morning your honor good morning paul waters on behalf of jay jones construction and fireman's fund insurance company i'd like to over sort of five minutes for a bottle of i'd like to start is focus on the court's attention hours that were involved in this particular extra work what the appeal is based upon or what we contend are errors and the district court's interpretation of the contract read as a whole and every part interpreted with reference to the whole contrast provisions and avoids a construction that focuses only on a single provision it's ok with those principles in mind can i ask you to use and test a theory of my reading of the contract which i think w if you start with the paragraph eight of the so contract which talks about change is there's a an owner initiated situation that the work show in a change the contractor may or director changes and then it says that any adjustment to the price or time for completion of the work shall be made or claim solely in accordance with the a portable provisions of the contract otherwise on an agreed or equitable basis so from that one would look to political provisions of the contract that may apply to the particular change or if it's not there presumably otherwise agree on an agreed that will basis so we take that principle looking to whether it's agreed or another provision of the contract noted that in schedule a where is talking and some paragraph section additive design changes in unit prices that any changes to the design or magnitude of scope of this project will be analyzed on the basis of cost conditions which are affected by these changes the following rates will apply and these are changes and it's as in paragraph eight second bullet point it is agreed that should it become necessary for the sub contractor to perform additional work for the contractor or another's in this case that is not an owner initiated change such work shall be performed at cost plus a percentage of markup not to exceed fifteen percent and so on so when i go back to schedule a paragraph  i find the word cost and i'm looking at the defined labor rate and i'm wondering why that doesn't give meaning to all of the contract and why it doesn't say with respect to these changes the which is fairly typical in the construction industry you have one method for pricing changes which are initiated by the owner and those are typically based here on unit prices not cost per unit prices that's what these are which are in schedule is the amount of money that you spend out of pocket to pay for your labor a unit price can be anything anything that the parties negotiate to perform a specific unit of work well how understand price and cost are different but this seems the find at least for purposes of owner initiated changes that an element of cost which is being defined as for the purpose of figuring the unit price there specifying the labor rate now argument which was basically discarded at trial that there was a that the notice of contemplated change provision which is a timing provision when i was a document called notice of contemplated changes issued if that applied that nut case primary argument has as i was and how it always has been that under schedule f we have a specific clause that i just really curious how how and act like patient of that you were it looked to that provision it said i make a determination that i can't find a piece of paper that says the notices contemplated change therefore that provision doesn't apply and i'm going to read out all the other clauses  if we go to six thirty four accordingly under the guidelines of your some contract agreement i'm sorry but where does it stay do not use these but the rates you're using are inappropriate you wanted this when the change was issued are just that but let me see if i can make a clearer request here maybe you're i'm just trying to understand what the interplay is that you started out with the principles of current all right principles of contract interpretation are very lovely when they're stated in the abstract but trying to apply them i'm trying to give meaning to every word in the contract ok you've now  schedule is irrelevant here because that only applies to owner initiated changes we should be looking only at schedule f for getting even though a talks about changes and if seems to be a modification of it we're it and again i think it's important that the court understands that this issue the application of schedule after these particular changes at contemporaneous with the receipt of these proposals was discussed by struck house project manager all these traditional i mean there's all sorts of right is the contract can be written and there's no i don't think it's you know a standard situation we have two teenagers of pricing for change orders i don't think that's the traditional way to write contracts at all and in fact you know news that the change if you read it the way journals want to read it in section eight schedule half section eight they're really exposing themselves to kind of open ended change specific dollar figure in the contract that you can always go back to and say you agreed to do it for this their argument is that that's why there's this process for some of subservient to them in advance of the word is and i didn't hear your question but the your honor i think judge fisher your approach when you were outlining reading the three key provisions is the approach that i think is the appropriate approach to take the goals of the approach that you argued i think it was i think it was that the the provision actually below we argued that that section a i apply to all changes and what the judge and schedule f section eight between those two classes he made a finding of fact that the parties intended that schedule any i applied to all of the changes so there is a finding of fact based upon experience  seven eighty eight line eighteen through nineteen which is the portion of the opinion the judge after going through the the background in the dispute states the court concludes that the parties intended that these to owner initiated changes or not on any issue changes it states right there anyone these rates apply to any changes and if you follow the course of the contract negotiations at the very beginning of  the contract negotiations jones asked stroke shall to submit unit prices for a change order work stroke else response was that cannot be done in our industry we don't price changes that way we will price changes based strange sort of work here because the court has already gone through the background that there's a dispute over whether schedule a i applies or whether the other schedule