Accurate Elec. Constr., Inc. v. Ohio State Univ. , 2019 Ohio 4992 ( 2019 )

[Cite as Accurate Elec. Constr., Inc. v. Ohio State Univ., 2019-Ohio-4992.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Accurate Electric Construction, Inc., :
Plaintiff-Appellant, :
No. 17AP-211
v. : (Ct. of Cl. No. 2014-00961)
The Ohio State University, : (REGULAR CALENDAR)
Defendant-Appellee. :
D E C I S I O N
Rendered on December 5, 2019
On brief: McDonald Hopkins, LLC, Peter D. Welin, and
Jason R. Harley, for appellant. Argued: Peter D. Welin.
On brief: Dave Yost, Attorney General, James E. Rook, and
William Becker, for appellee. Argued: James E. Rook.
APPEAL from the Court of Claims of Ohio
BROWN, J.
{¶ 1} Plaintiff-appellant, Accurate Electric Construction, Inc. ("Accurate"), appeals
from a judgment of the Court of Claims of Ohio granting the motion for summary judgment
of defendant-appellee, The Ohio State University (the "University" or "OSU"). For the
reasons which follow, we affirm in part and reverse in part the judgment of the Court of
Claims.
{¶ 2} The present case arises from a construction contract dispute between
Accurate and the University regarding the South High Rise Dormitory Project (the
"Project"). The Project consisted of demolition, renovation, and expansion of five student
housing facilities located on the University's main campus. The Project was constructed
under the multi-prime model of contracting.
No. 17AP-211 2
{¶ 3} There were "several moving parts and pieces" to the Project. (Purtee Depo. at
39.) The Project was split into three phases of construction with multiple bid packages.
Phase one involved Bid Packages 1 through 5 and concerned utility relocation and chiller
bunker work. Phase two involved Bid Package 6 and Bid Package 7 ("BP7") and concerned
additions and renovations to the Stradley and Park dormitories. Phase three involved Bid
Package 8 ("BP8") and concerned additions and renovations to the Smith, Steed, and
Siebert dormitories.
{¶ 4} Accurate served as the electrical prime contractor on BP7 and BP8. A
document titled "General Conditions" was "the contract between the University and
Accurate for the electrical work on the Project." (Mot. for Summ. Jgmt., Ex. A ("Purtee
Affidavit"), ¶ 3; Ex. 1004 (the "contract").)
{¶ 5} Smoot Construction Company ("Smoot") served as the University's
construction manager on the Project, and Schooley Caldwell Associates ("Schooley") served
as the associate architect on the Project (collectively, the University, Smoot, and Schooley
will be referred to as the "Management Team"). When the Project began, contractors were
informed that all communications regarding the Project were to be routed through Smoot.
Greg Palmer was Smoot's project manager on the Project. Patricia Purtee was the
University's senior construction manager on the Project.
{¶ 6} Both BP7 and BP8 were on aggressive scheduling timelines. There was
"[i]ntercoordination amongst those phases" of the Project, and each phase of construction
depended on the preceding phase being completed timely. (Palmer Depo. at 30.) The
Project completion dates were critical because the dorms needed to be ready to house
incoming students when they arrived at the University.
{¶ 7} As such, when contractors submitted their bids, the University informed
them that all contractual milestone dates had to be met. Milestone dates "are target dates
usually critical to certain activities on a schedule that will allow other work to follow."
(Purtee Depo. at 52-53.) At pre-construction meetings, the University informed the
contractors there would be no time extensions on the Project and no change to the contract
end date.
{¶ 8} The parties had a pre-construction meeting for BP7 on June 3, 2011, and the
contractual occupancy date for the BP7 buildings was July 6, 2012. By February 2012, BP7
No. 17AP-211 3
had fallen behind schedule and Smoot expressed concerns over meeting the deadline. BP7
ultimately finished a couple weeks behind schedule; the state issued a certificate of
occupancy for the BP7 buildings on July 25, 2012.
{¶ 9} Throughout the Project, the Management Team sought to take a "fair and
reasonable" approach to dealing with contractor issues. (Palmer Depo. at 51.) Palmer noted
that, if a contractor fell behind because of delays on predecessor activities, the Management
Team would need the contractor to "make it up, then [the Management Team] would seek
out to compensate them for whatever costs they incurred as a result of that." (Palmer Depo.
at 51.)
{¶ 10} Accurate experienced delays and other issues throughout BP7. On March 31,
2012, Accurate sent Smoot an e-mail indicating it was seeking additional compensation for
the issues that arose during BP7. Accurate and Smoot communicated regarding Accurate's
BP7 claims throughout 2012 and early 2013. The Management Team and Accurate resolved
Accurate's BP7 claims at a field level resolution meeting on January 24, 2013.
{¶ 11} The pre-construction meeting for BP8 occurred on March 26, 2012. BP8
ultimately completed on time; the state issued a certificate of occupancy for the BP8
buildings on June 17, 2013. The University began occupying the BP8 dorms on August 15,
2013.
{¶ 12} Accurate experienced a number of issues throughout BP8. In September
2012, a pipe burst in an underground tunnel on the Project and caused substantial flooding.
The flood caused "damage to a lot of equipment in the bunker," and Accurate "performed
some of the remedial work to get things back up and running" after the flood. (Purtee Depo.
at 200.)
{¶ 13} In January 2013, the Management Team realized that Accurate had installed
flexible conduit on the fire alarms in both the BP7 and BP8 buildings. Although the contract
specifications called for rigid conduit, Accurate had installed flexible conduit in the mockup
room without objection from the Management Team. On January 21, 2013, Smoot issued
a notice to comply to Accurate stating the flexible conduit did not comply with the Project
documents.
{¶ 14} Purtee informed Accurate the University could force Accurate to "tear off the
drywall in five buildings" and "backcharge them" for the related costs. (Purtee Depo. at
No. 17AP-211 4
209.) Purtee explained that, although it "wouldn't be appropriate" to actually make
Accurate tear out the drywall, it remained "an option for the University." (Purtee Depo. at
211; Palmer Depo. at 184.) The University ultimately sought to obtain a credit from
Accurate for the flexible conduit. The University "established a change order and provided
[Accurate] with the opportunity to sign the change order" regarding the proposed credit for
the flexible conduit, but Accurate did not agree with the amount of the credit and refused
to sign the change order. (Purtee Depo. at 211.)
{¶ 15} On February 13, 2013, Smoot sent change order 363 to Tony Evans,
Accurate's project manager, and asked Evans to sign the change order. Change order 363
was a zero cost change order which revised a number of the milestone dates in BP8.
Although change order 363 pushed some of the milestone dates back by several months, it
did not change the Project completion date. Accurate refused to sign change order 363 and
the University processed it unilaterally, i.e., without Accurate's signature.
{¶ 16} Accurate was supposed to install spare conduit in a trench at the 12th Avenue
crossing. Due to miscommunication between Accurate and the geothermal contractor,
Accurate missed the initial trench opening. The trench had to be reopened for Accurate to
install the conduit. In a June 10, 2013 e-mail, Palmer informed Evans that the Management
Team believed both contractors should share the expense of reopening the trench. Accurate
did not agree that it should have to share the cost of the trench work and the issue was
resolved by "a unilateral process change order." (Palmer Depo. at 208.)
{¶ 17} Thus, throughout BP8, the Management Team unilaterally processed a
number of change orders concerning Accurate. Purtee explained she processed change
orders unilaterally in order "to make sure that the contractors got paid something on their
change orders, whether they agreed to the amount or not." (Purtee Depo. at 284.) Purtee
admitted she did not know if the contract allowed for change orders to be processed
unilaterally.
{¶ 18} Article 7 of the contract, titled "Contract Modifications," provided for three
different methods of a contract modification: a change order, a field work order, or a minor
change in the work. Minor changes were changes which did not affect the contract sum (the
amount payable to the contractor) or the contract time (the time period for the completion
of the work). A change order was a written instrument "signed" by the Management Team
No. 17AP-211 5
and the contractor, stating their agreement on the change to the work, the amount of
adjustment to the contract sum, and the extent of adjustment to the contract time. Thus, a
change order had to be signed by both the Management Team and the contractor. By
signing a change order "the Contractor irrevocably certifie[d] that the elements of a Change
Order [were] completely satisfied, and waive[d] all rights, if any, to seek further adjustment
of the Contract Sum or Contract Time." (General Conditions, 7.3.2.)
{¶ 19} In contrast, the contract provided that a field work order "shall be used to
direct a change in the Work in the absence of total agreement on the terms of a Change
Order." (General Conditions, 7.2.2.3.) Upon receipt of a field work order, the contractor
had to "promptly proceed with the change in the Work involved." (General Conditions,
7.2.2.4.) A contractor could sign the field work order to indicate acceptance of its terms. If
the contractor did not sign the field work order, the University was obligated to determine
the adjustments, if any, to the contract sum and contract time caused by the field work
order. If the contractor did not agree with the University's determination regarding the
adjustment to the contract sum and/or contract time resulting from a field work order, the
contractor was obligated to "initiate a claim under Article 8 within 10 days of the date on
which the [University] issues its determination." (General Conditions, 7.2.2.7.)
{¶ 20} Article 8 of the contract, titled "Dispute Resolution," obligated a contractor
to "initiate every claim by giving written notice of the claim" to the Management Team
"within 10 days after occurrence of the event giving rise to the claim." (General Conditions,
8.1.2.) Article 8 provided that a contractor's failure to initiate a claim "as and when required
under this paragraph 8.1 shall constitute the Contractor's irrevocable waiver of the claim."
(General Conditions, 8.1.4.)
{¶ 21} Accurate brought the issues that arose throughout BP8 to the attention of the
Management Team. On October 16, 2013, the Management Team held a field level
resolution meeting with Accurate to try to resolve some of Accurate's BP8 claims. Some
claims were resolved as a result of the meeting and others remained pending.
