Court of Claims of Ohio

The Ohio Judicial Center 

65 South Front Street, Third Floor 

Columbus, OH 43215 

614.387.9800 or 1.800.824.8263 

www.cco.state.oh.us

APPLIED CONTRACTING CORP. 

 Plaintiff/Counter Defendant 

 v. 

OHIO DEPARTMENT OF TRANSPORTATION, et al. 

 Defendants/Counter Plaintiffs 

 and 

STATE OF OHIO 

 Defendant 

Case No. 2008-07195 

Judge Joseph T. Clark 

DECISION

{¶1} Plaintiff/counter defendant, Applied Contracting Corp. (Applied), brought this 

action alleging breach of contract and unjust enrichment. Defendants/counter plaintiffs, 

Ohio Department of Transportation (ODOT) and Ohio Department of Administrative 

Services (DAS), asserted counterclaims for breach of contract and for liquidated 

damages. The issues of liability and damages were bifurcated and the case proceeded 

to trial on the issue of liability. 

{¶2} In July 2006, DAS and Applied entered into a contract under which Applied 

would serve as the lead contractor for the “District 8 Wash Bay Additions” project, which 

involved making additions to existing structures at two ODOT facilities. (Plaintiff’s 

Exhibit A1.) Specifically, a vehicle wash bay was to be built at ODOT’s Wilmington 
Outpost, and both a wash bay and a service bay were to be built at ODOT’s Blue Ash 

Outpost. 

{¶3} While Applied was the lead contractor for the project, DAS also contracted 

with Airstream Mechanical, LLC (Airstream) for the installation of mechanical, electrical, 

and plumbing components. Additionally, DAS contracted with Alan Scherr Associates, 

LLC (ASA) to serve as the associate for the project, in which capacity it provided 

professional design services and contract administration. 

{¶4} On July 20, 2006, DAS issued a “Notice to Proceed” to Applied, directing it 

to commence work “within one week from the date of this notice, and to complete the 

work by January 3, 2007.” (Plaintiff’s Exhibit A3.) Over the course of the project, 

however, there arose various issues which resulted in the parties agreeing through 

change orders to extend the contract completion date three times, with the final such 

date being March 3, 2007. (Defendants’ Exhibit 9.) 

{¶5} Donald Legg, President of Applied, testified that although Applied 

substantially completed its work by the March 3, 2007 deadline, ASA deferred the 

completion date for certain items such as landscaping, execution of punch lists, and 

remedial work which ASA and defendants requested concerning the floor of the wash 

bay at the Wilmington Outpost. Legg testified that Applied timely completed all of the 

deferred work except for a portion of the remedial work which Applied refused to 

perform because he felt that it was unnecessary; this work included smoothing the 

concrete floor of the wash bay and then applying an epoxy coating over the floor. 

{¶6} The relationship between the parties unraveled as a result of the dispute 

over the remedial work at the Wilmington Outpost. According to Ryan Meeds, who was 

the project manager for ASA, Applied completed all of its other work by the beginning of 

May 2007 and withdrew from the project, in spite of multiple requests from ASA and 

defendants to complete the few remaining remedial tasks. Legg stated that when ASA 

sent him a proposed certificate of contract completion, which noted that remedial work 

remained at the Wilmington Outpost, he refused to sign. (Plaintiff’s Exhibit U.) 

{¶7} On June 5, 2007, Applied sent ASA a two-page letter titled “Final Notice of 

Claim and Request for Contract extension to September 1, 2007.” (Plaintiff’s Exhibit V.) 

Therein, Applied listed twelve issues that had allegedly delayed the project by a total of 

241 days, “as a result of the owner failing to adequately provide management, 
administration and redesign solutions through the course of the project * * *”; Applied 

requested additional compensation at a rate of $317.69 per day of delay, for a total of 

$76,563.29. On June 21, 2007, Applied also sent ODOT several one-page invoices 

which again requested $76,563.29 for delays, and included various other requests 

totaling $32,520.70. 

{¶8} Applied’s June 5 and June 21, 2007 requests for payment were declined by 

defendants. Further, John Burnie, an ODOT facilities manager who supervised 

construction at both project sites, testified that defendants terminated Applied’s contract 

and hired another contractor, ISPN, to perform the remaining work at the Wilmington 

Outpost. 

{¶9} On June 16, 2008, Applied filed the instant complaint, asserting that 

defendants committed a breach of contract both by causing project delays and by 

wrongfully withholding payments owed under the contract; that defendants were unjustly 

enriched; and that defendants committed a breach of its contract with Airstream, to 

which Applied was a third-party beneficiary. 

DELAYS

{¶10} In Count One of its complaint, Applied alleges that defendants 

committed a breach of contract by causing twelve separate project delays totaling 241 

days, as set forth in the June 5, 2007 “notice of claims” that Applied submitted to ASA. 

The court shall address the alleged delays individually. 

{¶11} “Utility pole relocation necessitated by failure to properly design 

the project. 30 days.” 