applies so there you've got a factual finding based  d of the first three or four payment requests where they were all on or an issue that's what jones contends that there's no evidence at the trial court level there's no proof there was never any discussion that some of the changes were passed through meaning owner initiated and some of them were not on pass through meaning not on or initiated but that was something that never was discussed during the course of the trial or i'm skipping during the course of the project that such fish or you are asking some questions about jones is one letters that object to the use of labor rates by stroke out and if you look at those documents that were cited excerpt of record six thirty four paragraph twenty six for example shop labor field labor to be estimated with final reconciliation now just you know my reading that correctly that that is guns response to i believe you're correct is a response to change or ten but what you're talking about here is they're going through the the way that we've prepared the summary yes or no or in here i don't think you they say you can't use the labor rates because you have to give us actual cost was never a discussion that came up in the first the project and it's not shown in the record anywhere and additionally this was also addressed by the district court judge where where he determined that the contract does not require stroke out to submit it's actual cost records and in fact in the structural steel industry st subcontractors do not keep what jones would consider kind of you know the actual cost records you don't keep a time card showing the man used twenty minutes to pick up one piece of steel and twenty minutes of pick up another piece of steel you just can't do it that way what stroke l does is come up with these labor rates forty five seventy and forty eight hour which is based upon their experience based upon their evaluation of the business and they use those labor rates and that's the way it's done in this industry the judge specifically made reference to that in his opinion after listening to expert testimony the stroke health provider so was there something else the hours involved in fabricating interaction and then this procedure is in accordance with the ongoing practice in the steel fabrication and erection business as established by the witnesses stroman dallas schwarz and to some extent by jones's own construction manager get demands from caliper duce that's not the practice in the industry and nowhere in the contract does it say when you're pricing change or if you must produce to me your actual cost records including you know time ticket showing the way judge fisher read it the work cost can mean a variety of things it can mean actual costs it can mean an estimated cost beginning an agreed price for example if you're pricing a scope of a change order the traditional way to do it would be for the contractor to say to the subcontractor i want you to change these fifteen beans on the floor give me a firm price to do it that's the traditional way to do it that's not actual costs it's an estimated cost that becomes the the the scope of the price for the scope of the work so cost certainly can mean the labor or a cost in ai another way to point to to read section  f schedule half section eight to make it consistent and not read out a contract is to understand what it's really directed to it's really not directed to change or to work at all it's directed to additional work and a construction project you have all sorts of tasks that come up for example stroke tells the structural steel erector they're going to be the only one on the job with a crane so other contractors might need the crane  their materials to the roof or the fifth floor etc usually as part of the contract that someone might stroke al has to let these other subcontractors use their crane on certain scheduled six certain scheduled time period what this is really directed to in my view is that kind of additional work it's not an owner change it's really not a change at all it's when jones comes to the contractor and says ok the guy with the mechanical equipment needs your crane to lift it up to the roof and for that kind of work we want you know that they just want to be done at a basic cost and i want too much markup in there and they don't want struck out to be able to say well i'll do it for you know two hundred bucks an hour they want you to be they want to be in a position to owner initiated change right ok because if the owner changes something then that would be over change but if the contractors have these kind of you scratch my back i'll scratch your situations come up that's what this is directed to jones wants to be able to of the recovery here is the cut is a recovery based upon the breach of contract action when the judge uses the part of maryland language in his opinion he's using that just kind of in the sense of incorporating the phrase other agree equitable basis  reasonable value here the reason the value is you know the actual you know how much or how much stroke al is really going to be affected by the cost impact which is set forth in their labor  if that's the case if we were in that mode would it was the court and correct in looking to a one leverage than absolutely because because if you look at macro you look at your own decision but makar says when there is no meeting of the minds you don't apply you know prices that are contained on the right look into it as a guide as he said it's very difficult to go extract a lead out they don't keep their rates that way the distinction is records of time expended that's what that's what we talk that's what you talked about purposes they agreed to labor rate would be these rates therefore is a matter of quantum arrow i'm going to use that as guidance like adopted as a contract matter with that being permissible under quantum principles i believe so you is telling me they don't keep the records that way i find that credible i don't have any how am i going to fix a rate i look to the contract and i say well for some purposes not binding here they fix this labor rate so i will use those labor rates is that permissible under the principles of quantum or i believe that for the court to say that in terms of determining the number of hours expended it can come up with it's own it's own calculation and we don't challenge that but for the purposes of what was the labor paid to that that steel worker that is that is what quantum error choir's so then they have the prove what they actually paid to the store which is very simple and the courts not determine that that was unavailable to them