.” at 366. difficulty, uncertainty, delay often involve Wise as valid and long recognized liquidated-damages provisions has enforceable, Sales, 12 Ohio St.3d at Jones see Samson Werke, Stevens, (1925), Lange v. Ohio St. Ohio St. 146 N.E. 894 are not ones for Samson Sales long penalties. as as the case, “The difficult in each problem, 28. And therein lies the rub. penalty not sum is an unenforceable or stipulated determine whether or for Dave 83 S.D. liquidated damages.” enforceable Gustafson 165, 156 N.W.2d permissible liquidated- a contract includes a addressing whether has or an one of our courts

damages provision penalty, unenforceable explained “penalty” compensation in a the measure of for

“a sum inserted breach, default, by way security as a or punishment but rather may nonperformance, actual which be sustained reason A is an to punishment. penalty agreement it involves the idea of damage sustained. irrespective sum on breach of stipulated as in terrorem of the money stipulated is a payment Its essence is a genuine the essence offending party, while covenanted, The amount is fixed and is not pre-estimate damages. however, if sum is deemed to be subject change; stipulated to the nondefaulting party it is not enforceable and the is left penalty, such actual can recovery damages prove.” he sic.) Inlow, CA-2530, 1978 Licking v. Stewart & 5th Dist. No. (Emphasis Piper (June 14, 1978), 2d, Jurisprudence Damages, *1 22 American quoting WL Section at 298 Sales, tripartite we set forth Ohio’s test to determine Samson a contractual should considered a penalty. or an unenforceable We held: amount of ascertained parties agreed damages,

Where the have on the this in clear by adjustment, expressed estimation and and have terms, unambiguous liqui- the amount so fixed should be treated as (1) if penalty, damages dated and not as would be uncertain (2) if proof, as to amount and difficult of the contract as a whole is not unconscionable, unreasonable, manifestly disproportionate so express amount as to the conclusion that it does not the true justify (3) intention of the and if the contract is consistent with the parties, parties conclusion that it was the intention of the amount stated should follow the breach thereof. Sales, syllabus. 12 Ohio

Samson St.3d liquidated-damages provisions Valid and enforceable are those intended parties give compensation damages, provisions reasonable but “manifestly amounts that are and unrealistic” are deemed impose inequitable Sales, have penalties. unenforceable Id. 28. Since Samson we reiterated once, holding Ridge Academy Carney, Lake 66 Ohio St.3d departed teachings. requires N.E.2d 183 and have not from its This case that we consider our in a we have not addressed: precedent previously context public-works-construction contracts. Damages in

Liquidated Public-Works-Construction Contracts building The benefits of and construc- liquidated-damages provisions R. Harper Benjamin tion contracts are well documented. R. Heckman & Edwards, Owner, Money: Recovery Liquidated Damages by Time is (Fall 2004). firm Constr.Lawyer expectations create allow construction. by delays allocate caused ability important public-works- Id. The about is particularly 456

construction contracts because difficult to calculate to uniquely “[i]t general public by interest caused a contractor’s breach of its to Co., 756, public Kan. at provide improvements.” Carrothers Constr. 288 207 P.3d In a in public-roadway-construction each inconvenience, costs, project adds to increased and loss of use of roadway. “ 167, Dave 83 S.D. at 156 N.W.2d 185. But ‘each day’s delay, Gustafson unquestionably injurious, injurious frequently ways while in that difficult are ” Id., (3d Contracts, 785, quoting Jaeger, estimate.’ 5 Williston on Section 733 Ed.1961). We that in recognize liquidated-damages provisions public-construction

