B&L Drywall, LLC. v. R.L. Turner Corporation ( 2024 )

IN THE
Court of Appeals of Indiana
FILED
B & L Drywall, LLC,
Jul 15 2024, 9:24 am
Appellant CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
v.
R.L. Turner Corporation,
Appellee
July 15, 2024
Court of Appeals Case No.
23A-PL-2962
Appeal from the Boone Circuit Court
The Honorable Lori N. Schein, Judge
Trial Court Cause No.
06C01-1910-PL-1505
Opinion by Judge Bailey
Chief Judge Altice and Judge Mathias concur.
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Bailey, Judge.
Case Summary
[1] B&L Drywall, LLC (“B&L”) appeals the order granting summary judgment
and damages to R.L. Turner Corp. (“RLTC”) for B&L’s breach of contract.
We affirm.
Issues
[2] B&L raises the following two issues:
I. Whether the trial court erred when it denied B&L’s
motion for summary judgment and granted RLTC’s
motion for summary judgment.
II. Whether the trial court’s damages award is erroneous.
Facts and Procedural History
[3] On March 29, 2018, RLTC, the Contractor, and B&L, the Subcontractor,
entered into a written subcontract (“the Contract”)1 for B&L to do drywall work
for RLTC at The Whittaker Inn (“the Project”). The work was to be done “in
full accordance with the Plans, Specifications,[2] and any issued Addendum
1
The Contract refers to itself as both “the Contract,” “the Subcontract,” and “the Subcontract Documents.”
To avoid confusion, we refer to it solely as “the Contract.”
2
The Contract—and both parties on appeal—refer repeatedly to the “plans,” “specifications,” and/or
“drawings.” Appellee’s App. v. II at 5-23. However, neither party points to where in the designated
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documents for this project.” Appellee’s App. v. II at 5, “THE WORK.” The
“Scope” of the work was, in relevant part:
Provide labor/materials/equipment complete, provided in strict
accordance with the plans and specifications[,] for the following:
All drywall work, including finishing to Level 4 and 5 finishes on
walls and ceilings as indicated on drawings and per the
specifications and industry standards, in all areas.
Id., “Scope.” The “[w]ork associated with th[e] scope will be completed per RL
Turner’s project schedule(s).” Id.; see also id. at 18, § 9.5 (“Subcontactor shall
perform work in accordance with [the] schedule provided by Contractor.”).
The “Contract Sum” to be paid by RLTC to B&L for performance of the work
was $141,770.00. Id. at 6.
[4] Section 7.3 of the Contract states, in relevant part, “The Contractor may,
without cause, order the Subcontractor in writing to suspend, delay[,] or
interrupt the Work of this Subcontract in whole or in part for such period of
time as the Contractor may determine[, and] the Subcontractor shall be entitled
to an equitable adjustment of the Subcontract Time and Subcontract Sum.” Id.
at 17. Section 5.2 provides, in relevant part,
The Subcontractor may be ordered in writing by the Contractor,
without invalidating this Subcontract, to make changes in the
Work within the general scope of this Subcontract, consisting of
additions, deletions, or other revisions…. [with t]ime being
evidence those plans, specifications, and/or drawings are located, and we were unable to locate those
documents in the record.
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adjusted accordingly. The Subcontractor, prior to the
commencement of such changed or revised Work, shall submit
promptly to the Contractor written copies of a claim for
adjustment to the Subcontract Sum and Subcontract Time or the
claim is deemed waived.
Id. at 16. Section 5.3 of the Contract states, in pertinent part, “The
Subcontractor shall make all claims to the Contractor for additional cost,
extensions of time and damages for delays or other causes in accordance with
the Subcontract Documents, but in no event later than 14 days of the event that
gives rise to the claims…. Claims not properly submitted will be rejected.” Id.
