Court Opinion

ID: 4290139
Source: CourtListenerOpinion
Date Created: 2018-06-29 18:00:22.455645+00
Date Added: 2024-06-11T14:38:04.521026
License: Public Domain

Case: 17-30091   Document: 00514534460     Page: 1   Date Filed: 06/29/2018

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                 United States Court of Appeals
                                                                          Fifth Circuit

                                 No. 17-30091                           FILED
                                                                    June 29, 2018
                                                                   Lyle W. Cayce
FISK ELECTRIC COMPANY,                                                  Clerk

             Plaintiff – Appellant,

v.

DQSI, L.L.C.; WESTERN SURETY COMPANY,

             Defendants – Appellees.

                Appeal from the United States District Court
                   for the Eastern District of Louisiana

Before KING, ELROD, and GRAVES, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
      A subcontractor performed electrical work for a general contractor on a
post-Hurricane Katrina federal construction project.        The subcontractor
alleges that the general contractor fraudulently induced it into entering a
settlement agreement that released the general contractor from any claims for
liability under the Miller Act—a federal statute that requires general
contractors to secure payment to subcontractors on most federal construction
projects.   The district court granted summary judgment to the general
contractor. We determine that there is a genuine issue of material fact on
justifiable reliance—an element of the subcontractor’s fraudulent-inducement
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claim—–and therefore REVERSE the district court’s judgment and REMAND
for further proceedings.
                                              I.
       DQSI, L.L.C., the general contractor here, contracted with the United
States Army Corps of Engineers to perform work on a post-Hurricane Katrina
pump station construction project. Western Surety Company issued a Miller
Act payment bond on the project on DQSI’s behalf. DQSI subcontracted with
Fisk Electric Company; Fisk was to perform electrical work on the project. The
contract allowed Fisk to assert claims for money damages for unforeseen
delays not caused by Fisk. Due to delays apparently caused at least in part by
adverse weather conditions, the completion of the project was delayed 464
days. Fisk asserted that it experienced significant additional expenses because
of the delay, amounting to more than $400,000. Fisk invoiced DQSI for this
amount but apparently was never paid. Months before filing a lawsuit, Fisk
also submitted to DQSI a Request for Equitable Adjustment seeking damages
for the 464 days of delay.
       In 2013, Fisk sued DQSI and DQSI’s surety, Western, pursuant to the
Miller Act, 40 U.S.C. § 3131, et seq., 1 and for breach of contract after attempts
to resolve the dispute without litigation. 2 Before Fisk filed this 2013 lawsuit,
Norman G. “Pat” Clyne, Fisk’s supervisor of operations, met twice with DQSI
representatives following Fisk’s demand letter for delay damages pursuant to
the Miller Act.      In his affidavit, Clyne states that Stanley Lee and Scott

       1 “The Miller Act requires general contractors on most federal construction projects to
furnish a bond for performance and to secure payment to all suppliers of labor and materials.”
J.D. Fields & Co. v. Gottfried Corp., 272 F.3d 692, 696 (5th Cir. 2001).

       2In accord with the parties’ briefing, we generally refer to Appellees throughout
simply as “DQSI,” rather than as “DQSI and Western.”
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McCumsey, representatives of DQSI, expressed that they were uncomfortable
submitting a Request for Equitable Adjustment for delay damages on Fisk’s
behalf. Clyne states: “I specifically asked if DQSI had already waived Fisk’s
rights to submit the [Request for Equitable Adjustment]. Stanley Lee and
Scott McCumsey responded that it had not.” In a later meeting, Lee and
McCumsey apparently reiterated that DQSI had not waived Fisk’s rights to
submit the Request for Equitable Adjustment.
      In December 2013, Clyne sent a letter to DQSI. According to the letter,
Fisk had previously requested from DQSI a copy of the bilateral modifications
issued to DQSI by the Corps granting the 464-day extension. When DQSI had
not readily complied with the request, Fisk had obtained copies of the bilateral
modifications directly from the Corps through a Freedom of Information Act
(FOIA) request. The contract modification to which Clyne’s December 2013
letter refers contains a “closing statement” declaring the following: “It is
further understood and agreed that this adjustment constitutes compensation
in full on behalf of the Contractor, its subcontractors and suppliers for all costs
and markups directly or indirectly attributable to the change, for all
delays . . . .” However, none of the bilateral modifications obtained through the
FOIA request were signed by DQSI. According to Clyne in the December 2013
letter, “It appears from the documents that we received [through the FOIA
request], that Fisk was foreclosed from seeking compensation from the Corps
before Fisk and DQSI even began negotiations.”
      Fisk and DQSI mediated the case in April 2014. Clyne states in an
affidavit that “based on the representations made at mediation by DQSI, my
concerns about the [Request for Equitable Adjustment] expressed in my
December 10, 2013 letter were laid to rest.” Clyne states that “[b]ased on the
prior representations by Mr. Lee and Mr. McCumsey and the fact that DQSI

