Opinion ID: 1638588
Heading Depth: 2
Heading Rank: 3

Heading: The Board's Claims of Breach of Contract as to Contract 15

Text: In its January 2004 order, the trial court concluded that subsection 8.11 of the standard specifications required the Board to provide Harbert with notice and an opportunity to cure before it terminated Contract 15; that the Board failed to satisfy the terms of subsection 8.11 and the requirements of applicable law; and that the Board's termination of Contract 15 was therefore wrongful. In the March 2005 judgment, the trial court concluded that its wrongful termination of Contract 15 prevented the Board from recovering on its breach-of-contract claim against Harbert and the related bond claim against Federal. [21] The Board does not argue on appeal that subsection 8.12 of the standard specifications allowed it to terminate Contract 15 in the manner that it did. Instead, the Board relies on the following arguments as to alleged error by the trial court.
Harbert and Federal do not dispute that the Board would be relieved of any obligation to comply with subsection 8.11 if Harbert in fact repudiated Contract 15. See Shirley v. Lin, 548 So.2d 1329, 1334 (Ala.1989) (Once a party to a contract repudiates the agreement, the other party is excused from further performance.). The Board argues that there was a genuine issue of material fact as to whether Harbert's conduct constituted an anticipatory breach and repudiation of Contract 15 so as to excuse the Board from providing ... notice and an opportunity to cure under subsection 8.11 of the standard specifications. Specifically, the Board argues that Harbert's anticipatory breach and repudiation took place in July and August 1997. As this Court stated in Shirley: The following rules concerning anticipatory breach, or repudiation[,] of a contract have been recognized in Alabama: `To amount to a renunciation, ... the evidence must show words or acts evincing an intention to refuse performance within the future time allowed by the contract. `... Merely because a given act or course of conduct of one party to a contract is inconsistent with the contract is not sufficient; it must be inconsistent with the intention to be ... bound by it. `.... `Repudiation, among other things, means rejection, disclaimer, renunciation, or even abandonment. `Some authorities state that the repudiation by one party must at least amount to an unqualified refusal, or declaration of inability, substantially to perform according to the terms of his obligation.'  Draughon's Business College v. Battles, 35 Ala.App. 587, 590, 50 So.2d 788, 790 (1951) ... (citations omitted). 548 So.2d at 1334 (emphasis omitted.) This Court has also stated: `A repudiation is a manifestation by one party to the other that the first cannot or will not perform at least some of his obligations under the contract.' E. Allan Farnsworth, Contracts, § 8.21, at 633-34 (1982). If a party `wrongfully states that he will not perform unless the other party consents to a modification of the contract, the statement is a repudiation.' Id. at 635, § 8.21. As a general rule, `an anticipatory repudiation gives the injured party an immediate claim to damages for total breach, in addition to discharging his remaining duties of performance.' Id. at 630, § 8.20. Congress Life Ins. Co. v. Barstow, 799 So.2d 931, 938 (Ala.2001). In support of its argument, the Board directs our attention to Harbert's July 14, 1997, letter to Asarisi, Harbert's August 18, 1997, letter to Asarisi, and Harbert's September 17, 1997, letter to Asarisi. As discussed earlier in this opinion, Harbert sent the July 14, 1997, letter purportedly after it had repeatedly attempted to repair the Combiflex system in accordance with the contract specifications. The letter stated: It is [Harbert's] position, at this point in time, that we have thoroughly exhausted all required means and methods in performing this repair work in accordance to the contract documents and as directed by ... BCM. As of July 11, 1997, we have ceased repair operations until further notice. We are hereby requesting that ... BCM now provide an alternative repair method that will resolve this situation. It is imperative that we receive your response and direction no later than July 17, 1997 to prevent further delay to the start-up of Reactor No. 2 and the timely completion of this project. .... If you have any questions or require additional information regarding this matter, please feel free to contract this office. We look forward to receiving your direction in completing these repairs to the mutual satisfaction of all parties concerned.  (Emphasis added.) The emphasized language clearly reflects that Harbert remained willing and able to make repairs to reactor basin #2 but that it believed it had complied with BCM's previous repair requests to no avail. We also note that the August 14, 1997, letter that Asarisi sent Harbert contains no indication that the Board had interpreted Harbert's July 14, 1997, letter as a repudiation of its obligations. Asarisi's August 14, 1997, letter stated, in part: ... Our daily records indicated that your present work force consists of 1 superintendent and 3 laborers. We are aware of your efforts to seal Reactor 2. However, there are still a number of items that would keep the project from starting up if Reactor 2 was ready today. We have enclosed a partial list of items that have to be completed before Reactor 2 is put on line. This is not a complete list and there may be other incomplete items that delay start up. We are quite concerned about the slow rate of progress on the project and the impact that delays have on the [Board] and the operation of the plant. Therefore, in accordance with [subsection] 8.11 of the Contract Specifications you are hereby notified that you have 10 days to start work on each of the items on the enclosed list, with the exception of items that are dependent on the completion of Reactor 2. If work has not begun on all noted items within 10 days the [Board] will notify [Federal] that the project is in default. We trust that you will provide an adequate work force to complete the work within the specified time and to avoid further actions against you. (Emphasis added.) Based on the foregoing, the July 14, 1997, letter would not support a finding that Harbert had repudiated its obligations under Contract 15. As to the Board's reliance on the August 18, 1997, letter from Harbert to Asarisi, that letter was written after Harbert had obtained an expert opinion as to the unsuitability of the Combiflex system for reactor basin # 2. The letter stated, in part: Based on the results of the inspection and Mr. Shutz's assessment thereof, it is the position of ... Harbert ... that ... BCM will now have to select an appropriate alternative method [to seal reactor basin # 2]. We trust that ... BCM will provide the appropriate repair method accordingly to minimize any further delays that have occurred to the project as a result of this matter. For the record, all work on Reactor No. 2 ceased August 13, 1997. We look forward to receiving a positive response from ... BCM no later than August 22, 1997. After Harbert sent the August 18, 1997, letter, it and Asarisi continued to dispute the appropriate repair method for reactor basin #2, and, as reflected in Harbert's September 17, 1997, letter to Asarisi and Steeves, Harbert proposed a repair method different from the repair method proposed by the Board and Asarisi. [22] Harbert closed the September 17, 1997, letter by arguing that the failure at issue was due to the choice of an improperly suited product, by warning the Board not to attempt to cover-up the problem by turning again to Sika and its product, and by stating: It is our steadfast position that we certainly cannot and will not acquiesce to the proposed method and approach by the [Board] in dealing with this problem. Thereafter, the parties correspondence reflects that Harbert continued to insist that the Board allow it to attempt its alternative sealant system while the Board proceeded with its proposed repair test, namely to have a Sika-certified installer reinstall the Combiflex system in a test cell of reactor basin # 2, and, if the system was successful in the test cell, to have the Combiflex system properly reinstalled in the remaining portions of reactor basin # 2. The foregoing correspondence reflects a sharp dispute between the parties as to the Board's  method and approach in dealing with this problem (emphasis added), i.e., the Board's attempt to confirm that the Combiflex system was suitable for reactor basin # 2 and, if so, to reinstall the system throughout the reactor basin. The correspondence does not reflect a refusal by Harbert to obey a directive from the Board or its agent, BCM, for Harbert to perform the repairs using the Combiflex system, or for Harbert to arrange and pay for a particular subcontractor to do so. The foregoing letters did not constitute substantial evidence that Harbert manifested an intent not to be bound by Contract 15, that Harbert abandoned the work on Project 15, or that Harbert exhibited an an unqualified refusal, or declaration of inability, substantially to perform according to the terms of [its] obligation under Contract 15 as to the sealing of reactor basin #2. Shirley, 548 So.2d at 1334. Likewise, the letters did not constitute substantial evidence that Harbert `wrongfully state[d] that [it] [would] not perform unless [the Board] consent[ed] to a modification of the contract.' Harbert simply continued to insist that the Board was making a mistake by proceeding with an independent party to test-repair the reactor basin using the Combiflex system rather than adopting Harbert's proposed alternative repair method. Based on the foregoing, we cannot conclude that the trial court erred by rejecting the Board's anticipatory-repudiation argument as to Contract 15.
