Opinion ID: 1782452
Heading Depth: 2
Heading Rank: 4

Heading: Utility-Delay Claim Against the County

Text: RaCON alleges in count I that it incurred idle-equipment costs not contemplated in the contract when the County failed to timely secure rights-of-way over certain properties and to relocate a Sonat gas pipeline in the path of the proposed roadway. In its utility-delay claim related to the Sonat gas pipeline, RaCON specifically seeks damages for idle-equipment expense of $106,443 for costs incurred from October 16 through November 13, 2000. The County moved for a summary judgment on all delay claims by RaCON asserted in count I. The trial court partially granted the County's motion and entered a summary judgment against RaCON on the utility-delay claim, but denied the County's motion with respect to RaCON's claims arising from the County's delays in securing access over other properties. [23] The trial court referenced Article III.A. of the contract in its order entering a summary judgment for the County on the utility-delay claim. That portion of the contract, commonly known as a no-damages-for-delay clause, states, in pertinent part:  Delay. If [RaCON] is delayed at any time in the progress of work by any of the following causes, [RaCON] may be entitled to a reasonable extension of time as determined by the County in which to complete the Project. Provided, however, no such delay nor the extension of time if granted shall be grounds for a claim by [RaCON] for damages or for additional cost, expense, overhead or profit or other compensation: 1. Fires, abnormal floods, tornadoes or other cataclysmic phenomenon of nature. 2. Strikes, embargoes, lockouts, war, [and] acts of public enemy. 3. Change orders. 4. Acts of performance or delays in performance by other contractors. 5. Causes beyond the control of [RaCON]. Provided further, that [RaCON] shall immediately give notice in writing to the County and follow extension of time procedures as provided for herein. The County expressly disclaims any liability to [RaCON] for any cost, expense or damage causes by other contractors, including those engaged by the County. The County shall not be liable for damages or cost to [RaCON] sustained due to any interference from utilities or appurtenances or from the operations of relocating the same.  (Emphasis added.) The trial court specifically relied on the last sentence in Article III.A. when it entered a summary judgment for the County on RaCON's utility-delay claim. When the contract was executed, RaCON initially was obligated to relocate, and was to receive compensation for relocating, utility facilities along the path of the proposed roadway. However, RaCON asserts that the parties orally amended the contract after it was signed so that responsibility for relocating utility facilities shifted to the County. [24] After that oral amendment, RaCON contends, the County had the responsibility to relocate utility facilities in a timely manner and RaCON repeatedly notified the County that its failure to relocate the Sonat gas pipeline was interfering with RaCON's work. The County asserts that the parties could not have orally modified the contract because Article I.D.2. requires that any amendment to the contract be in a writing executed by the parties. We disagree. The County undertook to relocate utility facilities after the alleged oral amendment. This Court stated in Ex parte Coleman, 861 So.2d 1080 (Ala.2003), that, under Alabama law, proof of an oral modification of a contract is allowed, notwithstanding a provision that oral changes following its execution were not binding. 861 So.2d at 1082, 1084. That holding is based on the premise that a party who has included . . . a provision [barring oral modifications] in a contract for that party's benefit can certainly waive that provision. 861 So.2d at 1084. Under these facts, when the County actually performed work pursuant to the oral understanding, the County cannot assert that an oral agreement to shift responsibility for the relocation of utility facilities was ineffectual. The parties dispute the effect of the no-damages-for-delay provision in light of the oral amendment. The County argues that the summary judgment on the utility-delay claim should be affirmed because the language in Article III.A. released the County from that claim. RaCON contends that the no-damages-for-delay clause was not applicable after the County assumed responsibility to move the Sonat gas pipeline, because, by implication, that amendment nullified the last sentence of Article III.A. or otherwise introduced ambiguities into its application to the relocation of the Sonat gas pipeline. RaCON argues that there are material issues of fact concerning the utility-delay claim that should be presented to the jury. We reject RaCON's argument that the last sentence or any other provision in Article III.A. was deleted by implication following the transfer of responsibility for relocation of utility facilities. RaCON has presented no facts to support its argument that the parties so intended to modify Article III.A. Assuming the no-damages-for-delay clause here remained effective after the oral amendment, RaCON cites two cases, E.C. Ernst, Inc. v. Manhattan Constr. Co., 551 F.2d 1026 (5th Cir.1977) (interpreting Alabama law), and Mississippi Transp. Comm'n v. SCI, Inc. 717 So.2d 332 (Miss. 1998), that provide limited latitude for damage claims resulting from delay despite the existence of a no-damages-for-delay clause. The United States Court of Appeals for the Fifth Circuit stated in Ernst: [Before us is] a reformulation of the common `no damage' clause in construction contracts whereby one party contractually limits its own liability for delay damages. Although the Alabama courts have not ruled on the validity of such provisions, their validity is now well established. See generally Peter Kiewit Sons' Co. v. Iowa Southern Utilities Co., 355 F.Supp. 376, 396-401 (S.D.Iowa 1973). Given their harsh effect, courts will strictly construe such provisions but generally enforce them absent delay (1) not contemplated by the parties under the provision, (2) amounting to an abandonment of the contract, (3) caused by bad faith, or (4) amounting to active interference. 551 F.2d at 1029 (footnotes omitted). Similarly, the Mississippi Transportation court observed that, while no-damages-for-delay clauses are generally enforceable, claims could be asserted under the following exceptions if the party seeking their benefit attempts to avoid payment of damages for a delay that (1) was not intended or contemplated by the parties to be within the purview of the provision; (2)resulted from fraud, misrepresentation, or other bad faith on the part of one seeking the benefit of the provision; (3) has extended such an unreasonable length of time that the party delayed would have been justified in abandoning the contract; or (4) is not within the specifically enumerated delays to which the clause applies. 717 So.2d at 338. We are unaware of any decision of this Court interpreting a no-damages-for-delay provision. RaCON argues that, notwithstanding Article III.A., its utility-delay claim is actionable because, it says, the delay was not contemplated by the parties, a ground for an exception noted in Ernst and Mississippi Transportation. Here the parties specifically anticipated the very type of delay at issueutilities relocationin the last sentence of Article III.A. Hence, the utility-delay claim here fails under the not contemplated by the parties exception. Furthermore, RaCON's utility-delay claim is not actionable because of the exception in Ernst and Mississippi Transportation for delays that extend such an unreasonable length of time so as to amount to or to justify an abandonment of the contract. Here the period of damages under the utility-delay claim extended less than 30 days (i.e., October 16 through November 13, 2000). That period could hardly support a claim that the County's alleged dilatory performance in relocating the Sonat gas pipeline amounted to or justified an abandonment of the County's contractual obligations. Additionally, RaCON argues that it should be entitled to present the utility-delay claim to a jury based on the active interference exception in Ernst. While RaCON alleges that it repeatedly requested the County to relocate the Sonat gas pipeline, RaCON presents no facts to support a claim that the County actively interfered with RaCON's work. Likewise, the record does not contain any evidence of fraud or bad faith by the County in relocating the Sonat gas pipeline so as to invoke that exception in Ernst and Mississippi Transportation. Article III.A. excludes claims by RaCON for damages or additional compensation for delays on the project. Having found that none of the possible exceptions to enforcement of that provision that are argued by RaCON apply with respect to the utility-delay claim, we conclude that Article III.A. should be enforced in accordance with its terms. Accordingly, we affirm the summary judgment of the trial court for the County with respect to the utility-delay claim.