Opinion ID: 171820
Heading Depth: 3
Heading Rank: 2

Heading: Apportioning the Delays

Text: Metric also challenges the district court’s decision to not attribute any of the construction delays to Belt Con. Metric challenges the district court’s legal analysis and its factual conclusions. We review issues of law de novo and the challenged fact findings for clear error. Hjelle v. Mid-State Consultants, Inc., 394 F.3d 873, 879 (10th Cir. 2005) (“If a finding of fact, we review only for clear error . . . ; but if an issue of law, our review is de novo.”) (citations omitted). After the bench trial, the district court denied Metric’s request for liquidated damages resulting from delays Metric attributed to Belt Con. The district court determined that it would not grant Metric’s request without evidence of the amount of delay attributable to Belt Con. The district court found, “Metric and other subcontractors delayed the FLETC project concurrently with Belt Con.” Aplt. App’x Vol. I at 155. The district court also noted, “because Metric did not prove by a preponderance of the evidence how much, if any, delay should be attributed to Belt Con, any award of damages would be speculative.” Id. In the Memorandum and Opinion addressing Metric’s motion to amend judgment, the district court expanded upon its factual findings and the legal basis for its conclusion. The district court stated that the project’s scheduling created problems during construction and hindered the court’s efforts to trace the causes of the delays. Aplt. App’x Vol. I at 222–23. The district court also found that “two of the largest culprits of delay—the GSA and R&R Concrete Contractors, 11 Inc. (“R&R[”])—[were] not parties to the case.” Id. at 222. Although Metric and Belt Con presented expert testimony regarding the project’s time line and the necessary order of benchmarks—the critical path 2—the district court “did not find [Metric’s expert’s] methodology, evidence, or testimony reliable.” Id. at 224. “Both experts that testified at the trial apportioned the construction delays between Belt Con and R&R.” Id. at 226. According to the findings of the district court, the critical path began on the first floor of “Building 21” and continued through Building 19. Id. at 224. “Belt Con admits that its masonry work on [Building 21’s first] floor was completed two days late.” Id. at 228. In its analysis regarding this work, the district court also considered that Metric did not deliver the entire first floor, as provided in the schedule, when Belt Con began working. Metric did not claim any delays associated with Belt Con’s work on Building 19’s first floor. Regarding Belt Con’s work on Building 19’s second floor, Belt Con’s expert “determined that Belt Con completed the work eight days late,” but that “there were concurrent delays” attributable to Belt Con and R&R. Id. at 230. When asked to clarify how the delays were concurrent, Belt Con’s expert stated, “They’re running—They’re both delaying the work. They are not exactly at the same time. Both of them 2 A delay along the critical path delays completion of the entire project. Morrison Knudsen Corp. v. Fireman’s Fund Ins. Co., 175 F.3d 1221, 1231–32 (10th Cir. 1999). 12 caused additional delay . . . .” Id. The district court noted that Belt Con’s expert did not quantify what portions of the delay were concurrent and what portions were sequential. On the other hand, the district court also found that “Metric’s expert . . . concluded that [the delays related to Building 19’s second floor] did not delay the project.” Id. Regarding Building 19’s third floor, the district court found that Belt Con’s expert testified that the delays were concurrent. Based on these expanded findings, the district court again declined to apportion the delays and reduce the amount of damages awarded to Belt Con. The district court stated, “Metric is correct that the Court can, where appropriate and the evidence so supports, apportion delay . . . The Court will not hesitate to undertake that task where appropriate. Metric has not, however, with its factual presentation or its legal arguments, convinced the Court that it should do so in this case.” Id. at 244. Although the district court acknowledged that California law allowed courts to apportion damages for sequential delays, the court found that the delays were not sequential. The district court rejected Metric’s contentions that the delays at issue were sequential, reasoning “the Court cannot determine that Belt Con’s delays were sequential when there was never a reliable project schedule in place.” Id. at 254. Significantly, the district court questioned Metric’s credibility in its effort to attribute fault for the delays to Belt Con. Id. at 225 (“Metric’s shifting position undercut its credibility with the Court.”). Before this action began, Metric 13 submitted a claim to the GSA with a delay analysis that attributed all of the delay to the GSA. This analysis consisted of a “twenty-page, single-spaced report with thirty-five pages of exhibits” and according to Metric’s president was “made in good faith . . . and complete to the best of [his] knowledge and belief.” Id. at 248. Based on this, the district court determined that “Metric did not equitably allocate delay damages in good faith, but arrived at [its expert’s] analysis for purposes of litigation.” Id. at 249. The district court concluded its analysis of the allocation of delays by agreeing with Metric’s initial analysis that the GSA caused all of the delays directly or indirectly. Metric raises four arguments challenging the district court’s conclusions regarding the allocation of damages caused by delay. First, Metric argues that California law favors enforcing liquidated damages clauses and apportioning delay damages. Second, Metric contends that courts can apportion sequential and concurrent delays both as a matter of law, and as a result of a provision in the contract (Article 8) between Metric and Belt Con. Third, Metric asserts, “There was