{¶ 22} By the end of December 2013 it became clear to Accurate "that the field level
discussion[s] that were ongoing would not lead to total agreement" between the parties on
the BP8 issues. (Memo in Opp. to Summ. Jgmt., Ex. A, Evans Affidavit ("Evans Affidavit"),
at ¶ 13.) As such, on December 23, 2013, Accurate filed a request for a change order seeking
No. 17AP-211 6
additional compensation from the University on Accurate's BP8 claims. The December 23,
2013 change order identified the following list of unpaid changes to Accurate's work:
A Flex to smokes $12,000.00
B Conduit to cable tray CM's Misuse of R.S. Means
$103,000.00
C Best Locks $3,881.00
D Viking Phones $10,733.48
E Additional Beams $3,389.80
F Flooding of Bunker $5,167.00
G Graphic Display Panels PK 8 $17,396.00
H 12th Ave crossing $4,682.23
I Mod bus Meters $2,558.00
J Fixture Deduct bulletin 638 $34,693.00
K Technology Conduit Fill $3,166.14
L Manipulating Milestones Change Order
$1,390,480.00
(Evans' Aff., Ex. A-2.)
{¶ 23} Accurate notes that Smoot rejected its change order request the following day
on December 24, 2013. Accurate filed its Article 8 claim ten days later, on January 3, 2014.
Accurate's January 3, 2014 Article 8 claim sought compensation for the following issues:
(A) flexible conduit for fire alarm system, (B) unilaterally processed change orders 416,
503R1, 682, 612A, 612B, 668R2, 662, 693, 683, 727, 710, 671, 703R2, (C) best locks,
(D) Viking phones, (E) unilaterally processed change order 587, (F) display panels bulleting
633, (G) 12th Ave. Crossing, (H) modification of bus meters, (I) data and light fixtures in
the connector bulletin 632, (J) technology conduit fill, (K) change order 877, and (L) change
order request for disputed milestone impact.
{¶ 24} Accurate's claims proceeded through the Article 8 process. The University
architect ruled on the claims on June 25, 2015. The architect addressed the merits of each
claim and additionally noted the claims were untimely. The architect denied most of
Accurate's claims, but granted Accurate's claims for the display panels bulletin 633 and the
technology conduit fill requirements. The architect stated its decision to grant the two
claims was made "without waiving any rights or provisions of the contract, including but
not limited to the late submission of this claim." (Purtee Aff., Ex. 7.)
{¶ 25} On December 9, 2014, Accurate filed its complaint in the Court of Claims
asserting the following counts: (1) breach of contract, (2) equitable adjustment, (3) breach
No. 17AP-211 7
of express and implied warranties, and (4) breach of the duty of good faith and fair dealing.
Accurate asserted it had exhausted its administrative remedies, and asserted that despite
its "requests for its outstanding contract balance, OSU continue[d] to hold $304,514.13 in
undisputed contract balance separate and apart from Accurate's claim." (Compl. at ¶ 31.)
{¶ 26} Accurate requested a referee be assigned to hear and determine the case
pursuant to R.C. 2743.03(C)(3).1 The Supreme Court of Ohio appointed a referee.
{¶ 27} The University filed a Civ.R. 56 motion for summary judgment on March 1,
2016. The University asserted it was entitled to summary judgment on Accurate's breach
of contract and equitable adjustment claims because Accurate did not file its underlying
claims against the University within the ten-day time limit set forth in Article 8 of the
contract. Regarding the third and fourth counts of the complaint, the University asserted
that Accurate "could not identify any real express or implied warranties it alleges the
University breached," and asserted that a claim for breach of the duty of good faith and fair
dealing could not "stand without a separate breach of contract claim." (Mot. for Summ.
Jgmt. at 2.) The University asserted Accurate did not have a right to receive final payment
under the contract as Accurate had not completed the required close-out documents.2
{¶ 28} Accurate filed a memorandum in opposition to the University's motion for
summary judgment on May 27, 2016. Accurate asserted the Court of Claims should deny
the University's motion as Accurate had "complied with the Article 8 notice requirements"
and/or because the University "waived the Article 8 notice requirements by its course of
conduct." (Memo. in Opp. at 3.) Accurate noted it complied with the Article 8 notice
requirement by filing its claim within ten days from the date the University denied its
change order request. Accurate asserted the University waived the Article 8 requirements
because it "waived the Article 8 requirements for other contractors on the Project, it waived
1 R.C. 2743.03(C)(3) provides that when a dispute regarding a public construction project is filed in the
Court of Claims, either party may request, and the Chief Justice of the Supreme Court shall appoint, "a
single referee or a panel of three referees. The referees need not be attorneys, but shall be persons
knowledgeable about construction contract law, a member of the construction industry panel of the
American arbitration association, or an individual or individuals deemed qualified by the chief justice to
serve."
2 Purtee averred that Accurate was not entitled to final payment because it had yet to submit the following
documents: formal payment application # 16, final payment application, retainage payment application
lien waivers, prevailing wage from October 1, 2013 to the last date of all work, consent of surety, certificate
of contract completion, certificate of warrant commencement, and the certificate of equipment
demonstration. (Purtee Aff. at ¶ 36.)
No. 17AP-211 8
the Article 8 requirements for Accurate's claim on [BP7] of the Project, and it paid for some
of Accurate's claims on [BP8] of the Project." (Memo. in Opp. at 36.)
{¶ 29} On June 9, 2016, the University sought leave to file a reply to Accurate's
memorandum in opposition instanter. Accurate filed a memorandum in opposition, asking
the court to deny the University's motion for leave or, if it granted the motion, to grant
Accurate leave to file a surreply brief.
{¶ 30} On August 18, 2016, the referee issued a recommendation granting the
University's motion for summary judgment on Counts 1 and 2 of the complaint. The referee
also granted the University's motion for leave to file a reply brief, and found that a surreply
brief from Accurate was unnecessary.
{¶ 31} The referee concluded that Article 8 of the contract was "clear and
unambiguous" and that all of Accurate's claims " 'arose' prior to ten days before the
assertion of [Accurate's] claim." (Recommendation of the Referee on the Mot. for Summ.
Jgmt. at 7.) Specifically, the referee stated that because students were occupying the dorms
by August 15, 2013, "all of the matters that 'arose' must have taken place at least four
months prior to the filing of the claim." (Recommendation of the Referee on the Mot. for
Summ. Jgmt. at 7.) As such, the referee concluded that Accurate's claims for breach of
contract and equitable adjustment were untimely under the Article 8 notice of claims
provision.
{¶ 32} Regarding Accurate's waiver argument, the referee acknowledged that
Accurate presented a number of "examples that it believes demonstrates that OSU, by its
conduct, waived the Article 8 requirements throughout the Project." (Recommendation of
the Referee on the Mot. for Summ. Jgmt. at 9.) However, the referee concluded there was
"no evidence that OSU waived the Article 8 requirements for this project."
(Recommendation of the Referee on the Mot. for Summ. Jgmt. at 9.) The referee
concluded the University was entitled to summary judgment on the contract balance issue
because Accurate failed to respond to the University's motion for summary judgment with
evidence demonstrating it had filed the close-out documents.
{¶ 33} The referee noted there was a lack of argument and/or explanation from the
parties regarding Accurate's claims for breach of warranties and breach of the duty of good
faith and fair dealing. As such, the referee requested the parties submit additional briefing
No. 17AP-211 9
on these claims. On September 2, 2016, the parties filed briefs in response to the referee's
request for additional briefing.
{¶ 34} On September 2, 2016, Accurate also filed the following objections to the
referee's August 18, 2016 recommendation: (1) the referee erred by weighing the evidence,
(2) the referee misunderstood Accurate's argument regarding the University's failure to
comply with its contractual obligations, (3) the referee misapplied the contractual notice
requirement, (4) the University waived the Article 8 notice requirements by failing to follow
its own contract procedures, (5) the referee erred in granting summary judgment as to the
remaining contract balance, and (6) the referee erred by granting the University leave to
file a reply brief but denying Accurate's motion for leave to file a surreply brief.
{¶ 35} On November 18, 2016, the referee issued a decision granting the University
summary judgment on Counts 3 and 4 of the complaint. The referee concluded Accurate's
breach of warranties claim was substantively a breach of contract claim, and that Accurate
waived the claim by failing to give timely notice under Article 8. The referee further
concluded that, because there was "no genuine issue of material fact regarding whether or
not [Accurate] waived its right to pursue an Article 8 claim related to breach of contract,
the claim for a breach of good faith and fair dealing must consequentially be dismissed."
(Nov. 18, 2016 Referee Decision at 5-6.) Accurate filed an objection to the referee's
November 18, 2016 decision on December 1, 2016.
{¶ 36} On February 15, 2017, the Court of Claims issued a decision and judgment
entry overruling Accurate's objections, adopting the referee's recommendations as its own,
and granting the University summary judgment. The court concluded the referee had not
weighed the evidence in resolving the waiver issue, as the referee found "no evidence of
OSU's waiver." (Decision at 3.) The court stated that, although its "independent review of
the record" demonstrated that "Accurate did provide some evidence which it argued
demonstrates OSU's waiver of the Article 8 process," the court found "no evidence in the
record that OSU waived the Article 8 process." (Decision at 3.)
{¶ 37} The court observed the referee made "no determination as to when, during
the project, the individual claims actually arose." (Decision at 5.) Regardless, because
Accurate did not file its claims until "four months after the completion of the project," the
court determined Accurate's claims were untimely under Article 8. (Decision at 5.) As such,
No. 17AP-211 10
the court concluded Accurate had waived its claims against the University by failing to
comply with the Article 8 notice requirements.
{¶ 38} As Accurate failed to produce evidence demonstrating that it had filed its final
pay application, the court concluded the University was entitled to summary judgment on
the contract balance. The court agreed with the referee's conclusion that Accurate's breach
of warranties claim was substantively a breach of contract claim, which Accurate waived
due to its untimely Article 8 notice. The court also agreed that, in the absence of a breach
of contract claim, Accurate's breach of the duty of good faith and fair dealing claim had to
be dismissed.
{¶ 39} Accurate appeals, assigning the following errors for our review:
[I.] THE TRIAL COURT ERRED IN GRANTING APPELLEE'S
MOTION FOR SUMMARY JUDGMENT BECAUSE
APPELLANT PRESENTED GENUINE ISSUES OF
MATERIAL FACT THAT THE TRIAL COURT MISAPPLIED
THE CONTRACTUAL NOTICE REQUIREMENTS.
[II.] THE TRIAL COURT ERRED IN GRANTING
APPELLEE'S MOTION FOR SUMMARY JUDGMENT
BECAUSE APPELLANT PRESENTED GENUINE ISSUES OF
MATERIAL FACT THAT APPELLEE WAIVED THE
CONTRACTUAL NOTICE REQUIREMENTS, AND THE
TRIAL COURT IMPROPERLY WEIGHED THE EVIDENCE.