[5] Section 7.2 of the Contract provides, in relevant part:
If the Subcontractor persistently or repeatedly fails or neglects to
carry out the Work in accordance with the Subcontract
Documents or to otherwise perform in accordance with this
Subcontract and fails within forty-eight hours (48 Hrs) after
receipt of written notice to commence and continue correction of
such default or neglect with diligence and promptness, the
Contractor may supplement Subcontractor’s workforce without
prejudice to any other remedy, terminate the Subcontract[,] and
finish the Subcontractor’s Work by whatever method the
Contractor may deem expedient.
Id. at 17.
[6] Section 3.3.1 of the Contract provides that the Contractor may recover from the
Subcontractor “consequential costs” and “actual damages” caused by the
Subcontractor. Id. at 8. Furthermore, “[i]f the Subcontractor defaults … the
Contractor may … make good such deficiencies and may deduct the reasonable
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cost thereof from the payments … due the Subcontractor.” Id., § 3.4.1. The
“Subcontractors will be back-charged for any additional cost and damages
incurred by the Contractor due to the [S]ubcontractor’s inability to complete the
performance of their scope of work.” Id. at 16, § 5.4(a); see also id. at 20, §
11.8.1 (“Subcontractor agrees that [C]ontractor may withhold or deduct from
any sums due [S]ubcontractor under the [C]ontract for claims[,] damages, back-
charges or other offsets that [C]ontractor may have against [S]ubcontractor on
this project or any other contract or project.”). In addition, “Subcontractor
agrees to pay Contractor for all legal fees incurred by Contractor resulting from
Subcontractor’s default, claims against Subcontractor, or Subcontractor’s
noncompliance with any Contract provisions.” Id. at 22, § 15.8.
[7] B&L performed a small amount of the work prior to December 2018 but could
not do more before that time due to the work of other subcontractors. In
December 2018, RLTC notified B&L to begin the bulk of the scope of work on
the Project. B&L objected to the sequencing of the work—specifically, it
objected that mechanical equipment had already been installed at the Project
before (rather than after) the drywall was to be installed, and B&L therefore
refused to proceed with drywalling as requested. However, B&L did not file a
written claim for adjustment to the Subcontract Sum and/or Subcontract Time.
On December 31, 2018, RLTC notified B&L in writing that B&L had “48 hours
to rectify the Default. After such time [RLTC] will find an alternate contractor
and B&L will be responsible for any and all costs associated with rectifying the
Default.” Id. at 50.
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[8] B&L did not take any action within forty-eight hours of RLTC’s December 31
written notice. Thereafter, RLTC engaged a replacement contractor to
complete B&L’s work on the Project for a total cost of $283,260.00. The
replacement contractor finished the work and the Project passed inspection by
the County.
[9] On October 8, 2019, RLTC sued B&L for breach of contract, seeking damages
and attorney’s fees. Specifically, RLTC alleged that B&L breached the contract
by “fail[ing] to complete the work of the Contract.” Id. at 3. RLTC sought a
damages award of the difference between the price paid to the replacement
contractor and the amount of the Contract Sum ($141,770)), plus an award of
legal fees. Each party moved for summary judgment. Following a hearing on
the motions, the trial court granted RLTC’s motion for summary judgment and
denied B&L’s motion.
[10] The court subsequently held a hearing on damages, and, on November 29,
2023, issued its Final Judgment and Order on Damages. The trial court did not
award RLTC the full amount it had claimed as payment to the replacement
contractor (i.e., $283,260.00) because it found that RLTC was not entitled to
alleged overhead loss or to damages “based upon charges for additional work
beyond the scope of the Contract.” Appealed Order at 3. The court found that
RLTC had paid the replacement contractor $197,360 for the work B&L was
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supposed to do,3 and it awarded RLTC the difference between that amount and
the Contract Sum. In total, the court awarded RLTC $55,590 in damages, plus
$40,407.50 in legal fees. B&L filed this appeal.
Discussion and Decision
Summary Judgment
[11] Both parties moved for summary judgment on RLTC’s claims. We review a
grant or denial of a motion for summary judgment under the same standard
used by the trial court; that is,
[t]he moving party bears the initial burden of making a prima
facie showing that there are no genuine issues of material fact
and that it is entitled to judgment as a matter of law. Summary
judgment is improper if the movant fails to carry its burden, but if
it succeeds, then the nonmoving party must come forward with
evidence establishing the existence of a genuine issue of material
fact. In determining whether summary judgment is proper, the
reviewing court considers only the evidentiary matter the parties
have specifically designated to the trial court. See Ind. Trial R.
