Mike M. Johnson, Inc. v. Spokane County

49 P.3d 916, 112 Wash. App. 462
CourtCourt of Appeals of Washington
DecidedMay 23, 2002
DocketNo. 20347-6-III
StatusPublished
Cited by7 cases

This text of 49 P.3d 916 (Mike M. Johnson, Inc. v. Spokane County) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mike M. Johnson, Inc. v. Spokane County, 49 P.3d 916, 112 Wash. App. 462 (Wash. Ct. App. 2002).

Opinion

Schultheis, J.

This contract dispute arises out of two sewer projects awarded to Mike M. Johnson, Inc., by Spokane County after a competitive bidding process. Because it failed to reach a negotiated agreement with the County over construction fees not included in the original contract, Johnson filed a lawsuit for damages incurred as a result of the County’s alleged breach of contract. At issue was approximately $500,000 in expenses for labor, building materials, and equipment charges. Johnson’s claims were dismissed on summary judgment when the trial court determined Johnson had not followed the protest and/or claim procedures outlined in the original contract between [464]*464the County and Johnson. Although we agree Johnson did not strictly comply with the contractual procedures, we find there are genuine issues of material fact regarding whether the County’s actual notice of Johnson’s claims resulted in a waiver of the formal notice requirements. Consequently, we determine summary judgment was improperly granted and reverse and remand for a trial on the merits.

Facts

In April 1998, Johnson was awarded a bid to construct two sewer projects for Spokane County. One was called the Apple Valley Sewer Project and the other was the Wolfland project. Both parties anticipated that Johnson would initially work on the Apple Valley project, then move its crews and equipment to the Wolfland project. The Apple Valley project was scheduled to start on May 4 and had a completion date of September 3. The Wolfland project was to commence on June 30 and be completed by October 8. County employees were at the various work sites associated with the projects on a daily basis to monitor progress and to inspect the work performed.

Problems arose soon after construction began on the Apple Valley project when Johnson’s equipment dug up and damaged water and phone utility lines in a specific area designated in the original contract. The County directed Johnson to repair the water lines, which was done. The phone line problem, however, required a complete redesign of one of the roads in the sewer project. This redesign is the subject matter of the County’s Change Order (CO) No. 3. The redesign increased the width of the road by 100 percent and resulted in changes to the grade and elevation as well. Johnson’s crews were on standby while the redesign process took place because the original construction contract limited how many streets Johnson could have torn up at any one time. The situation resulted in considerable increases in time and money for Johnson. The delay on the Apple Valley project also caused delay in commencing the [465]*465Wolfland project. The financial costs associated with the phone line relocation and street redesign and the resulting deleterious effects on the established time line for the projects led to several change orders being issued under the contract.

During the redesign process and implementation, Johnson submitted several written notices advising the County that its actions were delaying Johnson’s work on the sewer projects. The following events are included in the record:

June 4, 1998 County issues CO No. 3

June 26, 1998 Johnson notifies County that utility-caused delays add costs to project; compensation expected

July 5, 1998 County requests from Johnson additional information regarding pricing and time

July 14, 1998 Johnson supplies County with requested information; seeks approval to continue working

July 16, 1998 County advises Johnson to submit claims and protests pursuant to contract terms

July 24, 1998 Johnson again summarizes delays on project for County

August 7, 1998 County completes redesign work under CO No. 3

August 14, 1998 Johnson informs County that redesigned road still problematic

August 25, 1998 Johnson submits request for $98,000 and time extension of 50 days

September 2, 1998 Johnson submits signed copy of CO No. 3 with added reservation of rights clause

September 26, 1998 Johnson resubmits claims of August 25, 1998

[466]*466October 20, 1998 Johnson submits expenses related to CO No. 2

November 3, 1998 Johnson submits revised bill to County

November 6, 1998 Johnson submits second revised bill to County

November 7, 1998 Johnson sends demand letter to County for payment

December 22, 1998 Johnson’s attorney itemizes expenses for County

December 23, 1998 County attorney agrees to submit “package” to County

Initially, Johnson and the County appeared to negotiate in good faith regarding updated time lines for completion of the sewer projects and monies owed for work performed and materials provided by Johnson under CO No. 3 to the original contract. Letters discussing the issues flowed back and forth between Johnson and County personnel. Later, negotiations continued through legal counsel. The record suggests that by December 1998, the parties were still negotiating the outcome of Johnson’s claims for additional remuneration and working days on the project pursuant to the contract. The extra time to perform the projects was needed by Johnson so the County would not assess liquidated damages against it because the project did not come in on time. When the negotiation process came to a halt, Johnson filed a complaint for damages against the County.

The County filed an answer, which included counterclaims against Johnson. The issues raised in the counterclaim are not at issue in this appeal. The County claimed the unexpected utility work should have been anticipated by Johnson and factored into its bid both financially and in the time needed to complete the two projects. Arguing that Johnson failed to follow the contractual procedures regarding protests, changed conditions and/or extensions of time that would have allowed the County to consider Johnson’s claims for additional time and remuneration under the [467]*467Apple Valley and Wolfland projects, the County filed a motion for summary judgment. Johnson also filed a cross-motion for partial summary judgment. The County’s motion was granted and Johnson’s was denied. The court later clarified the order on summary judgment. Johnson filed a motion for reconsideration, which was also denied.

Analysis

We are asked to consider whether the trial court erred when it granted the County’s motion for summary judgment dismissal of Johnson’s claims for damages. We are convinced it did.

An order granting summary judgment is reviewed de novo. We engage in the same inquiries as did the trial court, e.g., whether there is a genuine issue as to any material fact and whether the moving party is entitled to judgment as a matter of law. Marquis v. City of Spokane, 130 Wn.2d 97, 105, 922 P.2d 43 (1996). We consider the evidence and reasonable inferences therefrom in a light most favorable to the nonmoving party. If there is a dispute as to any material fact, then summary judgment is improper. Id. On the other hand, when reasonable minds could reach but one conclusion from the admissible facts in evidence, summary judgment should be granted. Id.

As a general rule, Washington law requires contractors to follow contractual notice provisions unless those procedures are waived. Absher Constr. Co. v. Kent Sch. Dist. No. 415, 77 Wn. App.

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Bluebook (online)
49 P.3d 916, 112 Wash. App. 462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mike-m-johnson-inc-v-spokane-county-washctapp-2002.