1 NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION File Na me: 10a0186n.06 Nos. 08-2072/08-2289 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT

ACME CONTRACTI

NG, L TD., )

) P laintif f-App ellee, ) ) ON AP P EAL FROM THE U NI TED ) STATES DI STRI CT COURT FOR v. ) THE EASTERN DI STRI CT OF ) MI CHI GAN ) TOL TEST, I

NC., ) O P I N I O N ) Defendan t-Appellant, ) ) ) BERKL EY REGI ONAL

I NSURANCE ) COMPANY, ) ) De fend ant . ) BEF ORE: NO RRIS, CL AY , a nd SU TTON , C ir c uitJudg e s. ALAN E. NORRIS, Circuit Judge. The co n s o l idated appe als in this diversity action inv o l ve (1) a contr act dispute be tween pla intiff-appe llee Ac me Contracting , L td. (“Ac me”) , a contra ctor, a

nd defe ndants-appe llants TolTest, I nc., als o a contra ctor, a nd Be rkley

Reg ional I ns u r an c e Co mp an y , T o lT e s t, I n c . ’ s s u r e ty ( c o ll e c ti v e ly “ T o lT e s t” ) , an d ( 2 ) a c h a ll e ng e to the issuance of a writ of g arnishment by the district court followingthe entry of judg ment in the contra ct dispute. The contr act dispute a rose out of w ork TolTest subcontra cted to Ac me re lating to the de mol iti on

of and su bs e qu e nt s ite wo rk

on tw o b uil din g s lo c a te d at th e Ge or g ia Te c hn ic a l Ins tit

uteA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

Th is f igur e inc lud e s $ 2, 02 5, 33 0. 65 in d a ma g e s, $4 4, 81 2. 04 in p re jud g me nt i nte re st 1 under O hio law, and $26,733.52 in intere st under Michig an law. I n its opening br ief, TolTe st also appea led the district cour t’s issuance of

the writ of 2 g arn ish me nt a

nd de nia l of To lT e st’ s mo tio n to sta

y e xec uti on

of the g arn ish me nt. To lT e st conce ded at or al ar g ument, howeve r, that this Court’s resolution of the issues on appe al c on c e rn ingthe c on tr a c t c la ims moo ts the g arn ish me nt i ssu e . A c c or din g ly , w e do no t a dd re ss To lT e st’ s c ha lle ng e to t

he dis tr ic t c ourt ’s g arn ish me nt r uli ng s. Neither the Geor g ia Institut e of Te chnolog y nor Whiti ng -Turne r is a par ty to this action. 3 2 Nanotec hnology

Resear ch Center

in Atlant a, Ge o rgi a. After conductinga benc h trial, the district

c ourt e nte re d a mon e y jud g me nt of $2 ,0 96 ,8 76 .2 1 in fa vo r of Ac me . Th e dis tr ic t c ourt su bs e qu e ntl y 1 issued a wr it of g arnishment on the money judgme nt and denied T olTest’s motion to st ay execution of t he writ. TolTest appea ls the di strict court’s judgment insofar as it awar ds Acme de lay damag es for br eac h of contra ct and damag es for quantum meruit. For

the re asons t hat foll ow, we a ffirm the 2 district court’s judg ment with respec t to Acme’s e ntitlement to an awar d of dama g es, but we r emand for f urther pr ocee dings on the very limit ed issue of the calc ulation of quantum meruit damag es (f or time and materials g rading and shoring work) awarde d outside the 01-Cont rac t and delay damag es

awa rd e d un de r the 01 -C on tr a c t to d e te rm ine wh e the r d ou ble -c ounti ngoc c ur

re d w ithre sp e c t to tho se dis c re te c a te g or ie s o f d ama g e s. I. I n April 2006, TolTest enter ed into a contr act with Whiting-Tur ner Contr ac t ing Company (“ Whit ing -T ur

ne r” ) t o c on du c t ha z ardo us wa ste a bate me nt a

nd de mol iti on

of the El e c tr on ic Resear ch B uilding (“ ERB” ) and the Nee ly Resear ch Rea ctor (“Nee ly Reac tor”), both owned by the Ge or g ia Ins tit ute of Te c hn olo g y

Na no te c hn olo g y

Re se arc h Ce nte r. To lT e st the n su bc on tr a c te d to 3A c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

Ac me a lso ra ise d o the r c la ims that are no t im pli c a te d in

thi s a pp e a l. 4 3 Acme the portions of the Whiti ng -Turne r contra ct (“ Trade Contract 11000-01" or “01- Contract”) involving demolition and re lated site work. The ag ree ment betwee n TolTest and Ac me was e x ecute d on J une 12, 2006 in the for m of a Purchase Orde r P001652 (“Purc hase O rder ”). The Purchase Orde r included two attachme nts: (1) At tac hm ent A: S ub con tr a c to r S ervi ces A greemen t T erm s an d C on di ti on s, and(2) At tac hm ent B: Scope of Work. The Purchase Orde r also expressly incorporated the terms of Tr ade Contra ct 11000- 01. These doc uments comprised the entire agr eeme nt (“A g ree ment”) be tween T olTest and Ac me. Th e Ag re e ment pro vi ded that it s te rm s c ou ld b e a lte re d, ame nd e d o r a pp e a le d o nly

by a du ly

e xec ute d w ri tte n in str

ume nt. Al tho ug h th e Pur c ha se Or de r d e fi ne d A c me ’s pe ri od of pe rf or manc e a s Ma

y 30 , 2 00 6 to Aug ust 30, 2006, a “Projec t Schedule” prepa red by TolTest and provided to Acme identified the start date of Acme’ s demolition work as May 19, 2006 and the e nd date a s J uly 28, 2006. Acme be g an demolition on J une 3, 2006 and c ompleted it on October 11, 2006. On Fe bruar

y 1, 2007, Acme initiated this action, asserting claims ag ainst TolTest for br eac h of contra ct and qua

ntum meruit. Relevant to this appea l are the finding s of fa ct and c onclusions of