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was agreeing to submit Fisk’s claims to the Corps, I believed that Fisk’s claims
were still viable with the Corps and there had been no prior waiver of any
rights to seek equitable adjustment.”
      The “memorandum of agreement” signed at mediation states that “Fisk
agrees to provide DQSI with a fully supported [R]equest for Equitable
Adjustment that is certifiable by DQSI to [the Corps].” In the memorandum of
agreement, DQSI also agreed “to submit to [the Corps] the Request for
Equitable Adjustment presented by Fisk provided that DQSI will only be
responsible to submit the Request for Equitable Adjustment if it is certifiable
to [the Corps] and is fully supported by Fisk.” 3 Fisk also agreed “to defend,
indemnify[,] and hold DQSI harmless in connection with, arising from, or
related to DQSI’s submission of Fisk’s Request for Equitable Adjustment to
[the Corps].” Following mediation, Fisk submitted a Request for Equitable
Adjustment nearly identical to the previous one, again seeking damages for
the 464-day delay. DQSI objected that the Request for Equitable Adjustment
was “not properly supported as required” by the memorandum of agreement.
Following mediation, Fisk filed a motion to enforce settlement. The motion
was granted, requiring DQSI to submit Fisk’s Request for Equitable
Adjustment within seven days of the court order. DQSI submitted a Request
for Equitable Adjustment to the Corps.
      In December 2014, Fisk and DQSI entered into a settlement agreement
intended “to formalize the terms” of the memorandum of agreement. 4 As part
of the settlement, Fisk and DQSI agreed to a mutual release in which Fisk

      3  As a subcontractor, Fisk had no direct relationship with the Corps and therefore
relied on DQSI to submit the Request for Equitable Adjustment on its behalf.

      4Western was not a signatory to the memorandum of agreement or the settlement
agreement.
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would release DQSI from any claims for the consideration of approximately
$55,000. In consideration of the releases of claims, DQSI agreed “to submit a
Request for Equitable Adjustment (‘REA’) presented by Fisk to [the Corps].”
In the event that the Corps awarded funds in response to the Request for
Equitable Adjustment, the settlement agreement provided that if the amount
exceeded $175,000, DQSI would retain the excess funds, provided that it would
not retain more than $25,000. 5                According to Clyne, “[w]ithout the
representations made by Mr. Lee and Mr. McCumsey and the understanding
that Fisk had a viable option to present its claims to the Corps, I would not
have accepted the settlement agreement.” Gregory Thomas, Fisk’s in-house
general counsel who executed the settlement agreement on Fisk’s behalf,
states in his affidavit that during negotiations he “was specifically told by
representatives of DQSI that DQSI had not received payment for the work
done by Fisk or for its delay damages and therefore Fisk could present a
request for adjustment (REA) to obtain payment.” According to Thomas, “Fisk
relied on this fundamental representation by DQSI in accepting the settlement
agreement . . . .”
       In early 2015, the Corps informed DQSI that Fisk’s Request for
Equitable Adjustment, which DQSI had submitted following mediation, “does
not substantiate any Government-caused delays that have not been previously
addressed through bilateral modifications.” About a month later, Fisk and
DQSI met with the Corps to discuss Fisk’s Request for Equitable Adjustment.

       5   In addition, the settlement agreement states Fisk’s assertion that DQSI owed it
approximately $488,000, together with legal costs, as a result of DQSI’s alleged failure to pay
Fisk. The agreement also notes that “DQSI has since asserted that it is entitled to seek
liquidated damages from Fisk at the rate of $3,800.00 per day pursuant to the Subcontract
as a result of delays in the Project’s completion, which delays DQSI asserts were caused by
Fisk . . . .”
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Clyne stated that at the meeting, he “was told by the Corps that it would not
entertain the [Request for Equitable Adjustment] because DQSI had settled all
aspects of the modifications related to Fisk’s [Request for Equitable
Adjustment].” According to Clyne, this was “the first time that [he] was told
that the Corps already had a final settlement with DQSI.”
      Fisk then filed its second lawsuit against DQSI and Western. Fisk’s
complaint lists four claims: (1) rescission of release; (2) a Miller Act claim
against DQSI and Western; (3) an alternative claim for breach of contract
against DQSI; and (4) another alternative claim for unjust enrichment. Under
Claim 1, Fisk alleges that it is entitled to rescind the release of liability in the
settlement agreement on the basis of fraud pursuant to Louisiana Civil Code
article 3082. 6 Under Claim 2, Fisk alleges that it is entitled under the Miller
Act to an action and judgment against DQSI and Western for approximately
$410,000, plus interest, costs, and attorneys’ fees.
      DQSI moved to dismiss the lawsuit and filed a motion for summary
judgment; it also sought to enforce the settlement agreement. The district
court denied all three motions. The district court concluded that there was a
genuine issue of material fact as to whether Fisk knew that DQSI had waived
Fisk’s right to delay damages. Among other things, the district court noted
that Fisk “still stipulated to the submission of the [Request for Equitable
Adjustment] in the Agreements, which suggests that [Fisk] had some
reasonable expectation of recovery.”
      About a year later, DQSI filed a second summary-judgment motion. The
district court determined that federal law applied, stating that “[b]ecause the
claims in this case are premised on the Miller Act, federal law governs the

