Opinion ID: 2976166
Heading Depth: 3
Heading Rank: 1

Heading: A “claim” versus a “CCP”

Text: In light of the unambiguous language quoted above, CO #9 could settle Steel Service’s Claim only if the Claim were a CCP. But our review of the Contract and the record shows that the Claim is not a CCP in either form or substance. As a matter of form, Steel Service’s first letter in response to Hunt’s Extraordinary Measures directive, dated October 8, 2001, stated that Steel Service would be “submitting a claim” for costs related to the acceleration of its work. Consistent with that letter, Steel Service thereafter submitted a “Claim for Additional Costs” in December of 2001. The --13-- No. 07-3251 Steel Service Corp. v. Board of County Commissioners December letter refers repeatedly to Steel Service’s “Claim” and nowhere does it mention a CCD, a CCP, or the CCP process. The County, moreover, by executing CO #1 in January of 2002, expressly acknowledged and accepted that Steel Service had submitted a “Recovery Cost Claim Document” for costs associated with the Extraordinary Measures acceleration. Both this document and Steel Service’s prior correspondence repeatedly refer to the “Claim”; neither references a CCD or CCP, and neither invokes the CCP or CO process. Indeed, the second paragraph of CO #1 explicitly recognizes the fact that the Claim was submitted pursuant to Article 4 of the Contract, which governs “Claims and Disputes,” and specifically cites paragraph 4.7.7, the provision that permits “Claims for Additional Costs.” Also telling is the fact that the Claim does not bear the identifying mark of a CCP—a CCP number. According to Simonson’s testimony, which is supported by COs #2-9 and is undisputed by the County, each CCP was assigned a unique document number for tracking purposes. The Claim bears no such number or “CCP” designation, and there are no references to such a number or designation in the record that correspond to the Claim. “Claims” and “CCPs,” moreover, are distinguishable not only in form, but also in substance. As noted in Part I above, the Contract defines a “claim” as a demand or assertion by one of the parties seeking, as a matter of right, adjustment or interpretation of Contract terms, payment of money, extension of time, or other relief with respect to the terms of the Contract. A claim may also include other disputes and matters in question between the parties. (Paragraph 4.7.1) --14-- No. 07-3251 Steel Service Corp. v. Board of County Commissioners Steel Service’s Claim is clearly a “claim” under that definition. Hunt, on behalf of the County, directed Steel Service to undertake Extraordinary Measures to make up for lost time in the project construction schedule. Steel Service, in turn, undertook such measures and incurred additional costs in doing so—facts that the County accepted in CO #1 and does not now dispute. In its December 2001 letter, Steel Service notified the County that, under the terms of the Contract, it “is entitled to the compensation requested” for such additional costs. Steel Service, in other words, asserted a contractual right to payment for the extra costs incurred in performing the Extraordinary Measures requested. The description of Steel Service’s Claim in CO #1, which was accepted by the County, is consistent with Steel Service’s December 2001 letter. Such an assertion satisfies the contract definition of a “claim,” which includes an “assertion by one of the parties seeking, a[s] a matter of right, . . . [the] payment of money.” (Paragraph 4.7.1) The way the parties defined and dealt with CCPs does not apply to Steel Service’s Claim. Although the term “CCP” is not defined anywhere in the Contract and appears, undefined, only in COs #3-9, the parties agree on its meaning, which Jim Simonson of Steel Service explained in his deposition. A CCP, as noted in Part I above, is “a proposal for a change order to the contract” and is used to propose a change in the Work—either in response to a CCD or RFI from Hunt or upon Steel Service’s identification of the need for a change in the Work—and corresponding adjustments to the contract sum or construction time schedule. Steel Service’s Claim, as set forth in its December 2001 letter, is not a “proposal for a change order to the Contract.” It does not propose a change in the work. In fact, it is not a proposal for --15-- No. 07-3251 Steel Service Corp. v. Board of County Commissioners anything