Broward County v. Brooks Builders, Inc.
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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2005
BROWARD COUNTY, a political subdivision of the State of Florida,
Appellant,
v.
BROOKS BUILDERS, INC.,
Appellee.
No. 4D04-2715
[July 27, 2005]
OPINION ON REHEARING
POLEN , J.
We grant appellee’s motion for rehearing in part, withdraw our slip
opinion of June 8, 2005, and substitute the following in lieu thereof. By
so doing, we correct our ruling as to appellee’s claim for
unpaid/underpaid work.
Appellant, Broward County, has timely appealed a final judgment in
favor of the Appellee, Brooks Builders, Inc., challenging different aspects
of the damage award. We reverse for the reasons that follow and remand
with instructions to conduct further proceedings consistent with this
opinion.
This case arises from a contract in which Broward County hired Brooks
to build a fire station adjacent to a runway at the Ft. Lauderdale airport.
The material facts are largely undisputed. The project was originally
scheduled to be completed in October 2001 for $5,480,025. Although
the structure itself was not complicated to build, the location, i.e., an
active runway, presented significant challenges and resulted in
numerous delays. The certificate of substantial completion was not
ultimately issued until July 17, 2002.
Due to the sensitive location of the construction site, the contract
expressly required strict compliance with all airport security measures,
including entry and exit procedures. Understandably, these security
measures increased significantly after the tragic terrorist attacks carried
out on September 11, 2001, causing even greater delays. In light of the
numerous delays, both due to 9/11 and the rephrasing of the
architectural plans, Brooks submitted timely notifications to the county
and requested extensions of time and additional compensation. Various
change orders were issued authorizing additional work in the aggregate
amount of $386,221.86. One specific work item was only partially paid
by the county because there was a dispute as to the correct value.
Brooks sought an additional $12,145.42 for that specific work item.
Many other change orders, however, were denied. Brooks also submitted
additional compensation requests, in the amount of $75,511.40, for work
that had not been authorized, which were denied by the county. Finally,
after the project was long since completed, Brooks submitted a request
for additional compensation for $72,252.76 for unauthorized work
performed by its subcontractor and $133,426.33 for unauthorized work
Brooks had to complete after Brooks terminated the subcontractor midprogress.
In December 2002, Brooks filed suit against Broward County alleging
breach of contract in which it sought damages for post-9/11 delays,
compensation for unpaid and underpaid work, and Eichleay1 damages,
which relate to home office overhead costs.
Broward County
counterclaimed for defective work and delay damages. The parties
proceeded to a non-jury trial.
Pursuant to Brooks’ post-trial
memorandum of law, Brooks requested $292,887.40 in damages for
unpaid and underpaid work, $217,745.10 in damages for post-9/11 gate
delays, $508,280.20 in damages for direct field costs and unabsorbed
home office overhead arising from construction delays, and $129,223.63
in pre-judgment interest. The trial court entered a final judgment for
Brooks, awarding Brooks $1,018,912.71 in damages and $129,223.63 in
prejudgment interest. Broward County was not awarded any damages
on its counterclaim. Although the trial court’s final judgment did not
itemize its award of damages, the total figure corresponds exactly with
Brooks’ post-trial memorandum of law. 2
Broward County first challenges the apparent award of damages for
post-9/11 gate access delays, arguing that the construction contract
does not provide for such damages. “The interpretation of a written
contract is a question of law to be decided by the court. An appellate
1
2
Eichleay Corp., ASBCA No. 5183, 60-2 B.C.A. (CCH) ¶ 2688 (ASCBA 1960).
There is an extra unexplained penny.
2
court is not bound to give the trial judge's interpretation or construction
of a contract any weighted presumption of correctness.” Atlanta Jet v.
Liberty Aircraft Servs., LLC, 866 So. 2d 148, 150 (Fla. 4th DCA 2004)
(citing Gilman Yacht Sales, Inc. v. FMB Invs., Inc., 766 So. 2d 294, 296
(Fla. 4th DCA 2000)).
Notably, the trial court failed to make any
findings of fact or conclusions of law in its final judgment to explain its
reasoning. This court, while acknowledging such findings and
conclusions may not be mandated, noted:
Findings of fact and an analysis by the trial court are, however,
extremely helpful to appellate court review. Without them, the
appellate court may not understand the logic the trial court
perceived in its result. Where they are absent, the appellate court
must determine whether, based upon the record, the proper
analysis would have produced the result reached by the trial
court.