{¶12} On July 20, 2006, Legg sent a request for information to ASA in which 

he noted that a utility pole at the Wilmington Outpost needed to be relocated in order to 

begin excavation. (Plaintiff’s Exhibit F.) Burnie and Meeds stated that ASA arranged 

for the owner of the pole, Dayton Power & Light, to relocate the pole outside the project 

site, and that the site was ready for work on August 18, 2006. According to Legg, this 

issue delayed Applied from working at the Wilmington Outpost from July 26, 2006, to 

August 18, 2006. 
{¶13} On December 15, 2006, the parties signed Change Order No. G-02, 

which states, in part: “This Change Order is to provide the contractor a no cost, time 

exten[s]ion to the project completion date due to previous weather related conditions 

and unforseen utility relocation requirements. During this time exten[s]ion there will be 

no cost penalties assessed to the contractor for lack of project completion. If however 

the projects are not completed by this new [February 18, 2007] completion date 

penalties will be assessed per the original bid documents.” (Defendants’ Exhibit 6.) 

(Emphasis added.) All change orders executed during the project also stated: “This 

Change Order identifies and provides full and complete satisfaction for all direct and 

indirect costs, including interest and all related extensions to the time for Contract 

Completion, for the described changes in the Scope of the Work.” 

{¶14} Burnie testified that he believed the change order resolved all issues 

concerning the utility pole relocation. Legg also admitted that the parties intended for 

the change order to resolve the utility pole relocation, and he acknowledged that all 

change orders signed by the parties were negotiated. Legg stated, though, that he later 

decided that the change order failed to adequately redress the issue and that he 

therefore requested additional compensation in the June 5, 2007 notice of claim. 

{¶15} Article GC 7 of the contract provides, in part: 

{¶16} “7.1.1 The Department, without invalidating the Contract, may order 

changes in 

{¶17} the Work consisting of additions, deletions or other revisions, including 

without limitation revisions resulting from an extension granted in accordance with 

Paragraph GC 6.4. To the extent the time for Contract Completion or the Contract Price 

is affected, the Contract may be equitably adjusted by Change Order in accordance with 

this Article and the Change Order Procedure and Pricing Guidelines (CO). * * * 

{¶18} “7.1.1.4 The Contractor understands and agrees that agreement to a 

Change Order is final and without reservation of any rights.” 

{¶19} “Where the parties to a construction contract agree to a change order 

which they intend to provide complete compensation for a given change in the project, 

the party being compensated by the change order will be contractually foreclosed from 

seeking additional compensation related to that same project change.” Rabin v. 

Anthony Allega Cement Contractor, Inc., Franklin App. Nos. 00AP-1200 & 00AP-1241, 
2001-Ohio-4057. Furthermore, change orders constitute part of the contract between 

the parties. High Voltage Systems Div., The L.E. Myers Co. v. Ohio Dept. of Transp.

(Dec. 19, 1978), Franklin App. No. 78AP-88. 

{¶20} The evidence demonstrates that the parties intended for Change Order 

No. G-02 to be a final and complete resolution of the issues relating to the utility pole 

relocation. As such, the court finds that the terms of Article GC 7 and Change Order 

No. G-02 bar Applied from seeking additional compensation in relation to the utility pole 

relocation. 

{¶21} 2. “Downspout relocation necessitated by existing concealed 

conditions which was belabored by the design group to an appropriate 

resolution. 37 days.” 

{¶22} Legg testified that when Applied began to excavate at the Wilmington 

Outpost, a significant amount of groundwater was discovered. According to Legg, 

Applied attempted to pump the water out of the excavated foundation trenches, but the 

ground remained too saturated to build the foundation according to the project 

specifications. Legg stated that this problem resulted from naturally occurring 

groundwater, a downspout on the existing structure which emptied rainwater onto the 

project site, and water accumulating in a pit within the project site where an 

underground storage tank was once located. According to Legg, groundwater issues 

delayed Applied from working at the Wilmington Outpost from August 29, 2006, to 

October 4, 2006. 

{¶23} On October 27, 2006, the parties signed Change Order No. 1, which 

stated that “[g]roundwater was encountered during initial excavation at Wilmington site” 

and that, as a result, Applied was to install perforated drainage tile at the site which 

would empty into an existing catch basin. (Defendants’ Exhibit 7.) Change Order No. 1 

provided that Applied would receive $650 in additional compensation and that the 

contract completion date would be extended from January 3, 2007, to January 12, 2007. 

{¶24} Additionally, on December 28, 2006, the parties signed Change Order 

No. 5, which stated that, “due to water infiltration problems,” Applied was to excavate an 

additional six inches in the foundation trench and then pour a concrete “mud pad” in the 

trench so as to provide a stable surface on which to lay the footer. (Defendants’ Exhibit 
8.) Change Order No. 5 provided that Applied would receive additional compensation in 

the amount of $2,413.61. 

{¶25} Legg, Burnie, and Meeds testified that Change Orders Nos. 1 and 5 

were intended to address all groundwater issues, including the downspout which 

emptied water onto the project site. Legg testified that despite signing the change 

orders on behalf of Applied, he felt that they did not adequately compensate Applied, 

particularly to the extent that they failed to include compensation for overhead and 

profit. 

{¶26} Upon review of the evidence, the court finds that the parties intended 

for Change Orders Nos. 1 and 5 to provide complete and final resolution of all 

groundwater issues. Although Legg testified that he did not agree with these change 

orders, he nonetheless signed them on behalf of Applied. As previously stated, 

Subparagraph GC 7.1.1.4 of the contract provides that agreement to a change order is 

“final and without reservation of any rights.” Accordingly, the terms of Article GC 7 and 

Change Orders Nos. 1 and 5 bar Applied from seeking additional compensation in 

relation to the groundwater issues. 

