Accurate Elec. Constr., Inc. v. Ohio State Univ.

[Cite as Accurate Elec. Constr., Inc. v. Ohio State Univ., 2016-Ohio-8329.]
ACCURATE ELECTRIC Case No. 2014-00961
CONSTRUCTION, INC.
Referee Dale A. Crawford
Plaintiff
DECISION OF THE REFEREE
v.
THE OHIO STATE UNIVERSITY
Defendant
{¶1} Now before the Court is Defendant’s Motion for Summary Judgment
regarding Plaintiff’s Count III (Breach of Express and Implied Warranty) and Count IV
(Breach of Duty of Good Faith and Fair Dealing). On August 18, 2016, the Court
recommended that Defendant’s Motion for Summary Judgment be granted as to Count I
(Breach of Contract) and Count II (Equitable Adjustment). The Court then ordered the
Parties to file briefs regarding the remaining claims. The Court has reviewed those
briefs and for the reasons explained below recommends that Defendant’s Motion for
Summary Judgment be granted as to all of Plaintiff’s claims.
Summary Judgment Standard
{¶2} Under Civ.R. 56(C), summary judgment is proper “if the pleadings,
depositions, answer to interrogatories, written admissions, affidavits, transcripts of
evidence, and written stipulations of fact, if any, timely filed in the action, show that
there is no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law.” Thus, in order to determine whether Defendant is entitled
to judgment as a matter of law pursuant to Civ.R. 56(C), the Court must ascertain
whether the evidentiary materials presented by Defendant show that there is no genuine
issue as to any material fact involved in the case. In making this determination, it is
necessary to analyze the landmark Ohio Supreme Court decision which addresses the
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“standards for granting summary judgment when the moving party asserts that the
nonmoving party has no evidence to establish an essential element of the nonmoving
party’s case.” Dresher v. Burt, 75 Ohio St. 3d 280, 285, 1996-Ohio-107, 662 N.E.2d 264
(1996); see also Saxton v. Navistar, Inc., 2013-Ohio-352, 986 N.E.2d 611 (10th Dist.), ¶
7.
{¶3} In Dresher, the Ohio Supreme Court held:
{¶4} “[T]he moving party bears the initial responsibility of informing the trial court
of the basis for the motion, and identifying those portions of the record before the trial
court which demonstrate the absence of a genuine issue of fact on a material element
of the nonmoving party’s claim. * * * [T]he moving party bears the initial burden of
demonstrating that there are no genuine issues of material fact concerning an essential
element of the opponent’s case. To accomplish this, the movant must be able to point
to evidentiary materials of the type listed in Civ.R. 56(C) that a court is to consider in
rendering summary judgment. * * * The assertion must be backed by some evidence of
the type listed in Civ.R. 56(C) which affirmatively shows that the nonmoving party has
no evidence to support that party’s claims.” Dresher, supra, at 292-293.
{¶5} In interpreting the United States Supreme Court decision in Celotex v.
Catrett, 477 U.S. 317, 106 S. Ct. 2548 (1986), the Dresher Court found no express or
implied requirement in Civ.R. 56 that the moving party support its motion with affidavits
or other similar materials negating the opponent’s claim. Dresher, supra, at 291-292.
Furthermore, the Dresher Court stated that it is not necessary that the nonmoving party
produce evidence in a form that would be admissible at trial in order to avoid summary
judgment. Id. at 289, quoting Celotex. In sum, the Dresher Court held that the burden
on the moving party may be discharged by “showing”–that is, pointing out to the Court–
that there is an absence of evidence to support the nonmoving party’s case. Id.
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{¶6} “If the moving party fails to satisfy its initial burden, the motion for summary
judgment must be denied.” Id. at 293. If the moving party has satisfied its initial burden,
the nonmoving party has a reciprocal burden as outlined in Civ.R. 56(E):
{¶7} “When a motion for summary judgment is made and supported as provided
in this rule, an adverse party may not rest upon mere allegations or denials of his
pleadings, but the party’s response, by affidavit or as otherwise provided in this rule,
must set forth specific facts showing that there is a genuine issue for trial. If the party
does not so respond, summary judgment, if appropriate, shall be entered against the
party.”
Count III: Breach of Express and Implied Warranties
{¶8} The Supreme Court of Ohio has held that “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. v. Nationwide Ins. Cos., 86 Ohio St. 3d 270,
714 N.E.2d 898, 1999-Ohio-162, citing Kachelmacher v. Laird, 92 Ohio St. 324, 110
N.E. 933 (1915).
{¶9} In fact, the concept that no implied covenants exists between the Parties is
memorialized in the contract in question. Article 4.1 states, in part: “[t]he Contract
Documents embody the entire understanding of the parties and form the basis of the
Contract between the University and the Contractor.”
{¶10} Plaintiff describes the alleged breach of warranties in Paragraphs 42-46 of
its Complaint:
a. 42. OSU breached its obligation to Accurate to provide Accurate
with a site upon which Accurate could perform its work without
hindrance, interference, or delay and to do those things which it
promised to do at such time and in such manner as would not
hinder, interfere, or delay accurate.