In a brief argument inserted in the midst of the Board's discussion of anticipatory repudiation, the Board states: Also, where termination is for failure to meet a performance deadline, the law eliminates the notice requirement. Abcon Assoc., Inc. v. United States, 44 Fed.Cl. 625, 631 ([ ]1999). Harbert admittedly did not meet the December 29, 1996, contract completion date. In fact, as of the date of termination, December 8, 1997, Harbert's time for performance of Contract 15 had expired by 346 days. On July 14, 1997, Harbert gave the Board notice that it had `ceased' or discontinued Reactor Basin 2 work on July 11, 1997. Then, just so there would be no doubt, on August 18, 1997, Harbert again stated 'For the record, all work on Reactor No. 2 ceased August 13, 1997.' By its words and actions, Harbert manifested a clear intent not to complete Contract 15. It abandoned the work and refused demands to finish. Harbert and Federal have not responded to the Board's argument that Harbert's failure to timely complete Project 15 eliminated any requirement that the Board provide Harbert with notice under subsection 8.11, nor have Harbert and Federal discussed the pertinence of Abcon Associates, Inc. v. United States, 44 Fed.Cl. 625 (1999). However, after reviewing Abcon, we are not convinced by the Board's ephemeral, conclusory argument, even if Abcon correctly reflects the law in Alabama, an issue we do not decide. In Abcon, the Court of Federal Claims concluded, based on the language of the contract at issue there and a pertinent federal regulation governing contracts with the United States Postal Service, that in order [t]o terminate for a failure to make progress, an agency must provide a ten-day cure notice under the terms of the contract, whereas a termination for failure to meet deadlines requires no such notice. 44 Fed.Cl. at 631. The federal regulation discussed in Abcon is not pertinent to the present case, and the Board has directed us to no part of Contract 15, including the standard specifications, that relieved it of its obligation to comply with subsection 8.11 when termination of the contract was based on Harbert's failure to complete the project by the scheduled completion date. It is the appellant's burden to refer this Court to the parts of the record relied on in support of its argument for reversal. Rule 28(a)(10), Ala. R.App. P. This Court does not have the obligation to search the record for substantiation of unsupported factual matter appearing in an appellant's brief in order to determine whether a judgment should be reversed. Friedman v. Friedman, 971 So.2d 23, 31 (Ala.2007). Also, as noted above, it is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument. Dykes v. Lane Trucking, Inc., 652 So.2d 248, 251 (Ala.1994); see also Rule 28(a)(10), Ala. R.App. P. Based on the Board's failure to adequately develop its argument that it had an no obligation to provide Harbert with notice of default because Harbert did not complete the project by the scheduled completion date for Contract 15, we will not further address that argument, nor will we reverse the trial court's judgment based on that argument.
The Board argues that it complied with the notice and cure provision of subsection 8.11. Generally, [a] clear and unambiguous notice, timely given, and in the form prescribed by the contract, is essential to the exercise of an option to terminate the contract. 17B C.J.S. Contracts § 446 (1999). [24] Except as previously discussed with respect to the issue of anticipatory repudiation, the Board does not argue that it did not have to strictly comply with subsection 8.11 nor does it argue that the failure to comply with subsection 8.11 would not be a material breach of Contract 15 that would support the rejection of its breach-of-contract claim. Instead, the Board argues that the trial court erred when it found that Asarisi's November 14, 1997, letter did not provide clear and unambiguous notice under subsection 8.11. Further, the Board contends that in addition to Asarisi's November 14, 1997, letter, the Board sent Harbert many [subsection] 8.11 notices demanding Harbert cure its mal-performance and under-performance, including notices of May 7, 1997; August 14, 1997; [and] August 27, 1997. [25] We again note that subsection 8.11 of the standard specifications states: If the Contractor ... fails to perform the work with sufficient workmen, equipment or materials to insure its prompt completion, or performs the Work unsuitably, or neglects or refuses to remove materials or perform anew such work as shall be rejected as defective and unsuitable, or discontinues prosecution of the Work, or from any other cause whatsoever does not carry the Work in an acceptable manner, ... the [Board] or [its] representative may give notice in writing by registered mail to the Contractor and the Surety of such delay, neglect, or default. If within 10 days after such notice the Contractor does not proceed to remedy to the satisfaction of the [Board] the fault specified in said notice, or the Surety does not proceed to take over the Work for completion, the [Board] shall have full power and authority, without impairing the obligation of the Contract or the Contract Bonds, to take over the completion of the Work; ... to enter into agreements with others for the completion of the Contract according to the terms and provisions thereof; or to use such other methods as in its opinion may be required for the completion of the Contract. The Contractor and his Surety shall be liable for all costs and expenses incurred by the [Board] in completing the Work, and also for the liquidated damages in conformity with the terms of the Contract.  