[III.] THE TRIAL COURT ERRED IN GRANTING
APPELLEE'S MOTION FOR SUMMARY JUDGMENT
BECAUSE GENUINE ISSUES OF MATERIAL FACT EXIST
THAT APPELLANT IS ENTITLED TO THE UNDISPUTED
CONTRACT BALANCE.
[IV.] THE TRIAL COURT ERRED IN GRANTING
APPELLEE'S MOTION FOR SUMMARY JUDGMENT
BECAUSE THE REFEREE INCORRECTLY GRANTED
APPELLEE LEAVE TO FILE A REPLY BRIEF – WHICH
IMPROPERLY RAISED NEW ARGUMENTS FOR THE FIRST
TIME – AND DENIED APPELLANT'S MOTION FOR LEAVE
TO FILE A SUR-REPLY TO ADDRESS THESE NEW
ARGUMENTS.
[V.] THE TRIAL COURT ERRED IN GRANTING APPELLEE'S
MOTION FOR SUMMARY JUDGMENT BECAUSE
APPELLEE FAILED TO MEET ITS INITIAL BURDEN WITH
No. 17AP-211 11
RESPECT TO COUNTS III AND IV OF APPELLANT'S
COMPLAINT.
[VI.] THE TRIAL COURT ERRED IN GRANTING
APPELLEE'S MOTION FOR SUMMARY JUDGMENT
BECAUSE APPELLANT DEMONSTRATED THAT GENUINE
ISSUES OF MATERIAL FACT EXIST REGARDING COUNTS
III AND IV OF APPELLANT'S COMPLAINT.
{¶ 40} Appellate review of summary judgment motions is de novo. Helton v. Scioto
Cty. Bd. of Commrs., 123 Ohio App.3d 158, 162 (4th Dist.1997). "When reviewing a trial
court's ruling on summary judgment, the court of appeals conducts an independent review
of the record and stands in the shoes of the trial court." Mergenthal v. Star Banc Corp.,
122 Ohio App.3d 100, 103 (12th Dist.1997). We must affirm the trial court's judgment if
any of the grounds raised by the movant at the trial court level are found to support it, even
if the trial court failed to consider those grounds. Coventry Twp. v. Ecker, 101 Ohio App.3d
38, 41-42 (9th Dist.1995).
{¶ 41} Summary judgment is proper only when the party moving for summary
judgment demonstrates that: (1) no genuine issue of material fact exists, (2) the moving
party is entitled to judgment as a matter of law, and (3) reasonable minds could come to
but one conclusion and that conclusion is adverse to the party against whom the motion for
summary judgment is made, that party being entitled to have the evidence most strongly
construed in that party's favor. Civ.R. 56(C); State ex rel. Grady v. State Emp. Relations
Bd., 78 Ohio St.3d 181, 183 (1997). "Where the evidence presented allows conflicting
inferences, a court considering a summary judgment motion may not weigh the evidence."
Thyssen Krupp Elevator Corp. v. Constr. Plus, Inc., 10th Dist. No. 09AP-788, 2010-Ohio-
1649, ¶ 20.
{¶ 42} When seeking summary judgment on grounds that the non-moving party
cannot prove its case, the moving party bears the initial burden of informing the trial court
of the basis for the motion and identifying those portions of the record that demonstrate
the absence of a genuine issue of material fact on an essential element of the non-moving
party's claims. Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). The moving party does not
discharge this initial burden under Civ.R. 56 by simply making a conclusory allegation that
the non-moving party has no evidence to prove its case. Id. Rather, the moving party must
No. 17AP-211 12
affirmatively demonstrate by affidavit or other evidence allowed by Civ.R. 56(C) that the
non-moving party has no evidence to support its claims. Id. If the moving party meets its
burden, then the non-moving party has a reciprocal burden to set forth specific facts
showing there is a genuine issue for trial. Civ.R. 56(E); Dresher at 293. If the non-moving
party does not so respond, summary judgment, if appropriate, shall be entered against the
non-moving party. Id.{¶ 43} R.C. 2743.03(C)(3) provides that proceedings before a referee appointed to
hear a public construction contract case shall be in accordance with Civ.R. 53. Civ.R.
53(D)(4)(d) provides that "[i]f one or more objections to a magistrate's decision are timely
filed, the court shall rule on those objections." "In reviewing objections to a [referee's]
decision, the trial court must make an independent review of the matters objected to in
order 'to ascertain [whether] the [referee] has properly determined the factual issues and
appropriately applied the law.' " Randall v. Eclextions Lofts Condominium Assn., 10th Dist.
No. 13AP-708, 2014-Ohio-1847, ¶ 7, quoting Civ.R. 53(D)(4)(d). See also Roe v. Heap, 10th
Dist. No. 03AP-586, 2004-Ohio-2504, ¶ 34, quoting Nolte v. Nolte, 60 Ohio App.2d 227(8th Dist.1978), paragraph two of the syllabus. An appellate court reviews a trial court's
adoption of a referee's decision for an abuse of discretion. Meccon, Inc. v. Univ. of Akron,
10th Dist. No. 12AP-899, 2013-Ohio-2563, ¶ 15.
{¶ 44} Accurate's first assignment of error asserts the Court of Claims erred in
granting the University's motion for summary judgment because the Court of Claims
misapplied the contractual notice provisions.
{¶ 45} The construction and interpretation of written contracts involves issues of
law reviewed de novo by appellate courts. Alexander v. Buckeye PipeLine Co., 53 Ohio
St.2d 241 (1978), paragraph one of the syllabus. The purpose of contract construction is to
realize and give effect to the parties' intent. Skivolocki v. E. Ohio Gas Co., 38 Ohio St.2d
244 (1974), paragraph one of the syllabus. "[T]he intent of the parties to a contract resides
in the language they chose to employ in the agreement." Shifrin v. Forest City Ents., Inc.,
64 Ohio St.3d 635, 638 (1992). When " 'the terms in a contract are unambiguous, courts
will not in effect create a new contract by finding an intent not expressed in the clear
language employed by the parties.' " Holdeman v. Epperson, 111 Ohio St.3d 551, 2006-
Ohio-6209, ¶ 12, quoting Shifrin at 638.
No. 17AP-211 13
{¶ 46} "The meaning of any particular construction contract is to be determined on
a case-by-case and contract-by-contract basis, pursuant to the usual rules for interpreting
written instruments." Foster Wheeler Enviresponse, Inc. v. Franklin Cty. Convention
Facilities Auth., 78 Ohio St.3d 353, 361 (1997). " '[W]hen a contract has an express
provision governing a dispute, that provision will be applied; the court will not rewrite the
contract to achieve a more equitable result.' " Stanley Miller Constr. Co. v. Ohio School
Facilities Comm., 10th Dist. No. 10AP-298, 2010-Ohio-6397, ¶ 12, quoting Dugan &
Meyers Constr. Co., Inc. v. Ohio Dept. of Adm. Servs., 113 Ohio St.3d 226, 2007-Ohio-1687,
¶ 39.
{¶ 47} Article 8.1 of the contract provides as follows:
8.1.1 Every claim shall accrue upon the date of occurrence of
the event giving rise to the claim.
8.1.2 Except as provided [for emergency situations], the
Contractor shall initiate every claim by giving written notice of
the claim to [Schooley] and the [University], through [Smoot],
within 10 days after occurrence of the event giving rise to the
claim, with the following exceptions:
8.1.2.1 The 10 day time limit on a claim arising from a
determination of the [University] concerning a Field Work
Order begins to run on the date on which the [University]
issues its determination under subparagraph 7.2.2.7 or
subparagraph 7.2.2.10, as applicable.
8.1.2.2 The 10 day time limit on a claim arising from the
response of the [architect] to a Request for Interpretation
begins to run on the date on which the [architect] issues the
[architect's] response to the Request for Interpretation.
8.1.2.3 The 10 day time limit on a claim arising from the
[architect's] determination concerning a Differing Site
Condition begins to run on the date on which the [architect]
issues the [architect's] determination under subparagraph
7.4.5.
{¶ 48} Thus, the contract provides that an Article 8 claim accrues upon the
"occurrence of the event giving rise to the claim."
{¶ 49} The Court of Claims did not identify what date it believed the event or events
occurred that gave rise to each of the individual claims itemized in the January 3, 2014
No. 17AP-211 14
claim letter. Rather, the court concluded that each of the individual claims itemized in the
January 3, 2014 claim letter must have been untimely because Accurate submitted its claim
letter four months after construction was complete. In our view, the Court of Claims
committed reversible error in ruling on the University's motion for summary judgment,
when it failed to separately analyze each of the individual claims asserted in the January 3,
2014 claim letter in order to determine when and if an event giving rise to an Article 8 claim
occurred.
{¶ 50} It is not reasonable to conclude from the contract language that the ten-day
notice provision in Article 8 is tied to the end date of construction. The court's ruling tacitly
indicates the court's belief that the "occurrence of the event giving rise to the claim" must
have been the underlying on the job issues Accurate experienced while construction was
ongoing. The contract language and the evidence do not support such an interpretation.
{¶ 51} For example, Purtee and Palmer admitted that a contractor's initial request
for a change order does not amount to the submission of an Article 8 claim. Purtee also
stated that a request for a change order would only turn into a claim if the contractor
pursued Article 8. Purtee testified as follows:
Q. And generally you pursue Article 8 if there's disagreement
on the change order?
A. Generally.
Q. So a contractor doesn't have to assert a claim the first time it
raises an issue on the project?
A. No.
(Purtee Depo. at 248-49.)
{¶ 52} When a contractor experiences an issue on the job, the contract provides a
method by which the contractor can attempt to remedy the issue. The contractor may
submit a request for a change order pursuant to Article 7.2.3, by submitting written notice
to the construction manager accompanied by a proposal meeting the requirements of
Article 7.2.1. The proposal should detail any adjustment to the contract sum and any
adjustment to the contract time.
No. 17AP-211 15
{¶ 53} If the Management Team grants the contractor's change order request,
arguably no event has occurred giving rise to a claim. The contractor had an issue, but the
Management Team resolved the issue by granting the contractor's change order request.