{¶27} 3. “The existing out of level building concealed condition that 

when brought to the attention of the design group failed to give appropriate 

direction and redesign as requested by Applied Contracting Corp. 80 days.” 

{¶28} When Applied prepared to lay the footer and foundation for the addition 

to the Blue Ash Outpost, it discovered that the footer on the existing structure was 

approximately three inches out of level. There is no question that this issue was 

previously unknown to all parties and that it was thus not addressed in the project plans. 

Legg and Burnie testified that when Applied requested instructions from ASA on how to 

proceed in light of this discovery, ASA directed Applied to proceed with the block 

foundation as planned, but to match the profile of the existing structure, even though 

this would result in the addition also being out of level. 

{¶29} Applied built the foundation according to ASA’s directive. Afterward, 

Applied grouted the foundation blocks with cement and used vertical rods as 

reinforcement; however, while this was the method of construction shown in the project 

drawings, the project specifications stated that an additional wire-mesh reinforcement 
product known as Durawall was to be installed within the mortared joints of the block 

foundation. Legg acknowledged that Applied must have failed to review the project 

specifications. 

{¶30} On September 20, 2006, ASA issued a field work order directing 

Applied to remove the block foundation “for non-conformance with the contract 

documents” and to replace it with a poured concrete foundation. Burnie and Meeds 

stated that the order to replace the block wall with a poured concrete wall resulted from 

Applied’s failure to install Durawall and Applied’s failure to keep the footer dry during 

construction, which could weaken the foundation. In contrast, Legg testified that he 

believed defendants raised the Durawall issue in order to provide a convenient reason 

for retracting ASA’s original directive to build the addition out of level. 

{¶31} On December 15, 2006, the parties executed Change Order No. 4, 

which states, in part: “The existing CMU foundation was required by the associate to be 

removed due to multiple work and site related conditions. The conclusion by all parties 

was that a poured concrete foundation wall was the best alternative to achieve a level 

foundation elevation to begin CMU block walls.” (Defendants’ Exhibit 3; Plaintiff’s 

Exhibit J.) Change Order No. 4 provided that Applied would receive additional 

compensation in the amount of $8,897. In conjunction with Change Order No. G-02, 

which pertained to the utility pole issue and was executed on the same day, the contract 

completion date was extended from January 12, 2007, until February 18, 2007.

{¶32} Burnie testified that the parties intended for Change Order No. 4 to 

resolve all issues associated with the foundation problems. Legg testified that he 

believed Change Order No. 4 pertained to certain costs associated with the foundation 

problems, but that the matter of delays which Applied consequently incurred was a 

separate issue which the change order did not redress. 

{¶33} The weight of the evidence establishes that the parties intended for 

Change Order No. 4 to provide complete and final resolution of the issues pertaining to 

the construction of the foundation at the Blue Ash Outpost. Accordingly, the terms of 

Article GC 7 and Change Order No. 4 bar Applied from seeking additional 

compensation in relation to the foundation issue. 
{¶34} 5. “Lateral design delay which the design group failed to properly 

design according to the existing conditions. 13 days.” 

{¶35} 8. “Catch basin addition on the new lateral line which the design 

group failed to design for the storm sewer conflict even after warned of the 

conflict by their own representative and Applied Contracting Corp. 2 days.”

{¶36} Paragraphs five and eight of Applied’s June 5, 2007 notice of claim are 

similar in nature and shall be addressed together. The design plan for the Wilmington 

Outpost contemplated that wastewater inside the new wash bay would drain along the 

sloping cement floor of the bay, into a trench drain located in the middle of the floor, 

through an oil separator, and then through a buried lateral pipe which would connect 

with an existing sanitary sewer. This design plan contemplated that water would 

naturally flow through the buried lateral pipe by force of gravity, dropping in elevation 

from the oil separator to the sanitary sewer. However, the parties discovered during 

construction that there was not a sufficient drop in elevation from the oil separator to the 

sanitary sewer to allow the water to naturally flow in this manner. Legg stated that the 

parties also discovered around this time that an existing storm sewer intersected the 

path in which the lateral pipe was to be installed. 

{¶37} Legg testified that on November 30, 2006, he sent ASA a request for 

information pertaining to both the elevation and storm sewer issues. Legg stated that 

Applied was delayed for 13 days while it awaited a response from ASA. 

{¶38} The solution that ASA ultimately developed for the elevation issue 

involved routing a section of lateral pipe from the oil separator into a sump pit, and then 

installing a pump in the pit to propel water through another section of lateral pipe and 

into the sanitary sewer. As to the issue of the storm sewer that intersected the 

proposed path of the lateral pipe, Legg and Burnie stated that defendants decided to 

address this problem by rerouting the lateral pipe through a catch basin which ODOT 

employees would build on their own. Legg stated that Applied was delayed for two days 

while it waited for ODOT to build the catch basin. 