As the trial court construed it, subsection 8.11 required that the Board provide Harbert with written notice of any delay, neglect, or default in its performance, and we adhere to that conclusion, given the arguments presented by the Board. [26] As a preliminary matter, we note that subsection 8.11 simply provided Harbert with 10 days  to remedy to the satisfaction of the [Board] the fault specified in said notice; it does not provide that Harbert's mere attempt to remedy any fault at issue would preclude termination of the contract when its performance had already been deficient. Likewise, subsection 8.11 warns Federal that upon its receipt of notice of such delay, neglect, or default from the Board it would have 10 days to proceed to take over the Work for completion; it does not provide that Federal had the right to wait to see whether Harbert cured the delay, neglect, or default in its performance. We further note that the Board's undated resolution reporting its actions taken on December 8, 1997, constitutes substantial, though not conclusive, evidence that the Board terminated Contract 15, not only because of the deficiencies discussed in Asarisi's November 14, 1997, letter to Harbert, but also because the Board ha[d] allowed Harbert in excess of ten days from the date of default notice to remedy the deficiencies documented by various letters and multiple meetings between the parties to the project. With these matters in mind, we turn our attention to the letters the Board argues satisfied the notice and cure provision of subsection 8.11. The Board argues that Asarisi's letters to Harbert dated May 7, 1997, August 14, 1997, August 27, 1997, and November 14, 1997, satisfied the requirements of subsection 8.11, i.e., that each letter provided Harbert with notice of delay, neglect, or default that Harbert failed to cure within 10 days and as to which Federal failed to take over the Work within 10 days. We will address the letters in chronological order. The May 7, 1997, letter from Asarisi to Harbert states: Reactor Number 2 was pressure tested on May 1, 1997. The pressure test failed. The interior seal system is designed to withstand design pressures. The exterior seal is not a pressure system and is intended to keep water and other contaminates away from the interior seal. Therefore, leak repairs must be made on the interior of the reactor and not the exterior. We trust that these repairs will be made immediately to avoid further delays on the project. Please let us know if you have any questions. (Emphasis added.) The Board argues that the May 7, 1997, letter, and particularly the portion emphasized above, constituted substantial evidence of written notice to Harbert that its work was rejected as `defective and unsuitable' and specifically identified one of three reasons for termination allowed by [subsection] 8.11, i.e., `delay.' The Board then argues that there was substantial evidence that Harbert failed to correct its allegedly defective work on reactor basin # 2 within the cure period established by the May 7, 1997, notice. Aside from the fact that the May 7, 1997, letter did not notify Harbert of the need to make the necessary repairs within the 10-day period contemplated by subsection 8.11, that letter was not sent by registered mail, and it was not sent to Federal. Thus, we cannot conclude that the trial court erred by not treating the May 7, 1997, letter as a notice given pursuant to subsection 8.11. The August 14, 1997, letter from Asarisi to Harbert states: As you are aware, [Harbert] informed the [Board] and BCM in November 1996 that the new Reactor and Clarifiers would be on line by December 26, 1996 and the project would be complete by March 1997. To date, none of this has happened. Our daily records indicate that your present work force consists of 1 superintendent and 3 laborers. We are aware of your efforts to seal Reactor 2. However, there are still a number of items that would keep the project from starting up if Reactor 2 was ready today. We have enclosed a partial list of items that have to be completed before Reactor 2 is put on line. This is not a complete list and there may be other incomplete items that delay start up. We are quite concerned about the slow rate of progress on the project and the impact that delays have on the [Board] and the operation of the plant. Therefore, in accordance with [subsection] 8.11 of the [Standard] Specifications you are hereby notified that you have 10 days to start work on each of the items on the enclosed list, with the exception of items that are dependent on the completion of Reactor 2. If work has not begun on all noted items within 10 days the [Board] will notify [Federal] that the project is in default. We trust that you will provide an adequate work force to complete the work within the specified time and to avoid further actions against you. Should you have any questions, please call. The Board argues that Harbert's uncorrected insufficient work force was yet another ground per [subsection] 8.11 for the Board's takeover of the Work. ... Contrary to the [trial court's] findings, this letter clearly referenced and provided Harbert with a [subsection] 8.11 notice and opportunity to cure its deficiencies in the work of Contract 15. [27] We note that the August 14, 1997, letter was sent to Harbert and Federal by certified mail. Also, it clearly notified Harbert of its alleged delay, neglect, or default. The letter then specified the response the Board required of Harbert; that response was not that Harbert perform all the unperformed work within 10 days, but that it start work on each of the items on the enclosed list, with the exception of items that are dependent on the completion of Reactor 2 within 10 days. The letter continued: If work has not begun on all noted items within 10 days the [Board] will notify [Federal] that the project is in default.  