Depending on the nature of the claim and the particular contractual provisions at issue, the
Management Team's denial of the contractor's change order request may be considered an
event that has occurred giving rise to a claim.3
{¶ 54} We note that Article 8.1.2 identifies certain definite dates which commence
the ten-day notice period. Article 8.1.2.1 provides the ten-day period does not commence
until the University issues its determination on the adjustment to the contract sum and/or
contract time resulting from a field work order. Articles 8.1.2.2 and 8.1.2.3 both provide
that the ten-day notice period does not commence until the architect issues a determination
on a request for information ("RFI") or a differing site condition issue.4 Thus, Article 8.1.2
indicates that some amount of official decision-making is necessary to signal to a contractor
that the ten-day notice period has commenced.
{¶ 55} Accurate asserts the same event gave rise to each of the individual claims
asserted in the January 3, 2014 claim letter, the December 24, 2013 rejection of its change
order request. Based on this assertion, Accurate claims its January 3, 2014 notice of an
Article 8 claim was therefore timely. Accurate's position is that the January 3, 2014 claim
letter represents a single indivisible claim based on the denial of its December 24, 2013
change order request. In our view, Accurate's position is based on an overly simplistic
interpretation of the contract language.
{¶ 56} The contract cannot be reasonably interpreted as permitting Accurate to
bundle all of the individual claims that may have accrued during the Project into a single
change order request and then give "timely" notice of those individual claims simply by
submitting a claim letter within ten days of the denial of the change order. If the contract
were so interpreted, the language of Article 8.1 requiring the contractor to initiate every
claim by giving written notice of the claim to Schooley and the University, through Smoot,
3 Article 7.6 sets forth the contractor's reciprocal obligations with respect to "[c]hange order cost and credit
determinations."
4 If the contractor disagrees with the contracting authority's determination, Article 7.2.3 permits the
contractor to request a change order "by submitting written notice to the [architect] through the
[construction manager], accompanied by a Proposal meeting the requirements of subparagraph 7.2.1."
Article 7.2.3.1. Under such circumstances, the event giving rise to the claim would occur at a later date.
No. 17AP-211 16
within ten days after occurrence of the event giving rise to the claim, would have no
practical meaning.
{¶ 57} Nevertheless, we hold that the Court of Claims committed reversible error by
failing to analyze each of the individual claims asserted in the January 3, 2014 claim letter
to determine the date when an event giving rise to the claim may have occurred. In light of
the relevant contract language, arguments and evidence submitted by counsel, we find the
Court of Claims erred in granting summary judgment. The Court of Claims must interpret
the relevant contract language, in the first instance on remand, as it reviews the individual
claims. For this reason we need not address the alleged ambiguity raised by Accurate.
{¶ 58} For the foregoing reasons, we sustain Accurate's first assignment of error.
{¶ 59} Accurate's second assignment of error asserts the Court of Claims erred in
granting the University's motion for summary judgment as the record presents genuine
issues of material fact regarding the University's waiver of the Article 8 notice
requirements. We agree.
{¶ 60} As applied to contracts, waiver is a voluntary relinquishment of a known
right. State ex rel. Wallace v. State Med. Bd. of Ohio, 89 Ohio St.3d 431, 435 (2000).
"Waiver assumes one has an opportunity to choose between either relinquishing or
enforcing of the right." Chubb v. Ohio Bur. of Workers' Comp., 81 Ohio St.3d 275, 279
(1998). A party who has a duty to perform and who changes its position as a result of the
waiver may enforce the waiver. Id. at 279, citing Andrews v. State Teachers Retirement
Sys. Bd., 62 Ohio St.2d 202, 205 (1980). The party asserting waiver must prove the waiving
party's clear, unequivocal, decisive act. Automated Solutions Corp. v. Paragon Data Sys.,
Inc., 167 Ohio App.3d 685, 2006-Ohio-3492, ¶ 28 (8th Dist.)
{¶ 61} " '[W]aiver of a contract provision may be express or implied.' " Lewis &
Michael Moving & Storage, Inc. v. Stofcheck Ambulance Serv., Inc., 10th Dist. No. 05AP-
662, 2006-Ohio-3810, ¶ 29, quoting Natl. City Bank v. Rini, 162 Ohio App.3d 662, 2005-
Ohio-4041, ¶ 24. " ' "[W]aiver by estoppel" exists when the acts and conduct of a party are
inconsistent with an intent to claim a right, and have been such as to mislead the other
party to his prejudice and thereby estop the party having the right from insisting upon it.' "
(Emphasis sic.) Id., quoting Natl. City Bank at ¶ 24, quoting Mark-It Place Foods, Inc. v.
New Plan Excel Realty Trust, Inc., 156 Ohio App.3d 65, 2004-Ohio-411, ¶ 57. "Waiver by
No. 17AP-211 17
estoppel allows a party's inconsistent conduct, rather than a party's intent, to establish a
waiver of rights." Id., quoting Natl. City Bank at ¶ 24.
{¶ 62} Whether a party's inconsistent conduct amounts to waiver involves a factual
determination within the province of the trier of fact. Id. at ¶ 30, citing Lamberjack v.
Priesman, 6th Dist. No. 92-OT-006 (Feb. 5, 1993), fn. 5; Walker v. Holland, 117 Ohio
App.3d 775, 791 (2d Dist.1997). Accord Bustillos v. Bell, 3d Dist. No 5-11-44, 2012-Ohio-
3320, ¶ 16 (noting that "waiver is usually a fact-driven issue"); Synergy Mechanical Contrs.
v. Kirk Williams Co., Inc., 10th Dist. No. 96APE06-826 (Jan. 30, 1997) (concluding that
the trial court erred in granting summary judgment as there was a "genuine issue whether
this document constitutes a waiver"). A public entity may waive provisions of a construction
contract, such as the requirement of a written change order, " 'either in writing or by such
clear and convincing evidence as to leave no reasonable doubt about it.' " Mike McGarry &
Sons, Inc. v. Constr. Resources One, LLC, 6th Dist. No. S-17-005, 2018-Ohio-528, ¶ 103,
quoting Foster Wheeler Enviresponse v. Franklin Co. Convention Facilities Auth., 78 Ohio
St.3d 353, 364 (1997).
{¶ 63} In Aggressive Mechanical, Inc. v. Ohio School Facilities Comm., Ct. of Claims
No. 2010-12745, 2012-Ohio-6332, the Court of Claims adopted a referee's decision finding
that a public entity waived strict compliance with the Article 8 notice requirements. Due to
delays on the construction project at issue in Aggressive Mechanical,5 the construction
manager issued construction bulletin 63 ("CB 63") extending the contract deadline. The
plaintiff-contractor submitted a pricing proposal to the construction manager reflecting the
increased costs the contractor would incur as a result of CB 63. Over several months, the
manager rejected the contractor's first and second pricing proposals. In July 2009, the
construction manager issued a proposed change order on the pricing issue which the
contractor refused to sign.
{¶ 64} On July 30, 2009, the construction manager sent the contractor an e-mail
stating the proposed change order would be deleted from the system, and the construction
manager would "arrange to have a field level Article 8 meeting at [the construction
manager's] office, just let me know when works for you." Aggressive Mechanical at ¶ 7. No
correspondence between the parties concerning the pricing occurred again until November
5 Remaining citations are to the referee's September 18, 2012 decision.
No. 17AP-211 18
24, 2009, when the contractor sent the construction manager a letter requesting an Article
8 hearing. On December 16, 2009, the construction manager responded to the contractor's
claim, advising the contractor to "follow the specific requirements set forth in GC Article
8." Id. at ¶ 9. However, the construction manager also informed the contractor that, "while
the time constraints outlined [in Article 8 of the contract] have been grossly surpassed, the
Construction Manager, the Architect and the Co-Ownership Team will consider your claim
if properly documented and supported." Id.
{¶ 65} On these facts, the court concluded the construction manager had waived
strict compliance with the Article 8 notice provision.6 The court held that the construction
manager's "conduct as shown in the July 30 and December 16, 2009 correspondence [was]
inconsistent with an intent to claim strict compliance with the 10-day notice requirement
in Article 8." Id. at ¶ 25. The court further concluded that "the parties engaged in the Article
8 field level process in an effort to compromise the CB 63 claim." Id. See also J & H
Reinforcing & Structural Erectors, Inc. v. Ohio School Facilities Comm., 10th Dist. No.
12AP-588, 2013-Ohio-3827, ¶ 87 (agreeing that the Ohio School Facilities Commission had
"waived its right to strict compliance with the notice requirements of Articles 6 and 8 with
regard to the post-CO 29 claims due to its own failure to comply with Article 8");
Transamerica Bldg. Co., Inc., v. Ohio School Facilities Comm., Ct. of Claims No. 2013-
00349 (Sept. 17, 2015)7 (stating the referee was "convinced that by withholding the revised
drawings from [the contractor], disregarding its obligations under Article 8 and waiving
the Article 8 procedures for other contractors on the Dorm Project, OSFC, through the
authorized acts of its agent LL, knowingly and impliedly waived strict compliance with the
initiation, certification and submission requirements of GC 8.1, GC 8.2, GC 8.3, GC 8.4 and
GC 8.5").
{¶ 66} Accurate asserts the University waived its right to strict compliance with the
Article 8 notice provisions with regard to all of the individual claims set forth in the
January 3, 2014 claim letter, based on its conduct toward other contractors' Article 8
claims, and by its conduct toward Accurate on Accurate's BP7 and BP8 claims. Pursuant to
6 The Article 8 provision at issue in Aggressive Mechanical stated that any request "for equitable
adjustment" should be made in writing and filed "no more than ten (10) days after the initial occurrence of
the facts which are the basis of the claim." Id. at ¶ 25, fn. 5.
7 Citation is to the referee's decision; the parties settled the case after the referee issued its decision but
before the Court of Claims acted on the referee's decision.
No. 17AP-211 19
our de novo review, we will examine the evidence Accurate produced in response to
summary judgment.
{¶ 67} Purtee testified that she "always tried to resolve anything at the field level."
(Purtee Depo. at 258.) Purtee explained that a field level resolution was "at the level of what
we call the field. The contractor, the [construction manager], and the OSU staff try to
resolve it without going any further to Article 8, trying to resolve the request for
compensation, reach an agreement." (Purtee Depo. at 244.) Although Purtee acknowledged
the contract does not provide for a field level resolution, she stated "[i]t's just that if we have
a request for compensation we always try to resolve it right then and there so there's no
reason for it to escalate." (Purtee Depo. at 244.)