{¶39} On March 16, 2007, the parties executed Change Order No. 21, which 

states, in part: “This Change Order is to provide the contractor with additional funds to 

pay for the requirement for additional depth of excavation and fill from the existing 

building to the newly required sump pit area. The discovery was made that the actual 
height of the invert [at] the lateral connection from the new expansion trench drain was 

2’-0” +/- lower than was depicted on earlier as-built drawings. The sump pit/pump was 

required to be installed to get the water from the building to the newly discovered invert 

elevation.” (Defendants’ Exhibit 10.) The change order provided that Applied would 

receive additional compensation in the amount of $4,191.83, and an extension of the 

contract completion date from February 18, 2007, until March 3, 2007. 

{¶40} Legg testified that although Applied received additional compensation 

and a 13-day extension of time, he does not believe that Change Order No. 21 

adequately redressed the delay in ASA’s responding to his request for information. 

{¶41} However, the court finds that the parties intended for Change Order 

No. 21 to provide complete and final resolution of the issues pertaining to the differing 

site conditions that required redesigning, and delayed construction of, the lateral pipe at 

the Wilmington Outpost. Accordingly, the terms of Article GC 7 and Change Order No. 

21 bar Applied from seeking additional compensation in relation to such issues. 

{¶42} 4. “Delay of sump installation which the design group failed to 

properly design according to the existing conditions and then failed to direct the 

other prime contractor into a timely installation after the redesign. 24 days.” 

{¶43} 6. “Mechanical prime contractor delays in maintaining project 

scheduling, providing temporary heat and perform his cutting and patching as 

required by contract. The group failed to direct this prime contractor to maintain 

his contractual obligations after repeated request[s] to do by Applied Contracting 

Corp. 15 days.”

{¶44} 11. “Trench drain removal and replacement which the design 

group attempted to force Applied Contracting Corp. to incur the cost of. While 

alleviating the other prime responsibility for the cost, alleging failure to inspect, 

while in fact it was a latent defect by the other prime to properly install his work 

which floated during the pour. 24 days.”

{¶45} 12. “Delay of asphalt repairs which was brought on by the 

group[’]s failure to coordinate with the other prime a deal that Applied 

Contracting Corp. was not party to and ODOT’s failure to execute [its] own self 

performed work. 10 days.”
{¶46} Paragraphs four, six, eleven, and twelve of Applied’s June 5, 2007 

notice of claim are similar in nature and shall be addressed together. Applied contends 

that it suffered damages as a result of Airstream allegedly delaying its performance in 

several aspects of the project. Applied further argues that such damages are 

attributable to defendants to the extent that defendants and ASA did not enforce the 

project schedule. Legg stated that he informed ASA several times about Airstream’s 

alleged delays and requested that Airstream be removed from the project. 

{¶47} Article GC 4 states, in part: 

{¶48} “4.1.2 The Contractor shall perform the Work so as not to interfere, 

disturb, hinder or delay the Work of other Contractors. The sole remedy which may be 

provided by the Department for any injury, damage or expense resulting from 

interference, hindrance, disruption or delay caused by or between Contractors or their 

agents and employees shall be an extension of time in which to complete the Work. 

This provision is intended to be, and shall be construed as, consistent with, and not in 

conflict with Section 4113.62, ORC. 

{¶49} “4.1.2.1 If the Contractor, or any of the Contractor’s Subcontractors or 

Material Suppliers, causes damage or injury to the property or Work of any other 

Contractor, or by failure to perform the Work with due diligence, delays, interferes with, 

hinders or disrupts any other Contractor, who suffers damage, injury or expense, the 

Contractor shall be responsible to the other Contractor for such damage, injury or 

expense. 

{¶50} “4.1.2.2 The intent of Subparagraph GC 4.1.2.1 is to benefit the other 

Contractors on the Project and to demonstrate that each other Contractor who performs 

Work on the Project is third party beneficiary of the Contract.” 

{¶51} To the extent that Applied claims that it suffered damages as a result 

of Airstream’s delays, Article GC 4 provides that Applied shall seek its remedy from 

Airstream. Pursuant to Paragraph GC 4.1.2, the sole remedy which defendants could 

provide to Applied for Airstream’s delays was an extension of time. 

{¶52} Although Applied argues that Airstream’s delays are attributable to 

defendants in that defendants and ASA failed to enforce the project schedule or 

otherwise committed a breach of their contracts with either Applied or Airstream, the 

greater weight of the evidence shows that defendants and ASA worked to facilitate 
timely completion of the project in adherence to the contract. Defendants and ASA 

were responsive to Applied’s concerns and extended the project completion date as 

needed. Indeed, the evidence shows that the project was on pace to be timely 

completed until Applied withdrew from the project. 

{¶53} Further, Paragraph GC 4.1.4 of the contract provides that coordination 

among contractors was the responsibility of Applied. Upon review, the court is not 

persuaded that Applied sufficiently coordinated its work with Airstream as required by 

the contract. 

{¶54} Accordingly, the court finds that Applied has failed to prove its claims 

that defendant committed a breach of contract, either through third-party beneficiary or 

standard breach of contract theories. 

{¶55} 7. “Interior painting change delay which the group failed to 

design the protective coating that was applicable with its final design intent. 3 

days.”

{¶56} Legg testified that Applied was delayed by three days as a result of 

defendants’ decision to utilize a polyurethane paint for the wash bays rather than the 

latex paint specified in the plans. 