56(C), (H). We construe all factual inferences in the non-moving
party’s favor and resolve all doubts as to the existence of a
material issue against the moving party. The fact that the parties
have filed cross-motions for summary judgment does not alter
our standard for review, as we consider each motion separately
to determine whether the moving party is entitled to judgment as
a matter of law.
3
RLTC does not appeal the reduced amount of damages.
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Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012) (case quotations and citations
omitted). In reviewing a summary judgment, we “consciously err on the side of
letting marginal cases proceed to trial on the merits, rather than risk short-
circuiting meritorious claims.” Hughley v. State, 15 N.E.3d 1000, 1004 (Ind.
2014).
[12] The basic requirements for a contract are offer, acceptance, consideration, and a
meeting of the minds between the contracting parties on all essential elements
or terms of the contract. See Perrill v. Perrill, 126 N.E.3d 834, 840-41 (Ind. Ct.
App. 2019), trans. denied. When the terms of a contact are clear and
unambiguous, we will apply the plain and ordinary meaning of those terms and
enforce the contract accordingly. Id. Under such circumstances, “contract
cases are particularly suited for summary judgment.” Id. However, when a
“contract’s terms are ambiguous or uncertain and its interpretation requires
extrinsic evidence, its construction is a matter for the fact-finder.” Johnson v.
Johnson, 920 N.E.2d 253, 256 (Ind. 2010). A contract’s terms are ambiguous
“only when reasonably intelligent persons would honestly differ as to the
meaning of those terms.” Perrill, 126 N.E.3d at 841 (internal quotation and
citation omitted).
[13] Here, the parties do not dispute the existence of the Contract; rather, they
disagree only about which party breached it. B&L claims that it was RLTC
who breached the Contract by expanding the scope of its Work beyond that
contemplated in the Contract; that is, they contend that doing the drywalling
after mechanicals had been installed would have required additional time and
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expense. However, the clear and unambiguous terms of the Contract allowed
RLTC, “without invalidating th[e Contact],” to set the schedule for the work,4
“suspend” or “delay” B&L’s work,5, and/or “make changes [in writing] in the
Work within the general scope of [the Contract], consisting of additions,
deletions, or other revisions … [with t]ime being adjusted accordingly.”6
Therefore, B&L is mistaken when it claims that the change to the work was not
contemplated by the Contract; the Contract clearly anticipated that changes
could be made and provided for a procedure to be followed under such
circumstances. RLTC did not breach the Contract by requesting that B&L do
the drywall work after mechanicals had already been installed.
[14] Rather, it is B&L who breached the Contact terms by failing to follow the
procedures clearly required by the Contact when RLTC changed the work to be
done. When RLTC changed the scheduling of the work such that B&L would
be required to undergo the more time consuming and costly action of placing
drywalling after mechanicals had already been installed, section 5.2 of the
Contract plainly required B&L to “submit promptly to [RLTC] written copies
of a claim for adjustment to the Subcontract Sum and Subcontract Time or the
claim is deemed waived.” Id. at 16. In addition, the plain and clear terms of
the Contract required that, if B&L had a claim for “additional cost, extensions
4
Appellee’s App. at 5 (“Note” under subheading “Scope”) and 18, § 9.5.
5
Id. at 17, § 7.3.
6
Id. at 16, § 5.2.
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of time, and damages for delays or other causes,” it was required to inform
RLTC of the same within fourteen days or any such claim would be rejected.
Id., § 5.3. It is uncontested that B&L never submitted any “claim for
adjustment” or any other claim but, rather, simply refused to do the work. That
was a breach of the unambiguous terms of the Contract.7
[15] The terms of the Contract are clear and unambiguous. Those terms allowed
RLTC to make a change to the work and required that B&L submit a claim if it
believed the change in work would require additional time and/or expense.
