Opinion
CA No. 98C-10-327-JEB
Submitted: June 28, 2002
Decided: September 17, 2002
Decision Following Bench Trial.
Finding in Part for Plaintiff and in Part for Defendant.
Plaintiff's Motion to Amend the Complaint. Motion Granted.
Appearances: Thomas Marconi, Esquire Attorney for Structa-Bond, Inc., Plaintiff.
John G. Packard, Esquire Attorney for Mumford Miller Concrete, Inc., Defendant.
OPINION
This is the Court's decision following a bench trial on Plaintiff Structa-Bond's breach of contract claim against Defendants Mumford Miller, Inc. and USFG Company. Plaintiff alleges that Mumford failed to pay Plaintiff for performance of its obligations under two written construction contracts and one verbal agreement. Plaintiff seeks payment of $65,950.87, plus interest, under a bond secured by Mumford Miller from USFG. Following trial, Plaintiff moved to amend the complaint to include claims for quantum meruit and quantum valebant. For the reasons explained below, Plaintiff's motion to amend is Granted. On the merits of the case, the Court finds for Plaintiff and against Defendant in the amount of $53,803.47.
FACTS
In April 1997, Mumford and the Wilmington Housing Authority (WPA) entered into a contract in which Mumford was the general contractor retained to perform repairs and preventive maintenance to the premises known as the Customs House Facility, located at 7th and King Streets in Wilmington, Delaware. The Customs House Facility includes the Wyndam Hotel, where most of the construction at issue took place. The WHA hired Desman Associates, an architectural firm based in New York City, to oversee the project, and Matthew Gallagher was Desman's project engineer.
Mumford, which is owned and operated by Richard L Mumford, initially planned to perform most of the work itself, including the waterproofing and joint installation work. When the WHA insisted on retaining licensed installers for the these items, Mumford subcontracted with Plaintiff Structa-Bond, which is owned and operated by Donald Centrella. On August 6, 1997, Plaintiff and Mumford entered into two subcontracts pursuant to which Plaintiff would supply certain labor and materials to the construction project. The first subcontract provided that Plaintiff would install expansion joint systems in the concrete surface areas outside the hotel. Mumford was to provide the materials. The contract price was $3,300. The second subcontract provided that Plaintiff would apply waterproofing compounds to concrete surfaces at the hotel entrance and on the plaza behind the hotel. Plaintiff was to provide both materials and services. The contract provided prices per square foot but did not specify the total area.
Plaintiff began work in September 1997, after Mumford had finished laying concrete. Plaintiff's work under the expansion joint contract was completed, and Plaintiff was paid in full. However, by October, the parties were in disagreement about every aspect of Plaintiff's waterproofing work, including schedule, manpower, and compliance with specifications. Problems also resulted from changes recommended by one of the coating manufacturers.
When Plaintiff had nearly completed its work at the hotel entrance, Mumford terminated the job. Plaintiff had previously completed the waterproofing work on the plaza behind the hotel. Defendant paid Plaintiff nothing on the waterproofing contract. WHA paid Defendant in full on its contract by June 10, 1998.
In October 1998, Plaintiff filed a Complaint in Superior Court alleging that Defendants had breached the contracts by not paying Plaintiff in full for its work. Plaintiff alleged that between September 15, 1998, and November 18, 1998, it substantially performed its obligations under both contracts. Plaintiff further alleged that the amounts due under the contracts were increased as a result of changes and cancellations which were agreed to by the parties.
Defendants argue that Plaintiff's work was not complete, was not performed in accordance with the contracts, and was unsatisfactory to both Mumford and the WHA. While Mumford acknowledges that Plaintiff performed certain tasks, Mumford seeks set offs to Plaintiff's costs totaling $50,526.01, and a counterclaim on the expansion joint contract for $1056.44. Defendant seeks an award of $4,395.75 from Plaintiff.
Following a bench trial held between January 31 and February 6, 2002, the Court reserved decision pending receipt of post-trial briefs.
MOTION TO AMEND
After the briefs were filed, Plaintiff filed a motion to amend the complaint to allege quantum meruit and quantum valebant as alternative theories of recovery. Defendant Mumford opposes the motion, claiming that it is untimely and fails to join a necessary party, the WHA, and that the proposed amendment is prejudicial to Defendants and does not relate to issues consented to be tried.
Under Super.Ct.Civ.R. 15, amendments to pleadings are to be allowed in the absence of prejudice to the opposing party. The purpose of the rule is to encourage the disposition of a case on its merits. A decision to permit or deny an amendment is left to the discretion of the trial judge.
Chrysler Corp. v. New Castle County, 464 A.2d 75 (Del.Super. 1983).
Grand Ventures, Inc. v. Whaley, 632 A.2d 63, 72 (1993) (citing Bellanca Corp. v. Bellanca, 169 A.2d 620, 622 (1961)).
Id.