{¶57} On January 26, 2007, the parties executed Change Order No. 9, which 

stated, in part: “Paint the Wilmington and Blue Ash WASH BAY interiors with one coat 

of polyurethane and coat of epoxy paint in lieu of the specified (2) coats of latex paint as 

discussed. The Blue Ash site has two bays, only one of which is a wash bay - the other 

is a garage bay to remain as latex paint. This epoxy and polyurethane paint coating is 

to be applied over the block filler as specified in the base bid contract documents and 

per manufacturer recommendations. It was noted by ODOT that the latex paint 

currently specified has been found on other projects to not hold up to the wash bay 

conditions and a more durable paint is required for longevity.” (Defendants’ Exhibit 17.) 

Pursuant to Change Order No. 9, Applied received additional compensation in the 

amount of $3,857. Upon review, the court finds that the parties 

intended for Change Order No. 9 to provide complete and final resolution of the issues 

pertaining to the interior paint selection. Accordingly, the terms of Article GC 7 and 

Change Order No. 9 bar Applied from seeking additional compensation in relation to this 

issue. 
{¶58} 9. “Apron modifications * * * inappropriately design[ed] with out 

reinforcement. 2 days.”

{¶59} Legg testified that Applied was delayed for two days while defendants 

redesigned the concrete apron at the entryway to the wash bay at the Wilmington 

Outpost. According to Legg, defendants redesigned the apron in order to include a 

reinforcement product over which the concrete would then be poured. 

{¶60} On March 16, 2007, the parties executed Change Order No. 22, which 

stated, in part: “This Change Order is to provide the contractor with additional funds to 

pay for the requirement for fibermesh to be installed in the concrete for the aprons at 

both locations and also increase the depth of the apron at the joint to the asphalt 

pavement.” (Defendants’ Exhibit 18.) The change order provided that Applied would 

receive additional compensation in the amount of $962.46. 

{¶61} The weight of the evidence establishes that the parties intended for 

Change Order No. 22 to provide complete and final resolution of the issues pertaining to 

the redesign of the concrete apron. Accordingly, the terms of Article GC 7 and Change 

Order No. 22 bar Applied from seeking additional compensation in relation to this issue. 

{¶62} 10. “Additional time required to install sump location bollards. 1 

day.” 

{¶63} Legg stated that Applied was delayed one day as a result of 

defendants’ 

{¶64} decision to have Applied install protective bollards around the sump pit 

at the Wilmington Outpost so as to prevent vehicles from driving over the pit. 

{¶65} On March 16 and 17, 2007, the parties executed Change Order No. 

20, which states, in part: “This Change Order is to provide the contractor with additional 

funds to pay for the requirement for new painted steel bollards around the newly 

required sump pit area. The discovery was made that the actual height of the invert [at] 

the lateral connection from the new expansion trench drain was 2'-0" +/- lower than was 

depicted on earlier as-built drawings. The sump pit/pump was required to be installed to 

get the water from the building to the newly discovered invert elevation.” (Defendants’ 

Exhibit 9.) The change order provided that Applied would receive additional 
compensation in the amount of $753.57, and the contract completion date was 

extended from February 18, 2007, until March 3, 2007. 

{¶66} The weight of the evidence establishes that the parties intended for 

Change Order No. 20 to provide complete and final resolution of the issues pertaining to 

the installation of the steel bollards. Accordingly, the terms of Article GC 7 and Change 

Order No. 20 bar Applied from seeking additional compensation in relation to this issue. 

INVOICES 

{¶67} Applied alleges that defendants committed a breach of contract by 

failing to remit payment on the four invoices, dated June 21, 2007, which were 

submitted to ODOT and collectively requested payments totaling $109,083.99. 

(Plaintiff’s Exhibit W.) These one-page documents, which set forth only minimal details 

and are not accompanied by supporting documentation, requested payment on various 

grounds. 

{¶68} In one invoice, Applied sought $76,563.29 in “damages for delay due 

to owners inactions.” However, this is the same amount requested due to the alleged 

delays cited in Applied’s June 5, 2007 notice, which the court has determined to be 

without merit. 

{¶69} Also included in the invoices is a request for $379.48 in additional 

compensation for work associated with the “out of level building at [the] Blue Ash 

Outpost.” However, as previously stated, Applied agreed to resolve that issue through 

Change Order No. 4 and is thus contractually barred from seeking additional 

compensation for the same. 

{¶70} One of the invoices requests additional compensation in the amount of 

$7,590.01 for replacing the original trench drain which Airstream installed at the 

Wilmington Outpost; removing dirt from the sump and oil separator at the Wilmington 

Outpost, which “Airstream failed to remove”; and repairing wall surfaces which 

Airstream damaged at the Wilmington Outpost. As previously stated, though, the 

contract unambiguously states that Applied must pursue from Airstream a remedy for 

damages caused by Airstream. And, as the court has previously found, to the extent 

that Applied attributes damages allegedly caused by Airstream to defendants, such 

claim is without merit. 
{¶71} Applied also requested additional compensation in the amount of 

$2,296.90 for additional bond costs that it incurred as a result of increases in the 

contract price. Subparagraph GC 7.1.1.1 states: “The Contractor shall proportionately 

increase the amount of the Bond whenever the Contract Price is increased.” However, 

inasmuch as increases in the contract price occurred through the execution of change 

orders, the change orders afforded “full and complete satisfaction for all direct and 

indirect costs” associated with the project changes described therein. The court finds 

that Applied’s agreement to change orders which caused the contract price to increase 

contractually barred Applied from later seeking additional compensation. 