{¶ 68} Palmer similarly affirmed that the "preferred method of doing things" was a
"field level resolution" where the parties got "together and tr[ied] to work out a resolution
rather than claims being asserted and letters flying back and forth." (Palmer Depo. at 208.)
Palmer noted that trying to work things out at the field level was "an everyday occurrence."
(Palmer Depo. at 194.)
{¶ 69} Accurate presented evidence regarding the Management Team's handling of
Article 8 claims from three other contractors on the Project: Ohio Ceilings & Partitions
("OCP"), Hemm's Glass Shop ("Hemm's"), and TP Mechanical ("TP").
{¶ 70} OCP sent Smoot an e-mail on November 16, 2011 requesting a change order
for additional compensation. On November 21, 2011, Smoot informed OCP it was rejecting
their request for additional compensation. Palmer indicated that OCP had ten days from
the November 21, 2011 rejection of its change order request in which to file an Article 8
claim.
{¶ 71} On December 2, 2011, OCP sent Smoot an e-mail indicating that OCP was
filing an Article 8 claim regarding their request for additional compensation. Palmer
responded to OCP's e-mail stating Smoot would "accept this as notice as long as you follow
up in writing specifically following the requirements of Article 8 of the General Conditions
of the contract documents." (Ex. 1012.) Palmer affirmed the December 2, 2011 e-mail was
beyond the Article 8 ten-day notice period, and affirmed that by accepting the December 2,
2011 notice he was "not strictly enforcing the Article 8 requirements." (Palmer Depo. at 71.)
Purtee also noted that, while OCP had failed to strictly comply with the submission
No. 17AP-211 20
requirements of Article 8, the University generally "tr[ied] to give the contractors ample
opportunity to provide us with the documents that we need." (Purtee Depo. at 75.)
{¶ 72} On December 12, 2011, Palmer sent OCP an e-mail stating that, although he
had not "received any formal mailing of the dispute," he would like for OCP to provide
"several dates and times that they can be available to meet to try and bring this issue to
resolution." (Ex. 1017.) Palmer affirmed that the meeting he proposed would be a "field
resolution meeting." (Palmer Depo. at 76.) Purtee admitted she did not recall indicating
that OCP's claim should have been rejected based on their failure to comply with Article 8.
{¶ 73} Hemm's sent an e-mail to Smoot on December 20, 2011 indicating that based
on an RFI response it received it would have to install different materials than it originally
believed necessary. Smoot responded stating that if Hemm's "believe[d] that [it was] owed
additional costs for this, please follow the procedures outlined under Article 8 of the
General Conditions." (Ex. 1106.) On December 28, 2011, Hemm's e-mailed Smoot stating
that it was interested in making an Article 8 claim. On January 3, 2012, Smoot responded
stating that Hemm's must "get the letter sent in within the specified time frame (10 days?)"
and "[a]ddress the five items listed in Para 8.1.38 to the best of your ability." (Ex. 1106.)
Hemm's submitted its Article 8 claim on January 3, 2012.
{¶ 74} Palmer affirmed that, by January 3, 2012, he believed "the ten-day period had
expired" on Hemm's claim. (Palmer Depo. at 79.) Nevertheless, Palmer had no recollection
of telling Hemm's that their Article 8 claim was untimely.
{¶ 75} TP initially sent Smoot a cost proposal on February 3, 2012 requesting
additional compensation. Shortly thereafter, Smoot denied TP's request for additional
compensation. Several months later, on July 14, 2012, TP sent a letter to Palmer indicating
it was seeking Article 8 review of its request for additional compensation.
{¶ 76} Palmer responded to TP's July 14 letter on July 24, 2012, stating that TP's
"notice of intent to dispute does not follow the indicated guidelines as outlined in Article
8.1.3 of the General Conditions of the Contract Documents. Additionally, this dispute can
8Article 8.1.3 provides that a contractor's written notice of a claim must provide the following information:
nature and anticipated amount of impact; identification of the circumstances responsible for causing the
impact; identification of the activities on the schedule which will be affected; anticipated impacts; and
recommended action to avoid or minimize any interference, disruption, hindrance, delay or impact.
No. 17AP-211 21
be rejected solely for not complying with Article 8.1.2 of this same section." (Ex. 1047.)
However, Palmer further informed TP that:
In the interest of being fair and reasonable and to move
forward, this submitted claim needs to fulfill all aspects of the
requirements of Article 8.1.3 and be submitted with all relevant
information to allow the project team to properly review and
evaluate the claim.
Upon receipt of the above information, we will continue the
review process as outlined in the Article 8 process.
(Ex. 1047.)
{¶ 77} Purtee acknowledged that TP had failed to comply with the requirements of
Article 8 and admitted that she never told Smoot to deny TP's claims based on the Article
8 deficiencies. Purtee agreed with Palmer's indication that the Management Team would
be fair and reasonable, noting "we were trying to be fair and reasonable. We understand
that it takes time to pull together documentation according to the Article 8 sections. We
tried to be accommodating." (Purtee Depo. at 182.)
{¶ 78} Accurate experienced delays throughout its work on BP7. On March 31, 2012,
Bob Beal, the president of Accurate, sent Palmer a letter stating that Accurate was
projecting its "cost for completion of [BP7] and unfortunately we are projecting a 15,000
hour over loss of productivity." (Ex. 1026.) Beal informed Palmer that Accurate was seeking
$478,305 in additional compensation based on the BP7 delays, and attached a proposed
change order reflecting the request for additional compensation to the letter. Palmer
acknowledged the events giving rise to Accurate's March 31, 2012 claim for additional
compensation concerned events which occurred throughout 2011 and 2012.
{¶ 79} Palmer forwarded Accurate's March 31, 2012 proposed change order to
Purtee. Purtee responded stating, "I agree that we did create some of the issues. OCP
created some of the issues as well." (Ex. 1027.) On April 2, 2012, Purtee established a
potential change order for the entire amount of the additional compensation identified in
Accurate's March 31, 2012 letter.
{¶ 80} On May 28, 2012, Accurate wrote a letter to Smoot "follow[ing] up from our
meeting in April with the owner regarding our change order request." (Ex. 1037.) Accurate
indicated it had revised the amount of additional compensation it was seeking to
No. 17AP-211 22
$477,829.41. Following the May 28, 2012 letter, nothing substantively happened between
the parties on Accurate's BP7 claims for several months.
{¶ 81} In a December 5, 2012 letter, Accurate noted that Smoot still had yet to act
on Accurate's BP7 claims. At a December 12, 2012 meeting, the Management Team
concluded that Palmer should "set up meeting with Bob Beal and Tony as it relates to
Accurate Article 8." (Ex. 1048.) Palmer and Evans communicated about the BP7 claims via
e-mail and, on January 8, 2013, Evans sent Palmer a revised proposed change order
indicating that Accurate was now requesting $456,812.35 in additional compensation.
{¶ 82} On January 24, 2013, the parties had a field level resolution meeting
regarding Accurate's BP7 claims. The parties agreed to resolve Accurate's BP7 claims for
$202,657.95. On January 25, 2013, Purtee informed some University officials there had
been a "[f]ield level resolution for Accurate. [Change Orders] will be issued on each item."
(Ex. 1055.) Although Smoot had Evans sign change orders reflecting the results of the
January 24, 2013 meeting which stated "Justification: Article 8 Resolution," a few weeks
later, a Smoot employee altered the change orders to state "Justification: Compensation
Resolution." (Exs. 1056; 1058.) Purtee could not recall if she directed the Smoot employee
to alter the change orders.
{¶ 83} Throughout the nearly year-long proceedings on Accurate's BP7 claims, the
Management Team never informed Accurate it had waived its claims by failing to comply
with the Article 8 notice requirements. Palmer stated that Accurate's BP7 "work was so
comingled with impacts by every contractor, that we ended up -- even with Accurate, sat
down with him and negotiated a resolution. So to go to the notice discussion, no, I don't
think there was a response to tell them." (Palmer Depo. at 122.) Palmer testified as follows:
Q. Accurate's Article 8 claim in Bid Package 7 wasn't strictly
compliant with the Article 8 notice provision, was it?
A. No, nor were quite a few there.
(Palmer Depo. at 200.)
{¶ 84} Regarding BP8, Accurate initially informed Smoot it was experiencing
impacts and delays to its BP8 work in December 2012. In response, Palmer suggested the
parties meet and discuss the issues.
No. 17AP-211 23
{¶ 85} On February 27, 2013, Evans sent an e-mail to Palmer stating that Accurate
"disagree[d] with the Means9 pricing on our change order pricing." (Ex. 1084.) Evans
informed Palmer that the change orders in question on the pricing issue were change orders
612, ASI, 042, 682, 683, 693, 416, 622, and 587. Evans stated that Accurate would "like to
set up another meeting to try to resolve these pricing issues, would you like Accurate
Electric [to] file for an Article 8 or do you want us to submit an Alternative Dispute
Resolution? * * * Please let us know on how you want us to move forward." (Ex. 1084.)
{¶ 86} Purtee testified she did not recall if anyone responded to Accurate's question
in the February 27, 2013 e-mail about filing an Article 8 claim, but stated "there were
several meetings between Accurate and Smoot on the disputed change orders." (Purtee
Depo. at 281.) The parties did not reach an agreement on the pricing issue. The University
imposed its pricing and processed the following change orders unilaterally: 416, 662, 682,
683, 693, 503R1, 612A, and 612B.
{¶ 87} On March 4, 2013, Evans sent Palmer a letter noting that many of the
predecessor activities to Accurate's BP8 work were falling behind schedule. Accurate noted
these delays would "force Accurate Electric to work longer" and to "keep tools, equipment,
supervision and manpower on the project longer than planned." (Ex. 1076.)
{¶ 88} On March 8, 2013, Purtee wrote an e-mail to other University officials
regarding Accurate's March 4, 2013 "delay notice." (Ex. 1077.) Purtee stated the "delay
issue [would] likely move thru the Article 8 process," and noted that the Management Team
was "processing several [change orders] unilaterally. Accurate refuses to have their [change
order] pricing modified by MEANS or any other method and demands full payment. This
issue will likely move on thru the Article 8 process." (Ex. 1077.)