The designated evidence establishes that RLTC complied with the terms of the
Contract when it made the change to work, but B&L did not comply with the
Contract requirements that it submit claim(s) in response. There are no genuine
issues of material fact, and RLTC is entitled to judgment as a matter of law.
The trial court did not err in denying B&L’s Motion for Summary Judgment
and granting RLTC’s Motion for Summary Judgment.
Damages
[16] B&L challenges the damages award.8 Generally, we will not reverse a damages
award if it is within the scope of evidence before the trial court. McLean v.
7
We note that, in its Complaint and Motion for Summary Judgment, RLTC alleged that B&L breached the
Contract by failing to do the work but did not raise the more specific claim that B&L breached the Contract
by failing to follow the Contract’s procedures for addressing a change in the work. However, “we will affirm
the trial court’s ruling based on any theory supported by the evidence.” Markey v. Estate of Markey, 38 N.E.3d
1003, 1006-07 (Ind. 2015).
8
B&L does not challenge the legal fee award on appeal, only the damages award for the difference between
the Contract Sum and what was paid to the replacement contractor. Moreover, we note that the Contract
unambiguously provided that B&L agreed to pay RLTC for “all legal fees” it incurred as a result of B&L’s
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Trisler, 161 N.E.3d 1259, 1270 (Ind. Ct. App. 2020), trans. denied. “[I]f the
award of damages is supported by the record, the determination of damages is
within the sound discretion of the trial court.” Id. (internal quotation and
citation omitted). An abuse of discretion occurs when the trial court’s action is
against the logic and effects of the facts and circumstances before it. Id. In
determining whether the trial court abused its discretion, we must only consider
the evidence and reasonable inferences favorable to the non-moving party, and
we may not weigh conflicting evidence or judge the credibility of witnesses. Id.[17] B&L contends that the damage award is “not appropriate because it was not
within the contemplation of the parties at the time the [C]ontract was entered
into.” Appellant’s Br. at 22. However, as noted above, the unambiguous terms
of the Contract show that the parties did contemplate that RLTC may change
the work, and it provided procedures that B&L was required to follow under
such circumstances. Because B&L did not follow those procedures but simply
refused to do the work, it defaulted. See Appellee’s App. at 17, § 7.2.1. And the
clear and unambiguous terms of the Contract also provide for what may take
place when the Subcontractor defaults: “the Contractor may supplement
Subcontractor’s workforce without prejudice to any other remedy, terminate the
Subcontract[,] and finish the Subcontractor’s Work by whatever method the
Contractor may deem expedient,” id., and the “Subcontractor will be back-
“default, claims against [B&L], or [B&L’s] noncompliance with any Contract terms.” Appellee’s App. at 22,
§ 15.8.
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charged for any additional cost and damages incurred” as a result, id. at 16, §
5.4(a). RLTC followed those procedures, and B&L therefore owes them their
costs and/or damages.9 Id.
[18] The trial court did not abuse its discretion when it awarded RLTC damages in
the amount of the difference between the Contract Sum and the cost to pay the
replacement contractor to do the work B&L was supposed to do.
Conclusion
[19] The trial court did not err in denying B&L’s Motion for Summary Judgment
and granting RLTC’s Motion for Summary Judgment as there are no genuine
issues of material fact, and RLTC is entitled to judgment as a matter of law.
And the trial court did not abuse its discretion when it awarded RLTC damages
in the amount of the difference between the Contract Sum and the cost to pay
the replacement contractor, as such an award was permitted by the
unambiguous terms of the Contract.
[20] Affirmed.
Altice, C.J., and Mathias, J., concur.
9
B&L does not challenge the amount of the damages award, only whether RLTC was entitled to damages at
all. However, we note that the amount of damages was supported by evidence provided by RLTC at the
damages hearing.
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ATTORNEY FOR APPELLANT
Donald K. McClellan
McClellan & McClellan
Muncie, Indiana
ATTORNEY FOR APPELLEE
Michael L. Einterz, Jr.
Einterz & Einterz
Zionsville, Indiana
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