4 law the dis tr ic t c ourt

ma de re g ard ingAc me ’s a lle g a tio ns that T olT e st c a us e d mu lti ple de lay s to Acme’ s demolition work and fa iled to pay Acme f or additional work that was not part of the 01- Contract. On the brea ch of c ontrac t claim, Acme a lleg ed that TolTest fa iled to perfor m the require d

a b a te me n t w o r

k o n th e E RB an d

N e e le y Re a c to r in a c c o r d an c e w it

hit s o w nw o r

k p la n , th e rebyA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

4 delay ing A cme’ s demolition work, an d that Acme suf fer ed monetar

y damag es as a

result of that delay . The district cour

t a g ree d. The c ourt identified thre e instance s of TolTest’s lac k of dilige nce: (1 ) T olT e st’ s mu lti ple -d ay su sp e ns ion

of a bate me nt wor k in the ERB wh ile awa iti ngsa fe ty inspection and c lear ance from author ities to resume work a fter T olTest’s cr ew c aused a fire in that structure , thus delaying the s tart of Ac me’s demolition work; (2) TolTe st’s failure to secure

ne c e ssa ry pe rm its fo r rem ov a l of

wa ste mate ri a ls c on ta ine d w ith in t he ERB wa lls that A c me de mol ish e d, wh ic h p re ve nte d A c me fr om m ov ingthe wa ste mate ri a l and c on str uc tio n d e br is o ff

sit e in acc ordanc e with its planned work sc hedule; and ( 3) TolTest’s f ailure to provide sufficie nt staff to complete its abate ment work on the Neely Reac tor, which caused Acme t o chang e the methods it used to de molish that structure . The c ourt found that Ac me incurr ed dama g es of $1,088,715.15

as a r esul t of TolTest’s f

ailure to c onduct its work dilige ntly . I n rea chingits judgment, the c ourt considere d and re

jected T olTest’s ar g ument that the Ag re em en t contained pr ovisions prohibit ing Acme f rom rec overingdelay

damag es. The c ourt conc luded that the provisions of the Agr eeme nt purportingto limit da

mag es for delay s cause d by TolTest wer e void as a g ainst public policy under Ohio law. On the quantum mer

uit cl aim , Acme a lleg ed that, at TolTe st’s reque st, Acme pe rfor med

c e rt a in gra din g and

sh or ingwo rk wh ic h wa s not p art of the 01 -C on tr a c t. T olT e st d id n ot p ay Ac me for the additional service s rende red. The district c ourt found that TolTest e mploy ee Way ne L int had direc ted Acme to pe rfor

m a dditional g rading and shoringwork that fe ll bey ond the scope of the 01- Contract in anticipation of w ork that would be require d under a sepa rate subcontrac t, SubcontractA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

Neg otiations proved unsucc essful, and the parties did not, in fac t, enter into the 04- 5 Contract as the y

had expected. Th e c ourt de lin e a te d th e dama g e s a s f oll ow s: 6 1) $4 08 ,8 69 .0 0 f

or wo rk pe rf or me d und e r t

he 01 -C on tr a c t; 2) $399,371.87 for a dditional work perf ormed on T& M basis at TolTest’s re qu e st; 3 ) De l ay

d am age s o f $ 1 , 0 8 8 , 7 1 5

. 1 5 , wh i ch ar e c o mp ri s edo f t h e f o l l o wi n g amou nts : $2 72 ,0 05 .5 8 in

de lay dama g e s f

or the de lay re latin g to A c me ’s wo rk

in the ERB; a

nd $816,709.57 in delay

damag es for

the delay relating to Ac me’s wor

k in the Reac tor; and 4) $1 36 ,8 00 .0 0 in

int e re st t hat A c me ha d to pa

y a s a re su lt o f T olT e st improperly

withholding pay

ment from Ac me. Opinion, May

5, 2008, R. 64 at 30. 5 Numbe r 1 10 00 -0 4 ( “ 04 -C on tr a c t” ), th en unde r n e g oti a tio n. Th e c ourt fu rt he r f ound that A c me 5 perf ormed the a dditional gr adingand shoringwork a nd that the par

ties intended Ac me to be paid f or this wor k on a time a

nd materia ls ( “T& M”) basis. Acc ording ly , the cour t concluded that Acme wa s entitled to quantum meruit damag es of $399,371.87. Ba sed upon its findings of fac t and conc lusions of law, the cour t ruled that Ac me had established by

a pre pondera

nce of the evidenc e that it wa s entitled to total damag es of $2,033,756.02 fr om t he de fe nd ants
. 6 TolTest timely

appea led. As to the bre ach of conduct c laim, T olTest claims that the district

c ourt e rr e d in fi nd ingthat th e Ag re e me nt inc or po ra te d the Pr oje c t Sc he du le ; in c on c lud ingthat O hio statut or y law barr ed enforc e me nt o f t he te rm s o f t

he Ag re e me nt t

hat li mit de lay dama g e s; a

nd in fi n d i n gthat Acme pr oved its delay damag es with a re asonable deg ree of ce rtainty . As to the quantum meruit claim, TolTest contends that the district c ourt err ed in finding that Acme pe rfor medA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

