Castle Construction Co. v. Owens & Woods Partnership

590 So. 2d 186, 1991 Ala. LEXIS 915, 1991 WL 184478
CourtSupreme Court of Alabama
DecidedAugust 30, 1991
Docket1900327, 1900328
StatusPublished

This text of 590 So. 2d 186 (Castle Construction Co. v. Owens & Woods Partnership) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Castle Construction Co. v. Owens & Woods Partnership, 590 So. 2d 186, 1991 Ala. LEXIS 915, 1991 WL 184478 (Ala. 1991).

Opinion

MADDOX, Justice.

The issue in this case is whether the appellant contractor is entitled to a jury determination of whether it suffered delay and disruption loss resulting from the discovery of asbestos during its renovation of a housing project owned by the appellee, Housing Authority of the Birmingham District (hereinafter referred to as “HABD”).

On November 10, 1981, Castle Construction Company and Tuskegee Lumber Company entered into a joint venture (hereinafter referred to as “Castle”) in order to submit a bid to obtain a construction contract with HABD. On December 9, 1981, Castle entered into a contract with HABD to renovate and modernize the Central City [188]*188Housing Project in Birmingham, Alabama. This contract made Castle the general contractor for the project. Castle then contracted with subcontractors Mid-Tex Mechanical, Inc., and Quality Electrical Services, Inc. An architectural firm, The Owens and Woods Partnership, provided the plans and specifications for the renovation, pursuant to its separate contract with HABD.

HABD gave notice to Castle to begin work on January 4, 1982. The time for completion of the renovation, as set forth in the contract, was established at 920 calendar days from the inception of the work, i.e., July 11, 1984. Castle began renovations on January 4, 1982, but experienced many delays within the first six months. In July 1982, HABD informed Castle that its progress was unacceptable and expressed its concern that Castle was not properly coordinating or supervising its subcontractors. Later in July 1982, the Jefferson County Department of Health notified Castle that asbestos was present in each building of the Central City Housing Project. On July 30, 1982, Castle suspended all work in the asbestos-contaminated areas and advised Owens and Woods in writing of the delay that would result. Owens and Woods responded by changing the project specifications to provide for the asbestos removal, and HABD, Owens and Woods, and Castle agreed to two change orders that afforded Castle the direct costs of the asbestos removal. Castle notified Owens and Woods, however, that it would not know the full extent of its delay costs until the completion of the project.

On July 5, 1984, Castle presented HABD with a claim for delay costs associated with the asbestos removal, costs it claimed were suffered in addition to those direct costs for the asbestos removal. HABD denied Castle’s claim and on May 10, 1985, Castle sued HABD for breach of contract. Castle alleged as damages the increased costs that it claimed it suffered as a result of the delay and disruption, plus similar costs incurred by its subcontractors, Mid-Tex and Quality Electric. On July 8, 1988, Castle amended its complaint to add The Owens and Woods Partnership, Kenneth Owens, and F.D.R. Woods, alleging that they had breached their contractual obligations to HABD and that Castle, as a third-party beneficiary of that contract, had suffered loss as a direct result. Castle also alleged that Owens and Woods, by failing to discover the asbestos before Castle entered into its contract with HABD, had failed to design the project to conform with applicable laws and regulations regarding asbestos removal and that Owens and Woods had breached an implied warranty to provide sufficient and accurate project plans and specifications.

HABD and Owens and Woods moved for a partial summary judgment, and HABD filed a counterclaim against Castle, alleging fraud. Castle then moved for a partial summary judgment on HABD’s fraud counterclaim. The trial court denied Castle’s motion for partial summary judgment as to HABD’s fraud counterclaim, but entered a summary judgment in favor of HABD on claims for Mid-Tex and Quality Electric. The trial court also entered a summary judgment in favor of HABD and Owens and Woods with regard to Castle’s breach of contract claims. Castle appealed each summary judgment, and this Court granted Castle’s motion to consolidate those appeals. The trial court entered a 54(b), Ala.R.Civ.P., finding of finality as to those summary judgments and continued HABD’s fraud counterclaim.

Initially, we must determine whether the trial court appropriately entered the summary judgment in favor of HABD and Owens and Woods with regard to Castle’s claims for delay damages. Summary judgment is proper when there exists no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P.; King v. Breen, 560 So.2d 186 (Ala.1990). In determining the existence or absence of a genuine issue of material fact, this Court is limited to a consideration of the factors that were before the trial court when it ruled on the summary judgment motion. Broadmoor Realty, Inc. v. First Nationwide Bank, 568 So.2d 779 (Ala.1990). However, this Court’s reasoning is not limited to that applied by the trial court. Hill [189]*189v. Talladega College, 502 So.2d 735 (Ala.1987).

Under the “scintilla rule,” applicable to actions pending on June 11, 1987, as this action was, once the party moving for summary judgment has made a prima facie showing that there is no genuine issue of material fact and that he is entitled to a judgment as a matter of law, the burden shifts to the nonmoving party to show that there is at least a scintilla of evidence in his favor that creates a genuine issue as to some material fact. See Harris v. Food Equipment Specialist, Inc., 559 So.2d 1066 (Ala.1990).

Castle alleged in its complaint against HABD and Owens and Woods that it suffered loss because it was prevented from completing the renovation of the housing project ahead of schedule. Castle informed HABD that it proposed to complete the project 51 days earlier than the scheduled completion date set out in their contract and that the discovery of the asbestos and the resulting delays prevented it from completing the project until 102 days after its projected early completion date. Thus, Castle claims that it is entitled to compensation, delay damages, and related disruption and acceleration costs. Castle further asserts that HABD and Owens and Woods should have discovered the asbestos prior to receiving bids on the project, and that doing so would have allowed Castle to accurately determine the amount of time, work, and materials necessary to complete the project.

HABD maintains that any changes in the work and the payment for the costs of extra work were specifically provided for in its contract with Castle; that the asbestos was an unknown, latent condition as defined in the contract; that HABD paid Castle for the cost of removing the asbestos; and that there is no evidence that the required removal of the asbestos caused Castle to suffer any delay or disruption loss not already compensated for by HABD pursuant to their contract.

In Metropolitan Paving Co. v. United States, 325 F.2d 241, 163 Ct.Cl. 420 (1963), a case cited by each party to this appeal, the court stated that although the government had no obligation to help a contractor finish early, it could not hinder or prevent a contractor’s early completion without incurring liability. However, the court continued by explaining that a contractor must show that it would have finished early but for the government’s delays. See G.M. Shupe, Inc. v. United States, 5 Cl.Ct. 662 (1984); Coley Properties Corp. v. United States, 593 F.2d 380, 219 Ct.Cl. 227 (1979); and

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Metropolitan Paving Company v. The United States
325 F.2d 241 (Court of Claims, 1963)
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451 So. 2d 803 (Supreme Court of Alabama, 1984)
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Bluebook (online)
590 So. 2d 186, 1991 Ala. LEXIS 915, 1991 WL 184478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/castle-construction-co-v-owens-woods-partnership-ala-1991.