{¶ 89} On March 14, 2013, Palmer responded to Evans' March 4, 2013 letter
asserting Accurate had contributed to the delays. Palmer further indicated that Accurate
"never provided proper notification until the March 4, 2013 correspondence and to that
end have lost their rights against reported impacts/delays prior to ten days before this
notification." (Ex. 1073.) However, Purtee affirmed that, following Accurate's March 4,
9 "Means" or "RSMeans" is a "national publication to document the cost of construction that is indexed to
cities around the United States." (Palmer Depo. at 177.) Thus, Means pricing "is a process of evaluating
change orders." (Purtee Depo. at 279.)
No. 17AP-211 24
2013 delay letter, the parties had "some meetings to discuss trying to get those things
resolved at the field level." (Purtee Depo. at 290.)
{¶ 90} On March 5, 2013, Beal sent Palmer an e-mail asking that Palmer rescind the
January 21, 2013 notice to comply on the flexible conduit issue. Beal stated that if Palmer
wanted to pursue the flexible conduit issue "consider this a request for mediation as called
for in Article 8.11.4.210 alternative dispute resolution and we also request ADR mediation
on [Smoot's] decision to cut our change order labor hours expensed and unilaterally
executing change orders." (Ex. 1061.)
{¶ 91} On March 12, 2013, Palmer wrote an e-mail to Beal stating the disposition of
the flexible conduit issue would likely "be in the format of issuing a unilateral deductive
change order for not complying with the documents. Accurate may follow the dispute
proceedings for resolving this outcome should they choose to follow this path." (Ex. 1062.)
Palmer also informed Beal that his "request of pursuit of mediation or ADR will not be
followed, at least at this point in time, as is stipulated in Article 8.10.6.11 Accurate is
requested to follow specifically those requirements as outlined under Articles 8.1.2 and
8.1.3 for all such disputes that they intend to pursue." (Ex. 1062.) Regarding Palmer's
March 12, 2013 e-mail, Purtee stated that the Management Team was "following the
process in trying to do a field level resolution, and [she did not] recall ever directing Smoot
to not follow mediation or ADR." (Purtee Depo. at 232-33.)
{¶ 92} At the March and April meetings of the Management Team, the meeting
minutes note that Accurate's BP8 issues would likely turn into Article 8 claims. On June 10,
2013, Palmer e-mailed Evans about a number of issues outstanding between the parties,
including display graphic panel work, fire alarm pricing resolution, the milestone dates
change order, the flexible conduit resolution, and the 12th Avenue conduit crossing.
{¶ 93} By October 9, 2013, the Management Team concluded "[t]here [were] several
issues with Accurate, we need to have a meeting." (Ex. 1087.) A meeting between the parties
was scheduled for October 16, 2013.
10Providing for mediation as an alternative dispute resolution method.
11Providing that any "claim remaining unresolved after completion of the [Article 8] process * * * shall be
subject to litigation, which may be preceded by Alternative Dispute Resolution." (General Conditions,
8.10.6.)
No. 17AP-211 25
{¶ 94} On October 11, 2013, Evans e-mailed Smoot a copy of "the agenda for the
meeting." (Ex. 1088.) Evans stated that Accurate "wishe[d] to resolve disputed
problems/unpaid changes and impacts to our contract." (Ex. 1088.) Accurate's agenda
listed several items, including change order 363 regarding the milestone dates.
{¶ 95} On October 14, 2013, a Smoot employee e-mailed Evans the following list of
the official meeting agenda for the October 16, 2013 meeting:
255 Pre Action System
632 Resident Room Data & Light [F]ixtures
633 Door Position Graphics Display Panels
RFI #1725
699R1 Fuel Oil Fill Revision
Repair Site Lighting Damaged by Others
Add LED Lights to Display Panels
Meters TCP/Ethernet
Flex Conduit
Fire Alarm Allowance
Blank-off Plate Allowance
Site Lighting Circuit Phasing
Watermain Event Balance Billing
(Ex. 1089.)
{¶ 96} Evans responded on October 15, 2013 asking "[w]as there some reason you
left out several items from our agenda that wasn't added to your official meeting agenda."
(Ex. 1090.) Palmer responded to Evans that same day stating "[y]es we will respond or meet
to those items that you have presented as topics of discussion separately." (Ex. 1090.)
{¶ 97} Palmer affirmed that the October 16, 2013 meeting was "a field resolution
meeting like the ones we talked about for Bid Package 7." (Palmer Depo. at 213.) Purtee
described the October 16, 2013 meeting as follows:
Q. This October meeting was a meeting, though, to try to field
resolve these issues, though, right?
A. Yes, that was the intent.
Q. And it wasn't about making a claim? It was just to – let's see
if we can resolve it like you had been doing?
A. Yes, I believe so.
(Purtee Depo. at 302.)
No. 17AP-211 26
{¶ 98} At the October 16, 2013 meeting, the parties resolved some issues but were
unable to resolve others. The meeting minutes state under the section "closing" that
"[s]ome of the items Accurate needs to provide additional information. Some of the items
Accurate knows what Smoot and Heapy's position is so if they are still in dispute they
should follow contract guidelines." (Ex. 1091.) Palmer stated that, as a result of the
October 16, 2013 meeting, Smoot was expecting "[a]dditional information, for sure," from
Accurate, and was "speculative on the claim." (Palmer Depo. at 214.) Purtee affirmed that
as a result of the October 16, 2013 meeting, "there was talk about providing additional
information." (Purtee Depo. at 304.)
{¶ 99} Following the October 16, 2013 meeting, the Management Team established
a potential change order relative to Accurate's BP8 claims in the amount of $500,000. In
an October 18, 2013 e-mail, Purtee informed a University official that, as a result of the
October 16, 2013 meeting, Accurate was directed to "go back and provide all the back-up
information necessary to substantiate with request, most of which we want to pay them for
their work since they are due payment. The other large request for compensation was not
discussed." (Ex. 1093.) Purtee explained that the "other large request for compensation"
referred to the delay issues and the milestone dates. (Purtee Depo. at 309-11.)
{¶ 100} On October 21, 2013, Beal sent an e-mail to several individuals from the
University and Smoot. Beal addressed the issues discussed at the October 16, 2013 meeting,
and further stated as follows:
On October 11, 2013 [Accurate] provided [the Management
Team] an agenda of items that also included, Manipulation of
milestone change orders, Viking Phones, Best Locks, Exterior
Cleaning, 12th Ave crossing, Technology conduit fill, Conduit
to cable tray, & CM's misuse of R.S. Means, that have been yet
to be addressed by the "Team" totaling $2,125,171.49 * * *. At
the end of Wednesday's meeting Greg Palmer advised that I
should go by the contract for the next step to resolve and I am
requesting "The Team" take this to your higher ups at and seek
better plan. It's our desire to make one last attempt * * *. This
work was authorized by you and performed by Accurate
Electric and the owner is currently benefiting from it.
(Ex. at 1094.)
No. 17AP-211 27
{¶ 101} Regarding Beal's statement that he wanted to make "one last attempt,"
Purtee testified as follows:
Q. Did you take that to mean that Accurate was still wanting to
talk about this and trying to make an attempt to resolve things
at the field level as it relates to their other items?
A. That's what it says in this e-mail.
Q. So he was asking for future consideration as to those items
as of this date?
A. That's what it appears to state, yes.
Q. Did you agree with that?
A. We didn't disagree. We didn't say they couldn't or that we
would not continue discussions.
Q. Well, you did continue, though, to consider some of these as
the time progressed; did you not?
A. As far as I can recall, yes.
(Purtee Depo. at 314-15.)
{¶ 102} On October 24, 2013, Palmer responded to Beal's October 21, 2013 e-mail
stating that, as the e-mail was "not part of the Article 8 process and makes general,
unsupported statements," Palmer would not respond to it. (Ex. 1121.) Palmer further stated
the University's decision to reach an equitable resolution on some of the issues at the
October 16, 2013 meeting was "not a waiver of its right to enforce the Contract. To the extent
[Accurate] has failed to provide notice of any claim in compliance with Article 8, such claim
is irrevocably waived per General Conditions Article 8.1.4." (Ex. 1121.)
{¶ 103} In November 2013, the University continued to hold the potential change
order of $500,000 for Accurate's BP8 claims. In a November 5, 2013 e-mail, Purtee asked
a Smoot employee to send her information about Accurate's BP8 claims. The Smoot
employee responded, providing Purtee with some information. On November 13, 2013,
Purtee wrote back to the Smoot employee stating "[w]hat about those other items that
Accurate referred to * * * Viking phones, Best Locks, Additional beams, technology conduit
No. 17AP-211 28
fill, exterior cleaning." (Ex. 1099.) Purtee stated as follows regarding this time period in
November 2013:
Q. Okay. Were you still willing to try to work towards a field
resolution to all those issues with Accurate?
A. I don't know why I would not have been.
(Purtee Depo. at 324.)
{¶ 104} When communications broke down between the parties, Accurate filed its
December 23, 2013 request for a change order on the remaining BP8 issues. Through the
Article 8 process, the University paid some of Accurate's BP8 claims.
{¶ 105} In light of the evidence presented, and considering that waiver is a fact-
driven issue, we conclude the record presents genuine issues of material fact regarding
whether the University waived its right to strict compliance with the Article 8 notice
requirements with regard to some or all of the individual claims asserted in the January 3,
2014 claim letter. The evidence demonstrates the University's preferred method of
resolving contractor claims was pursuant to informal field level resolutions. The University
ignored the Article 8 notice requirements for claims made by OCP, Hemm's, and TP, and
similarly ignored the Article 8 notice requirements for Accurate's BP7 claims. Such conduct
by the University demonstrated an intent to work with contractors to resolve their claims
outside the Article 8 process. Indeed, Purtee testified she tried to resolve things at the field
level to specifically avoid the Article 8 process.
{¶ 106} The evidence permits the inference that the University, by endeavoring to
resolve individual claims at the field level and outside of the Article 8 process, may have
misled Accurate, to its prejudice, into believing that the University would similarly act to
resolve Accurate's BP8 claims exclusively through field level resolutions. Indeed, the
University held a field level resolution to address some of Accurate's BP8 claims on
October 16, 2013.