{¶72} In another invoice, Applied requests an interest payment of $129.66 for 

an alleged 10-day delay in the payment of Applied’s Draw Request No. 4. Upon review, 

the court finds that Applied failed to produce sufficient evidence, such as the relevant 

dates, in order to prevail upon this claim. 

{¶73} Finally, the invoices include a request for payment in the amount of 

$932.25 pursuant to Change Order No. 26 (Plaintiff’s Exhibit T), and a request for 

payment in the amount of $21,192.40, representing Applied’s contractual Payment 

Request No. 7. Legg testified that these invoices comprise Applied’s request for final 

payment, representing the balance of Applied’s contractually-approved compensation. 

Burnie testified, however, that these invoices did not comply with the contractor 

payment process set forth in Article GC 9 inasmuch as Applied failed to provide any 

documentation to substantiate its right to final payment. 

{¶74} Article 9 states, in part: 

{¶75} “9.2.1 The Contractor shall submit monthly to the Associate an 

itemized Contractor Payment Request for Work performed based upon the Schedule of 

Values. * * * 

{¶76} “9.2.1.1 The Contractor Payment Request shall be supported by 

documentation substantiating the Contractor’s right to payment. The Contractor shall 

supply such additional documentation as the Associate may request in connection with 

each payment to the Contractor. 

{¶77} “9.2.1.2 Contractor payroll reports for the period of time indicated shall 

be attached to one (1) copy of every Contractor Payment Request * * * 
{¶78} “9.2.1.3 The Contractor shall list on the Contractor Payment Request 

any approved Change Orders processed and performed during the time covered by the 

Contractor Payment Request. 

{¶79} “* * * 

{¶80} “9.7.1 The Contractor, as a condition precedent to * * * final payment, 

shall provide all documents pursuant to Subparagraph GC 11.1.1 for approval by the 

Associate. 

{¶81} “9.7.1.1 The Contractor shall execute an affidavit to certify that the 

Contractor has complied with all requirements of Section 4115, ORC. 

{¶82} “9.7.1.2 The Contractor shall execute an affidavit to certify that all 

Subcontractors and Material Suppliers have been paid in full for all Work performed or 

materials furnished for the Project.” 

{¶83} Further, Paragraph GC 11.1.1 states that “[t]he Contractor, as a 

condition precedent to * * * final payment, shall provide all Project record documents to 

the Associate for approval, which may include, without limitation” various documents 

such as payroll reports, inspection certificates, as-built drawings, and an affidavit to 

certify that all subcontractors and material suppliers have been paid in full. 

{¶84} The court finds that Applied failed to prove that it complied with the 

process for requesting final payment under the contract. The one-page, cursory invoice 

that Applied offered as evidence of its request for final payment lacks any substantiating 

documentation and thus fails to satisfy the requirements of Articles GC 9 and 11 relating 

to a request for final payment. Moreover, the invoice reflects that it was submitted to an 

ODOT district office rather than to ASA, as required by Articles GC 9 and 11. 

{¶85} Accordingly, the court finds that Applied failed to prove that defendants 

committed a breach of contract by declining to remit payment in response to Applied’s 

invoices. 

UNJUST ENRICHMENT

{¶86} With respect to Applied’s claim for unjust enrichment, the Tenth District 

Court of Appeals has held that “the doctrine of unjust enrichment does not apply when a 

contract actually exists; it is an equitable remedy applicable only when the court finds 

there is no contract.” Alternatives Unlimited-Special, Inc. v. Ohio Dept. of Edn., Franklin 
App. No. 08AP-396, 2008-Ohio-6427, ¶23; see also Struna v. Ohio Lottery Comm., 

Franklin App. No. 03AP-787, 2004-Ohio-5576, ¶22, quoting Turner v. Langenbrunner, 

Warren App. No. CA2003-10-099, 2004-Ohio-2814, ¶38 (“‘Unjust enrichment is an 

equitable doctrine to justify a quasi-contractual remedy that operates in the absence of 

an express contract or a contract implied in fact to prevent a party from retaining money 

or benefits that in justice and equity belong to another.’”) In the instant case, the subject 

matter of Applied’s unjust enrichment claim is governed by the terms of the parties’ 

contract. Consequently, the doctrine of unjust enrichment has no application. 

{¶87} Based on the foregoing, the court finds that Applied failed to prove any 

of its claims by a preponderance of the evidence. 

DAS AND ODOT’S COUNTERCLAIMS

{¶88} DAS and ODOT claim that Applied committed a breach of contract in 

that (1) Applied failed to properly apply interior and exterior paint at the Wilmington 

Outpost; (2) Applied failed to properly construct a parapet wall at the Wilmington 

Outpost; (3) Applied failed to properly install pipe at the Wilmington Outpost; and (4) 

Applied failed to complete its work in a timely manner, thereby entitling DAS and ODOT 

to liquidated damages under the contract. 