6 g ra din g and

sh or ingwo rk

outsi de the sc op e of

the Ag re e me nt and in fi nd ing that Ac me pr ov e d it s qu an tu mm e r

u i td am a g e s w i t ha

r e a s o n a b l e d e g r e e o f

c e rt a i n t y. II. This appea l from a judg ment following a benc h tr i al i n v o l v es both questions of fa ct and questions of law. We re view the district co u rt ’s factual finding s for c lear err or and its leg al

c on c lus ion s de novo

. Pressman v. F ranklin Nat’l Bank , 3 84 F .3 d 1 82 , 1 85 (6 th Cir

. 20 04 ); F e d. R. Civ. P . 52(a) (6) ( “F indings of f act, whe ther ba sed on ora l or other e vidence , must not be set aside

un le ss c le arl y

e rr on e ou s, and

the re vie wi ng c ourt mus t gi ve du e re g ard to t he tr ia l c ourt ’s op po rt

un ity to judge witnesses’ c redibility .”). The district court’s application of state law is re viewed de novo

. Int’l Ins. Co. v. Stonewall Ins. Co. , 86 F.3d 601, 604 ( 6th Cir. 1996). A. Delay D amages Wit h respe ct to Acme’ s brea ch of c ontrac t claim, TolTest m ai n tains that the district court committed clear

err or in g ranting Acme de lay damag es. In TolTest’s view, the district court er red in a number o f its fa c tua l f

ind ing s. Spe c if

ic a lly , T olT e st c on te nd s th a t th e dis tr ic t c ourt e rr e d in finding that the t erms of the Agre ement provide for a 74-day period for Acme ’s per formanc e; that the “pr og ress c hart” (which the district court c alled the “ Project Schedule ”) e stablished the dates f or Acme’ s perf

ormanc e oblig ations; that TolTest was responsible for securingthe documentation for hauling waste ma

nag ement debr is; that Acme wa s , i n fact, delay ed at a ny time during the pe rf or manc e of its c on tr a c tua l ob lig a tio ns ; and that Ac me wa s e nti tle d to de lay dama g e s d e sp ite itsA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

7 failure to comply

with the “notice a

nd approva l” re quirements of the Agr eement. TolTest’s

argume nts la c k me ri t. Whe t h er t h e district court committed clea r er ror in findinga per formanc e per iod of approximately

74 day s depends upon whe ther the c ourt impr o p er l y conclude d that the Project Schedule f

ormed part of the parties’ Ag ree ment. TolTest contends that the district c ourt ig nored bo th t he langua g e of

a sti pu latio n id e nti fy

ingAcme’s pe ri od

of pe rf or manc e a s Ma

y 30 , 2 00 6 to Aug ust 30, 2006 and the express t erms of the Ag ree ment providing for f luidity in the prog ression of the wor

k. Although the district c ourt failed to e x plain how it identifie d a 74-da y perf ormanc e sche dule,

we c onclude th at the cour t discerne d (as a

matter of la

w) a nd resolved ( as a matter of f act) an ambig uity contained in the A g ree ment conce rni n g t h e d at es of perfor mance . “The question of whether the lang uag e of a written ag ree ment is ambiguous is one of law.” Parrett v. Am. Ship Bldg. Co. , 990 F.2d 854, 858 ( 6th Cir. 1993) (construing Ohio law). “Howe ver, the interpre tation of such lang uag e, once held to be ambiguous, is a fac tual issue t u rni ng on the intent of the pa rties.” Id. Proof of the pa

rties’ c ourse of

dealingmay

be u s ed to expl ain or supplement the pa rties’ wr itten ag ree ment. See W

atkins & Son Pet Supplies v. I ams Co. , 254 F.3d 607 , 6 1 4 (6 t h Cir. 2001) (interpr eting contra ct under Ohio law). Her e, as note d above, the Ag ree ment consist ed of the Purchase Orde r, Attac hment A, Attachment B , and, by express incorporation, the 01-Cont rac t betwee n TolTest and Whiting-Tur ner. The Purcha se Orde r, dated May 25, 2006, and signe d by Acme on June 9, 2006, established a 92-dayA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

8 period of pe rfor

mance beg inning Ma

y 30, 2006 and ending Aug ust 30, 2006. Howeve r, Attac hment A c on ta ins a

pr ov isi on

re fe rr ingto a

wo rk sc he du le : The Work shall be pe rfor

med ac c or

ding to thesc he du le ou tli ne d b yTol Test , which may

be modified per t he ins tructions of t he TolTest Project Manag er. . . . Any e xten sio n o f t

he c on tr a c t com

ple tio n da te or any po rt ion s th e re to whic h ma y be c ome pe rt ine nt a

nd c ri tic a l in tim ing duri ng the c omp le tio n o f t he Pur c ha se Or de r m ay

on ly be g rante d by

TolTest in writing , proper ly executed and definitively stating that an extension i s g rante d. Attachment A, ¶ 3 (empha sis added). Previously , on or about May 10, 2006, TolTest had sent Acme a schedule setting f orth the p ro j ec t ed start dates and duration for ea ch phase of the wor k Acme w as to perf

orm under the Ag ree ment. Acc ording to that doc ument, which the district c ourt called the “Projec t S ch edule,” Acme w as to beg in on-site work on May 19, 2006 and to complete it by no later tha

n J uly 28, 2006. Be cause Attachment A spe cifica lly ref err ed to “the schedule outlined by TolTest,” and bec ause the only work sche dule outlined by TolTest that appea

