Opinion ID: 779684
Heading Depth: 3
Heading Rank: 1

Heading: Waiver of Contract Procedures

Text: 14 Hall first contends that Entergy's refusal to pay additional compensation for Phase One constitutes a breach of contract. Entergy argues in response that, by failing to comply with contract procedures, Hall has waived any claims for additional compensation. RAD-Razorback Limited Partnership v. B.G. Coney Co., 289 Ark. 550, 713 S.W.2d 462, 466 (1986), states the applicable Arkansas law on this point: The general rule pertaining to construction contracts is, absent a waiver ..., if it is required, a request for additional compensation must be in writing and cannot be made after the work is completed. Hall does not dispute its failure to comply with change-order procedures, but argues instead that Entergy (1) waived strict compliance through its course of conduct, and (2) had actual knowledge of the debris conditions in the spillway cells. 15 Section 6.4 of the contract clearly states: Contractor hereby waives all claims for schedule extensions or additional compensation beyond that allowed in this Agreement or by a Contract Order, unless the claim is expressly authorized under this Agreement and is made in accordance with the following procedures. Sections 6.2, 6.4, and 37.3 then provide detailed procedures for the submission, approval, and payment of such claims. But according to Hall, Entergy would normally first approve change-order requests orally. Hall would only commence the written change-order procedures after it had obtained oral approval. It would then memorialize the modification with the required paperwork. Hall claims that Entergy denied Hall's initial request for additional compensation arising from the debris conditions, thus rendering a written request futile. The district court found, however, that Hall had simply not met its burden of showing that the custom, practice and conduct of the parties was that written requests would only be made once oral approval had been received and so there is no basis for a finding of waiver. We agree. 16 Even accepting Hall's evidence of waiver at face value, 3 Hall has not presented evidence sufficient to create a fact question or to justify a finding of waiver under Arkansas law. In Rivercliff Co. v. Linebarger, 223 Ark. 105, 264 S.W.2d 842, 846 (1954), the Arkansas Supreme Court found that a waiver had occurred where several changes had been made and paid for during the construction ... yet ... only one written change order had been made. Likewise in J.N. Heiskell v. H.C. Enterprise, Inc., 244 Ark. 857, 429 S.W.2d 71, 74-75 (1968), the court found that a fact question as to waiver was properly submitted to the jury where the contractor had presented evidence that oral changes were approved and paid for on many occasions. Finally, we held in Falcon Jet Corp. v. King Enterprises, Inc., 678 F.2d 73, 77 (8th Cir.1982), that waiver had occurred where virtually all changes had been approved orally. In contrast, it is undisputed in this case that Hall submitted several change orders, and Entergy paid them, according to the contract procedures, while there is no evidence that Entergy ever approved and paid for any changes without the required paperwork. The district court correctly found the evidence of waiver insufficient to create a triable question of fact. 17 Hall's contention that Entergy had actual knowledge of the debris conditions and therefore cannot equitably require compliance with contract procedures is likewise without merit. The two cases Hall cites on this point, St. Louis, I.M. & S. Ry. Co. v. Shepherd, 113 Ark. 248, 168 S.W. 137 (1914), and Marion County Rural School District No. 1 v. Rastle, 265 Ark. 33, 576 S.W.2d 502 (1979), are inapposite. First, neither of these cases involve contractually required change-order procedures. Second, and more importantly, the contracts at issue in the cases are not construction contracts. RAD-Razorback definitively establishes that, absent a waiver, change-order provisions in construction contracts will be strictly enforced in the state of Arkansas. 713 S.W.2d at 466. We find that Hall has not provided sufficient evidence to create a fact question on whether Entergy waived compliance with change-order procedures. By failing to comply with those procedures, Hall forfeited its right to seek additional compensation under the contract.