Defendant argues that the motion to amend must be denied because it fails to join a necessary party, the WHA. Under Super.Ct.Civ.R. 19(a), "a person who is subject to service of process and whose joinder will not deprive the Court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties. . . ." The purpose of this provision is to "protect those who are already parties by requiring the presence of all persons who have an interest in the litigation so that any relief that may be awarded will effectively and completely adjudicate the dispute."
Heritage Homes of DeLaWarr, Inc., 1989 WL 41257 (Del.Super.) (quoting 7 Wright, Miller Kane, Federal Practice and Procedure: Civil 2d, § 1604 at 42).
Defendant has not shown that relief cannot be accorded in the absence of WHA. Mumford took out the bond, and Mumford contracted with Plaintiff to perform certain tasks. WHA has paid Mumford in full, pursuant to the contract as well as certain change orders. The Court finds that the WHA is not a necessary party to Plaintiff's allegations under the amended complaint.
Plaintiff moves to amend pursuant to Rule 15(b), which provides for amending a complaint to conform to the evidence at any time, even after judgment:
When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the Court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the Court that the admission of such evidence would prejudice the party in maintaining the party's action or defense upon the merits. The Court may grant a continuance to enable the objecting party to meet such evidence.
Plaintiff asserts that Mumford did not object to Plaintiff's evidence concerning the additional materials and labor allegedly supplied by Plaintiff and that under Rule 15(b) Mumford therefore impliedly consented to try the issues of quantum meruit and quantum valebant.
Although Delaware case law considering the proper use or application of Rule 15(b) is scant, the federal courts have often entertained post-trial motions to amend a complaint pursuant to F.R.C.P. 15(b), which is the model for Delaware's rule. The federal cases show that an amendment under Rule 15(b) "should be permitted if the record indicates that the parties understood that the evidence was aimed at the unpleaded issue." The party opposing the amendment has the burden of showing that the amendment would be prejudicial to that party's defense. During his opening statement, counsel for Mumford voiced his awareness that the case entailed quantum meruit issues: "Structa-Bond never filed a claim for quantum meruit in this action. You cannot award Structa-Bond any quantum meruit damages."
In Grand Ventures, Inc. v. Whaley, 632 A.2d at 71-72, the Court, without comment, affirmed the trial court's decision to grant plaintiff's Rule 15(b) motion to amend complaint at the close of the evidence to include a claim of negligence where there was insufficient evidence to establish that defendant had a duty to plaintiff.
United States v. Croom, 1994 WL 88783 at ** 1-2 (9th Cir. (Cal.)).
Croom at **2.
Tr. (1/31/01) at 25.
For this reason, counsel confined his argument to breach of contract issues.
However, Rule 15(b) addresses the need for the pleadings to conform to the evidence and the issues, not to counsel's argument. In this case, the evidence presented at trial was identical to what it would have been if the Complaint had included claims of quantum meruit and quantum valebant.
To prevail on a quantum meruit claim, a plaintiff must show that it performed services with an expectation that the defendant would pay for them, and that the services were performed under circumstances which should have put the defendant on notice that the performing party expected to be paid by the defendant. To prevail on quantum valebant, a plaintiff must show that the defendant received materials from the plaintiff and enjoys the benefit of them. The elements of these two causes of action conform to the facts that were presented by both parties at trial. Therefore, Defendant Mumford cannot show prejudice. Plaintiff's motion to amend the Complaint is Granted.
Construction Systems Group, Inc. v. The Council of Sea Colony, WL 622421 (Del. 1995) (citing Bellanca Corp. v. Bellanca, 169 A.2d 620, 623 (Del. 1961)).
Hayes Sons Construction Co. v. Mangini, WL 458850 (Del.Super. 1999).
EXPANSION JOINT CONTRACT
According to the expansion joint contract for the concrete plaza deck outside the hotel, Plaintiff agreed to fabricate and install 152 linear feet of Interspan and 10 linear feet of Jeene Joint for a lump sum of $3300. Although the contract specifies the length of the joint, it does not provide for a particular depth. Mumford was to provide the material. Plaintiff is a certified installer of both Interspan and Jeene Joint. Plaintiff completed the joint work and was paid $3850, or $550 more than the full contract price.
The contract provided that Structa-Bond was to "supply all necessary labor, equipment, tools, supplies, etc., to fabricate and install approximately 152 [linear feet] of Interspan and 10 [linear feet] of Jeene Joint" for a lump sum of $3300. Pl.'s Ex. 1 at Tab 1.
Plaintiff seeks $4295.00 under the contract, arguing that the check stub for the $3850 was labeled as payment for waterproofing membrane and was not payment for the joint installation work. In addition to the contract price, Plaintiff seeks to recover the cost of additional labor and material that Plaintiff supplied on the day of the installation. While applying the epoxy material, Centrella realized there was not enough to complete the job and went to his office to pick up an additional 5 gallons of epoxy. Plaintiff argues that the extras were necessary because Defendant made the block-outs for the Interspan epoxy deeper than recommended by the manufacturer. For the material, Plaintiff seeks $275, which is priced at $55 per gallon. For the labor, Plaintiff seeks $720, to cover the cost of four men working two hours each at $90 per hour, Saturday's time-and-a-half rate. Defendant argues that the $3850 check was mislabeled and was in fact payment on the joint installation contract. Defendant's position on the so-called extras is that this work was covered under the contract price. Defendant also counterclaims for $1056.44 as reimbursement for warranty work performed by Hinton on the Interspan joints on September 28 and October 4, 2001.