Thus, the August 14, 1997, letter required only that Harbert begin work on all the noted items, not that it complete the work, within 10 days. The Board did not produce substantial evidence that Harbert failed to begin work on the specified items within 10 days, though, as hereafter discussed, there is evidence indicating that it did not complete the items. Likewise, we note that the August 14, 1997, letter informed Federal that the Board would notify Federal that Harbert was in default if Harbert had not begun [work] on all noted items within 10 days. The Board produced no evidence indicating that it sent Federal such a notice. Thus, we cannot conclude that the trial court erred by not treating the August 14, 1997, letter as a notice given pursuant to subsection 8.11. The August 27, 1997, letter from Asarisi to Harbert states: As you know, we sent a letter on August 21, 1997, to Mr. Enrico Tissi, the President of [Sika], which included a copy of your consultants report on the Combiflex system inside Reactor 2. We were notified yesterday that Buddy Bonine, from [Sika], will be at the [treatment plant] on Tuesday, September 2, 1997, to inspect the installation and provide their opinion. As Malcolm [Steeves] has previously indicated, we will provide [Harbert] an alternative system to seal the Reactor if [Sika] agrees that the Combiflex system is not suitable for the application. We welcome and encourage you to be present during [Sika's] visit on September 2. If you have any questions, please let us know. The Board argues that this letter directed Harbert to seal Reactor basin 2 and that Harbert again refused to do the work as called for by [BCM] when it responded by sending the September 17, 1997, letter to Asarisi and the Board, vigorously objecting to the Board's proposed reapplication of the Combiflex system to a test cell, rather than approval of Harbert's Liquid-Boot proposal. The August 27, 1997, letter does not request that Harbert seal reactor basin #2. As we discussed in Part IV.C.1. above (Anticipatory Repudiation), the September 17, 1997, letter does not reflect Harbert's refusal to perform repair work as directed by the Board. Instead, the correspondence between the parties at that point in the dispute concerning the sealing of reactor basin # 2 reflects that the Board was attempting to verify whether the Combiflex system was appropriate for sealing reactor basin # 2 in the face of Harbert's and Spiderman's assertions that they had properly applied and/or attempted to repair the Combiflex system in accordance with the standard specifications and that the Combiflex system was not the appropriate product to use to seal the reactor basin. In addition, the August 27, 1997, letter was not sent by registered mail, and it was not sent to Federal. Thus, we cannot conclude that the trial court erred by not treating the August 27, 1997, letter as a notice given pursuant to subsection 8.11. The Board continues its argument by discussing the November 14, 1997, letter from Asarisi to Harbert. Again, that letter states: It appears that a number of items remain incomplete that will keep the new system from going on line when Reactor 2 is satisfactorily sealed and tested. Most if not all of the items are electrical (i.e. load shedding, etc.). In order to avoid further delays on this project we request that you provide an updated schedule which includes all work associated with starting the new system. This schedule should be in our office no later than November 24, 1997. Failure to provide a schedule within ten days will be grounds for finding [Harbert] in default of the Contract in accordance with [subsection] 8.11 of the Specifications. The November 14, 1997, letter was sent by certified mail to Harbert and to Federal. The Board argues that the incomplete items referred to in the November 14, 1997, letter are the deficiencies identified in Asarisi's August 27, 1997, letter, which included addressing the load-shedding work. The November 14, 1997, letter, however, does not purport to declare that the prior delays were grounds for proceeding under subsection 8.11. Rather, the November 14, 1997, letter states unequivocally that [f]ailure to provide a schedule within ten days will be grounds for finding [Harbert] in default of the Contract in accordance with [subsection] 8.11 of the [Standard] Specifications. Before the November 14, 1997, letter, Harbert was under no specific contractual obligation to produce the particular schedule of work required by that letter. Instead, that specific obligation was first imposed on Harbert by BCM, as the supervising engineer for the project, in the November 14, 1997, letter. Appropriately, therefore, the letter informs Harbert of this obligation and then merely states that failure to provide the requested schedule within ten days will be grounds for finding [Harbert] in default of the Contract. It appears that neither Harbert nor Federal provided the requested schedule within 10 days, but the Board did not thereafter notify Harbert and Federal that it was actually declaring their failure to be a default under subsection 8.11, and it did not give them 10 days after such notice in which to cure the default before it terminated Contract 15. Thus, we cannot conclude that the trial court erred by not concluding that the November 14, 1997, letter satisfied the Board's obligation under subsection 8.11. Based on the foregoing, we cannot conclude that the trial court erred by entering a summary judgment for Harbert and Federal on the Board's claims of breach of contract as to Contract 15.