sufficient evidence presented . . . to allow the trial court to allocate the delay.” Aplt. Br. at 38. Lastly, Metric argues that some of the delays were sequential. Belt Con responds that the district court’s findings were correct, highlighting Metric’s prior analysis attributing the delays to the GSA. California courts apportion contractual liquidated damages “where delays in construction projects have been caused by both the owner and by the 14 contractor.” Stop Loss Ins. Brokers, Inc. v. Brown & Toland Med. Group, 49 Cal. Rptr. 3d 609, 621 (Cal. Ct. App. 2006) (citing Jasper Constr., Inc. v. Foothill Junior Coll. Dist., 153 Cal. Rptr. 767 (Cal. Ct. App. 1979); Nomellini Constr. Co. v. California ex rel. Dep’t of Wat. Res., 96 Cal. Rptr. 682 (Cal. Ct. App. 1971)). In Nomellini, the California Court of Appeals rejected the notion that “where delays are caused on both sides there is no way to ‘apportion damages[.]’” 96 Cal. Rptr. at 686. Instead, the California Court of Appeals reasoned that “[q]uantum of delay in terms of time is all that is being apportioned. That is an uncomplicated fact finding process.” Id. Following Nomellini, the California Court of Appeals noted the importance of the contractual language allowing apportionment. Jasper, 153 Cal. Rptr. at 774 (listing “because the contract contained an explicit provision allowing apportionment” and the distinctions between public and private contracts as the two reasons for applying apportionment). We are unaware of, nor does Metric provide, 3 California law addressing apportionment of concurrent delays. The reasoning of Nomellini suggests that California would not apportion concurrent delays, but such a determination is 3 Although Metric devotes several pages to its assertion that “Both Sequential and Concurrent Delay Can Be Apportioned,” the only legal support for this argument is a citation to a case from the United States Court of Federal Claims. As stated, because California is the place of execution for the contract, we apply California law unless it contravenes New Mexico public policy. Metric has not addressed apportionment of delays under New Mexico law. 15 unnecessary for our present analysis. Following the court’s direction in Jasper, we turn to the present contractual provision that addresses apportioning concurrent delays. Article 8 of the contract states in pertinent part: If delays are caused by more than one subcontractor, Contractor shall equitably allocate the damages for delay among the Contractor and those subcontractors responsible for the delay, and the Contractor’s decision as to the allocation shall be final and binding on all subcontractors as long as the decision is made in good faith. Aplt. App’x Vol. II at 261–62. The district court found that Metric did not allocate the damages in good faith, relying on Metric’s initial delay analysis that attributed all of the delay to the GSA. Although Metric does not argue that this finding is incorrect, Metric dismisses the “so-called ‘delay analysis’ [as] a document prepared by Metric’s counsel in litigation advocating the position of its client prior to any discovery.” Aplt. Reply Br. at 8. This argument does not nullify the district court’s conclusion that “Metric did not equitably allocate delay damages in good faith, but arrived at [its trial expert’s] analysis for purposes of litigation.” Aplt. App’x Vol. I at 249. Moreover, as noted by the district court, the contract “is silent . . . with regard to what happens if Metric’s allocation was not done in good faith.” Id. at 249. We conclude that the district court’s findings of fact and conclusions of law regarding the apportionment of damages in this case are correct. The court looked to the applicable contractual language and found Metric did not allocate concurrent damages in good faith. Consequently, we turn to Metric’s argument 16 that the delays were sequential, not concurrent. Metric bases its argument on the testimony of Belt Con’s expert. While testifying about the construction of Building 19, the expert had this exchange with counsel: A. On the second and third floor there are concurrent delays between the masonry and concrete work. Q. So does that mean that the concrete delay and the masonry delay are running at the same time, during the same period of time? A. No. They’re running—They’re both delaying the work. They are not exactly at the same time. Both of them caused additional delay to the floor construction. Aplt. App’x Vol. IV at 776. Metric concludes this argument by asserting, “If the delays are truly concurrent delays and are simultaneously caused by two subcontractors, each should bear a portion of the prime contractor’s delay damages . . . .” Aplt. Br. at 40. This testimony is insufficient for us to determine that the district court’s factual findings were clearly erroneous. The district court heard Metric’s expert testify that Belt Con’s work on the second floor of Building 19 was not part of the critical path. The district court found that “Belt Con’s expert testified that there were concurrent delays between the masonry and concrete [on the third floor of Building 19].” Aplt. App’x Vol. I at 247. Metric’s reference to a statement where Belt Con’s expert equivocated slightly does not establish that these findings were clear error. See Pencro Assocs., Inc. v. Sprint Spectrum, L.P., 499 F.3d 1151, 17 1161–62 (10th Cir. 2007) (“[P]ointing to conflicting evidence inconsistent with the district court’s finding is insufficient, standing alone, to establish clear error, for every trial is replete with conflicting evidence, and in a bench trial, it is the district court, which enjoys the benefit of live testimony and has the opportunity to weigh firsthand to weigh credibility and evidence, that has the task of sorting through and making sense of the parties’ competing narratives.”) (quotation omitted). We conclude that the district court did not err in denying Metric’s motion to amend judgment to attribute some of the construction delay to Belt Con.