Opinion ID: 2592878
Heading Depth: 1
Heading Rank: 3

Heading: When Did Carrothers Achieve Substantial Completion?

Text: Carrothers' first argument is that the district court erred in awarding the City liquidated damages by using a substantial completion date of January 12, 2004. Carrothers asserts it really achieved substantial completion, as that term is defined under the contract documents, by November 3, 2003, when the construction project progressed to the point where the City was able to occupy the new facility, shut down the old treatment plant, and simultaneously transition the City's water service using the new facility. In making this argument, Carrothers acknowledges it did not achieve substantial completion by the contractually required date of July 26, 2003. At oral argument, Carrothers' counsel conceded the contractor owes liquidated damages at the $850 per diem amount specified in the parties' agreement for the period of time between July 26, 2003 and November 3, 2003, when, Carrothers says, the new plant began operations. We note an immaterial factual discrepancy between the parties as to whether the plant began these limited operations on November 3, as claimed by Carrothers, or November 10, as testified to by Moore, the project engineer. But it is sufficient here to note this entire controversy reduces itself down rather quickly from a $145,350 assessment to approximately $61,500 based on Carrothers' admissions. With this acknowledgment, Carrothers argues that under the contract documents as written, it achieved substantial completion by November 3, 2003. Quoting from a selected portion of the contract's definition of substantial completion, Carrothers says it was in November 2003 that the Work (or a specified part thereof) actually was being used for the purposes for which it is intended. Carrothers argues the City began using the new facility in November 2003 for the purposes for which it is intended because the City shut down the old facility and switched its operations to the new plant, even though the City had to operate the facility manually and did not have in operation the computer-based control system specified in the contract. We reject Carrothers' contention. To make its argument, Carrothers ignores the language, taken as a whole, of the plain and unambiguous agreement between these parties. As quoted above, this contract expressly states: A new computer based control system for the improvements is included in the Work. To accept Carrothers' interpretation would require us to overlook the undisputed fact that the computerized control system was not operational until January 12, 2004. This asks too much, given the agreement between the parties and its clear expression of the parties' intent as to what performance was required to substantially complete the work. In addition, Carrothers would have us give no meaning to the specific provision adopted by both parties that delegated to their project engineer the task of determining when the work would be deemed sufficiently complete in accordance with the Contract Documents that it could be utilized for the purposes for which it is intended. When the contracting parties clearly intended to make such a delegation, this court should respect those wishes absent a showing the engineer acted in bad faith when making this determination. No evidence exists in this record that the project engineer was acting in bad faith. MKEC determined Carrothers did not substantially complete the project until January 12, 2004, because that was the date when Carrothers finished its work on the control system and other safety features. MKEC's determination is consistent with the plain language contained within the contract documents and the undisputed facts set out in the parties' cross-motions for summary judgment. Since Carrothers was willing to accept the project engineer's determination as to completion dates when it initially contracted with the City, this court sees no reason now, and on the basis of this record, how it can contractually reject those determinations. In summary, we find the district court and Court of Appeals did not err in determining July 26, 2003, was the date Carrothers was contractually required to substantially complete the project. In addition, we find the district court and Court of Appeals correctly determined January 12, 2004, was the date when substantial completion actually was achieved based on the undisputed facts in this case and the plain and unambiguous language in the agreement. Accordingly, it was not error to find Carrothers was 170 days late in substantially completing this project pursuant to these contract terms.