White-Spunner Construction, Inc. v. Construction Completion Co.

103 So. 3d 781, 2012 WL 2362637
CourtSupreme Court of Alabama
DecidedJune 22, 2012
Docket1101285 and 1101340
StatusPublished
Cited by4 cases

This text of 103 So. 3d 781 (White-Spunner Construction, Inc. v. Construction Completion Co.) 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
White-Spunner Construction, Inc. v. Construction Completion Co., 103 So. 3d 781, 2012 WL 2362637 (Ala. 2012).

Opinion

STUART, Justice.

White-Spunner Construction, Inc., and Hartford Fire Insurance Company (“Hartford”) appeal the summary judgment and the award of attorney fees in favor of Construction Completion Company, LLC (“CCC”), in CCC’s action alleging that White-Spunner failed to pay it for labor and materials it provided as a subcontractor to White-Spunner in the fall of 2008 in conjunction with White-Spunner’s work as the general contractor on a public-works project at Auburn University (case no. 1101285). CCC cross-appeals, arguing that the Mobile Circuit Court erred in dismissing its bad-faith and fraud claims against Hartford, which had issued payment bonds to White-Spunner for the project (case no. 1101340). We reverse the judgment in case no. 1101285 and dismiss the appeal in case no. 1101340.

I.

In May 2008, White-Spunner, a licensed general contractor, signed two contracts worth approximately $99 million to construct eight four-story dormitory buildings at Auburn University (“the Auburn project”). As required by § 39-l-l(a), Ala. Code 1975, White-Spunner subsequently obtained two payment bonds from Hartford, one of which would compensate Auburn in the event White-Spunner failed to perform under the contract, the other of which would be used to compensate subcontractors and suppliers in the event White-Spunner failed to do so in a timely fashion.

After construction on the Auburn project began, White-Spunner subcontracted with CCC, which also held a general contractor’s license, to provide labor, materials, and services in connection with the framing of the buildings being constructed. Under the terms of their agreement, CCC agreed to provide workers for the project and White-Spunner agreed to pay CCC a set fee for each man-hour worked pursuant to the following schedule: $42 per hour for a “lead man,” $32 per hour for an experienced carpenter, and $22 per hour for a carpenter’s helper. In its proposal setting these terms, CCC further stated:

“At the rates listed, we will be able to provide the best labor with the best tools for this job. These rates include any and all supervision, labor, overtime labor, tools, transportation, per-diem, and lodging. We will supply nails to complete the job, but will be submitting those receipts with our billing to be reimbursed.”

CCC also requested that it be paid every two weeks. An executed contract memorializing these terms is not included in the record; however, neither party disputes that these were the essential terms of their agreement. It is also undisputed that either party could terminate their relationship at will.

Subsequently, CCC subcontracted with Buena Vista Construction, LLC (“Buena Vista”), a Florida company, for Buena Vista to provide CCC with the workers CCC [783]*783needed to fulfill its agreement with White-Spunner. Although it appears that no written contract was executed between Buena Vista and CCC, Buena Vista did provide CCC with a certificate of insurance establishing that it held commercial general-liability and workers’ compensation policies. Invoices in the record submitted by Buena Vista to CCC also indicate that CCC generally paid Buena Vista between $19.50 and $21.50 for each man-hour worked. The workers provided CCC by Buena Vista wore CCC uniforms on the construction site and, CCC alleges, were at all times under the direct control of CCC’s owner Richard Jensen and/or CCC’s direct employee, Richard Able. White-Spunner apparently had no knowledge of CCC’s separate agreement with Buena Vista. It is undisputed that Buena Vista was not licensed as a contractor in Alabama during this time.

For some time, it appears that there were no problems with this arrangement. Workers would arrive on the job site each day and sign in and out on daily time sheets that were also signed by White-Spunner superintendents. Copies of the daily time sheets were apparently then retained by White-Spunner and by the supervisors among the workers supplied to CCC by Buena Vista. Buena Vista would then submit weekly summaries as well as invoices to CCC based on the daily time sheets, and CCC would then process this information and prepare invoices that were submitted to White-Spunner every two weeks, payment being due two weeks thereafter. Invoices received by White-Spunner were initially reviewed by Jim Schjott, White-Spunner’s general superintendent for the Auburn project, and then ultimately approved by Tom Clutter, White-Spunner’s project executive for the Auburn project.

A dispute between CCC and White-Spunner first arose in October 2008 when White-Spunner made only partial payment on certain invoices based on a belief that the invoices submitted could not be reconciled with the progress of the Auburn project. This dispute was apparently never resolved; however, CCC continued working on the Auburn project, and White-Spunner thereafter paid at least some subsequently submitted invoices in full. By December 8 however, CCC was apparently either unwilling or unable to keep working without being paid the balance of the October invoices — $255,859.48—and it accordingly ceased work on the Auburn project.1 On December 12, 2008, CCC sent White-Spunner a letter from its attorney demanding $698,468.93 as payment on all outstandinginvoices.

In an affidavit later submitted in conjunction with White-Spunner and Hartford’s motion opposing CCC’s motion for a partial summary judgment, Clutter described the genesis of the dispute with CCC as follows and claimed never to have received the November 28 and December 10 invoices — totaling $298,482.00 and $144,127.45, respectively — prior to CCC’s initiating this litigation:

“4. During the month of October 2008, a series of invoices were submitted by [CCC] which were not justified , by the descriptions of work provided with the invoices or the observed progress of work on the project. Upon receiving these invoices and noting the discrepancies, I disputed these invoices through numerous meetings with [CCC’s] princi[784]*784pal, Richard Jensen. I expressed my concerns to Mr. Jensen, asked him to provide additional documentation or explanation to account for the disparity between the amount of work which had been billed compared with the amount of work which had actually been performed. Where the progress on the project justified payment, payment of the undisputed amounts was made. [CCC] did not submit the additional justification as requested, although it did continue to work and its bills were paid.
“5. During this process I had numerous conversations with general superintendent Jim Schjott to clarify his role as an initial reviewer of [CCC’s] invoices to make sure they were consistent with work which was being performed. It was my impression that the conversations I had with both Rich Jensen and Jim Schjott led directly to the submission of subsequent invoices which I felt accurately reflected work done and progress made on the project.
“6. During the course of [CCC’s] work on this project the original invoices were submitted to the White-Spunner project office at Auburn. Invoices were not submitted to the Mobile office because the necessary review of project progress and daily sign-in documentation was conducted on the job site at Auburn. Once the invoices were received they were initially reviewed by general superintendent Jim Schjott and submitted to me for final review and approval.
“7. Jim Schjott left the Auburn project before the Thanksgiving weekend of 2008 and did not return until December 8.

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103 So. 3d 781, 2012 WL 2362637, Counsel Stack Legal Research, https://law.counselstack.com/opinion/white-spunner-construction-inc-v-construction-completion-co-ala-2012.