rs in the re cord pr ovided a pe riod of per formanc e that is inconsistent with t he date s set forth on the Purc hase O rder , the language wi thin the four

corne rs of the Ag ree ment contained an internal ambiguity requiringref

ere nce to e x trinsic evidenc e to asce rtain the pa

rties’ intent re g ardingAcme’ s perf ormanc e sche dule. Accor d i n gl y , the cour t p ro p er l y co n s i d er edt h e p ar t i es ’ p ri o r c o u rs e o f d ea l i n g. As fac tfinder, the district c ourt deter mined that the par

ties intended to be bound by the dates in the Project Schedule

. TolTest’s ar g ument that Acme w as put on notice that the pr oject date s were fluid fails to acknow ledg e that the de lay s t o Ac me’s wor k wer e not the re sult of a direc tive from Whit ing- Turner

or ca used by the cond u ct o f other c ompanies. Rather , Acme’ s work wa s delay edA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

We note that the district court found the ag ree d work sche dule to be appr ox imately –not 7 pr e c ise ly –7 4 d ay s. 9 by To lT e st’ s o wn

c on du c t. A s th e dis tr ic t c ourt ob se rv e d, To lT e st w a s r e qu ir e d to c omp le te its

a bate me nt w or

k b e fo re Ac me c ou ld d e mol ish the str uc tur e s. B e c a

us e To lT e st w as the f

ir st contra ctor to per form on-sit e work, ther e we re no othe r contra ctors pre sent to interfe re w ith the schedule . TolTest’s fluidity argument is theref

ore unpe rsuasive. The court did not err in finding that Ac me jus tif

ia bly re lie d u po n T olT e st’ s p ro

je c t sc he du le in p lann ingits wo rk on the 01 -C on tr a c t. I n light of the fore g oing, w e find no error in the c ourt’s dete rmination that Acme ha d

a pp ro xima te ly

74 da y s to pe rf or m it s o bli g a tio ns un de r t

he 01 -C on tr a c t. 7 Si mi la r ly , th e d is tr ic t c o u rt d id n o t c le ar ly e r r in f in d in g th a t T o lT e s t w a s r e s p o n s ible for

se c ur ingthe do c ume ntatio n f or ha uli ngc on str

uc tio n d e br is t a ke n f

ro m th e ERB . Att achm ent B states that “TolTe st w ill be responsible for the ha uling pe rmits necessa

ry for the r emoval of a sbestos and other hazardous mater ials.” At trial, Acm e em p l o y ee David Mac Donald testified that the construct i o n d eb ri s taken fr om the demolition Acme per formed on the ERB c ontained hazar dous materia ls. TolTest did not refute this testimony . TolTest was therefor e oblig ated to sec ure the proper hauling permit by

helping Acme obta in the nece ssary s i gn at u re from Ge org ia Tec h. Acc ording ly , the district court did not clea rly err in finding that the delay

resulting from TolTest’s fa ilure to o bta in t

he sig natur e and

se c ur e the pe rm it e nti tle d A c me to d e lay dama g e s. The district cour

t also committed no clear err or in finding that TolTest’s conduc t delay ed Acme’ s work. In Toltest’s view, Acme could have experience d delay only if it was pre vented f

romA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

10 perf orming any

work at all. A ccor ding to TolTest, any rec overy for de lay claimed f or day s on which Ac me wa s a c tua lly

wo rk ingwo uld

c onst it ute do ub le re c ov e ry in t hat it wo uld pe rm it A c me to

rec over both for

the work it per formed a

nd for the de lay

it suffere d. TolTest essentially misconstrues

w h a tc o n s t i tu t e s d e l ay. C o u rt s h av e r e c o g n i z e d t h a t d e l ay m ay a l s o o c c u r t h r o u g hl o s te f

f i c i e n c y, such as ha

ving to pe rfor

m work out of seque nce or to perfor m work in way s that use worke rs ineffic iently

. See Cle v e lan d Cons tr. , Inc . v. Oh io Pu b. Em plo y e es R e t. S

y s. , No. 07AP-574, 2008 WL 885841, at *3 (Ohio Ct. App. April 3, 2008) (discussingcase s interpre ting the c oncept of delay broadly to include loss of eff

iciency ). He re , th e dis tr ic t c ourt

fo un d th a t A c me wa s r e qu ired to c ha ng e the me tho ds it u se d to demolish the Nee ly Reac tor beca use TolTest did not complete its a batement work on s ch edule. Th us , me re ly

be c a us e Ac me wo rk e d o n th e da y s f or wh ic h it c la ims de lay

re latin g to t

he Ne e ly Reac tor demolition does not me an that it wa s working as eff iciently as it could have been w ere it not fo r t he c ha ng e d me tho ds To lT e st’ s d e lay re qu ir e d Ac me to e mpl oy . Si mil arl y , th e fa c t th a t A c me perf ormed other

work a fter T olTest cause d the fire in the ERB doe s not mean that Ac me was not delay ed. Rather , as t he dis trict court’s opinion sug g ests, Acme was required to perform ce rtain work out of sequenc e, re su l ting in a loss of e fficie ncy that it would not have otherw ise incurr ed. Ac c or din g ly , th e dis tr ic t c ourt did no t c le arl y

e rr in fi nd ing de lay

me re ly be c a us e Ac me wa s n ot i dle

e ve ry da y fo r whic h it

c la ime d d e lay

dama g e s. Finally , the district court did not clea rly err in determining that Acme w as entitled to delay damag es despite Ac me’s fa ilure to comply with the “notice a

nd approva l” re qu i re m ents of theA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

