Opinion ID: 2655158
Heading Depth: 3
Heading Rank: 3

Heading: Retainage

Text: Sections 2.4 and 2.5 of the contract allowed LaSalle to withhold a percentage of the fixed price to guard against any breach by Gerken, including a failure of timely or proper performance. LaSalle then had the right to apply the retained money to the cost of completing or repairing Gerken’s work. Here, LaSalle retained ten percent of the contract price because Gerken did not pave the outlot or complete certain punchlist items. At the summary judgment motion hearing, LaSalle “acknowledged that it owed Gerken the retention amount minus the cost of paving [the] outlot, the cost of which LaSalle calculated to be $24,880.00.” Gerken Paving, 2012 WL 3079249, at . Despite LaSalle’s concession, Gerken claims that questions of fact exist regarding alleged breaches of contract because LaSalle: (1) failed to have the outlot ready for paving; and (2) denied a price change reflecting an increase in the price of petroleum for the outlot asphalt mix. The district court, however, found that LaSalle did not appear at fault for the delay. Also, Gerken admits that the City of Northwood, not LaSalle, “wisely refused” to allow paving the outlot to proceed based on the weather conditions. Appellant Br. 8, 26. The denial of the price change also does not raise a question of material fact. No factual dispute exists that the contract already required Gerken to pave the outlot and permitted LaSalle to pay for any unfinished work 14 No. 12-2380 Gerken Paving, Inc. v. LaSalle Group, Inc. using the retainage. Section 2.4 of the contract provides that LaSalle may use the retainage to cover the “entire cost” of paving the outlot, not just the amount it would have cost Gerken. When Gerken refused to pave the outlot, LaSalle paid another company $20,000 to complete this work. LaSalle paid this amount with money from the retainage. Gerken also asserts it had no obligation to complete the punchlist items. While the district court listed the cost of paving the outlot as $24,880, LaSalle admitted that paving the outlot only cost $20,000. The amount of the cost of completing the punchlist items is unclear; the parties and the district court have listed varying figures between $4,000 and $4,880 as potential punchlist costs.5 The district court even noted that “[t]he record is unclear regarding what punchlist items were requested and whether or not Plaintiff failed to complete them.” Gerken Paving, 2012 WL 3079249, at . The district court also failed to address Gerken’s arguments regarding the waiver of warranties and the impact of those waivers on its obligation to complete the punchlist items. LaSalle did not respond to these allegations in its brief; LaSalle only noted that it had to pay another contractor to complete the items. Despite the apparent errors in the district court opinion regarding the precise amount of the retainage that LaSalle had the right to retain, we find those errors or lack of clarity to be harmless. Any reduction in the amount LaSalle had the right to charge for those items would have been recoverable as part of the award of attorneys’ fees. A swing of a few thousand dollars in the size of the retainage could not have rendered a fee award unreasonable when the fee requested was over $20,000 less than the fees the trial court found actually and reasonably had 5 LaSalle claimed they spent $20,000 on paving the outlot and “over $4,000” to fix issues on the punchlist. Aff. Scott Nemecek at 2, Gerken Paving Inc. v. LaSalle Grp. Inc., No. 10-cv-14905 (E.D. Mich. Apr. 30, 2012), ECF No. 22 Ex. B. 15 No. 12-2380 Gerken Paving, Inc. v. LaSalle Group, Inc. been incurred. Therefore, we affirm the district court’s grant of summary judgment regarding the retainage.