Pl.'s Ex. 1 at Tab 5.
The first question is whether the $3850 check was payment for the joint installation contract or the Neogard portion of the waterproofing contract. The check stub is labeled "waterproof membrane," and Plaintiff includes it as payment for the Neogard work in its post-trial memorandum. At trial, the parties agreed that Plaintiff had been paid in full on the contract and was seeking payment only for additional labor and materials. Mumford reiterated on cross examination that the check was for the joint installation, not the waterproofing. Although Defendant's brief offers no explanation for the $550 discrepancy, common sense suggests that the difference was intended as payment for the additional epoxy used, especially when Defendant's foreman, Robby Hinton, was present at the installation and was fully aware of the extra work. When asked why there were not enough materials to complete the Interspan installation, Hinton replied that the supplier had not sent enough material. Under the contract, Defendant Mumford was responsible for providing all materials. The Court finds by a preponderance of the evidence that the $3850 was intended as payment for the $3300 contract price as well as the additional materials and that the identification on the check as payment for waterproof membrane was a clerical error.
See Pl.'s Ex. 1 at Tab 13, page 2.
Tr. (1/31/02) at 140.
Tr. (2/6/02) at 149.
The next question is whether Plaintiff is entitled to the difference between the check for $3850 and Plaintiff's claim for $4295, which is $445. It is undisputed that Centrella used more material than was provided by Interspan. Hinton, referring to Plaintiff's Tab 2, testified that the engineering drawing for the concrete block-outs allowed for minimum and maximum measurements. Hinton stated that he made the block-outs to the maximum measurements because the joints are easier to install in the larger space. Hinton also acknowledged that Interspan, the supplier, had not sent enough material to complete the joints as sized. In essence, Centrella offered to complete the job using his own materials and additional man-hours. Hinton accepted the offer. Centrella performed the additional work and completed the job within one day, as required by the contract.
Expansion Joint contract, ¶ 2.
Defendant argues that Plaintiff never submitted a written change order, as required under the contract, and is therefore not entitled to payment. Defendant relies on ¶ 19 and ¶ 33 of the contract as support for this position. Paragraph 19, Changes in Work, provides as follows:
In the event Contractor requests Subcontractor to perform extra work or deductions to work, Subcontractor shall submit its written quotation covering such change within seven (7) days from the date of such written notification by Contractor and such quotation shall include the necessary supporting details. It is understood and agreed that payment shall not be made for extra work until a written Modification has been issued by contractor incorporating this additional cost into the Subcontract Price and Contractor shall then pay Subcontractor for such extra work as such work is completed and payments are received from the Owner.
This provision, which requires written notification from the contractor and a written quotation from the subcontractor, applies to a situation where there is an anticipated change, and both contractor and the subcontractor have the opportunity to respond in advance. In regard to the extra epoxy work, no such opportunity existed. The only way to complete the job in one day, as required under the contract, was for Centrella to use his own epoxy and spend additional time, with Hinton's approval. The Court concludes that this work does not fall within the scope of § 19.
Paragraph 33, which appears under Additional Articles, provides as follows:
No increase in the subcontract amount will be recognized without written approval prior to the performance of the related change. This Subcontractor recognizes that Richard L. Mumford or his authorized agent are the only agents of Mumford and Miller Concrete, Inc. who are authorized to bind said contracts, covenants, extras or agreements of any nature.
Like ¶ 19, this provision does not pertain to an on-the-spot need for materials and manpower to finish a job that had to be completed in one day.
The Court concludes that the contract makes no provision for payment for the extra services and materials. However, when recovery under a contract is not available, an award under the theory of quantum meruit may be available. The term quantum meruit literally means "as much as he deserves." Such an award is discretionary with the Court as to the fair value of services rendered. Recovery may also be possible under the theory of quantum valebant, if a defendant enjoyed the benefit of supplies received from a plaintiff. While under both theories it could be argued that WHA not Defendant enjoyed the benefit of the additional labor and material, it is also true that Defendant enjoyed the benefits of completing its obligations to WHA and receiving full payment on the contract. The Court finds by a preponderance of the evidence that Plaintiff is entitled to recover, under the theories of quantum meruit and quantum valebant, respectively, the value of the labor and material provided to Defendant. Plaintiff seeks $995 for the extras. Having already been paid $550 beyond the contract price, Plaintiff is entitled to an award of $445.
Nepa v. Marta, 415 A.2d 470, 472 (Del. 1980).
Id.
Id.
Hayes Sons Construction Co. v. Mangini, WL 458850, Order at **1.