The pa rties ag ree d that Ohio law g overne d the contra ctual dispute. 8 11 Ag ree ment. As discussed below, the district court cor rec tly applied Ohio’s statute pr ohibiting “no damag es for

delay” cla

uses when the cause of the de lay results from the a ction or i n ac t i on of the contra ctor. B y

finding void a

nd unenfor cea

ble the delay damag es limitation of the Ag ree ment, the district court did not clea

rly err in excluding from its consider ation whether Acme complied with the

“ no tic e and

a pp ro va l” re qu ir e me nts
. B. Application of Ohio’s Statut e Prohibiting Certain “ No-Damages-

for-Delay” Clauses I n deter mining that Acme was entitled to de lay damag es, the district c ourt appli ed Oh i o’s statutory bar ag ainst contra ct provisi ons that waive or prec lude a c ontrac tor’s liability for de lay when that delay is caused by the contractor. The district court conc luded that the Ag ree ment’s re strictions on damag es for

delay s cause d by

TolTest wer e unenf

orce able. 8 To lT e st a rgue s th a t th e dis tr ic t c ourt a pp lied th e statut or

y ba r t oo br oa dly , e rr on e ou sly b r i n g i n g i n t o i t s amb i ta l l o f t h e l i m i t a t i o n s o n d e l ay d a m a g e s i n c o r p o r a t e d i n t o t h e A g r e e m e n t
. In TolTest’s view, the limit ations requiring notice and approva l and prohibiting rec overy of dama g es fo r d e lay s of le ss t

ha n f our m on ths me re ly

de fi ne the c ir c ums tanc e s und e r whic h d e lay dama g e s w ill be re cover able. Accor ding to TolTest, no limit ation in the Agre ement waives or pre cludes re cover y altog ether

. Se c tio n 4 11 3. 62 of

Oh io R e vis e d Co de pr ov ide s, in r e le va nt p art : Any provision of a construction subcontra ct, ag ree ment, or under standing , or sp e c if ic a tio n o r o the r do c ume ntatio n that is ma de pa rt of a c on str uc tio n s ub c on tr a c t, ag ree ment, or understanding , that waives or prec ludes liability for delay during theA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

12 c ours e of a c on str

uc tio n su bc on tr a c t wh e n the c a

us e of the de lay

is a pr oximate re su lt of the owner ’s or contra ctor’s act or fa ilure to ac t, or that waive s any other re medy for a construction subcontra ct when the cause of the delay is a proxim ate r esult of the ow ne r’ s o r c on tr a c to r’s act or fa ilure to a c t, i s v oid

and un e nf or c e a ble a s a g a ins t p u b l i c p o l i c y. Ohio Rev. Code § 4113.62(C)(2)

. Her e, base d upon the evi d en ce pr esente d at trial, and a fter r eviewingthe sca nt case law applying O hio Rev. Code § 4113.62(C)(2) , the cour t rea ched the following conclusion: [T] he contr act pr ovisions at issue in thi s case , which bar , limit o r wa i ve dela y dama g e s th a t a

re c a us e d b y the ow ne r or c on tr a c tor , are un e nf or c e a ble un de r O .R. C. § 4113.62. That statute provides that a ny provision in a construction subcontra ct that wa ive s o r p re c lud e s li a

bi li ty for de lay , whe n th e c a us e of the de lay is a pr oximate re su lt o f th e con tr a c tor ’s a c t or fa ilure to a c t, i s v oid

and un e nf or c e a ble a s a g a ins t public policy . O.R.C. § 4113.62( C)(2). I n this c ase, the contra ct provisions at issue include that any delay must be repor ted in writing and an “extension of time shall be the sole and e x clusive re medy of Contractor for any

such dela y s or suspensions, but only to the extent that a time ex tension is obtained from the Owner” (Ex. 44 at T-2; See De f. ’s B r. in Op p. to Pl. ’s Re qu e st fo r D e lay Da ma g e s at 1) , a

nd that “ No c la ims will be acc epted for costs incurre d due to delay s cause d by others except to the extent that such dela

y s exceed four

(4) months.” (E x hibit 44 at T- 21). Thus, the c ontrac t as a whole precludes, li mits or wa ives liability for de lay , even when the c ause of the delay is a proxi mate re sult of TolTest’s ac tions or failures to a ct. The Court ther efor e co n cl u des that these pr ovisions are ther efor e void and une nforc eable and do not prec lude re cover

y of dela y damag es by

Acme in this ca se. Opinion at 28-29. I n applying the statute to the contra ct in this action, the district court conside red thre e ca ses de c ide d by Oh io co ur

ts wh ic h inte rp re t the statut e : Du ga n & Me y e rs Con str

. Co. , In c . v . Oh io D e p’ t. of A dm in. Se rv

s. , 864 N. E. 2d

68 (O hio 20 07 ) ; B.I. Chipping Co. v. R.F. Sc urlock Co. , N o. 04 AP1219, 2005 WL 3484306 (Ohio C t. App. Dec . 20, 2005) (unpublished); a nd Cleveland Constr., Inc.A c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

