State v. Ross Bros. & Co.

342 P.3d 1026, 268 Or. App. 438, 2015 Ore. App. LEXIS 49
CourtCourt of Appeals of Oregon
DecidedJanuary 14, 2015
Docket09C13172; A150551
StatusPublished
Cited by1 cases

This text of 342 P.3d 1026 (State v. Ross Bros. & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Ross Bros. & Co., 342 P.3d 1026, 268 Or. App. 438, 2015 Ore. App. LEXIS 49 (Or. Ct. App. 2015).

Opinion

ORTEGA, P. J.

This appeal and cross-appeal arise out of a public works contract dispute between a subcontractor (KT), a general contractor (Ross), and the general contractor’s labor and materials bond surety (Safeco). KT brought claims under the “Little Miller Act,” ORS 279C.380 to 279C.625, against Safeco for payment on the bond, and claims against Ross for breach of contract and quantum meruit. Ross and Safeco counterclaimed against KT for breach of contract and sought liquidated damages.1 After a bench trial, the trial court ruled that KT could recover in quantum meruit against Ross, but refused KT’s request to enter judgment against Safeco on the bond claims. The court concluded that, because KT brought its quantum meruit claim against Ross only, it was not entitled to a judgment against Safeco on its bond claims. The trial court entered a general judgment and a supplemental judgment against Ross. KT appeals, and defendants cross-appeal, both judgments.

On appeal, KT raises three assignments of error. Because it is dispositive, we address only KT’s first assignment: that the trial court erred by not entering judgment against Safeco on the bond claims. Ultimately, we conclude that it did, and reverse the trial court’s judgment. We also conclude that Ross failed to preserve its assignment of error on cross-appeal challenging the trial court’s determination that KT could recover in quantum meruit even though the parties had a valid and enforceable contract.

The following background facts are undisputed. In February 2003, the Oregon Department of Transportation (ODOT) awarded a contract to Ross for the renovation of the Depot Street Bridge on Interstate 5 in Jackson County. The contract specified a completion date of December 31, 2005, for the project. Pursuant to public contracting laws, see ORS 279C.380(l)(b), Ross obtained a labor and materials payment bond from Safeco to protect parties that provided “labor or materials for the performance of the work provided for in” [441]*441the public contract.2 Ross executed a subcontract with KT to provide temporary traffic signs and markers, traffic control devices, and a pedestrian rail on the bridge for $319,000. As relevant to the parties’ dispute, the subcontract contained a “pay when paid” provision that KT would not be paid for work “not approved and accepted by [ODOT],” and a provision that KT’s subcontractors must first be paid before KT could secure payment from Ross. In addition, a provision of the subcontract provided that any claim for “additional compensation” had to be presented to Ross within 30 days of the “occurrence,” and that written and oral notice of additional compensation had to be given to the project manager.

The bridge renovation ran into substantial delays, and was not completed until about two years after the scheduled completion date. Ross continued to use KT’s temporary traffic control devices on the construction site during the delay. In October 2007, Ross sent a letter asking KT to submit any claims for additional costs. KT submitted a formal claim for over $80,000 in additional compensation for the extended use of its traffic control devices. Ross refused to pay, and KT initiated this action.

KT filed a complaint against Ross and Safeco seeking $245,134 for unpaid work and additional costs. KT asserted a “Little Miller Act” claim against Safeco and a breach of contract claim against Ross. Defendants counterclaimed for breach of contract, alleging that KT had failed to complete its work in a timely and agreed upon manner, had failed to follow the claim procedures under the subcontract, and that Ross had performed all of its contractual obligations. Defendants’ counterclaim sought $288,000 in [442]*442liquidated damages. Defendants did not assert any affirmative defenses specific to the bond claim.

KT filed a second amended complaint in December 2010. In that complaint, which was the operative complaint at trial, KT alleged three bond claims against Ross and Safeco, three claims for breach of contract against Ross, and a quantum meruit claim against Ross. The bond and breach of contract claims were separated into individual claims related to (1) $151,827 for initial contract work, (2) $4,704 for change orders and “force account” work, and (3) $82,857 for the extended rental of the traffic control devices. Alternatively, KT sought $239,388 in its quantum meruit claim for recovery of the reasonable value for all labor, materials, and services performed by KT.

At trial, KT presented evidence to establish that Ross had breached the subcontract by nonpayment. In response, defendants argued that KT’s own failure to comply with certain provisions of the subcontract precluded any recovery by KT. In particular, defendants pointed to the “pay when paid” provision in the contract. Defendants also argued that a significant amount of the project delay could be attributed to KT. As for KT’s claim for rental expenses for the extended use of the traffic control devices, defendants asserted that KT failed to establish that it paid the company that rented out the devices, so under the contract, KT could not recover those amounts from Ross. Defendants also argued that KT waived its claims because its notice of claim to Ross regarding the “additional cost” of extended use of the traffic control devices was untimely.

The trial court ruled that KT was entitled to recover $239,388 on its quantum meruit claim against Ross. Although the court’s letter opinion did not explicitly explain the basis of its ruling, the court seems to have implicitly concluded that KT could not recover under a breach of contract theory because it had not complied with certain notice and timing provisions of the subcontract. The court concluded, however, that regardless of any deficit in KT’s performance, KT could recover for all unpaid work performed on the project through its quantum meruit claim. The court did not address KT’s bond claims against Safeco.

[443]*443After the court issued its letter opinion, KT submitted a proposed form of judgment that named Ross and Safeco as judgment debtors. The court, however, entered a general judgment that named only Ross as the judgment debtor. In response, KT sought leave to file a third amended complaint that also named Safeco as a defendant in the quantum meruit claim. At a hearing, KT argued that Safeco could and should be liable under the bond that it issued for the project, but the trial court denied KT’s motion. KT moved for a new trial, arguing that the court had failed to address its claims against Safeco under the bond. The court denied that motion as well.

As noted, the trial court did not address KT’s Little Miller Act claims in its initial letter opinion. However, in response to KT’s post-trial motions, the court explained that it agreed with defendants’ position that “the relief I * * * awarded [KT] was on its quantum meruit claim against [Ross] and that claim was not made against defendant Safeco, nor was there any claim on [KT’s] complaint against Safeco’s bond in the pleadings alleging the quantum meruit claim.” The court further explained that “I can find no legal basis in the pleadings as they existed on the day of trial to somehow ‘include’ Safeco’s bond to apply to the

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State v. Smith & Smith Excavation, Inc.
386 P.3d 112 (Court of Appeals of Oregon, 2016)

Cite This Page — Counsel Stack

Bluebook (online)
342 P.3d 1026, 268 Or. App. 438, 2015 Ore. App. LEXIS 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-ross-bros-co-orctapp-2015.