Opinion ID: 2655158
Heading Depth: 3
Heading Rank: 1

Heading: The LaSalle-Gerken Contract

Text: LaSalle, a Michigan general contractor, entered into a contract with non-party Menard, Inc. (“Owner”) to build a home improvement store in Oregon, Ohio. On July 18, 2007, LaSalle entered into a fixed price subcontract (“Project”) with Gerken, an Ohio paving company, to pave the access roads and parking lots for the Project, including an outlot on Curtis Road, and to complete the items on a punchlist. In return, LaSalle agreed to pay Gerken a fixed price of $545,705.00. The contract required Gerken to pave in accordance with Ohio Department of Transportation (“ODOT”) guidelines, which set a minimum air temperature for paving of 40 °F. According to the contract, a non-party would complete the preliminary grading work by October 26, 2007. Then, Gerken would need to finish all asphalt paving by November 16, 2007, and the entire Project no later than December 3, 2007. The contract also required Gerken to provide a two year warranty on all completed work. The contract included provisions governing Project changes. Section 5.2 provided that “[u]nless otherwise directed by [LaSalle] in writing, any increase or decrease in [Contract] price and time of performance resulting from changes shall be agreed upon in writing by the parties hereto in advance of performance of the work.” (emphasis added). Section 5.4 required that “[a]ny claim for an increase in the Subcontract price . . . based upon Contractor’s written or verbal order, . . . must be made by Subcontractor to Contractor, in writing, within five (5) working days . . . [or] in any event prior to starting work involved in the claim; otherwise, the claim shall be barred. All such written claims must furnish full details and supporting documentation.” (emphasis added). Section 5.5 provided that “[Gerken] shall not be entitled to any increase in the [Contract] price . . . unless the amount of any such increase . . . has been 2 No. 12-2380 Gerken Paving, Inc. v. LaSalle Group, Inc. agreed upon in writing, accepted by Owner . . . and as a condition precedent, paid by Owner to [LaSalle].” And, Section 5.6 included a provision regarding requests by LaSalle or the Owner for “extra work” beyond the contract. The contract further allowed LaSalle to withhold payments to Gerken if Gerken breached any provision of the contract or if LaSalle had a reasonable doubt about whether Gerken could complete the work in a timely and proper manner.1 If LaSalle retained any payments, it was authorized to use the retained money to pay for the unfinished work. The contract also included a provision that shifted attorneys’ fees to Gerken if any dispute over the contract resulted in a decision in favor of LaSalle, either in whole or in part.