GC and its subcontractor disagreed over whether the scope of work of the subcontract required the Sub to remove all pavement in a parking lot or only the concrete portion of the pavement. The bidding documents described the work of subcontractor bidders to include removing “pavement,” “cement concrete pavement,” “existing Portland cement concrete pavement,” and “existing PCC pavement.” The subcontract included a Scope of Work statement requiring the Sub to demolish “the existing concrete pavement.” The GC bid the project to the owner assuming the entire parking lot, including driveway, was concrete and that the subcontractor’s bid covered removing all of it. When the Sub objected to the extra work, it nevertheless performed under protest at the GC’s direction, preserving its legal argument for recovery of its extra costs. In the subsequent litigation, the trial judge granted summary judgment to the subcontractor. This was affirmed on appeal based on the theories of quantum meruit and unjust enrichment – with the court finding no actual contract remedy available. F.H. Paschen, S.N. Nielsen & Assoc. v. B&B Site Development, Inc., 311 So.3d 39 (FL 2021).
The GC argued that the removal of all asphalt was within the scope of the subcontractor’s work and the subcontractor disagreed. They came to no agreement so the subcontractor performed the work under protest and provided the GC with its cost proposal for performing the additional work. The GC responded that the project architect would review the costs and proposals to “ensure that this area was not already included” in the subcontract. The architect reviewed the matter and opined that the asphalt area was included in the cost of the project. The GC then refused the subcontractor’s change order request and this law suit was filed.
First Issue. The trial court properly determined that the scope of the subcontractor’s work was limited to the concrete removal. To the extent that some work was general such as removing “pavement,” other wording of the bidding documents specifically referenced removal of “concrete pavement.” The appellate court explained that specific provisions in a contract control over the general provisions. Nothing in the subcontract stated that the Sub was required to remove all asphalt from the parking lot. Nor did the subcontract state that the Sub was required to remove pavement from the “entire” parking lot instead of just the portion that was paved with concrete. The subcontract even specified the thickness of the concrete to be removed, but provided no similar specification for the existing asphalt.
The court also addressed the GC’s argument that because the contract stated that the work was “not limited to” the enumerated tasks, including disposal of the existing concrete pavement, “this phrase cannot be used to expand the required tasks beyond the “contract plans and specifications.”
Second Issue. The dispute resolution clause of the contract cannot be used to rewrite the express language in the contract regarding the scope of work. The clause stated that should any dispute arise respecting the true construction and interpretation of the plans, specifications and contract documents, the decision of the Owner or Owner’s designated representative would be final. The court states, “The law does not permit a party to use such a clause to rewrite the express language of a contract.” “The Florida Supreme Court has cautioned that ‘construction contracts cannot leave the arbitrary or fraudulent decision of an architect or engineer or the like to operate as a conclusive settlement of matters in controversy.”
In this case, says the court, the GC appears to argue for an interpretation of the subcontract that would preclude judicial scrutiny of even an arbitrary interpretation of the scope of the subcontract.” In rejecting such an argument, the court concluded, “In this case, to the extent that the Postal Service’s architect determined the scope of the project specifications in the subcontract, the determination was a “gross mistake” and was manifestly arbitrary,” since the only reasonable interpretation was that the subcontract didn’t encompass the removal of the existing asphalt on the parking lot.
The balance of this interesting decision deals with why the court reversed the trial judge with regard to award of monetary damages based on breach of contract. The court found that this added scope of work was not subject to the contract and could not be a contract dispute. The court then explained how the theories of quantum meruit and unjust enrichment were applied to grant the subcontractor relief. The matter was remanded to the trial court to hear evidence concerning damages to be awarded under those two legal theories.
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 ConstructionRisk 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 Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 23, No. 3 (May 2021).
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