Town of Jupiter v. Alexander, 747 So. 2d 395, 400 (Fla. 4th DCA 1998).
The post-9/11 delays for which Brooks sought additional
compensation occurred daily as the construction workers spent
significant time gaining access to the airfield through the security gates.
The construction contract at bar did not anticipate any extraordinary
delays resulting from the aftermath of 9/11, as 9/11 itself was
unforeseen, apparently even by our country’s intelligence agencies.
Nevertheless, there are numerous provisions in the construction contract
suggesting that any risk of loss for unexpected changes in conditions was
to be fully assumed b Brooks. The provision that Brooks relies upon
y
most heavily in arguing that the construction contract authorizes an
award of damages for post-9/11 gate access delays is Article 80-06,
which provides:
In the event that the Contractor is ordered by the Engineer, in
writing, to suspend work for some unforeseen cause not
otherwise provided for in the contract and over which the
Contractor has no control, the Contractor may be reimbursed for
actual money expended on the work during that period for
shutdown. … No provision of this article shall be construed as
entitling the Contractor to compensation for delays due to
inclement weather, for suspensions made at the request of the
Contractor, or for any other delay provided for in the contract,
plans, or specifications.
3
However, the post-9/11 gate access delays were not orchestrated by any
orders of Broward County’s engineer. Brooks’ strained interpretation of
this provision so as to authorize damages for post-9/11 gate access
delays is an interpretation we are unwilling to accept. Accordingly, we
reverse that portion of the final judgment which awarded damages for
post-9/11 gate access delays.
Broward County next challenges the apparent award of damages for
unpaid and underpaid work. We reject the county’s argument for
reversal on the basis of sovereign immunity, as we find it unpersuasive.
However, the county also contends that the express terms of the
construction contract bar any claims for additional compensation.
Broward County asserts two separate arguments of which we find only
one to be persuasive.
Section 50-16 of the contract provides that any claims for additional
compensation must be submitted within ten calendar days after
completion of the work. While most of Brooks’ claims complied with
section 50-16, Brooks did not submit a final accounting of the additional
$133,426.33 in costs it incurred in completing work it undertook on
behalf of its subcontractor until more than one year after completion.
This claim is barred by the express terms of the construction contract.
As such, we remand with instructions that this item be excluded from
the damage award.
Broward County’s final challenge on appeal is the award of Eichleay
damages. This court has adopted the federal approach to Eichleay
damages. See Broward County v. Russell, Inc., 589 So. 2d 983 (Fla. 4th
DCA 1991).
The damages at issue are damages which are awarded, pursuant
to Eichleay, to a government contractor who suffers unabsorbed
home office overhead when the government delays work on the
contract indefinitely but requires the contractor to remain
available to resume work immediately on the government's
instruction. The rationale for such damages is explained, thusly:
Home office overhead costs are those [costs] that are expended for
the benefit of the whole business, which by their nature cannot
be attributed or charged to any particular contract. They are fixed
costs that are allocated on a pro-rata basis among various
contracts. When the government delays or disrupts contract
performance, the contractor's stream of income decreases while
the fixed costs allocated to that contract continue. The Eichleay
4
formula "seeks to equitably determine allocation of unabsorbed
overhead to allow fair compensation of a contractor for
government delay. ...
Entitlement to Eichleay damages depends on proof of three
elements: (1) a government-imposed delay occurred; (2) the
government required the contractor to "standby" during the delay;
and (3) while "standing by," the contractor was unable to take on
additional work. Once the contractor proves the first two
elements, a prima facie case of entitlement to Eichleay damages is
established, the burden of production then shifts to the
government to show either (1) that it was not impractical for the
contractor to obtain 'replacement work' during the delay, or (2)
that the contractor's inability to obtain such work, or to perform
it, was not caused by the government's suspension.
Triple R Paving, Inc. v. Broward County , 774 So. 2d 50, 57 (Fla. 4th DCA
2000) (citations omitted).