{¶ 107} Although Palmer at various points throughout BP8 referred Accurate to
Article 8, the evidence permits an inference that the University's continued indication that
it would resolve issues at the field level may have compromised Accurate's ability to file a
timely Article 8 claim. For instance, although Palmer directed Accurate to follow the Article
8 procedures regarding the flexible conduit issue in a March 12, 2013 e-mail, Palmer
No. 17AP-211 29
continued to address the flexible conduit in a June 10, 2013 e-mail, and the flexible conduit
was an agenda item the parties addressed at the October 16, 2013 field level resolution
meeting.
{¶ 108} Similarly, on February 27, 2013, Accurate asked Smoot if it should file an
Article 8 claim on the pricing issue regarding its change orders. Instead of responding to
the question about filing an Article 8 claim, Smoot had meetings with Accurate regarding
the pricing issues. Although Accurate indicated it wanted to discuss the milestone dates at
the October 16, 2013 field level resolution meeting, Palmer informed Evans that the parties
would have a separate meeting on the milestone issue. Thus, in October 2013, rather than
indicating that Accurate needed to file an Article 8 claim on the milestone dates or
informing Accurate that it had missed the deadline to do so, the University indicated to
Accurate it was willing to have another meeting to discuss the milestone dates. Purtee
testified she remained willing to work toward a field level resolution of Accurate's BP8
issues even into November 2013. Accordingly, Accurate presented some evidence from
which reasonable minds could conclude that the University waived its right to demand
strict compliance with the Article 8 notice provisions with respect to some or all of the
claims asserted in the January 3, 2014 claim letter.
{¶ 109} On this record, the question whether Accurate has established, by clear and
convincing evidence, the University's waiver of the Article 8 notice provisions as to any of
the individual claims asserted in the January 3, 2014 claim letter is a question that must be
resolved at trial and not in these summary judgment proceedings. Because the record
presents genuine issues of material fact regarding the University's waiver of the Article 8
notice provisions, summary judgment was inappropriate.
{¶ 110} Accurate's second assignment of error is sustained.
{¶ 111} Accurate's third assignment of error asserts the Court of Claims erred in
granting the University's motion for summary judgment on the undisputed contract
balance.
{¶ 112} Accurate explains it is not seeking to obtain its final payment under the
contract but, rather, seeks only to obtain the undisputed contract balance of $304,514.13
which is not related to the claims at issue in the present case. Accurate notes that once the
instant case is concluded, it will then "submit a final payment application for the
No. 17AP-211 30
determined amount with all of the required closeout documentation." (Appellant's Brief at
49.)
{¶ 113} In its complaint, Accurate alleged that it sought payment for its "outstanding
contract balance" and for an "amount due under the contract." (Compl. at ¶ 31, 35(k).)
Accurate never stated it was seeking the final contract balance or the retainage amount. In
moving for summary judgment, the University asserted Accurate was not entitled to release
of the final contract balance or retainage amount because Accurate had not completed the
required close-out documents. The Court of Claims determined the University was entitled
to summary judgment on the contract balance issue because Accurate never submitted the
necessary close-out documents.
{¶ 114} Thus, our review of the record demonstrates that Accurate never sought to
obtain its final contract balance or retainage amount. Rather, Accurate has only sought to
obtain the undisputed portion of the contract balance which is not related to the claims
pending in the present case.
{¶ 115} Article 8.14.2 of the contract provides that the "Contracting Authority shall
continue to make payment of any undisputed amounts in accordance with the Contract
Documents pending final resolution of a claim, unless otherwise agreed by the Contractor
and the Contracting Authority in writing." There is nothing in the record indicating the
parties have "otherwise agreed" pursuant to Article 8.14.2. Accordingly, the University
must make payment to Accurate of any undisputed amounts in accordance with the
contract documents pending final resolution of the claims at issue in the instant case. The
Court of Claims erred in granting the University's motion for summary judgement on the
unpaid contract balance.
{¶ 116} Accurate's third assignment of error is sustained.
{¶ 117} Accurate's fourth assignment of error asserts the Court of Claims erred in
granting the University leave to file a reply brief and in denying Accurate leave to file a
surreply brief. At the time of these proceedings, Court of Claims Local Rule 4(C)12 provided
a "[r]eply brief or additional briefs may be filed only upon a showing of necessity therefore
and with leave of court." Accordingly, it was within the Court of Claims discretion to permit
12 Loc.R. 4(C) was amended effective July 1, 2019. The rule now provides that "[r]eply briefs may be served
within seven days after service of the response to the motion. Additional briefs may be filed only upon a
showing of the necessity therefore and with leave of court."
No. 17AP-211 31
the parties to file either a reply brief or a surreply brief. First Fin. Servs., Inc. v. Cross
Tabernacle Deliverance Church, Inc., 10th Dist. No. 06AP-404, 2007-Ohio-4274, ¶ 39;
Bates v. Midland Title of Ashtabula Cty., Inc., 11th Dist. No. 2003-L-127, 2004-Ohio-6325,
¶ 34.
{¶ 118} In moving for leave, the University argued that Accurate had omitted
relevant provisions of the contract from its memorandum in opposition to summary
judgment. Specifically, the University asserted that Accurate failed to mention Articles 7.1.2
and 7.1.2.1 of the contract. We find no abuse of discretion in the court's decision to grant
the University leave to file a reply brief.
{¶ 119} Accurate asserts the Court of Claims should have allowed it to file a surreply
brief because the University raised new arguments in its reply brief. However, Accurate
fails to identify what new arguments the University allegedly raised in its reply brief. Our
review of the reply brief demonstrates the University did not raise new arguments. Rather,
the University reiterated its summary judgment arguments and responded to the
arguments Accurate made in opposition to summary judgment. As such, the Court of
Claims did not abuse its discretion in denying Accurate's request to file a surreply brief.
{¶ 120} Accurate's fourth assignment of error is overruled.
{¶ 121} Accurate's fifth assignment of error asserts the Court of Claims erred in
granting the University summary judgment on Counts 3 and 4 of the complaint because
the University failed to meet its initial summary judgment burden with respect to these
counts. The party seeking summary judgment bears the initial burden of informing the
court of the basis for the motion and identifying portions of the record that demonstrate no
genuine issue of material fact remain as to the essential elements of the non-moving party's
claim. Dresher at 293.
{¶ 122} Accurate notes that, in the University's March 1, 2016 motion for summary
judgment, the University simply asserted that Accurate could not prove its claims under
Counts 3 and 4 of the complaint. The Court of Claims, however, did not grant the University
summary judgment on Counts 3 and 4 based on the arguments contained in the
University's initial summary judgment motion. Instead, the referee sought and the parties
produced additional briefing on these counts.
No. 17AP-211 32
{¶ 123} The University supported its September 2, 2016 brief in response to the
referee's request for additional briefing with Beal's deposition testimony and the affidavit
of the University Director of Projects, Scott Conlon. The University asserted that Beal's
testimony demonstrated Accurate was not able to identify any actual warranties it claimed
the University had breached, and that Accurate's breach of warranties claim was
substantively a breach of contract claim. Conlon's affidavit incorporated by reference the
contract between the University and Accurate. Article 4.1 of the contract provided that the
"Contract Documents embody the entire understanding of the parties and form the basis
of the Contract between the Contracting Authority and the Contractor." (University's Brief
in Response to Recommendation of Referee, Conlon Aff. Ex. 1.) Based on this contract
provision, the University asserted there could be no implied warranties as the parties'
contract constituted the entire agreement between the parties. The University asserted that
Accurate's breach of the duty of good faith and fair dealing claim failed as a matter of law,
and cited case law to support its legal argument.
{¶ 124} The University satisfied its initial summary judgment burden with respect
to Counts 3 and 4 of the complaint by informing the court of the basis for its motion. The
University identified Beal's deposition testimony and Conlon's affidavit as portions of the
record which demonstrated there were no genuine issues of material fact on Accurate's
breach of warranties claim, and directed the court to case law supporting its contention that
it was entitled to summary judgment on the breach of the duty of good faith and fair dealing
claim.
{¶ 125} Based on the foregoing, Accurate's fifth assignment of error is overruled.
{¶ 126} Accurate' sixth assignment of error asserts the Court of Claims erred in
granting the University summary judgment on Counts 3 and 4 of the complaint because
Accurate presented substantial evidence in support of these counts.
{¶ 127} In response to the referee's request for additional briefing, Accurate asserted
that the "warranty at issue in Count III is the University's implied warranty to provide
Accurate with a site upon which Accurate could perform its work without hindrance,
interference, or delay." (Accurate's Memo in Support of Counts III and IV of its Compl. at
3-4.) Accurate also asserted the University breached an implied warranty to provide
Accurate with additional compensation by unilaterally processing change order 363 as a
No. 17AP-211 33
zero cost change order, and asserted the University breached an implied warranty to
promote teamwork, cooperation, and respect among the contractors by failing to develop
the partnering agreement described in Article 4.4.313 of the contract.
{¶ 128} "There can be no implied covenants in a contract in relation to any matter
specifically covered by the written terms of the contract itself." Hamilton Ins. Servs. Inc. v.
Nationwide Ins. Cos., 86 Ohio St.3d 270, 274 (1999), citing Kachelmacher v. Laird, 92
Ohio St. 324 (1915), paragraph one of the syllabus. The parties' agreement contained an
integration clause stating that the contract was "the entire understanding of the parties."
(Conlon Aff., Ex. 1.) See McGrath v. Nationwide Mut. Ins. Co., 295 F.Supp.3d 796, 808
(S.D.Ohio.2018) (noting the principle that there can be no implied covenants in a contract
in relation to any matter specifically covered in the contract "is especially true in the
presence of an integration clause"). Because the implied warranties identified by Accurate
relate to matters specifically covered by the parties' written agreement, the University was
entitled to judgment on the implied warranties claim, as a matter of law. Hamilton;
Kachelmacher.
{¶ 129} In response to the referee's request for additional briefing, Accurate asserted
the University breached its duty of good faith and fair dealing in the following ways: failing
to develop the partnering agreement under Article 4.4.3; issuing unilaterally processed
change orders; informing contractors there would be no extension to the contract end date;
negotiating Accurate's BP7 claims in bad faith; arbitrarily treating Accurate's BP8 claims
differently from Accurate's BP7 claims; and by threatening Accurate with being blacklisted
from future University projects.
