Opinion ID: 2592878
Heading Depth: 1
Heading Rank: 6

Heading: Did the City waive its right to further liquidated damages by occupying the facility?

Text: Finally, Carrothers contends as a matter of law that the City waived its right under the contract to continue with liquidated damages after the City elected to occupy the new facility and began using it. As to this argument, Carrothers would have us rewrite the parties' contract as an operation of law and relieve Carrothers from the consequences imposed by the plain and unambiguous language in its contract. We decline to do so. In support of its argument, Carrothers cites this court to no Kansas cases applying the legal principle it is espousing, and we are aware of none. Instead, Carrothers refers us to opinions in other states such as Stone v. City of Arcola, 181 Ill.App.3d 513, 130 Ill. Dec. 118, 536 N.E.2d 1329 (1989); Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479, 610 A.2d 364 (1992); Page v. Travis-Williamson County Water C. & I. Dist., 367 S.W.2d 307 (Tex.1963); and S.L. Rowland Constr. Co. v. Beall Pipe and Tank Corp., 14 Wash.App. 297, 540 P.2d 912 (1975). In sum, these cases hold that when a contractor achieves substantial completion and has only minor repairs, adjustments, or finishing work remaining, the full assessment of liquidated damages may constitute gross unfairness. But these decisions do not apply to the undisputed facts in this case. Here, Carrothers would seek to invoke these decisions from other jurisdictions to block liquidated damages after November 3, 2003, when it says the City began using the new treatment facility. But the new facility still did not have in operational condition the computer-based control system and other significant installations, including many safety features, expressly required by the contract. These shortcomings may not be described fairly as trivial or relegated to a characterization of mere finishing work. They were substantial obligations under the contract agreed to by the parties. Accepting Carrothers' argument in this instance would defeat the express language in the contract, the parties' clear intent as shown by that language, and the important public policy considerations favoring liquidated damages clauses. We decline to adopt a rule that operates solely to invalidate liquidated damages clauses that were freely entered into just because damages would be applicable after occupancy. We believe the better rule is to require a liquidated damages clause applicable to a delay in achieving final completion to withstand the prospective analysis described in this opinion. We affirm the district court and the Court of Appeals for the reasons stated.