projects play important civic in that purpose they help timely comple- foster of projects, thereby tion the loss of of avoiding taxpayers’ billions dollars See, by delays. e.g., Tyler, caused contractors’ M. (Easy) Way Scott No Out: “Liquidating” Stipulated Damages Delay Contractor in Public Construction Contracts, (1994); Christian, 44 Duke L.J. 358-359 Public Entities in Beware, Nevada Lawyer 12-OCT Nevada 16. We are not alone in that recogni- tion. The Supreme many Court and state and federal appellate courts also that recognize public particularly contracts are given unique valuable difficulty calculating associated with a public contractor’s breach of promise timely complete a public-improvement See, Sons, project. e.g., Priebe & 332 U.S. at 92 L.Ed. 32 (recognizing that liquidated-damages provisions particularly “serve a useful func- tion unmeasurable, are uncertain in nature or amount or are as is Constr., many contracts”); government case Hovas Inc. v. W. Line Consol. Trustees, School Dist. Bd. 111 So.3d 666-667 (Miss.App.2013); Carrothers (the Constr. Co. unique difficulty calculating damages when a contractor a public-works breaches an important “should be consideration in such weigh cases and favorably finding liquidated damages provision to be reasonable”); Fortune Bridge Dept. 533-534, Co. v. Transp., Ga. (1978) S.E.2d 401 (noting “damages that flowing the contractor’s failure to complete [public] roadway are, in a bridges timely practical fashion as a matter, (8th Wichita, Cir.1902) incapable proof’); Brooks v. 114 F. (recognizing liquidated-damages provisions only way are the for a city adequate compensation contract; obtain a public breach of the damages ascertainment,” sustained public capable “judicial such cases are not remote, because are “too conjectural, speculative” prove); Cty. Dade Constr., Inc., Pub. Health Trust v. Romart (Fla.App.1991) So.2d (fact public entity may monetary have suffered no loss from breach does not unconscionable, render liquidated-damages provision public project because was use, intended for public profit). not for public protection that find that “the with those courts We determining validity [the] consideration proper

interest Kan. at 207 P.3d 231. Carrothers Constr. damages provision.” public-improvement- every state-funded Assembly requires Ohio General 153.19. provision. R.C. include a construction contract 166; at Fortune Dave & Co. requirements. have similar Many states Gustafson Westerville, 7 App.3d Ohio Contracting, also Bale Bridge Co. 534. See Dist.1982) (10th of a materiality the (recognizing 455 N.E.2d that a for such project and bid public-works-construction date in a completion citing R.C. performance, it fails to the time for specify incomplete 153.19). in mind, opinion court’s appellate in we turn to the principles With these 24}

{¶ this case. Provision Analysis Liquidated-Damages Court’s Appellate provision this case liquidated-damages whether the considering

{¶ 25} applied penalty, appeals properly an unenforceable the court constituted Sales, St.3d 465 N.E.2d of the test Samson parts first and third that incurred as a result recognized court “the appellate 392. The amount were uncertain as to project] Boone Coleman delay [by unambiguous language plain difficult to and that “the prove” with the conclusion that clause is consistent contrac- would follow the per day that in the amount of intended $700 2014-Ohio-2377,13 N.E.3d deadline.” project completion tor’s breach of the ¶ that the court concluded appellate But the 38 and Samson Sales. second test. The prong not the second of the Samson Sales pass did provision to consider reviewing a court prong requires unconscionable, unreason- manifestly not so “the contract as whole is not that it does able, justify in amount as to the conclusion disproportionate Sales, syllabus. parties.” intention of the Samson express the true already court had determined though appellate Even intentions, solely court focused parties’ appellate reflected the $277,900, value of the in relation to the total penalty, amount of the aggregate ¶ contract, $683,300. 2014-Ohio-2377, Only finding 42. after See the total constituted a third of aggregate award the provision application did the court determine price ¶ reasons, it was at 40. For several penalty. rendered it an unenforceable Id. to do so. error of its sister First, heavily on a decision of one relied 2011-Ohio-6449, Haehn,

courts, Mahoning 7th Dist. No. 10 MA Harmon v. here. distinguishable is wholly 2011 WL 6296731. But Harmon contracts, range variety subject- Given “the wide and of their matter, it is sometimes difficult to determine whether the terms thus agreed upon actually provide penalty.” advance or for a Sheffield-King 1014. Milling Lange, Ohio St. N.E. See also Ohio St. at 533 that in (noting evaluating liquidated-damages provision, “[arbitrary rules can us, help judicial upon decisions are of less value than most other circumstances”). Thus, questions, depends peculiarly as each case so on its own liquidated-damages provisions, they when courts review often look to similar See, govern subject contracts that similar matter. e.g., Kurtz v. W. L.L.C., 10AP-1099, 2011-Ohio-6726, Franklin Property, 10th Dist. No. 2011 WL ¶ (in estate, involving delay a case in sale of involving real cases “readily distinguishable”). breaches other contexts are Here, Harmon is of limited value because it arose from a private commercial real-estate lease than a public-works-construction rather contract. ¶ 2011-Ohio-6449, WL That distinction is particularly relevant because the actual at issue in quantify Harmon were far easier to than those at issue here. Moreover, Harmon involved a liquidated-damages provision that con- a