{¶ 130} "[U]nder Ohio law, 'there is an implied duty of good faith and fair dealing in
every contract.' " CosmetiCredit, LLC v. World Fin. Network Natl. Bank, 10th Dist. No.
14AP-32, 2014-Ohio-5301, ¶ 35, quoting Am. Contrs. Indemn. Co. v. Nicole Gas Prod., Ltd.,
10th Dist. No. 07AP-1039, 2008-Ohio-5056, ¶ 13. The implied duty to exercise good faith
and fair dealing has been described as " '[a] compact reference to an implied undertaking
13 Providing that "the Project's key stakeholders shall meet prior to the construction of the Project for
developing a partnering agreement." (General Conditions, 4.4.3.) The partnering agreement would provide
"a problem solution process, an Alternative Dispute Resolution ("ADR") strategy in accordance with
paragraph 8.11, and an implementation plan for the partnering arrangement." (General Conditions, 4.4.3.)
Purtee testified that she did not recall "on the South High Rise if there was partnering meetings" pursuant
to Article 4.4.3 of the contract. (Purtee Depo. at 32.)
No. 17AP-211 34
not to take opportunistic advantage in a way that could not have been contemplated at the
time of drafting, and which therefore was not resolved explicitly by the parties.' " Natl./Rs,
Inc. v. Huff, 10th Dist. No. 10AP-306, 2010-Ohio-6530, ¶ 18, quoting Ed Schory & Sons,
Inc. v. Society Natl. Bank, 75 Ohio St.3d 433, 443-44 (1996).
{¶ 131} However, "the covenant of good faith is part of a contract claim and does not
stand alone as a separate cause of action from a breach of contract claim." Interstate Gas
Supply, Inc. v. Calex Corp., 10th Dist. No. 04AP-980, 2006-Ohio-638, ¶ 98, citing Lakota
Local School Dist. Bd. of Edn. v. Brickner, 108 Ohio App.3d 637, 646 (6th Dist.1996). Thus,
"[a] claim for breach of contract subsumes the accompanying claim for breach of the duty
of good faith and fair dealing." Krukrubo v. Fifth Third Bank, 10th Dist. No. 07AP-270,
2007-Ohio-7007, ¶ 19.
{¶ 132} The court concluded that, because Accurate could not maintain its breach of
contract claim due to its failure to comply with Article 8, Accurate's breach of the duty of
good faith and fair dealing claim had to be dismissed as well. In our ruling on Accurate's
first and second assignments of error, we found genuine issues of material fact regarding
the application of Article 8 to the present case. As such, we find the Court of Claims erred
in granting the University's motion for summary judgment on Counts 3 and 4 of the
complaint based on Article 8 of the contract.
{¶ 133} Based on the foregoing, we sustain Accurate's sixth assignment of error, in
part, as to the claims for breach of the implied covenant of good faith and fair dealing, and
we overrule Accurate's sixth assignment of error, in part, as to the implied warranties claim.
{¶ 134} In conclusion, we sustain Accurate's first, second, and third assignments of
error, and sustain Accurate's sixth assignment of error, in part, and we overrule Accurate's
fourth and fifth assignments of error and overrule Accurate's sixth assignment of error, in
part. Accordingly, we affirm the judgment of the Court of Claims of Ohio, in part, and
reverse, in part, and remand the matter for further proceedings consistent with this
decision.
Judgment affirmed in part and reversed in part;
case remanded.
SADLER, J., concurs.
BRUNNER, J., concurs in part and dissents in part.
No. 17AP-211 35
BRUNNER, J., concurring in part and dissenting in part.
{¶ 135} Because I believe this Court should remand this matter to the Court of
Claims of Ohio based on prejudice to Accurate Electric Construction, Inc. ("Accurate")
according to App.R. 12(D), I concur with the decision of the majority in reversing the Court
of Claims' decision, but I respectfully dissent from the majority opinion in that it addresses
each of Accurate's assignments of error.
{¶ 136} The record is clear on de novo review and the arguments of the parties that
Accurate and The Ohio State University ("University") are at odds as to one basic fact: the
number of contracts that are at issue in this matter. Accurate has consistently maintained
that this action concerns its claims for additional compensation for its performance of two
construction contracts, Bid Package 7 ("BP7") and Bid Package 8 ("BP8"). The University,
however, argues that all of Accurate's claims relate only to one contract, BP8, and that "any
factual allegations regarding BP7 are irrelevant." (University's brief at 13.) The University's
motion for summary judgment focuses exclusively on Accurate's contract and claims in
connection with BP8, stating the following in footnote 1: "Please note that while Accurate
tries to conflate Bid Packages 7 and 8, the Bid Package 7 Project involved Park and Stradley
Halls and the connector between the two, while the Bid Package 8 Project involved Smith
and Steeb Halls and the connector between those two buildings. Accurate also received the
work for the standalone building, Siebert Hall." (Mar. 1, 2016 University's Mot. for Summ.
Jgmt. at fn. 1.) Since the record is clear that reasonable minds could differ about the
number of contracts at issue, this factual question should be resolved before appellate
review so that the Court of Claims is able to determine whether a contractual breach has
occurred such that either Accurate is entitled to damages on one or both contracts, or the
University is entitled to summary judgment as to one or both contracts.
{¶ 137} It is incumbent on this Court to review independently the evidence in the
record to determine whether genuine issues of any material facts exist that relate to
whether this matter concerns claims raised in connection with two contracts, rather than
just one, and for consequent damages or instructions to the parties. Construing the
evidence in a light most favorable to Accurate, the nonmoving party (see Wilkins v.
Harrisburg, 10th Dist. No. 14AP-1028, 2015-Ohio-5472, ¶ 7), there exists evidence creating
No. 17AP-211 36
genuine issues of material fact about the number of contracts under which Accurate is
asserting claims against the University.
{¶ 138} While this may be argued to elevate form over substance, the record
establishes that it is undisputed that the Project was complex, comprised of separate, but
interwoven, time-sensitive components. The parties agree the phases of the projects
overlapped, such that an untimely completion of Phase 2 could impact Phase 3. (Palmer
Dep. at 30.) As part of the factual scenario between the parties, they also agreed that failure
to complete BP7 on time could impact on BP8. The record demonstrates that Accurate was
still attempting to resolve issues and claims from work it performed under BP7 while it was
performing work on BP8.
{¶ 139} De novo review of the record and the arguments of the parties show that the
evidence provided for determining summary judgment to avoid a trial was in the form of
deposition testimony and documents, which in and of themselves elicited material
questions of fact. Taking into consideration all the testimony and documentary evidence
and drawing all reasonable inferences in favor of Accurate, it is not possible to say that no
genuine issue of material fact remains, even before examining Accurate's assignments of
error. It is clear from the record that material issues of fact exist before addressing
Accurate's assignments of error, because the Court of Claims did not determine the basic
question of whether one or two contracts existed before stating as a matter of law that the
University was entitled to summary judgment, based on the contractual language and the
actions of the parties.
{¶ 140} I find that Accurate's assignments of error do not squarely permit this Court
to sustain any of them, being colored by legal arguments other than the simple conclusion
that material issues of fact remain that preclude summary judgment. I strongly hesitate as
a reviewing court to find that the Court of Claims has tacitly adopted the University's
argument that BP7 is irrelevant or that BP7 arguments are subsumed by those for BP8,
because of the dependency of one on another, which I believe requires separate
determination. Thus, I would moot all of Accurate's assignments of error, since our de novo
review of the record of the Court of Claims makes it clear that the Court of Claims did not
address the basic, disputed issue as to whether one or two contracts existed.
No. 17AP-211 37
{¶ 141} I recognize that App.R. 12(A) requires that we address at least one
assignment of error in reviewing a "trial court" decision. However, because the Court of
Claims is not a typical "trial court" as contemplated in App.R. 12, I believe the catchall
provision of App.R. 12(D)14 permits us to reverse without addressing Accurate's
assignments of error when we find on de novo review such basic error in the record that
serves to moot all of them.
{¶ 142} Examining briefly the origin and nature of the Court of Claims, R.C. 2743.05
provides that "[e]xcept as stated in section 2743.63 of the Revised Code, the court of claims
has the same powers to subpoena witnesses, require the production of evidence, and punish
for contempt as the court of common pleas." But R.C. 2743.03(C)(1) provides that only a
single judge or in "a civil action presenting novel or complex issues of law or fact" a panel
of three judges, may be appointed to hear a civil action against the State. Here, as often
occurs in the Court of Claims, Civ.R. 53 was invoked to essentially transfer the time-
consuming complexities of this case to a magistrate. As sometimes occurs with the
operation of Civ.R. 53, critical matters appear to have been "lost in translation," from
magistrate decision to the Court of Claims' decision to entry of final judgment such that the
basic determination of whether one or two contracts existed (one that permeates the
record) was not addressed. There being no provision for a jury in claims against the State
(here a state university, and one of many in the State), we are not the three-judge panel
contemplated by R.C. 2743.03(C)(1) that could have thoroughly considered the issues
before the Court of Claims.
{¶ 143} I would find that App.R. 12(A), with its direction concerning the "trial court,"
is not exclusive for appeals arising from the Court of Claims because of the distinct statutory
underpinnings of the Court of Claims' origin and its inherent limitations and differences
from a constitutionally created trial court of this State. There is no provision for the Court
of Claims (of which there is only one in the State) for a typical "trial court" jury trial, the
specter of which often acts as the "pressure valve" for reaching factual determinations in a
typical trial court, especially in a summary judgment determination. The Court of Claims'
limited, civil jurisdiction and the statutory provision for a three-judge panel in complex
14 "In all other cases where the court of appeals finds error prejudicial to the appellant, the judgment or
final order of the trial court shall be reversed and the cause shall be remanded to the trial court for further
proceedings." App.R. 12(D).
No. 17AP-211 38
cases such as this make App.R 12(D) the appropriate means for reversing the Court of
Claims in Accurate's case.
{¶ 144} Thus, I would find that App.R. 12(D) provides this Court a means to address
the basic, underlying error readily observable on de novo review. Accordingly, I would
moot Accurate's six assignments of error and, in accordance with App.R. 12(D), find from
our review of the record that prejudice to Accurate exists because of an unresolved basic
material issue of fact. I would on this basis reverse the judgment of the Court of Claims and
remand it for further proceedings consistent with this opinion.
________________________