United States Pipeline v. Northern Natural Gas Co.Annotate this Case
The Supreme Court affirmed the decision of the district court denying Northern Natural Gas Company's request for a declaratory judgment upholding its decision to withhold the maximum amount of liquidated damages allowable under its contract with U.S. Pipeline, Inc. for a delay in the completion of a relocation project, holding that Northern manifested a clear intent to waive the contractual liquidated damages provision.
The parties in this case entered into a construction contract providing that the relocation project would be substantially completed by a certain date. The project was not substantially completed by that date, and based on the liquidated damages provision in the contract, Northern withheld $351,000 in liquidated damages and refused to pay certain costs requested by U.S. Pipeline related to extra work orders. The district court denied Northern's request for a declaratory judgment upholding its decision to withhold liquidated damages from U.S. Pipeline, holding that Northern waived its rights to these liquidated damages under the contract. The Supreme Court affirmed, holding that the district court's determination that Northern's conduct amounted to a waiver was supported by the evidence and was not clearly wrong.