at all. Rather, it is a demand for compensation that Steel Service believes it has a right to recover under the terms of the Contract. Furthermore, even a cursory review of the CCPs submitted during the course of the project illustrates the substantive distinction between Steel Service’s Claim and a CCP. CCP 271, for example, memorializes that “[m]embers MK4004 & MV4004 [are] revised to W14x48 and W14x61.” Similarly, CCP 291 is described as “[d]esign revisions to suit SKS 639 changes to light tower to allow for light fixture clearance.” CCP 387, just to give another example, calls for Steel Service to “[s]horten columns in Area 7 due to incorrect concrete elevations.” The Claim, unlike the CCPs listed in the various COs, does not propose or describe specific changes in the construction of the Ball Park; it instead asserts a contractual right to compensation for the costs of the Extraordinary Measures. But the County argues that “the claims Steel Service presented in the lawsuit below were first presented during the course of the Project through the contract change process,” and that “the CCP process was the genesis of the claims Steel Service pursued in the lawsuit.” In support of its argument, the County points to Simonson’s deposition, in which he said that “what simply became a change proposal for the acceleration cost has now morphed into a claim which has now morphed into a lawsuit.” The County’s argument, however, is unavailing. Nothing in the record, including Simonson’s comments, suggests that Steel Service intended to submit a CCP instead of a “claim,” or even that its Claim was first drafted as a CCP. To the contrary, Steel Service sent at least two letters to Hunt that consistently referred to a “claim” and invoked Article 4 of the Contract (captioned “Disputes and Claims”). This documentation was the --16-- No. 07-3251 Steel Service Corp. v. Board of County Commissioners basis for CO #1 and was readily available to the County when it drafted and executed CO #1. Whatever the “genesis” of Steel Service’s Claim, the language of CO #1 clearly shows that Steel Service actually submitted, and the County accepted, a “claim” and not a “CCP.” Simonson’s statement quoted above does not contradict the express agreement of the parties, which is to be ascertained from the language of the Contract itself (here, CO #1). See Hamilton Ins. Servs. v. Nationwide Ins. Cos., 714 N.E.2d 898, 901 (Ohio 1999). The County also had the benefit of the foregoing documentation when it drafted and executed CO #9 in August of 2003, one and a half years after CO #1 was signed. If the County had wanted or intended to settle Steel Service’s Claim, it could have done so by simply drafting the fourth sentence to settle the CCPs and Steel Service’s December 2001 Claim. Accordingly, the County’s argument does not change the analysis set forth above, and does not support the conclusion that the Claim is actually a CCP settled by CO #9. The County also argues that “the trial court was correct in concluding that the claims Steel Service alleged were ‘intertwined with CCP’s’ and therefore released through Change Order No. 9.” But its reliance on this ambiguous statement, which is unsupported by any analysis, is misplaced. In the first place, the County has misstated the district court’s language. The court did not conclude that Steel Service’s claims were intertwined with CCPs. It determined, rather, that “Change Orders are intertwined with the deployment of Extraordinary Measures” and that “the utilization of Extraordinary Measures is intertwined with CCPs.” (Emphasis added.) But even the correct language does not help the County because the Contract provisions that authorize Extraordinary --17-- No. 07-3251 Steel Service Corp. v. Board of County Commissioners Measures do not refer to COs or CCPs, nor do they set forth any procedures by which Steel Service should seek compensation for its costs. In contrast, paragraph 4.7.1 suggests that Extraordinary Measures are connected to claims. Paragraph 4.7.1 provides that “[Steel Service] shall be entitled to make a Claim for an increase in the Contract Time and the Contract Sum for actual costs incurred by [Steel Service] for reasons other than the failure of [Steel Service] to perform under its obligations under the Contract Documents.” Accordingly, compensation for costs relating to Extraordinary Measures was properly sought as a claim under Article 4 of the Contract.