See J.O.B. Construction Co. v. Jennings Churella Services, Inc., WL 985106, Order at ** 4 (Del.Super. 2001) (noting that when an owner has made full payment to a general contractor a subcontractor who is not paid cannot complain about the owner's benefit).
Defendant counterclaims for $1056.44 for joint repairs completed by Hinton in September 2001. Defendant argues that the repair work should have been completed by Plaintiff under the contractually required warranty and that Plaintiff failed to provide any warranties. Plaintiff argues that there is no evidence that the alleged failure was the result of a faulty joint and that Hinton's repair work in fact caused the problem.
Under the joint contract, Plaintiff guaranteed its work for one year, and also guaranteed the work to the extent provided in the contract documents, which include the project plans and specifications. The project plans, which might put this question to rest, are not included in the evidence, as acknowledged by counsel for Defendant. According to the testimony of Matt Gallagher, Desman's project engineer, section 1.08 of the project specifications requires a five-year warranty from the materials manufacturer and the special coating contractor for the waterproofing systems, but he does not mention a five-year warranty for the expansion joints. In letters to Centrella, dated December 22, 1997, and January 9, 1998, Swain (Mumford's superintendent) requested five-year warranties for the Interspan and Jeene Joint installations. Swain also wrote letters to the joint material manufacturers requesting them to demand that Plaintiff supply WHA with the five-year warranties. However, none of these letters refers to a specification section, and standing alone the letters do not constitute evidence of a contractual requirement. Therefore, the Court accepts Mr. Gallagher's testimony that the project plan requirement for a five-year warranty pertains to the waterproofing contract, which is consistent with the contract itself.
Expansion Joint contract, ¶ 8.
Expansion Joint contract, ¶ 1.
Def.'s Ex. 1 at Tab 54 is identified as "Project Plans," and Tab 55 is identified as "Project Manual and Specifications." Neither tab includes anything other than the title sheet.
Tr. (1/31/02) at 129-30.
Def.'s Ex. 1 at Tabs 30 and 32.
Def.'s Ex. 1 at Tabs 33 and 34. See also Def.'s Ex. 1 at Tab 36 (letter from Swain to Centrella, dated January 27, 1998, emphasizing Plaintiff's refusal to supply joint installation warranty, but not citing to spec section).
Pursuant to Exhibit A of the waterproofing contract, Plaintiff agreed to provide a 5-year warranty for both the Neogard and the Strongcote installations. Paragraph 8 provides a 1-year warranty identical to that included in the joint installation contract.
The only evidence pertaining to an expansion joint warranty required from Plaintiff is the one-year warranty provided for in Paragraph 8 of the contract. Hinton performed joint repair work on September 28 and October 4, 2001, after Plaintiff's one-year contract warranty had expired. Defendant is not entitled to an award on its counterclaim.
WATERPROOFING CONTRACT
Neogard membrane. Plaintiff argues that it substantially completed the Neogard installation and, after allowing for certain set-offs, it seeks to recover $23,341.87 for this work. Plaintiff argues that it completed installation of 9600 square feet of Neogard on new concrete, which is highlighted in purple on the project plan; 700 square feet highlighted in blue on the project plan; and 542 square feet of patched areas throughout the white area of the plaza. The total square footage is 10,842, priced at $3.50 per square foot, for a total price of $37,947, before valid deductions.
From this figure, Plaintiff concedes the following deductions: (1) $15,721.03 for a materials payment by Mumford; (2) $2,834 for wages paid to John Fellows, a Mumford laborer who assisted in clean-up; and (3) payment to Plaintiff of $3850. As to John Fellows, Defendant's Exhibit I at Tab 38 [or 39] shows that Defendant paid Fellows $1269. The $2,834 figure is for 12 unspecified "extra work reports," for which Defendant will not receive credit. The Court has already found that Mumford's payment of $3850 was for the joint contract and does not impact the Neogard calculations. Thus the applicable Neogard set-offs are $15,721.03 for materials and $1269 for additional labor, reducing Plaintiff's amount due under the contract to $20,956.97. In addition, Plaintiff seeks $7800 in extra costs resulting from the alleged interference of another subcontractor, Technical Services Mid- Atlantic (Tech Services), at Mumford's behest. Plaintiff asserts that this amount is not unspecified damages for delay but actual out-of-pocket clean-up costs, which were not part of its responsibilities. Thus Plaintiff seeks an award of $28,756.97 for the Neogard waterproofing work.
Def.'s Ex. 1 at Tab 39.
See Pl.'s Ex. 1 at Tab 11 for a breakdown of the additional charges.
The Neogard system includes a primer coat and five coats of urethane. Each coat typically requires a 24-hour curing time and will not cure if the temperature drops below approximately 40 degrees F.
Plaintiff began hosing down the concrete plaza with a power washer rented from Tech Services on September 17, 1997, several days after Mumford finished laying the concrete. Because the surface was dirtier than expected, Centrella rented a stronger power washer and used it on September 18 and 19. Centrella's men started installation of the Neogard on September 22 and 23. On September 24, Tech Services began hydrodemolition of old joint material from the perimeter of the plaza and also the removal of old coating from certain areas of the plaza deck. Robby Hinton, Mumford's foreman, had accepted an offer from Mike Alloway, owner and president of Tech Services, to remove caulk along two of the perimeter walls and various patches throughout the plaza deck.
