United States Ex Rel. MMS Construction & Paving, L.L.C. v. Western Surety Co.

754 F.3d 1194, 2014 WL 2767100, 2014 U.S. App. LEXIS 11545
CourtCourt of Appeals for the Tenth Circuit
DecidedJune 19, 2014
Docket13-6076
StatusPublished
Cited by2 cases

This text of 754 F.3d 1194 (United States Ex Rel. MMS Construction & Paving, L.L.C. v. Western Surety Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Ex Rel. MMS Construction & Paving, L.L.C. v. Western Surety Co., 754 F.3d 1194, 2014 WL 2767100, 2014 U.S. App. LEXIS 11545 (10th Cir. 2014).

Opinion

HARTZ, Circuit Judge.

MMS Construction & Paving, L.L.C. entered into a subcontract with Head, Inc. to pave asphalt runway shoulders at Altus Air Force Base in Oklahoma. The project was delayed and MMS, expressing concern that Head had not been making agreed payments, quit the job. MMS also complained that completing the job would be more expensive than it originally believed because certain requirements were being imposed that Head had said would be waived. After MMS quit, Head finished the job, relying on other subcontractors.

MMS sued Head on state-law claims of breach of contract, tortious breach of contract, quantum meruit (unjust enrichment), and misrepresentation, and brought a claim under the federal Miller Act, 40 U.S.C. §§ 3131-34 (formerly 40 U.S.C. §§ 270(a)—270(d)), on Head’s surety bond for the project. Head filed a counterclaim, alleging that MMS breached the contract. After a jury trial, MMS was awarded $801,575.65 in damages and $60,826.05 in attorney fees. Head filed a motion for judgment as a matter of law, under Fed. R.Civ.P. 50(b), or for a new trial, under Fed.R.Civ.P. 59, which the district court denied.

Head appeals, arguing: (1) the evidence at trial was insufficient to show that Head breached the contract; (2) if there was a breach, it was not material; (3) an Okla *1197 homa statute limited MMS’s breach-of-contract damages to the amount unpaid plus interest; (4) the evidence was not sufficient to establish MMS’s alleged lost-profits damages for breach of contract; (5) MMS did not present sufficient evidence to prove misrepresentation or any damages from misrepresentation, MMS waived the misrepresentation claim, and the award of misrepresentation damages duplicated the award of damages for breach of contract; and (6) MMS was not entitled to attorney fees from Head because the Miller Act does not allow recovery of those fees. Exercising jurisdiction under § 1291, we reverse the award of damages on the misrepresentation claim because the jury’s award was not supported by any evidence at trial. On all other issues we affirm the district court: There was sufficient evidence to show that Head breached the contract by not paying sums owed to MMS; Head did not preserve its arguments on the materiality of the breach and on its claim that recovery should be limited by an Oklahoma statute; there was sufficient evidence to support lost-profits damages; and MMS was entitled to attorney fees on its state-law breach-of-contract claim.

I. BACKGROUND

Head is a corporation that works on “horizontal surfaces” at airports, including “surfaces, concrete, asphalt, gravel surfaces, drainage, [and] underground electric.” Aplt. App., Vol. V at 1691-92. It prepared a bid on a project to repair runways at Altus Air Force Base and reached out to potential subcontractors to lay the asphalt runway shoulders. The Army Corps of Engineers (Corps) required the work to be done with an asphalt plant on-site instead of bringing in asphalt from an external plant. One of the companies contacted was MMS, an Oklahoma asphalt and concrete company owned by Mike Matthews and two partners. In December 2009, MMS gave Head an estimate. Head was awarded the contract as general contractor in early February 2010.

After the Corps awarded the bid to Head, MMS read the project specifications. It became concerned that some of the specifications for work on the asphalt shoulders would impose large expenses not taken into account in its original estimate to Head. On February 12, MMS and Head had a meeting during which they discussed the specifications, particularly whether MMS (1) would need to use a material transfer vehicle (MTV) to transport asphalt, and (2) would have to comply with “ride specifications,” which related to the smoothness of the asphalt. Id. at 1601. At this meeting Jim Head, president of Head, stated that he “never had to use [an MTV]” for shoulders, id. at 1604, and that “generally smoothness requirements are never enforced on shoulders.” Id. at 1601. MMS claims that these statements constituted a fraudulent misrepresentation that the two specifications would not be enforced.

In March, MMS sent a letter to Head asking for a formal commitment to work together on the project. The letter set forth a payment plan, including a price per ton for asphalt laid, various monthly payments, and payments to be made when the asphalt plant was mobilized. Mr. Head initially scratched out the monthly-payment and mobilization terms in the letter and replaced them with a higher per-ton-laid price. MMS responded by resending the letter with the language, “When our letter of intent was sent back in small letters it said payment was base per ton. We wanted to make sure for clarification reasons that our bid was understood. MMS based our bid on payments for mobilization, plant rental and other expenses listed.” Id. at 1814. The letter then relist-ed payment amounts it expected: a price of $84.50 per ton of “[a]sphalt laid in *1198 place”; $40,000 for mobilization of the asphalt plant and $12,500 for environmental permits, both to be paid when the plant was in place; and $12,499.99 per month for testing, plant lease, and lodging. Id. As Mr. Matthews testified, the monthly payments were “to make sure [MMS] got enough a month to survive, basically, until [it] poured,” id., Vol. IV at 1223, in part because it needed to hire personnel to be on site ready to go. Mr. Head signed the letter on March 26. He testified that he viewed the letter as a binding agreement. The letter will be referred to as the “March Agreement.”

Head later asked MMS to sign a subcontract. Although the subcontract was dated April 2, Head did not receive a copy signed by MMS until May 28. The subcontract contained the payment terms from the March Agreement and contained no terms inconsistent with that agreement, although it required MMS to submit “applications for payment in such reasonable time as to enable [Head] to apply for payment under the Contract [between Head and the Corps].” Id., Vol. V at 1819. MMS began to move its asphalt plant to Altus Air Force Base on May 17. In late May, MMS decided it needed to acquire an MTV.

By August, MMS was unhappy with Head because it believed that Head was blaming MMS for delays on the project, was going to back-charge MMS for these delays, and was delinquent in payments owed to MMS. Mr. Matthews testified that MMS had expected to be paid the monthly payments “right after” the March Agreement was signed. Id., Vol. IV at 1421. Also, MMS had mobilized its plant by July 1 and expected to be paid $40,000 for plant mobilization and $12,500 for the Oklahoma Department of Environmental Quality (DEQ) control fee. It claimed it had invoiced $12,499.99 (for a monthly payment) on May 28; $64,999.99 (for a monthly payment, the DEQ fee, and mobilization) on July 1; and $12,499.99 (for a monthly payment) on August 4, for a total of $89,999.97.

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Cite This Page — Counsel Stack

Bluebook (online)
754 F.3d 1194, 2014 WL 2767100, 2014 U.S. App. LEXIS 11545, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-mms-construction-paving-llc-v-western-surety-ca10-2014.