INTERIOR AND EXTERIOR PAINTING

{¶89} DAS and ODOT allege that the application of interior and exterior paint 

at the Wilmington Outpost was “grossly inadequate and not performed in a workmanlike 

manner.” Legg acknowledged that some peeling and blistering occurred in a few 

spots, which he attributed to moisture in the block walls that prevented the paint from 

properly adhering. Legg stated that he believes any such moisture resulted from 

groundwater being absorbed into the foundation and “wicking” upward through the block 

wall. 

{¶90} Anthony Caludis, who is the superintendent of Flannery Painting, Inc., 

stated that the Sherwin-Williams paints which were used on the walls were high quality 

products that met the project specifications. Caludis testified that when he was 

informed in mid-2007 of a complaint pertaining to peeling paint, he visited and 

investigated the site. Caludis related that he saw some areas of blistered paint on the 
exterior walls, which he attributed to the block being moist while the paint was applied. 

As for the interior, Caludis stated that he saw blistered paint in one area of the ceiling. 

{¶91} Tim Bleh is an employee of Sherwin-Williams who advises customers 

in selecting appropriate paints. Bleh testified that he accompanied Caludis to the site in 

mid-2007 in response to the complaint that Caludis received. Bleh related that he saw a 

few small blisters in the exterior paint, but he opined that the paint had not failed overall 

and that it is common in a project of that scale to find a few areas of paint in need of 

retouching. Bleh stated that inside the wash bay, he saw one area of blistered paint on 

the ceiling underneath the parapet wall. Bleh tested the moisture content of the exterior 

walls and determined that they were moist, probably as a result of groundwater “wicking 

its way up” through the blocks. 

{¶92} Burnie testified that the exterior paint blistered soon after its 

application, but that the interior paint did not blister. Burnie stated that he believes the 

blistering did not result from moisture in the walls inasmuch as it occurred on only one 

side of the wall. 

{¶93} Upon review, the court finds that DAS and ODOT failed to prove that 

the peeling and blistering of paint occurred as a result of a failure by Applied or its 

subcontractor to properly apply the paint in a manner consistent with the project 

specifications. Accordingly, the court shall enter judgment in favor of plaintiff as to this 

portion of the counterclaim. 

PARAPET WALL

{¶94} The wash bay addition at the Wilmington Outpost was designed to be 

about four feet taller than the existing structure to which it would be attached. In order 

to achieve a uniform appearance between the wash bay and the existing structure, the 

project design included a four-foot high parapet wall to be built atop the outer walls of 

the existing structure. 

{¶95} DAS and ODOT allege that Applied built the parapet wall in a defective 

and unworkmanlike manner, and that, as a result, it cracked and is now damaging the 

original structure. Burnie stated that multiple cracks exist in the parapet wall and that 

the roof over the original portion of the structure leaks along the wall. Meeds stated that 

he visited the Wilmington Outpost on September 15, 2009, and determined that a “weep 
joint” on a parapet cap had been painted over and was thereby trapping moisture inside 

the masonry wall. 

{¶96} Legg testified that Applied’s subcontractor, Greg Jones Masonry, built 

the parapet wall according to the project specifications. Legg stated that any cracks 

which subsequently developed are attributable to design flaws, including a lack of 

vertical wall reinforcement in the existing wall upon which the parapet wall was built; a 

membrane between the existing wall and the parapet wall which did not allow for a 

sufficient bond at the bed joint between the walls; unstable ground due to excessive 

groundwater; and the existing wall is heated by the interior of the building whereas the 

parapet wall is not heated, thus resulting in different expansion and contraction rates 

between the two sections of the wall. 

{¶97} Kevin Kramer is a project manager for William Kramer & Son, Inc., the 

subcontractor that Applied hired to perform the roofing work at the Wilmington Outpost. 

Kramer stated that he was contacted about one year after the roofing work was 

complete and apprised of a complaint about a leak in the roof of the original structure 

near the parapet wall. Kramer stated that he consequently visited the site and 

investigated, but found that the roofing membrane was watertight and that there was no 

evidence to substantiate a leak. 

{¶98} The court finds that DAS and ODOT failed to prove that any defect in 

the parapet wall occurred as a result of a failure by Applied or its subcontractor to 

properly construct the wall in a manner consistent with the project specifications. 

Accordingly, judgment shall be entered in favor of plaintiff as to this portion of the 

counterclaim. 

LATERAL PIPE 

{¶99} DAS and ODOT allege that Applied failed to properly install the lateral 

pipe which runs into and out of the sump pit at the Wilmington Outpost, and that, as a 

result, the pipe leaks in or around the sump pit. 

{¶100} Pursuant to Change Order No. 21, Applied installed the pipe to and 

from the sump pit. (Plaintiff’s Exhibit BB.) Legg testified that after Applied installed the 

pipe, Airstream installed the sump pump and connected it to the pipe. Thus, according 

to Legg, any leak at the connections between the pipe and the sump pump is 

attributable to Airstream. 
{¶101} Burnie acknowledged that Airstream was responsible for installing the 

sump pump, and that Change Order No. 21 required Applied to only install the pipe, not 

connect the pipe to the sump pump. Further, Burnie admitted that the responsibilities of 

Applied and Airstream regarding the sump pump installation were not entirely clear to 

him. 