Because Tech Services' high power spray gun shot hot water, debris and small bits of old urethane coating material in every direction, Plaintiff's men moved around to find an area to coat. Centrella asked Hinton if the demolition could be postponed about five days until the initial coatings were applied and the surface protected, but Hinton refused. Centrella had partially coated several areas but had to move before finishing them. He was unable to complete them without cleaning and recoating them at additional cost. Tech Services performed hydrodemolition on the plaza deck on the following dates: September 23 through 26 and 30; October 1 through 3 and 6 through 10.
Tech Services men had built a three-sided box with mesh on the top to catch as much debris as possible, but the water spewed freely, and two hoses, in addition to the blast hose, were run back and forth on the deck. Tech Services used a high- powered pressure washer wand with a spinning head to remove the old membrane, blowing water as well as pieces of membrane in every direction. Alloway acknowledged that the high-powered hose had actually blasted hot debris into the newly prepared surface, and that the trucks driving back and forth to refuel had left track marks. He also testified that while he was working on one section of the plaza, his truck and hoses were on other areas. Tech Services worked for Mumford 12 days in September and October, and then did Plaintiff's prep work on October 10, 13, 14, and 15.
Hinton, Mumford's foreman, was on the job site everyday. He conceded that the old caulk material would have become embedded in Plaintiff's initial coatings because it was dispersed as hot epoxy by the high-power washer.
Because of the unanticipated hydrodemolition, Centrella was unable to follow the two-part installation he had planned. His men moved from spot to spot in reaction to Tech Services' shifting locations, cleaning up debris as they went. The debris had to be removed by hand from the new coating before the next coat could be applied. Defendant argues that the work fell behind because Plaintiff undermanned the job. Plaintiff argues that it sent as many men as could work in the limited space available due to the hydrodemolition.
The Court finds by a preponderance of the evidence that Tech Services interfered with Plaintiff's work in two ways. It prevented Plaintiff from completing the job in the orderly, two-part stages that Centrella had planned. It caused further delay by dirtying the already prepared surface, necessitating significant clean-up efforts. Alloway and Hinton both acknowledged this fact.
Defendant also argues that Plaintiff failed to fulfill its obligations under ¶ 5B of the contract. These obligations include complete and satisfactory work, submission by Plaintiff of release of liens and certificates of payment to suppliers, proof of satisfaction of the subcontractor's indebtedness, and contractor's receipt of compensation from the owner. As is clear from the nature of these requirements, ¶ 5B refers to final payment. In fact, ¶ 5B begins with the statement that "[f]inal payment shall be due within forty (40) days after all of the following four conditions have been satisfied. . . ." Defendant cannot rely on these provisions for withholding all payment under the contract.
Paragraph 5A establishes the conditions for partial payment:
Approximately ten (10) working days after contractor receives payment from owner, 90% of the value, proportionate to the amount of the total payments of labor and materials incorporated in the work at the site up to the first day of the previous month, as estimated by Contractor (whose estimation shall be binding on the parties hereto) less the amount of previous payments and retainage, shall be paid.
The record shows that Gallagher (Desman) sent Mumford the Certificate of Substantial Completion on December 5, 1997. The accompanying letter states that final payment rested on Desman's receipt of product warranties and punch list repairs.
Def.'s Ex. 1 at Tab 28.
At trial, Centrella stated that he chose not to provide the warranties or to repair the items on the punch list because he had not received any payment for the Neogard work, which was substantially completed. Mumford acknowledged at trial that he withheld payment for these reasons, and because Plaintiff had not supplied the release and waiver of liens. Mumford ultimately provided the Neogard warranty.
Def.'s Ex. 1 at Tabs 42 and 48.
The record shows that by June 10, 1998, Defendant Mumford was paid $39,360 for its Bid Item 10A (similarly identified on Plaintiff's subcontract), which is the 9600 square feet of Neogard coating on the back plaza, as shown in purple on the project plans. The record also shows that Mumford was paid $ 7985.05 for its Bid Item 10C, which is membrane removal and reinstallation of new coating, identified on Plaintiff's subcontract as "not included in Bid Items 3a, 3b, 10a 10b." This area is identified in blue on the project plans.
Pl.'s Ex. 1 at Tab 6.
Def.'s Ex. 1 at Tab 1, Exhibit A.
Based on these facts of record, the Court finds by a preponderance of the evidence that the requirements of Contract ¶ 5A were met no later than June 10, 1998, when Mumford received full payment on its contract with WHA and months after Desman had issued its Certificate of Substantial Completion. It is undisputed that Plaintiff failed to meet the requirements for full payment under 5B. Under ¶ 5A, Plaintiff is therefore entitled to 90 percent of the value of its work under the contract. With the set-offs described in this section, infra, the Court concludes that Plaintiff is entitled to 90 percent of its work performed under the contract, that is, 90 percent of $20,956.97, which equals $18,861.27.