templated lump sum. Piketon and Boone Coleman did not contract lump for a Rather, sum. per which, contracted for a diem measure damages of as Chief Justice recognized, likely Marshall is more to be an enforceable liquidated-damages provision than an penalty: unenforceable “[T]he to pay specified weekly during work, sum the failure of the party perform the partakes much more of the liquidated damages character of than the reservation in gross.” Tayloe Sandiford, sum v. T. & S. 20 U.S. 7 Wheat. distinction, L.Ed. 384 In failing recognize this appellate committed its second error. More importantly, myopic court’s focus on the reasonable-

ness of the total amount of in liquidated damages application, rather than on the terms, reasonableness of the in per diem amount the contract not proper. was analysis The correct looks at whether was conscionable to assess per day $700 in liquidated damages day each that the contract was not completed rather looking than at the amount aggregate awarded. Accord Carroth- ers Constr. 288 Kan. at P.3d Although per vary law, diem amounts in greatly the case courts have in

upheld liquidated-damages provisions public-construction per contracts with See, diem e.g., amounts similar to those at issue here. Group, Sec. Fence Cincinnati, C-020827, 2003-Ohio-5263, 1st Dist. Hamilton No. 2003 WL 22270179 (enforcing diem in per liquidated-damages provision a public-bridge-replace- project ment that imposed per day); see also Carter Steel & Fabricating Co. $600 C1.1999) (Ct. Misc.2d Transp., Dept. v. Ohio diem validity liquidated-damages per recognizing (impliedly day, but liquidated damages per project imposed bridge-construction $600 delay); who had no control over against subcontractor refusing enforce Constr., per as reasonable a diem (upholding 111 So.3d at 667 Hovas $500 contract); Carrothers public-construction liquidated assessment of ($850 held diem assessment of per at 759 Constr. Co. contract). fact, far upheld courts have in public-construction reasonable See, e.g., in construction contracts. Dade amounts of diem greater per Trust, reasonable” a (upholding “perfectly at 638 Cty. Pub. Health So.2d $2,500 in damages per day public- provision imposing Corp. Chicago, Bethlehem facility); construction for medical Steel project (7th Cir.1965) liquidated-damages provision imposing (upholding F.2d 649 $1,000 highway, for elevated damages per day public-construction opening public from though prevent highway even contractor’s did not (in scheduled). Worden, fn. 1 L.Rev. also Unruh & 34 Santa Clara date See contracts, damages provi- typical per construction “a diem commercial $10,000 general owner/developer that the contractor might provide sion delay). day” for each calendar Moreover, the contract liquidated damages imposed by diem per 33}

{¶ Department Transporta- and Boone Coleman reflect the Ohio between Piketon Those Specifications. specifications tion’s 2013 Construction and Material sum owed the contrac- only liquidated damages to be deducted require date, but set out completion which the contractor exceeds the day by tor each are thus damages.3 per amount of the diem diem specific public policy. consistent with Ohio Department Transportation’s and Material 2013 document entitled “Construction

3. The Ohio http://www.dot.state.oh.us/Divisions/ConstructionMgt/Specifieation% Specifications” at is available provides: 2011142012% 20FINAL.PDF. Section 108.07 20CMS% 20Files/2013% Complete complete the Work the on Time. If the Contractor fails to Failure Date, Director, making Completion if the is reasonable then the satisfied Contractor may public, allow the to continue progress, and it in the best interest of the Contractor deems performed Department on the The will the Contractor for Work in control of the Work. Project any liquidated damages less incurred. (Boldface sic.) 108.07-1, provides liquidated damages, that the amount of found Table The 2013 schedule depending day varies