13 v . O hio Pu b. Em

plo y e es R e t. S

y s. , No. 07AP-574, 2008 WL 885841 (Ohio Ct. App. April 3, 2008) (unpublished). The district cour

t c orre ctly found Dugan inapplicable to this ac tion because the statute wa s

e na c te d a ft e r t

he c on tr a c t at is su e in t hat c a se wa s ma de . T he dis tr ic t c ourt a lso c or re c tly distinguished B.I. Chipping from the f

acts of this ca se in finding that, by limit ing the subcontrac tor’s

re c ov e ry fo r de lay s to the amou

nt that the c on tr a c tor re c e ive d thr ou g h a pa rt ic ula r c la ims pr oc e ss, the B.I. Chipping c on tr a c t did not e nti re ly fo re c los e de lay dama g e s, wh e re a s th e lim itatio ns in t his action, take n toge ther, e ffe ctively prec l u d e re co v ery . Fur

ther, a lthough the district c ourt did not mention them, two additional distinctions may be made: in B.I. Chipping (1) the par ties ag ree d that the contra ctor did not ca

use the delay s to the subcontrac tor’s work; and (2) the subcontra ct did not contain any provision that the work lef t undone (the r elocation of utili ty lines) nee ded to occ ur bef ore the subcontra ctor wa s to beg in its work. See B.I. Chipping , 2 00 5 WL 34 84 30 6, a t *3 . B y

c on tr a st, in this action, the delay s to Acme’ s work were the result of TolTest’s acts or failures t o act, a nd the Ag ree ment provided that the a batement, f

or which TolTe st was re sp o n s i ble, would occ ur bef ore Acme’ s work wa s to beg in. The district cour

t did find Cleveland Construction instructive. In Cleveland Construction , as in this action, the contra ct contained provisions limit ing the reme dy for de lay to an extension of time and re quiring reque sts f or such e x tensions to be submitt ed in writing . The c ourt there found the provisions void an d u n enfor cea ble under § 4113.62 based in pa

rt upon a re cog nition thatA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

14 contra ctors w h o c a

u s e a p r o je c t d e la y s h o u ld n o t b e p e r

mi tt e d to e s c a p e li a b il it y f o r the conseque nces of

their ac ts or failure s to act. Cle v e lan d Co ns tr. , 2008 WL 885841, at *4. The district cour

t he re corr ectly

adopted the r ationale of

the Cleveland Construction c a se to conclude that the provisions limi ting the r emedy for de lay to an extension of time, r equiringwritten notice and approva l from the owner for any time ext ension, and a llowing c laims for costs incurr ed by delay s cause d by

others only

if s u ch dela

y s exceed four

months–when consider ed toge ther–ope rate d to insulate TolTest from any liability for delay s it cause d to Acme’ s perf ormanc e of its obligations under

the contra ct. C o n s eq u en t l y , the district court prope rly conclude d that the limit ation s we re void and unenfor cea ble as a g ainst public policy under O hio Rev. Code § 4113.62(C)(2)

. C. Proof of Delay Damage s W i t h re s p ec t t o t h e am o u n to f d el ay d am age s , t h e d i s t ri ct co u rt m ad e t h e f o l l o wi n g fi n d i n gs of fa c t: The va rious delay s that Acme e ncounter ed with re spect to its work in the ERB c aused A cme to incur additional costs totaling $272, 005.58. (Exhibi t 215 A). Of tha t amou nt, $1 41 ,0 76 .8 1 w a s d

ue to T olT e st’ s fa il ur e to a ssi st [A c me ] in se c ur ingthe do c ume ntatio n f or the de mol iti on

de br is.

. . . . Wit h respe ct to the delay

and interf

ere nce c aused by

TolTest relating to the Ne e l y R e a c t o r , A c m e i n c u r

r e d d a m a g e s o f

$ 8 1 6 , 7 0 9

. 5 7

. O f

t h a ta m o u nt, $107,091.50 was a dditional costs Acm e i n cu rr ed relating to the remova l of the Do me , w hil e the re ma ini ngpo rt ion wa s a dd iti on a l c os ts A c me inc ur re d in perf orming the re mainder of

its work relating to the Rea ctor. (Exhibi t 215 B & C). Opinion at 10, 17.A c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

15 Ba sed upon those finding s, the court stated that Acme had established by a pre pondera

nce of evide nce that it was entitled to delay damag es of $1,088,715.15, whic h fig ure the court de rived by a dd ing$2 72 ,0 05 .5 8 in

a dd iti on a l c os ts i ncurred resul tin g fr om d e lay s r e latin g to t he ERB de mol iti on

to $ 81 6, 70 9. 57 in a dd iti on a l c os ts in curr e d r e su lti ngfr om d e lay s r e latin g to t he Ne e ly Reac tor. T o lT e s t c o n te n d s th a t A c me f a il e d to p r o v id e p r o o f o f d a ma g e s to a r e a s o n a b le d e g r e e of

c e rt a int y and that th e dis tr ic t c ourt e rr e d b y re lyingup on

the do c ume nts su

bmi tte d b y

Ac me summarizing the daily

delay char g es. Acc ording to T olTest, those documents–and c onsequently the court’s c alculations-- contained discrepa ncies in the dates of the delay , unsubstantiated cha rg es, and claims of dela

y for da y s when Ac me was a ctually working

. Th e d is tr ic t c o u rt u s e d

th e f igu r e s p r o v id e d

in E xh ib it 2 1 5 A , B & C t o id e n ti f

y th e aw ard of dama g es. Opinion at 10, 17. With respect to dama g es, Ac me employ ee Mic hael B ates testified