In regard to the extra costs resulting from Tech Services work, Plaintiff seeks $7800. As discussed above, the unanticipated hydrodemolition in areas where Plaintiff was attempting to lay new coating led to significant additional costs. Defendant argues that Plaintiff never had enough manpower to complete the work on time, but Plaintiff asserts that it provided as many men as could work in light of the demolition work. It is undisputed that Plaintiff completed extra clean-up work and rework of certain areas. Hinton and Alloway, both of whom were present at the site, conceded these facts. Under the theory of quantum meruit, the Court finds by a preponderance of the evidence that Plaintiff is entitled to an award of $7800 for the extra work necessary to complete the job.
Strongcote installation. The waterproofing contract also provided for Plaintiff to install Strongcote coating on the concrete in front of the hotel. The parties agree that Mumford canceled the job before it was complete, but they disagree about how much work Plaintiff completed and also about why the job was canceled. Plaintiff asserts that it finished everything but the final joint detailing and the two coatings required under the contract and also performed extra work at Defendant's request. Plaintiff seeks to recover $24,446 under the contract, and $19,820 in extras, for a total of $44,266. Defendant argues that all of Plaintiff's work was unsatisfactory and that removal of the old membrane was the only thing completed, which was performed by Tech Services. Defendant asserts that nothing is due Plaintiff either under the contract or for the alleged extras.
The contract required Plaintiff to remove the existing membrane, clean the concrete slab, remove and treat all joints per the drawings and specifications, apply two coats of Strongcote, and provide a five-year warranty signed by both Plaintiff and the manufacturer. Although the contract provides for a price of $5.64 per square foot, it does not specify the total area to be coated.
See Pl.'s Ex. 1 at Tab 17.
Prior to removing the coating at the front of the hotel, Tech Services performed work for Defendant on the plaza behind the hotel. The parties agree that Tech Services began its work for Plaintiff at the hotel entrance on October 10 and finished on October 15. The parties also agree that this work fell within the scope of Plaintiff's contract and that Defendant paid $6,463.80 directly to Tech Services instead of paying Plaintiff. Plaintiff argues that standard industry practice is for the general contractor to pay the subcontractor who in turn pays its own subcontractor and keeps a 10 percent profit. Plaintiff factored this mark-up into his bid.
When Tech Services finished its removal work on October 15, Centrella's men completed the removal by hand because the equipment used by Tech Services could not reach to the edges of walls or columns. Centrella was aware of this handwork from the outset and factored its cost into his bid price. Plaintiff's workers then caulked and detailed, that is, sealed, 988 feet of tooled joints and 233 feet of expansion joints. With this work complete, they were ready to apply the final coats of Strongcote.
On October 24, 1997, Centrella received a phone call and a faxed memo from George Van Dyk, executive vice president of Strongwall Industries, Inc., the manufacturer of Strongcote. Van Dyk had visited the site and observed that vehicles were passing back and forth on the surface. In the memo, Van Dyk recommended using the vehicle grade of Strongcote rather than the pedestrian grade for the crack treatment. He did not criticize Plaintiff's work. Centrella sent a copy of the fax to Swain (Mumford) and added a note that Van Dyk was in effect changing quantities, steps, materials and costs. Centrella also stated in the fax that he had spoken to Gallagher, who indicated that WHA would cover the additional costs.
Pl.'s Ex. 1 at Tab 23.
Pl.'s Ex. 1 at Tab 24.
On October 27, Centrella received a letter from Van Dyk outlining specific changes, although they were less extreme than those contained in his first memo. Because WHA had agreed to restrict vehicles from the deck, Van Dyk recommended using the pedestrian grade but strengthening it by adding an additional coat of EM-100-N, a sealant which cures to a solid rubber, broadcasting sand into it, and applying an additional coat of pedestrian grade Strongcote. Gallagher (Desman) was sent a copy of this memo by both Swain and Van Dyk.
Pl.'s Ex. 1 at Tab 25.
Pl.'s Ex. 1 at Tab 27.
Pl.'s Ex.1 at Tab 25.
After receiving Van Dyk's memo, Centrella installed the joint detail according to the new instructions. Hinton (Mumford) and Eyad (Desman) were present at the installation.
On November 4, 1998, Van Dyk again visited the job site. He then sent a fax to Swain (Mumford) listing seven items that required repair. At trial, when asked about the accuracy of this memo, Centrella stated that his work conformed to industry standards, that some of the problems were caused by Defendant's inadequate concrete work, that some of the alleged deficiencies were minimal and that others were so hard to detect as to be questionable. Centrella also asserted that Van Dyk's November 4 statement that the EM-100-N detailing had been improperly applied in overly large joints was inconsistent with his October 27 instructions. Centrella acknowledged that he had not used sand in the application of the EM-100-N coating, but stated that Van Dyk had previously told him that that omission caused no real problems.
