Beasley v. Monoko, Inc.

958 N.E.2d 1003, 195 Ohio App. 3d 93
CourtOhio Court of Appeals
DecidedAugust 11, 2011
DocketNo. 09AP-1074
StatusPublished
Cited by19 cases

This text of 958 N.E.2d 1003 (Beasley v. Monoko, Inc.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beasley v. Monoko, Inc., 958 N.E.2d 1003, 195 Ohio App. 3d 93 (Ohio Ct. App. 2011).

Opinion

Connor, Judge.

{¶ 1} Plaintiff-appellant, James Beasley, Director of the Ohio Department of Transportation (“ODOT” or “appellant”), appeals from a judgment entered in the Court of Claims of Ohio granting summary judgment in favor of defendantsappellees Monoko, Inc. and Peerless Insurance Company (collectively, “appellees”) and denying appellant’s cross-motion for summary judgment. For the following reasons, we affirm the judgment of the Court of Claims of Ohio.

I. Facts and Procedural History

{¶ 2} This action involves a contract for painting four bridges located in Guernsey County, Ohio. The contract was executed between ODOT and Monoko, Inc. in 1997. The contract incorporates several documents, including the agreement, the proposal, ODOT’s standard construction and material specifications (“CMS”), and the supplemental specifications, specifically, Supplemental Specification 815, also known as the “painting specification,” which included specific requirements for the preparation and painting of steel structures.1

{¶ 3} Supplemental Specification 815, titled “Field Painting of Existing Steel, System OZEU,” set forth the process to be used in preparing and painting the bridges. Surface preparation was to occur prior to the application of the painting process and required abrasive blast cleaning of all steel surfaces to be painted. Paint was then to be applied in a three-part process consisting of an organic zinc prime, an intermediate epoxy, and a final urethane coat. That process is known as the OZEU system.

{¶ 4} As part of Supplemental Specification 815, Monoko was required to designate its own quality-control specialist who was responsible for inspecting work on the project. In addition, a series of ten quality-control points were to be observed at designated points of completion during the preparation and painting [96]*96process. At those designated points, Monoko, as well as ODOT representatives, were given access to inspect the affected surfaces. Once ODOT representatives had inspected a particular step in the process, Monoko was allowed to continue with its work unless a defect was found, at which time that phase of work had to be corrected to comply with the specifications before the subsequent phase of work could begin.

{¶ 5} The contract also required the issuance of a performance bond as well as a payment bond, each in the amount of $619,000. The bonds were issued by Peerless Insurance Company in June 1997. The performance bond was issued pursuant to the statutory requirements of R.C. 5525.16, and required Monoko to provide a contract performance bond conditioned upon the contractor’s performing the work upon the terms proposed, within the time prescribed, and in accordance with the plans and specifications, and that would indemnify the state against any damage that may result from the contractor’s failure to perform accordingly. The payment bond was issued to ensure that all laborers, suppliers, and subcontractors were paid in full.

{¶ 6} Notably, the contract at issue did not include a specification establishing a warranty-maintenance-bond requirement for bridge painting. Such a specification was not “standard” in contracts that were signed in 1997 or 1998. Furthermore, the warranty provisions imposed by R.C. 5525.25 were not in effect when this contract was executed.

{¶ 7} Monoko performed work on the project in 1997 and/or 1998. ODOT representatives had the opportunity to inspect the work at the interim quality-control points. A final inspection was made on February 26, 1999. On April 29, 1999, ODOT sent a letter to Monoko setting forth corrective work to be completed prior to the final inspection/acceptance. In the “Report of Final Inspection,” which was signed by the appropriate ODOT representative(s), ODOT listed a “work completed” date of May 11, 1999, and stated, “[W]e find the above Project has been completed in substantial conformity with the approved plans and specifications, including authorized changes and extra work. Accordingly, the Contractor [Monoko] is relieved of responsibility for further maintenance of this Project. This informal acceptance is subject to the provisions of the Construction and Material Specifications.”

{¶ 8} Between 2002 and 2004, ODOT began investigating its bridge-painting projects following a tip from the United States Attorney’s Office that it was investigating several bridge-painting contractors for offering bribes to ODOT employees. This eventually led to the indictment and conviction of several painting contractors, their principals, and ODOT inspectors. However, no Monoko representatives and no ODOT inspectors working on the Guernsey County bridges at issue here were ever indicted or accused of being involved in the [97]*97bribery scheme. As part of its investigation, ODOT hired an expert, Gary Tinklenberg, to conduct an investigation of approximately 250 bridges located throughout the state of Ohio, including the four bridges at issue in this case.

{¶ 9} In August 2005, ODOT filed a complaint against Monoko in the Guernsey County Court of Common Pleas, asserting claims for breach of contract and unjust enrichment. ODOT alleged that Monoko had breached the contract by failing to properly prepare the steel surfaces of four bridges, which were to be painted using the three-step “OZEU” process in accordance with the contract specifications, specifically Supplemental Specification 815. As a result of Monoko’s failure to properly prepare the bridge surfaces, ODOT argued that Monoko’s painting work was defective and thus, ODOT is entitled to damages. ODOT later amended its complaint to include Peerless and also sought recovery under the terms of the performance bond. The case was eventually removed to the Court of Claims of Ohio, due to the filing of an amended answer and counterclaim by appellees asserting claims for monetary relief.2

{¶ 10} On November 24, 2008, ODOT filed a motion for summary judgment against appellees. On January 23, 2009, appellees each filed cross-motions for summary judgment. On September 11, 2009, the referee issued a decision recommending that appellees’ motions for summary judgment be granted and appellant’s motion for summary judgment be denied. The referee found that prior to final acceptance, the terms of the contract gave ODOT the right to reject defective work and require corrective measures, even though ODOT’s engineer had previously inspected and accepted the work at an earlier stage in the process. However, the referee determined that after final acceptance occurred, ODOT no longer retained the right to reject the work. Because ODOT had performed a final inspection and provided Monoko with a “Report of Final Inspection” stating that the project had been “completed in substantial conformity with the approved plans and specifications,” the referee found that Monoko and Peerless had been released from further obligations and responsibilities, and ODOT was not entitled to recover.

{¶ 11} Following the filing of the referee’s decision, appellant filed timely objections. Appellant also filed a motion to submit an additional expert affidavit expressing an opinion as to the correct interpretation of various contract provisions. The trial judge denied the motion to submit the affidavit of the expert, overruled the objections, and adopted the decision and recommendation of the referee. Because Monoko had not moved for summary judgment on its own [98]

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Bluebook (online)
958 N.E.2d 1003, 195 Ohio App. 3d 93, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beasley-v-monoko-inc-ohioctapp-2011.