Where an agreement barred claims brought by a subcontractor for damages arising out of the construction of an FBI facility in West Virginia, and the subcontractor waived other arguments by not raising them in district court, the contractor prevailed.
The FBI entered into a contract with Turner Construction Company to build a facility in West Virginia. Turner then retained various subcontractors to handle particular parts of the project, including Modern Mosaic Ltd.
During and after Modern’s work on this project, disputes between it and Turner arose. After attempts to resolve the disputes failed, Modern sued Turner in the district court. The district court rejected all of Modern’s claims based on the plain language of the subcontract.
Modern first challenges the district court’s grant of summary judgment to Turner based on its conclusion that the contracts unambiguously required Modern to field verify the structure.
Modern points to section 010100 of the prime contract, which required Turner to verify and accept the work of previous contractors and compare the contract documents and the as-built conditions for discrepancies. Further, section 010400 required Turner to verify all existing structures and dimensions as shown on the documents. Relying on these provisions, Modern argues Turner was responsible for field verification.
However, as the district court properly noted, the prime contract contains a “flow down” clause. Based on this language, Modern was responsible for Turner’s obligations under sections 010100 and 010400 of the prime contract. Moreover, beyond the flow down provision in the prime contract, the subcontract expressly placed the responsibility of field verification on Modern. The district court correctly refused to consider the extrinsic evidence Modern proffered.
Modern also challenges an alternative basis on which the district court rejected Modern’s claim for $975,072.31. According to Modern, Turner accepted its shop drawings for the panels that were to be attached to the parking garage. Therefore, Modern claims Turner should be responsible for the costs Modern incurred to modify the panels after Turner’s approval.
Both the subcontract and the prime contract required Modern to obtain Turner’s approval of its shop drawings before it fabricated the concrete panels. Therefore, Modern did not have the contractual right to begin fabrication of the panels until its shop drawings were approved.
Modern’s second claim relates to expenses it incurred for supervisory surveillance. Modern does not deny that some form of surveillance was required under the prime contract. Before the district court, Modern contended that the prime contract’s monitoring requirement unambiguously allowed for part-time monitoring. The district court disagreed. After the bench trial, it found that the contracts unambiguously required full-time surveillance.
On appeal, Modern now argues, for the first time, that the contract is ambiguous with respect to whether full-time or part-time supervisory surveillance was required. This court will only exercise its discretion to consider such an issue in a civil case where the newly raised argument establishes a fundamental error or a denial of fundamental justice. Modern fails to meet this high standard. But even if we were to consider this new argument, it would nevertheless fail.
Modern’s third claim relates to costs and expenses it incurred due to the deficient soil remediation for the project by another subcontractor. The district court determined that, while Modern incurred costs in cutting or shaving the panels to fit the leaning walls, those costs had been paid by Turner. It found the remaining amounts sought by Modern not recoverable. In reaching this conclusion, the district court relied on the “no damages for delay” clause. We see no error in the district court’s conclusion.
On appeal, Modern argues that the “no damages for delay” clause contravenes the purpose of the Miller Act and is, therefore, unenforceable. Modern waived this claim by failing to raise it below.
Finally, Modern argues that Turner should be estopped from denying Modern’s claims because Turner violated the subcontract and breached the duty of good faith and fair dealing when it settled with the FBI. Aside from any waiver issues, Modern’s estoppel claim fails substantively.
United States of America for the use and benefit of Modern Mosaic Ltd. v. Turner Construction Company, Appeal No. 18-1703, Dec. 26, 2019. 4th Cir. (Quattlebaum), from NDWVA at Clarksburg (Stamp). Edward J. Sheats for Appellant, Michael David Griffith Jr. and Douglas Leo Patin for Appellees. VLW 019-2-306. 16 pp.