See Pl.'s Ex. 1 at Tab 28.
See Pl.'s Ex. 1 at Tab 29.
See Tr. (1/31/02) at 199-200.
The effect of Van Dyk's November 4 memo was that Plaintiff's joint work had to be completely removed and reinstalled. Plaintiff argues that only two of the problems noted by Van Dyk required total demolition of the joint work and that those flaws existed at the time that Van Dyk first visited the site on October 24. Plaintiff asserts that the third item, pertaining to the imperfectly scaled concrete, was Mumford's responsibility and that Van Dyk failed to mention it until the rework was complete. Furthermore, Eyad (Desman) and Hinton (Mumford) were present at the second installation and never mentioned a scaling problem.
The other item requiring total demolition was number 6, which required removal and reinstallation of cracks larger than 3/8 inch. Plaintiff asserts that these cracks were also present on Van Dyk's October 24 inspection, but he made no mention of them. Furthermore, Gallagher, Desman's project engineer, and Hinton, Mumford's foreman, knew the size of the cracks and never objected. Plaintiff argues that Defendant is withholding payment from Plaintiff for unsatisfactory concrete work, which was Defendant's responsibility.
On November 5, 1997, Defendant sent Centrella a letter stating that Plaintiff had three days to remedy its defaults before the agreement would be terminated.
Def.'s Ex. 1 at Tab. 21.
On November 7, 1997, a meeting was held at the job site to decide how to proceed in light of Van Dyk's latest recommendations. Later that day, Centrella wrote a letter to Defendant verifying the new changes and another letter stating that he did not accept responsibility for the changes in the scope of work.
Pl.'s Ex. 1 at Tab 30.
Def.'s Ex. 1 at Tab 21 includes Mumford's letter. Pl.'s Ex. 1 at Tab 31 includes Centrella's response.
Tech Services was subcontracted to demolish the joints. Plaintiff did the hand clean-up, caulked the tool joints on the deck, and ordered the additional Strongcote materials. At that point, the only remaining work was the final joint detailing and two coats of Strongcote. Under ideal weather conditions, applying the two coats of Strongcote to the two halves of the entranceway would have taken four days.
On November 18, 1997, Mumford canceled the Strongcote job, citing low temperatures and Plaintiff's inability to maintain the project schedule. The final decision to terminate the agreement had been made by Eversmann, executive director of the WHA, in reliance on the opinions of Gallagher, Desman's project engineer, and Richard Mumford. Gallagher decided that the only part of the work which was complete was Tech Services' demolition work, which Gallagher decided constituted 25 percent of the total job. At trial, Gallagher conceded that he was unsure whether any joint caulking had been done.
Def.'s 1 at Tab 26.
Plaintiff asserts that by November 4, it had completed 78.8 percent of the contract work, for a value of $24,446. In other words, Plaintiff had completed everything but the installation of the Strongcote, which Plaintiff estimates was 16.7 per cent of the job, priced at $5164, and caulking of the expansion joints, which was 4.5 per cent of the job, priced at $1389. Plaintiff also seeks $7992 for redoing some of the contract work between November 4 and 18, as required by Van Dyk. In extras outside the scope of the contract, which were required by Van Dyk, Gallagher and Mumford, Plaintiff seeks $11,828. Plaintiff seeks a total award of $44,266 for its Strongcote work.
These numbers are based on Pl.'s Ex. 9 and Plaintiff's post-trial memorandum at 11.
Defendant argues that Plaintiff's work was unsatisfactory and that Plaintiff has not met any of the conditions required for payment under ¶ 5B of the contract. As discussed infra, ¶ 5B addresses the conditions for final payment, while ¶ 5A addresses a 90 percent payment after the contractor has received full payment. The Court again notes that Desman issued a Certificate of Substantial Completion on December 5, 1997, and that Mumford received full payment on June 10, 1998.
Based on Plaintiff's Exhibit 9, the $24,446 figure includes a payment of $6464 to Tech Services for hydrodemolition, which Mumford made directly to Tech Services, as discussed infra. Subtracting that payment leaves $17,982. In addition, both parties claim to have paid for the original Strongcote materials, as well as the extra material necessitated by Van Dyk's changes, although there is no verification of any payment from either party. In its reply brief, Plaintiff asserts that WHA paid for all the Strongcote materials, and, without any evidence that the parties made these payments, the Court finds that WHA paid for the Strongcote materials. Deducting Plaintiff's original $7884 materials payments leaves a total claim of $10,098 under the Strongcote contract. Under ¶ 5A of the contract, Plaintiff is entitled to, at most, 90 percent of this amount, or $9088.20.
In Pl's Ex. 9, Plaintiff includes credit for two Strongcote payments, one for $7884 and another for $2651. In Def.'s Ex. 1 at Tab 39, Defendant also includes credit for two payments for Strongcote, one for $7966.76 and another for 3146. Neither party verified these alleged payments.