liquidated damages for each calendar of an “overrun time” to be deducted $500,000, per original 0 and the amount of on amount of the contract. For contracts between $2,000,000, $500; $500,000 per amount of liquidated damages between diem contracts $2,000,000 $10,000,000, $1,000; the amount of for contracts between diem 460 and most we note that the Finally importantly, appellate stated its conclusion resulted from “the contract as a whole its viewing ¶ added.) 2014-Ohio-2377, 1190, (Emphasis 13 N.E.3d 3. The use of

application.” “in phrase application” part is not of our test from Samson Sales. The use of this resulted in a perspective analysis court’s invented distorted precedent. of our court, a requires considering We reaffirm that Ohio law it in of what at

liquidated-damages provision, light parties “examine knew Jones, 43, 894, 112 the time the contract was formed.” Ohio St. 146 N.E. at paragraph syllabus; Blockberger, one of the Miller v. 111 Ohio 146 N.E. St. 2003-Ohio-5263, syllabus; one of the Fence paragraph Group, Sec. ¶ Sons, at WL Accord Priebe & U.S. L.Ed. 32. “If the was reasonable at the time bears offormation (not exact) actual necessarily damages, reasonable relation to will added.) (Emphasis Ridge Academy, be enforced.” Lake 66 Ohio St.3d at 613 N.E.2d 183. analysis This or “front end” prospective liquidated-damages provi-

sion focuses on the reasonableness of the clause at the time the contract was i.e., executed rather than looking provision retrospectively, ascertaining reasonableness of the with the benefit of hindsight after breach. See Edwards, 30-31; Constr., generally Heckman Constr.Law. Hovas (Maxwell, J., concurring); So.3d 668-669 Carrothers Constr. 288 Kan. 207 P.3d at paragraph syllabus. prospective nine of the approach (1) evaluated, properly focuses at the time of contract formation, construction, probable resulting delay loss (2) parties clearly intended to use case of a (3) ascertain, because actual would be difficult the parties reached an as to a amount for delays. diem Carrothers Constr. Co. at 757. also Contracting Coffeyville, See Hutton 487 F.3d (10th Marx, Cir.2007), quoting Kelly v. 428 Mass. “ (1999) (recognizing analysis that prospective disputes efficiently by ‘resolve[s] ” making unnecessary to wait until actual from a proved’ breach are “ ”); ‘eliminates uncertainty prevent costly litigation’ and tends future McNamara, William Schwartzkopf Calculating Damages, & John J. Construction (2d Ed.2015) (“The 13.02, Section at 257-258 reasonableness of the forecast or estimate liquidated-damages provision] usually [in determined view of the contracting, facts known at the time and not at the time of the breach or sic]). delayed completion” [emphasis $1,500; $10,000,000 $50,000,000, per per diem is for contracts between the $2,600; $50,000,000, $3,200. per diem amount is and for contracts over the amount diem

461 Here, appellate engaged analysis, the court improperly retrospective i.e., looked, hindsight, with to the aggregate application per the diem liquidated damages to conclude that the was But it unconscionable. did not determine that the amount diem was unconscionable the time the parties entered into the the question contract.

provision is conscionable viewed the court “must be from the of the standpoint parties post at the time of the and not ex when the litigation up facto for trial. are so and a always stipulation Contracts construed for is no Jacobs Shannon Furniture 22 C.D. exception.” Ohio (1910), Moore, 1910 WL 1170 Printing Sun & Pub. Assn. v. 183 U.S. 642, 672, Rocky-Blasting L.Ed. Knox Co. v. Moreover, Stone Ohio St. 60 N.E. 563 when the Grafton appellate court that determined the award was unenforceable penalty because unreasonably the amount was “so high disproportionate and so to consider- the ¶ 2014-Ohio-2377, ation paid,” 13 N.E.3d the failed to fully consider that large only the amount was because Boone Coleman failed to the complete year date, more than a the agreed-upon after completion with full the awareness of consequences. By the appellate reasoning, court’s the same have been might briefer,

enforceable if weeks, Boone Coleman’s had been two e.g., days, two months, or two long even but not as to accrue significant damages so perverse arose here. It is a rule of law to hold that court can relieve a breaching party consequences agreed by refusing to to a per enforce liquidated-damages provision solely diem egregious because the breach was an rationale, one. adopt We decline to and we vacate the judgment court in appellate this cause. We our appellate analysis, remind courts that engaging prospective role is to what appellate court’s not determine should have on

