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A road contractor’s claim for entitlement to compensation for installing double the amount of fill material than was estimated in the bidding documents by the county engineer was untimely filed after the contract was completed, and when the engineer recommended that only a partial amount of the claim be paid, the contractor sued the county for breach of contract and the engineer for tortious interference with its contract. Before filing suit, the contractor failed to first submit a “pre-suit notice” as required by the state law when suing a governmental entity. The trial court rejected motions to dismiss and a jury awarded judgment of almost $200,000 against the engineer. On appeal, the court reversed the judgment against the engineer because (1) the engineer was entitled to interfere because it did so within the scope of its contract, providing advice to its client, and there was no showing that the engineer acted with malice and bad faith; and (2) the county engineer was entitled to the protections afforded a governmental employee, including the requirement that no suit could be brought against it without a pre-suit notice first being filed. Springer v. Ausbern Construction Co., Inc., 2016 WL 4083981 (Mississippi 2016).

 

The project in question was subject to regulations found in a state specifications book known as the “Green Book.” According to the book, the county engineer is responsible for “inspecting the contractor’s work, measuring and keeping track of the actual unit quantities placed by the contractor, preparing monthly estimates of the work actually performed by the contractor, and reporting that quantity and corresponding earned contract amounts to both the State Aid Division and the County.”   Another section of the book states, “the Contractor shall notify the Engineer in writing of an intention to make such claim for additional compensation before beginning the work on which the Contractor bases the claim or for such extension of time as soon as the facts first become known on which the Contractor bases the claim for adjustment,” and that “then Contractor hereby agrees that failure to provide written notice has denied the Board and the State Aid Engineer the prerogative of verifying [the claim].”

The contractor did not bother, during contract performance, to notify the county engineer that it was installing more fill material than the county had estimated. It waited instead until the project was completed and then submitted an invoice for unit price payment for double the amount of fill than had been estimated. One can imagine the county was quite surprised and not in a mood to make payment when the state rules so clearly stated that failure to make a timely claim would be deemed a waiver of any right to make a claim.

In any event, for reasons unknown, the State Aid Department reviewed the claim and advised the county to pay it. The county, however, delayed payment pending approval by the county engineer who corresponded with the contractor and attempted to negotiate a settlement instead of paying based on the full unit price. Rather than negotiate an amount, the contractor filed suit as discussed herein.

Comment:   It is perplexing how the contractor was able to prevail against the county and the engineer at trial in light of its clear failure to meet the requirements of the Green Book with regard to filing a claim during construction before doing the extra work, and also failing to meet the state law requirement of filing a pre-claim notice against the sovereign government and its employee.

Only the engineer appealed and it obtained reversal of the jury verdict. The county, for reasons not explained in the decision, chose not to appeal despite the fact that the pre-claim notice requirements were not met and the appellate court likely would have reversed the judgment against the county for the same reasons it reversed it against the engineer.

 

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 19, No. 2 (February 2017).

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