{¶102} Upon review, the court finds that DAS and ODOT failed to prove that 

Applied was responsible for any leak in the connections between the sump pump and 

the lateral pipe, and judgment shall be entered in plaintiff’s favor as to this portion of the 

counterclaim. 

LIQUIDATED DAMAGES

{¶103} DAS and ODOT assert that they are entitled to liquidated damages as 

a result of Applied’s failure to complete the project in a timely manner. 

{¶104} Paragraph K-2 3.3 of the contract states, in part: “Failure to complete 

all Work within the period of time specified, or failure to have the applicable portion of 

the Work completed upon any milestone completion date, shall entitle the Department 

to retain or recover from the Contractor, as Liquidated Damages, and not as a penalty, 

the applicable amount set forth in the following table for each and every calendar day 

thereafter until Contract Completion or the date of completion of the applicable portion 

of the Work, unless the Contractor timely requests and the Department grants an 

extension of time in accordance with the Contract Documents.” (Plaintiff’s Exhibit A1.) 

The table at paragraph K-2 3.3 of the contract provides that the daily rate of liquidated 

damages shall be $500. 

{¶105} The adjusted contract completion date for the project was March 3, 

2007, but, in accordance with the contract, ASA deferred completion of remedial work 

and other items until May 1, 2007. (Plaintiff’s Exhibit U.) Legg testified that Applied 

substantially completed its work by the contract completion date and also timely 

performed the deferred work, notwithstanding certain remedial work on the wash bay 

floor of the Wilmington Outpost which Applied refused to perform. Meeds agreed that 

Applied ceased work by about the beginning of May 2007, without carrying out the 

remedial work requested for the wash bay floor. 
{¶106} Burnie testified that as a result of both Applied and its bonding 

company refusing to perform any further work, defendants terminated Applied’s contract 

and hired another contractor, ISPN, to finish the remaining work. The evidence 

demonstrates that ISPN performed this work in late September 2007, approximately five 

months after Applied ceased work on the project. Around that same time, defendants 

also issued change orders which provided that ISPN would be compensated for 

performing additional work not specified in the contract, such as applying an epoxy 

coating to the wash bay floor. (Plaintiff’s Exhibit Q.) 

{¶107} The evidence fails to establish that the delay in project completion is 

attributable to Applied as to entitle DAS and ODOT to liquidated damages. Applied 

declined ASA and defendants’ request to remedy the wash bay floor no later than about 

May 1, 2007. Although the remedial work entailed the relatively minor task of 

smoothing and sloping certain areas of the wash bay floor and then applying an epoxy 

coating over the floor, approximately five months passed before defendants had another 

contractor perform the same, and Burnie acknowledged that ODOT had already begun 

using the wash bay by that time. The evidence presented does not explain the reason 

for the delay, nor does it establish when Applied was terminated from the project, when 

Applied’s bonding company was contacted, or when and how ISPN came to be hired. 

{¶108} Based upon this evidence, the court finds that DAS and ODOT have 

failed to prove by a preponderance of the evidence that any portion of the delay was 

attributable solely to Applied. See Lee Turzillo Contracting Co. v. Messer & Sons, Inc. 

(1969), 23 Ohio App.2d 179, 184 (“* * * where an owner and a contractor are each 

responsible for a certain amount of unreasonable delay in completing the work, the 

owner is barred from assessing the contractor with liquidated damages for whatever 

delay might have occurred in the completion of the work.”) Accordingly, the court finds 

that DAS and ODOT have failed to prove by a preponderance of the evidence that they 

are entitled to liquidated damages. 

{¶109} For the foregoing reasons, the court renders judgment in favor of 

defendants as to plaintiff's claims for relief and in favor of plaintiff as to DAS and 

ODOT’s counterclaim. 

 

 
Court of Claims of Ohio

The Ohio Judicial Center 

65 South Front Street, Third Floor 

Columbus, OH 43215 

614.387.9800 or 1.800.824.8263 

www.cco.state.oh.us 

 

APPLIED CONTRACTING CORP. 

 Plaintiff/Counter Defendant 

 v. 

OHIO DEPARTMENT OF TRANSPORTATION, et al. 

 Defendants/Counter Plaintiffs 

 and 

STATE OF OHIO 

 Defendant

Case No. 2008-07195 

Judge Joseph T. Clark 

JUDGMENT ENTRY

{¶110} This case was tried to the court on the issue of liability. The court has 

considered the evidence and, for the reasons set forth in the decision filed concurrently 

herewith, the court enters judgment in favor of defendants as to plaintiff's complaint and 

in favor of plaintiff as to DAS and ODOT’s counterclaim. Court costs are to be shared 

equally by the parties. The clerk shall serve upon all parties notice of this judgment and 

its date of entry upon the journal. 

 

 JOSEPH T. CLARK 

 Judge 
cc: 

Bryan R. Perkins 

6470 A Glenway Avenue, #178 

Cincinnati, Ohio 45211 

Kristin S. Boggs 

Mark R. Wilson 

Paula Luna Paoletti 

William C. Becker 

Assistant Attorneys General 

150 East Gay Street, 18th Floor 

Columbus, Ohio 43215-3130 

RCV/dms

Filed August 22, 2011 

To S.C. reporter October 13, 2011