contracted based after understanding court’s breach. Lake Ridge Academy, 66 Ohio St.3d 613 N.E.2d 183. This court has made clear for years judges power disregard over have no more to liquidated-damages provision valid than contractu- disregard do other 533; al provision. Ohio Lange, Rock-Blasting St. at see also Knox 367- Co. proper 368. The course to enforce contracts their according plain meaning Jones, and “not to than undertake be wiser St. at parties.” * * * N.E. “It is certainly incumbent courts fact, change after people, policy.” contracts the name of public Am., (Ind.1981). Court Rooms Diefenbach, are in expectations regard know what their themselves best “The attendant on its undertaking the advantages of their and to the amount of such failure, mutually agreed when have the and it is as much the illegality, duty and without good faith as is the other of enforce that court to contract.” Knox quoting 115 N.E. Milling 95 Ohio St.

Sheffield-King at 368. Rock-Blasting Co.

Conclusion money.” that “time is Franklin advised us remember Benjamin 40} {¶ 89-5398, E.D.Pa. No. 1990 WL Stingray, Corvette States v. One 1971 United (Jan. 1990), Benjamin Franklin, Young Advice to Tradesman *1 have well follow advice. Boone Coleman would done required perform contract it to Boone Coleman entered a 41} {¶ may to do It not avoid days. long within 120 It took four times that so. negotiated through able result of the valid free to why persons competent is no reason and counsel. “There sound fully as subject liquidated damages] upon may agree upon [of this and entered into with other, agreement, fairly understandingly or why their loss, just anticipated should not compensation a view enforced.” Wise, L.Ed. 249 U.S. at analysis use to find retrospective court erred in its as to to Piketon was so unreasonable

that the total amount awarded to focus on the diem nature of penalty, failing constitute a of the Fourth District damages. Accordingly, judgment we vacate the cause to that court to reconsider enforce- Appeals remand Court light opinion. this ability

Judgment vacated cause remanded. O’Neill, JJ., O’Donnell, Kennedy, concur.

Lanzinger JJ., French, judgment only. concur J., dissents. Pfeifer,

Kennedy, J., concurring. However, I majority opinion. with the I would exclude first

paragraph majority’s conclusion. Therefore, concur. respectfully I J., foregoing opinion. concurs O’Donnell, J., dissenting. Pfeifer, having accepted We should been improvidently dismiss this case court

allow the decision stand. That court reached a sound and appeals Furthermore, is fair no proper parties. conclusion that to both new issue is legal at stake. Instead, court a this has taken bad situation and made it worse. Boone already performing

Coleman suffered loss from additional work for which it was that, not paid. topOn this court now determines that Boone must Coleman time, penalty complete because didn’t contract on mind that never provided Boone Coleman claims that part problem was Piketon justice: inaccurate site information. is akin to frontier we This do it because we can, not it makes because sense. dismissal, case, Barring approach the sensible to this approach appeals,

taken court of declare the clause to Equities unreasonable and do matter —even in a disproportionate. contract case. case, Given the circumstances of this which include allegedly providing Piketon Coleman, inaccurate site plans right. Boone It appeals got disallowed Boone requests payment Coleman’s additional because were not properly submitted and refused to enforce the clause because it was so disproportionate penalty. unreasonable and as to amount to dismissing Because the court is neither nor the court affirming ease I appeals, dissent. Gambill,

Stephen C. A. for appellee. Rodeheffer John L.P.A., Ritter, Travers, & Kegler Kelley, Brown Hill Eric B. A. Timothy for appellant. Eckler, L.L.P., Jr., Florey,

Bricker Jack R. Rosati F. urging Adam curiae, Ohio, County reversal amici Commissioners Association of Association, Municipal League, Ohio School Boards and Ohio Associa- Township tion.

Case Details

Case Name: Boone Coleman Construction, Inc. v. Village of Piketon

Court Name: Ohio Supreme Court

Date Published: Feb 24, 2016

Citation: 50 N.E.3d 502

Docket Number: 2014-0978

Court Abbreviation: Ohio