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b. 43. OSU breached its obligation to Accurate by unreasonably
denying Accurate’s legitimate claims for additional compensation
necessary to meet the mandated contractual end dates.
c. 44. OSU breached its obligation to Accurate to promote teamwork,
cooperation, and respect amongst all of the contractors on the
Project.
d. 45. OSU breached its obligations to Accurate when it failed to
schedule and coordinate the Project so as not to make the
performance more difficult and costly than anticipated.
{¶11} In support of its position that Defendant failed to provide a site upon which
it could work Plaintiff relies on Valentine Concrete, Inc. v. Ohio Dept. of Administrative
Serv., 62 Ohio Misc.2d 591 (Ohio Ct. Cl. 1991). The Court finds there is no genuine
issue of material fact regarding whether or not Plaintiff 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 be dismissed. In Valentine, this Court granted summary judgment in favor
of the plaintiff because Valentine Concrete, Inc. proved that it was damaged by delays
on the project and it was not the cause of said delays.
{¶12} This case is distinguishable from Valentine in that the plaintiff in that case
alleged breached of contract and did not bring claims for an alleged breach of
warranties. Therefore, the Court’s finding in favor of the plaintiff was based on the
terms of the contract and not on any implied or express warranties. The Court has
already dismissed Plaintiff’s claims related to breach of contract.
{¶13} Plaintiff’s claims arise from facts similar to those in Valentine, wherein the
contractor was damaged by delay caused by Defendant. However, Plaintiff was aware
of the claim described in paragraph 42, throughout the Project, yet failed to give timely
notice of its claim pursuant to Article 8.
{¶14} Plaintiff also claims that it was denied additional compensation related to
Change Order 363, which extended milestone dates without compensating the
contractors for any costs associated with the changed dates. Plaintiff was aware of the
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potential claim when it refused to sign Change Order 363 on or about February 13,
2013, yet Plaintiff did not assert its claim under Article 8 until several months after the
contract was completed. Plaintiff has failed to demonstrate how its breach of warranty
claim is any different than its breach of contract claim as it pertains to the changes in
schedule referenced in paragraphs 43 and 45 of its Complaint.
{¶15} Regarding paragraph 44 of the Complaint, Plaintiff has likewise failed to
demonstrate how the alleged breach of warranty is separate and distinct from its breach
of contract claim. In fact, Plaintiff cites to Articles 4.4.2 and 4.4.3 of the General
Conditions for the proposition that Defendant failed to conduct a partnering meeting and
develop a partnering agreement.
{¶16} Pursuant to the holding in Hamilton Ins. Servs., there can be no implied
covenant, such as an implied duty to “promote teamwork, cooperation, and respect
amongst all of the contractors on the Project,” where the contract specifically addresses
the subject matter in question.
{¶17} Article 4.4.2 explains that the purpose of the partnering agreement is to
“build cooperative relationships between the Project’s key stakeholders, avoid or
minimize disputes, and nurture a more collaborative ethic characterized by trust,
cooperation and teamwork.” Therefore, this claim is not a breach of warranty; rather, it
is based on an alleged breach of contract. Plaintiff was aware of this alleged breach
and the lack of partnering agreement at the onset of the Project, and failed to give
timely notice of this claim under Article 8.
Count IV: Breach of the Duty of Good Faith and Fair Dealing
{¶18} The covenant of good faith is part of a contract claim and it does not stand
alone as a separate cause of action from a breach of contract claim. DVCC, Inc. v.
Med. Coll., 10th Dist. Franklin No. 05AP-237, 2006-Ohio-945; Interstate Gas Supply,
Inc. v. Calex Corp., 10th Dist. Franklin No. 04AP-980, 2006-Ohio-638, citing Lakota
Local Sch. Dist. Bd. of Educ. v. Brickner, 108 Ohio App. 3d 637, 671 N.E.2d 578 (6th
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Dist.1996). “[T]here is an implied duty of good faith and fair dealing in every contract.”
However, this duty “is part of a [breach of] contract claim and does not stand alone.”
Lakota, 671 N.E.2d at 584.
{¶19} Accordingly, as the Court already found, there is no genuine issue of
material fact regarding whether or not Plaintiff 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.
Conclusion
{¶20} For the above-mentioned reasons, the Court finds that there exist no
genuine issues of material fact regarding Counts III (Breach of Express and Implied
Warranties) and IV (Breach of Duty of Good Faith and Fair Dealing). Accordingly, it is
recommended that OSU’s Motion for Summary Judgment be granted as to these
claims.
{¶21} A party may file written objections to the magistrate’s decision within 14
days of the filing of the decision, whether or not the court has adopted the decision
during that 14-day period as permitted by Civ.R. 53(D)(4)(e)(i). If any party timely files
objections, any other party may also file objections not later than ten days after the first
objections are filed. A party shall not assign as error on appeal the court’s adoption of
any factual finding or legal conclusion, whether or not specifically designated as a
finding of fact or conclusion of law under Civ.R. 53(D)(3)(a)(ii), unless the party timely
and specifically objects to that factual finding or legal conclusion within 14 days of the
filing of the decision, as required by Civ.R. 53(D)(3)(b).
DALE A. CRAWFORD
Referee
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cc:
Jason R. Harley James E. Rook
Peter D. Welin William C. Becker
250 West Street, Suite 550 Assistant Attorneys General
Columbus, Ohio 43215 150 East Gay Street, 18th Floor
Columbus, Ohio 43215-3130
Filed November 18, 2016
Sent to S.C. Reporter 12/22/16