W.M. Schlosser Co. c. Fairfax County Redevelopment & Housing Authority

975 F.2d 1075
CourtCourt of Appeals for the Fourth Circuit
DecidedSeptember 17, 1992
DocketNos. 90-2177, 90-2197, 91-2003 and 91-2017
StatusPublished
Cited by1 cases

This text of 975 F.2d 1075 (W.M. Schlosser Co. c. Fairfax County Redevelopment & Housing Authority) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
W.M. Schlosser Co. c. Fairfax County Redevelopment & Housing Authority, 975 F.2d 1075 (4th Cir. 1992).

Opinion

OPINION

WIDENER, Circuit Judge:

This consolidated appeal arises out of a dispute concerning a construction contract between the Fairfax County, Virginia, Redevelopment and Housing Authority (Authority) and W.M. Schlosser Company (Schlosser), a Maryland corporation. Both parties appeal from decisions of the district court.1

On August 2, 1988, Schlosser and the Authority entered into a contract for the construction of a mobile home park. The contract provided that the Contract Sum (the consideration) was .$3,192,000.00.

I.

From December 1988 through February 1989, Schlosser removed over 9,000 cubic yards of unsuitable fill material from the property and replaced it with select fill. Schlosser sought compensation for the removal and replacement of the unsuitable fill. The Authority’s field representative, Greenhorne & O’Mara, signed the first two change orders submitted by Schlosser for the removal and replacement of unsuitable fill. On March 8, 1989, the Authority notified Schlosser that it would not pay for change orders involving unsuitable fill. Greenhorne and O’Mara, on March 16, denied Schlosser’s third change order for unsuitable fill, “as recommended by” the Authority.

On May 4, 1989, Schlosser filed a claim, as required by statute, with the Director of the Authority seeking payment for the removal and replacement of the unsuitable fill. See Va.Code § 11-69 (requiring submission of claim to public body prior to instituting administrative procedures or legal action). The Director denied the claim on June 1, 1989. Schlosser then invoked the administrative review provided for in the contract and appealed the decision to the Fairfax County Executive on June 28, 1989. See Va.Code § 11-71 (allowing a public body to establish administrative procedures for review of public contract claims). On May 25, 1990, the County Ex[1077]*1077ecutive issued his decision in favor of Schlosser in the amount of $634,437.00. The Authority then brought an action in the Circuit Court of Fairfax County. Schlosser removed the case to the United States District Court for the Eastern District of Virginia. The district court denied the Authority’s motion to remand.

On November 19, 1990, the district court denied the Authority’s motion for summary judgment and granted Schlosser’s motion for summary judgment. On November 29, 1990, the court granted the Authority’s motion to alter or amend the judgment on the issue of the amount of damages to be awarded. The court remanded the claim to the County Executive for a determination of the precise amount of damages. The court did not disturb its decision granting summary judgment in favor of Schlosser. At the same hearing, the court denied Schlosser’s motion for sanctions against the Authority.

The Authority appeals in No. 91-2003 the district court’s decision that the contract provided that certain excavation work would be compensated over and above the lump sum contract price. The Authority argues that Schlosser’s claim should be denied because the removal of unsuitable fill material was included in the lump-sum contract price, Schlosser waived its right to contest the matter, Schlosser suffered no damage since the work was performed by a subcontractor who has released Schlosser from liability, Schlosser did not comply with a contractual notice provision, and the district court was without jurisdiction to review the County Executive’s decision. Schlosser cross appeals in No. 91-2017 the district court’s denial of sanctions.

Although these appeals have been briefed and argued by the parties, it has now come to our attention that the order of the district court appealed from is not a final order under 28 U.S.C. § 1291. That order was a remand to the County Executive to ascertain the correct amount of damages, and the initial order of the district court fixing damages was vacated. A final order is one which has decided all the issues between all the parties and which leaves nothing remaining to be done except execution of the judgment. The damages have not been fixed in this case, so there is not a final order. United States v. Dember Constr. Corp., 600 F.2d 11 (4th Cir.1979). That being true, the appeal in No. 91-2003 must be dismissed. Because No. 91-2017 is a cross-appeal, and there has been no final order in No. 91-2003 from which to cross appeal, the appeal in 91-2017 must also be dismissed. Both of these appeals are dismissed without prejudice.

II.

Next, we are presented in No. 90-2177 with the issue of.whether Virginia’s statutory provision, that a contractor dealing with a public body may or may not utilize administrative review procedures prior to instituting legal proceedings, overrides language in a contract in which the contractor agrees to submit to the administrative review procedures created by the public entity. We decide that the statutory language is controlling and the contractor can choose to proceed directly in court without utilizing the public body's administrative review procedures.

On June 29, 1990, Schlosser brought an action in the United States District Court for the Eastern District of Virginia seeking damages resulting from change orders 6, 11, and 12.2 The Authority filed a motion to dismiss based on its argument that Schlosser was required to exhaust the administrative procedures as set forth in the contract before instituting legal proceedings. The district court granted the motion, holding that when Schlosser entered into the contract it waived its right given under Va.Code § 11-70 that it could proceed in court without previous resort to [1078]*1078administrative remedies.3 We are of opinion the district court erred in so ruling.

Under Virginia law, Schlosser was required to submit its claim to the Authority. Va.Code § 11-69. After it received the Authority’s decision, by statute, Schlosser had two options: (1) institute legal action as provided for in § 11-70, or (2) invoke administrative procedures meeting the standards provided for in § 11-71, if available.4 In this case, the Authority had established administrative procedures which would conform to the standards required under § 11-71.

The contract contained a provision stating that the County Executive would hear appeals of decisions by the Housing Authority. It also provided that “A party may not institute legal proceedings until all administrative remedies as set forth herein or as required by the ordinances or resolutions of Fairfax County have been exhausted.” 5

The issue before us is whether the merits of the case should be heard before the district court or whether the contractor must proceed through the administrative review procedures provided for in the contract prior to any proceedings before the district court. We are of opinion that the clear statutory language that a “contractor need not utilize administrative procedures,” Va.Code § 11-70(F), and “a contractor may bring an action involving a contract dispute with a public body in the appropriate circuit court,” Va.Code § 11-70(E), is controlling. The Virginia legislature provided that a contractor dealing with a public body could either utilize administrative review or bring an action in court. We are of opinion that the parties could not validly contract contrary to the plain terms of an applicable statute.

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Bluebook (online)
975 F.2d 1075, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wm-schlosser-co-c-fairfax-county-redevelopment-housing-authority-ca4-1992.