a t tr ia l ho w h e c a lc ulate d th e amou nts Ac me wa s c la imi ng . T olT e st m a kes mu ch of a sin g le st ate men t t hat Bates mad e in whi ch he assert ed tha t th e fi gures con tai nedin Ex hi bi t 2 15 A, B & C repr esent time whe n Acme should have bee n workingbut was not. (Tria l Tr., Vol. 5, at 4.) Relying upon this statement, T o l T es t cl aim s that delay damag es ca

nnot be awa

rded be cause the evidenc e shows that Acme c laimed delay s for da y s on which it was not idle. Howe ver, TolTe st ignore s the bu lk o f B a te s’ te sti mony

and Ex hi bi t 21 4 ( Ac me ’s c la im f or Eq uit a ble Ad jus tme nt, su

bmi tte d to TolTest on J anuar

y 2, 2007, and admitted as a joint ex hib i t at t ri al ), both of which c alculate the

amou nt o f dama g e s cla ime d an d expla in that the a dd iti on a l del ay c os ts as sume d the fo rm of no t on lyA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

16 “down time” but a lso work ineff iciencie s. See, e .g. , Trial Tr., V ol. 4 at 86- 95; Vol 5 at 3-4, 11- 16, 33 -37 ; E x hi bi t 2 14 . Al th ou gh th e di st ri ct c ou rtus ed th e fi gures con tai ned in Ex hi bi t 21 5 A, B & C to asce rtain the amount of delay damag es, the c ou rt ’s deliberations were inf ormed by evidenc e of work inef ficienc ies. SeeOp ini on

a t 13 -1 6. As dis c us se d a

bo ve , the dis tr ic t c ourt

fo un d th a t A c me

wa s r e qu ir e d to pe rf

or m c e rt a in w or

k o n th e ERB out of

sequen ce and to cha

ng e the me tho ds it

e mpl oy e d to de mol ish

the Ne e ly Re a c tor
. Th e se c ha ng e s in Ac me ’s wo rk pla

n pe rm itt e d A c me to continue wor

king, to be sure, but they

also resulted in a

loss of eff

iciency

. To lT e st a ssume s th a t d ela y oc c ur s o nly

wh e n th e re is a

pe ri od of idl e ne ss. To lT e st misapprehe nds what constit utes delay , as we explain above. B eca use loss of ef

ficienc y is a specie s of de lay , the dis tr ic t c ourt

pr op e rl y c on sid e re d e vid e nc e of

wo rk ine ff ic ie nc ie s p re se nte d in

B a te s’ testimony and conta ined in Ex hibit 214. This evidence supporte d the damag es ca lculations claimed by Acme in Exhibit 215 A, B & C. The court’s acc eptanc e of the fig ures contained in Ex hibit 215 A, B & C a s a c c u r a t e l y p o rt r ayi n g d e l ay

d a m a g e s w a s t h u s b a s e d i np artu

p o nc r e d i b i lit y deter minations concer

ning the evidenc e of w ork ineff iciencie s in Bates’ testi mony and Exhibi t 214. Acc ording ly , the cour

t’s finding s on delay

damag es should be ac corde d g reat defe re n ce. See Schroye r v. Franke l , 197 F.3d 1170, 1173 ( 6th Cir. 1999) (“W h en t h e fa ctual findings re st upon

cre dibilit y

deter minations, thi s Court affor ds g reat de fer ence to the finding s of the district court.” ). TolTest claims that s uch defere nce should not be ac corde d in this case bec ause the fig ures in Ex hibit 215 B & C are unreliable

. As support for this contention, Tol Test claims that Exhibi t 215 B & C c on ta in e vid e nc e of do ub le -c ounti ngon

July 19 and 20 , 200 6. To lT e st ar g ue s tha t on the seA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

The T& M work on the Ne ely Reac tor Dome wa s perf

ormed unde r the 01-Contra ct and 9 should not be confuse d with the T& M g radingand shoringwork for which Ac me claimed quantum meruit damag es. Acme did list a “Misce llaneous Power T ool” cost of $150 f or both delay

and T& M on 10 J uly 19 and 20, 2006, but the re cord of fer s no indication of whethe r the c harg e is for same set of mis c e lla ne ou s p ow e rs too ls. 17 dates Ac me s eeks recove ry both for delay of demoli tion work on the Neely Reac tor (Ex. 215 B) and for T& M work per formed unde r the c ontrac t on the remova l of t he Neely Dome (Ex

. 215 C). The 9 po rt ion of the re c or d to whic h T olT e st d ir e c ts u s, ho we ve r, do e s n ot s up po rt su c h a fi nd ing . O n b oth d ay s , A c me c la im e d la

b o r c o s ts an d lo d g in g c h ar g e s f

o r it s T & M w o r

k b u t n o t f o r d e la y . Se e E x. 215 C. Si milarly , Acme ide ntified equipment costs for its T&M contra ct work on the Nee ly Reac tor Do me but li ste d d ifferen t e qu ipm e nt c os ts f or de lay un de r t he c on tr a c t. Th e de lay

c os ts A c me 10 cl ai m edfo r J u l y

1 9 an d 2 0 , 2 0 0 6 i n cl u d e n o d i s ce rn i b l e d o u b l e- co u n t i n g. Our re view of the rec ord, howe ver, indicates that double-c ounting may have o cc u rr ed on Au g us t 15 , 2 00 6, and

fr om August 17 -2 7, 20 06 , w ithre sp e c t to Ac me ’s c ha rg e s f or e mpl oy e e s,

e qu ipm e nt, and inc ide nta ls, a s se t f or th i n E xhibi t 21 5, and

that A c me may

have re c ov e re d th os e char g es twice , once as delay damag es under the 01-Contrac t a nd ag ain as quantum meruit damag es (for time a nd materia ls w ork for g rading and shoring ) outside the 01-Contra ct. Acc ording ly , rema nd on this very

narr ow issue is warr anted. D. Qu an tum Me ru it Re g ardi ngAc me ’s qu antum me ru it c la im, To lT e st a rgue s th a t th e dis tr ic t c ourt e rr e d in fi nd ingthat th e a dd iti on a l g ra din g and sh or ingwo rk

that A c me pe rf

or me d o n a T& M b a sis fe llA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

