J. Wm. Foley, Inc. v. United Illuminating Co.

Connecticut Appellate Court·Decided June 23, 2015·No. AC36194·Published

Opinion

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J. WM. FOLEY, INC. v. THE UNITED ILLUMINATING COMPANY (AC 36194)

Gruendel, Mullins and Mihalakos, Js.

Argued November 19, 2014—officially released June 23, 2015

(Appeal from Superior Court, judicial district of Hartford, Complex Litigation Docket, Bright, J.) Ira S. Sacks, with whom were Gerard P. Brady, and, on the brief, Alan J. Sobol and Paul G. Ryan, for the appellant (plaintiff).

Jonathan M. Freiman, with whom were Timothy A. Diemand and Ivana D. Greco, for the appellee (defendant).

Opinion

MULLINS, J. The plaintiff, J. Wm. Foley, Inc. (Foley), appeals from the judgment of the trial court, after a bench trial, rendered in part in favor of the defendant, The United Illuminating Company (United). Foley claims that the court improperly: (1) denied its claim for compensation arising from delays in a construction project in which Foley served as a contractor; (2) concluded that it was not entitled to a 10 percent markup on United’s settlement payments to Foley’s subcontractors pursuant to a markup provision in the parties’ contract; (3) denied its claims for interest; (4) rejected its tort claims; and (5) denied its request for leave to file a fifth amended complaint. We affirm the judgment of the trial court.

The relevant facts found by the court in its memorandum of decision are as follows. To meet the growing energy demands of southwest Connecticut, United undertook the construction of a sixty-nine mile power transmission line. As a part of that endeavor, United was required to install an underground power transmission line over a six mile stretch of land between Bridgeport and Stratford (project). ‘‘Doing so was not simply a matter of digging a single six mile trench through open land, laying a six mile transmission line in the trench, and then filling it in. [United’s] route passed through congested residential and commercial areas, and included work on public roads. In addition, to protect the transmission line, concrete would be poured into the trench to encase the line in a ‘duct bank.’ Finally, the transmission line would be laid in segments and connected to other segments along the length of the duct banks. These connection points are known as splice chambers. . . .

‘‘To complete the work required on the project, [United] sought bids from qualified contractors who would be responsible for digging the trenches, laying the transmission line, installing the duct banks and splice chambers, laying the transmission line into the splice chambers and filling in the trenches. On or about January 25, 2006, Foley submitted a bid of $43,344,000 to do all of this work, except for supplying and installing the transmission line. . . .

‘‘In submitting this bid, Foley considered the drawings [United] gave to potential bidders as part of the bid package. These drawings showed various obstructions a contractor should expect to encounter when doing the trenching and laying work called for by the bid request. Among these obstructions were other utilities already in the area where the work was to be performed. [United] notified Foley that it was the low bidder on the contract, and Foley and [United] then began negotiating the terms of a contract.’’

On or about September 29, 2006, United and Foley entered into a contract for Foley’s work on the project (contract). The contract reflected an understanding by the parties that Foley could encounter site conditions not identified in the drawings. Specifically, the contract provided that ‘‘in the event that [Foley] encounters unknown or misidentified site conditions whose presence will cause a change in [Foley’s] scope of work or delay in the critical path’’ Foley would be entitled to additional compensation. ‘‘Critical path’’ was defined in the contract as ‘‘the particular sequence of tasks, activities, and/or other [m]ilestones associated with performance of the [w]ork which must be accomplished as scheduled in order for the [w]ork and the [p]roject as a whole to be completed on time and in accordance with the [c]ontract [d]ocuments, including the [p]roject [s]chedule.’’1 The contract included a lump sum contract price of $53,348,057.

Article 6 of the contract outlined a mechanism for compensating Foley for the expenses that it incurred from unexpected obstacles. When Foley sought additional compensation, § 6.4 (a) required that Foley submit to United a ‘‘[c]hange [o]rder’’ request. The change order request had to include ‘‘an equitable schedule and/or price adjustment to compensate [Foley] for the actual, demonstrable delay in the [c]ritical [p]ath and/ or the cost of [Foley’s] additional [w]ork.’’ Section 6.1 (d) provided that claims for additional compensation would be ‘‘irrevocably waived and released’’ unless Foley submitted its change order request within ten business days of the event or decision giving rise to the claim (ten day rule). ‘‘Pursuant to § 6.1 (e), [United] then had ten business days to respond to Foley’s proposal . . . . Pursuant to § 6.3, if [United] agreed with the proposal, a change order would issue. . . . Thus, based on the structure of the agreement, the parties . . . intended that any price adjustments related to delay were to be resolved as part of the above process and addressed on a change order by change order basis.’’

United hired Black & Veatch to serve as its consultant on, and coordinator of, the project.2 Foley hired as subcontractors Manafort Brothers, Inc. (Manafort) and A.M. Rizzo Electrical Contractors, Inc. (Rizzo). Manafort dug the trenches and installed the duct banks and splice chambers. Rizzo installed the piping in the trenches that would include the transmission line. After Rizzo installed the piping, Manafort then refilled the trenches.

According to their anticipated schedule, the parties expected the project to take approximately one year to complete. Foley was to commence construction in October, 2006, and have construction substantially completed 3 by November, 2007. Foley did not notify United that the project was substantially complete, however, until November, 2008, approximately one year after the expected completion date.

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