Defendant argues that under the contract, payment is due to Plaintiff only after Defendant receives payment from WHA, and, that on this bid item, Defendant was paid only 25 percent of its bid. Defendant bid this item to WHA at $10,574.50 whereas Plaintiff bid it to Defendant at $33,000. Defendant was paid $2543., or 25 percent of its bid. Paragraph 5A of the contract provides that the subcontractor is to be paid after payment is received from the owner, but it does not say that if the general contractor underbids an item, the subcontractor cannot be paid any more than the general contractor is paid. The Court finds that Plaintiff is entitled to an award of $9088.20, or 90 percent of its claim for the contractual Strongcote work.
Def.'s Ex. 1 at Tab 3, Bid Item 10b.
Pl.'s Ex. 1 at Tab 6.
Plaintiff's charges for the rework required because of Van Dyk's changes totals $7992, although the $2651 in payment for Strongcote material must be deducted to leave a claim for $5341. Although Plaintiff's Exhibit 9 includes this amount as payable under the contract, the Court finds that neither party completed the necessary paperwork under Contract ¶ 19 to warrant such payment. However, the work was performed with the full knowledge and approval of Mumford, Gallagher (Desman) and Eversmann (WHA). The Court finds by a preponderance of the evidence that Plaintiff is entitled to recover the value of this work, or $5341, under the theory of quantum meruit.
As extras not included in the contract, Plaintiff seeks to recover $11,828, as shown in Plaintiff's Exhibit 9. Based on the evidence, the Court finds that Van Dyk made his first set of changes largely in response to his perception vehicular traffic at the entrance to the hotel rather than to Plaintiff's work. In regard to the second set of changes, the Court accepts Plaintiff's argument that the major changes were based on alleged problems with the concrete that Van Dyk should have noted on his first visit to the site. The Court finds by a preponderance of the evidence that Plaintiff is entitled to recover $11,828, the value of its additional work, under the theory of quantum meruit. In so finding, the Court notes that Mumford submitted its bid to WHA on May 13, 1997, and bid the Strongcote work as Item 10b for $10,574. After WHA insisted a licensed Strongcote installer, Defendant accepted Plaintiff's bid to do the Strongcote work for $33,000. In other words, from the outset, Mumford was aware of being at a monetary disadvantage in regard to the Strongcote work.
The Court interprets Exhibit 9, which was prepared by Centrella, to include as extras only those items under the heading "extras" in the columns marked "completed 11-4" and "completed 11-18." This differs from Plaintiff's counsel's interpretation of Exhibit 9, which seems to include all items in the column marked "completed 11-18" as being extras, even though three of them appear under the heading "per spec."
Def.'s Ex. 1 at Tab 3.
Pl.'s Ex. 1 at Tab 9.
TRAIN STATION JOINTS
Defendant's contract with WHA included sites other than the Customs House facility, one of which was the Wilmington Train Station. Pursuant to Bid Items 14a and 14b, Mumford installed five new floor drains and piping for those drains in the Wilmington Train Station garage. After completion of the drains, Robbie Hinton, Defendant's foreman, asked Plaintiff to waterproof two of them with Neogard. Centrella agreed and expected that a price would be agreed to at a later time. There was no such discussion, and Defendant paid Plaintiff nothing for this work.
Def.'s Ex. 1 at Tab 3.
Plaintiff argues that this work was not covered in either of its written contracts because it was never discussed until midway through the contract work. Defendant argues that this work was included in Exhibit A to the waterproofing contract as the fourth item, the heading to which provides as follows:
Removal and replacement of existing waterproof membrane system of previously coated areas per plan, not included in Bid items 3a, 3b, 10a 10b.
Def.'s Ex. 1 at Tab 1.
This section goes on to refer to removing the deck coating, and plainly refers to work conducted on the plaza deck behind the hotel. This conclusion is confirmed by Swain's letter to Centrella, dated September 25, 1997, in which Swain relates this section of the contract to the parking decks at the hotel. The Court finds that the work on the train station drains was not included in the waterproofing contract. Nor was it the subject of a verbal agreement, since there was no meeting of the minds on price. However, Plaintiff did the work and under the theory of quantum meruit deserves the value of his services.
Pl.'s Ex. 1 at Tab 14.
Plaintiff seeks $1600 for the Neogard water proofing of the two drains, and itemizes these costs both in the post-trial brief and at Tab 5. Plaintiff charges 18 hours of work at $75 per hour, which is high compared to Defendant's charges of $48.40 for a foreman and $28.20 for a laborer. The evidence shows that under the contract, Plaintiff charged $3.50 per square foot for Neogard coating work and that the train station drains entailed a 40 square-foot area. The Court finds by a preponderance of the evidence that Plaintiff is entitled to this amount, $140, plus his materials and equipment costs of $300, for a total of $440 for waterproofing the train station drains.
See Def.'s Ex. 1 at Tab 39.
CONCLUSION
For the foregoing reasons, Plaintiff's motion to amend the complaint is Granted, and an award of $53,803.47 plus interest and costs is to be entered for Plaintiff Structa-Bond.
It Is So ORDERED.