18 outsi de the sc op e of

the 01 -C on tr a c t. T olT e st f ur the r a rgue s th a t A c me wa s r e qu ir e d to ob tain written appr oval for a

ny additional work re lating to “ moving TolTe st’s dirt” and a djusting to a d i ff er en tco mp ac t i o nra t e i ngra d i n g t h e E R B s i t e. T h es e a rgu m en t s ar e u n av ai l i n g. TolTest employ ee Way

ne L int testified at trial that he dire cted Ac me to do the extra g rading and shoringwork on a

T& M basis in anticipation of the 04-Contra ct. T he district cour t did not clea rly err in finding that the additional work w as there fore was outside the sc ope of the 01-Contrac t and that TolTest was aware of t he out-of-scope work Acme was performing

. Moreove r, t he re cord supports the court’ s conclusion that TolTest neither objected to t h e d aily

T& M documents or monthly invoices submitted by

Acme nor disputed that Acme ha d perf ormed the out-of

-scope work

re po rt e d o n th os e do c ume nts . In li g ht o f t he a bo ve fa c tua l f

ind ing s, the c ourt

did no t c le arl y

e rr in deter mining that Ac me was entitled to the reasonable value of service s rende red for t he T& M work it perfor med in anticipation of the 04- Contract bec ause that work was outside the scope of Acme’ s ob lig a tio ns un de r t

he 01 -C on tr a c t. Th e dis tr ic t c ourt re lie d up on the fi g ur e s pr ov ide d in Exhi bit 66 to a sse ss qu ant um mer uit damag es of $399,371.85. Opinion at 18, 30. TolTest contends that the evidenc e Acme submitted at trial, which inc luded both Ex hibit 66 and Ex hibits 6 and 7, fails to provide proof of quantum

me r u it d ama g e s to a r e a s o n a

b le d e g r e e o f c e rta inty
. T o lT e s t p o ints to d is c r e p an c ie s b e tw een the T& M c lai ms Acm e ma de in t he se e xhibi ts a

nd the “ Da ily

F ie ld O bs e rv a tio n Re po rt s” Ac me

su bmi tte d to To lT e st wh ile on the job

. Ac c or din g to To lT e st, the da ily re po rt s ind ic a te that A c me did no t pe rf or m th e a dd iti on a l w or

k it c la ims to have pe rf

or me d on a numb e r of da

y s in th e e xhibi tA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

The district cour

t may , howeve r, adjust this assessment on rema nd if it determines that 11 double-c ounting oc curr ed with re spect to quantum meruit dama g es for T& M g radingand shoring wo rk outsi de the 01 -C on tr a c t and fo r d e lay dama g e s und e r t

he 01 -C on tr a c t. 19 summa ri e s. To lT e st c la ims that th e dis tr ic t c ourt fa ile d to a c kn ow le dg e and c on sid e r t

he c on fl ic ts bet ween th e tw o s ets of docu men ts
. Furt her, To lT est ass ert s tha t Acme fai ledto ob tai n s ignedT&M tickets from TolTe st to verify Acme’ s claimed wo rk an d that Acme f ailed to pre sent testimony

e vid e nc e fr om a

wi tne ss who c ould di scer n f ro m th e wo rk

re po rt s w hat w or

k d e sc ri be d th e re in constituted Acme’ s T&M la bor and e quipment costs. As evidenc ed by the testimony of Acme employ ee D avid Mac Donald, howe ver, A cme did, in fa c t, su bmi t da ily T& M tic ke ts to To lT e st. To lT e st pr e se nte d no e vid e nc e to c on tr a dic t the c os t summaries in Exh i b i t s 6 , 7, and 66, nor did TolTe st impeach Ac me’s witnesses on this matter, or

o f f e r e v i d e n c e t o s h o w t h a tT o l T e s tn e v e r r e c e i v e d th e T & M t i c k e t s s u

b m i t t e d b y A c m e . F i n a l l y, during closing arguments, TolT es t d ef er red the issue of damag es ca lculation to the court. To the

e xten t th a t th e re c or d c on ta ins c on fl ic tin g e vid ence, the dis tr ic t c ourt re so lve d th os e c on fl ic ts i n Acme’ s fa v or. Given the defe rential standa rd ac corde d to such finding s, the district court’s assessment of the amount of quantum meruit dama g es will be upheld. 11 III . F or the fo re g oin g re a so ns , th e jud g me nt i s aff irm ed in p art and rem anded i n part for further proce eding s on the very

limit ed issue of w h ether double-countingoccur red f or both delay damag es under

the 01-Contrac t and for qua ntum meruit damag es (for time and mater ials work forA c m e C o n tra c tin g , L td . v. Tol Tes t , I nc. N os . 08- 2072/ 08- 2289

20 g ra din g and

sh or ing ) o uts ide the 01 -C on tr a c t, w ithre sp e c t to Ac me ’s c ha rg e s f or e mpl oy e e s, equipment, and incide ntals on Aug ust 15, 2006, and August 17-27, 2006, as set for th in Ex hibit 215.