The Federal Circuit Court of Appeals, however, has recently
clarified its position on the extent of the suspension necessary to
satisfy the standby requirement in P.J. Dick Inc. v. Principi, 324 F.3d
1364, 1371 (Fed. Cir. 2003). We adopt the following clarification:
The contractor must show effective suspension of much, if not
all, of the work on the contract. … [E]very case where this court
has held a contractor to be placed on standby has involved a
complete suspension or delay of all the work or at most continued
performance of only insubstantial work on the contract. See, e.g.,
E.R. Mitchell Constr. Co. v. Danzig, 175 F.3d 1369, 1372, 1374
(Fed. Cir. 1999)(holding subcontractor was entitled to Eichleay
damages where it pe rformed "some work" on the contract, but
where most "work could not proceed until the faults [causing the
suspension] were cured"); [West v.] All State Boiler, Inc., 146 F.3d
[1368] at 1370, 1373 (Fed. Cir. 1998)(holding contractor was
entitled to Eichleay damages where the government suspended all
work on the contract); Satellite Elec. Co. v. Dalton, 105 F.3d 1418,
1421 (Fed. Cir. 1997)(holding contractor was on standby where
all the work on the contract was stopped). … In addition to being
implicit in our early cases, our later decisions explicitly state that
such a suspension or delay of the work on the contract is a
prerequisite to a finding that the government placed the
contractor on standby. In Melka [Marine, Inc. v. United States, 187
5
F.3d 1370, 1375 (Fed. Cir. 1999)], we held that a contractor was
not on standby where it “was working on the contract and the
government had not suspended all contract work.” There, the
government stopped work on one type of work, but, by
resequencing the work under the contract, the contractor was
able to perform substantial work on another type of work with
comparable direct cost billings. Id. at 1375-76. [See also] Carousel
Dev., Inc., ASBCA No. 50719, 2001-1 B.C.A. (CCH) ¶ 31,262,
2001 WL 66657, 2001 ASBCA Lexis 9, at *56-57 (ASBCA Jan. 23,
2001)(concluding contractor was not on standby where it
continued to perform substantial amounts of work on the
contract--here “approximately one quarter of the entire scope of
the contract work”).
P.J. Dick, 324 F.3d at 1371-73.
Brooks’ principal testified that Brooks faced delays at “virtually every
turn” because “either the plans were deficient and we had trouble getting
a response” or “we couldn’t get change orders” and “we couldn’t get
anything we needed in the way of support from either the owner or the
architect.” When questioned as to whether work continued nonetheless,
Brooks’ principal answered “We kept working the best we could.
Although, I must say it wasn’t in a sufficient manner.” Such an answer
does not demonstrate effective suspension of much, if not all, of the work
on the contract. Furthermore, there is a trial exhibit documenting
Brooks’ substantial monthly invoices. 3 These monthly invoices appear
3
Payment #
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Date Requested
06-13-00
07-05-00
08-21-00
09-06-00
10-04-00
11-07-00
12-08-00
01-05-01
02-02-01
03-08-01
04-05-01
05-03-01
06-04-01
07-03-01
08-07-01
09-10-01
10-01-01
11-07-01
6
Amount
$306,761.00
$266,128.92
$137,316.83
$143,008.58
$399,122.73
$260,157.37
$254,535.35
$177,943.25
$191,682.77
$284,550.46
$385,981.20
$270,521.79
$440,663.35
$439,217.74
$331,199.55
$270,494.24
$170,137.68
$248,204.64
to suggest the exact opposite, namely that work continued. Accordingly,
we find that the trial court did err, to the extent that it awarded Eichleay
damages. However, because the Final Judgment does not itemize the
damages and there is a $2,983.21 discrepancy between the amount of
damages (Eichleay and direct field costs) Brooks sought at trial and in its
post-trial memorandum of law, the exact amount of Eichleay damages
that Brooks was awarded is not entirely clear. Consequently, we again
remand with instructions that the exact amount of Eichleay damages
awarded should be calculated and subtracted from the Final Judgment.
To the extent possible, the trial court should rely on the previous record
in making all adjustments and conduct further evidentiary hearings only
if necessary.
Reversed and Remanded.
GUNTHER and HAZOURI , JJ., concur.
*
*
*
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; J. Leonard Fleet, Judge; L.T. Case No. 02-23650 08.
Edward A. Dion, Andrew J. Meyers, and James D. Rowlee, Fort
Lauderdale, for appellant.
Bruce Charles King of Carlton Fields, P.A., Miami, for appellee.
Not final until disposition of timely filed motion for rehearing.
19
20
21
22
23
24
12-06-01
01-02-02
02-04-02
03-04-02
03-27-02
10-11-02
7
$318,894.50
$245,175.55
$76,464.26
$109,483.86
$131,404.14
$14,299.21
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