      6  This article provides that “[a] compromise may be rescinded for error, fraud, and
other grounds for the annulment of contracts.” La. Civ. Code Ann. art. 3082.
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validity of the Agreements and thus any fraud claim that might invalidate
them.” However, relying on federal district court cases applying Louisiana law,
the district court concluded that Fisk could not demonstrate justifiable
reliance—an element of a fraudulent-inducement claim. The district court
granted DQSI’s summary-judgment motion, stating that “[i]n light of very
convincing evidence of fraud by movant, we were unable to find an exception
that would allow excusing opponent’s above noted deficiencies.” Fisk timely
appealed.
                                       II.
      We review a grant of summary judgment de novo. Gulf & Miss. River
Transp. Co. v. BP Oil Pipeline Co., 730 F.3d 484, 488 (5th Cir. 2013).
“Summary judgment is proper if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” Id. (quoting Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986)); see also Fed. R. Civ. P. 56(a). “A genuine
issue of material fact exists when the evidence is such that a reasonable jury
could return a verdict for the non-moving party.” Amerisure Ins. Co. v.
Navigators Ins. Co., 611 F.3d 299, 304 (5th Cir. 2010) (quoting Gates v. Tex.
Dep’t of Protective & Regulatory Servs., 537 F.3d 404, 417 (5th Cir. 2008)).
“Evidence is construed ‘in the light most favorable to the non-moving party,
and we draw all reasonable inferences in that party’s favor.’” R & L Inv. Prop.,
L.L.C. v. Hamm, 715 F.3d 145, 149 (5th Cir. 2013) (quoting Griffin v. United
Parcel Serv., Inc., 661 F.3d 216, 221 (5th Cir. 2011)).
                                       III.
      We must first decide whether federal or state law applies to Fisk’s claim
for fraudulent inducement into the settlement agreement. Fisk argues that

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federal law applies because the release “arose out of a federal law dispute (the
Miller Act).” Fisk contends that the district court failed to apply the correct
legal standard for justifiable reliance by imposing an active duty of
investigation on the party alleging fraud.       DQSI argues that summary
judgment was appropriate here under both federal law and Louisiana law.
      Federal law applies. “Questions regarding the enforceability or validity
of [settlement] agreements are determined by federal law—at least where the
substantive rights and liabilities of the parties derive from federal law.” Mid-
S. Towing Co. v. Har-Win, Inc., 733 F.2d 386, 389 (5th Cir. 1984) (applying
federal law to decide the validity of a settlement agreement because the claims
in the case were premised on general maritime law). “The Miller Act provides
a federal cause of action, and the scope of the remedy as well as the substance
of the rights created thereby is a matter of federal not state law.” F.D. Rich
Co. v. United States ex rel. Indus. Lumber Co., 417 U.S. 116, 127 (1974),
superseded by statute on other grounds; see also Liberty Mut. Ins. Co. v. United
States ex rel. Lamesa Nat’l Bank (In re Schooler), 725 F.3d 498, 508 (5th Cir.
2013) (stating that “with the bond required under the Miller Act, the rights
and obligations . . . do not originate in state statutes, but rather derive from
federal law and the bond issued in compliance therewith”).
      The Miller Act serves “to protect persons supplying labor and material
for the construction of federal public buildings in lieu of the protection they
might receive under state statutes with respect to the construction of
nonfederal buildings.” Arena v. Graybar Elec. Co., 669 F.3d 214, 220 (5th Cir.
2012) (quoting United States ex rel. Water Works Supply Corp. v. George
Hyman Constr. Co., 131 F.3d 28, 31 (1st Cir. 1997)); see also United States ex
rel. Sherman v. Carter, 353 U.S. 210, 216 (1957), superseded by statute on other
grounds. “The Act gives suppliers and subcontractors the right to sue a prime

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contractor in U.S. district court for the amount owed to them.” Arena, 669 F.3d
at 220. Thus, the district court was correct that “[b]ecause the claims in this
case are premised on the Miller Act, federal law governs the validity of the
Agreements and thus any fraud claim that might invalidate them.”
      Young v. BP Exploration & Production, Inc. (In re Deepwater Horizon),
786 F.3d 344 (5th Cir. 2015) (Deepwater Horizon I), is instructive here. In that
case, the district court enforced a settlement agreement against BP. 786 F.3d
at 348. BP argued, among other things, that the appellee fraudulently induced
it into entering the settlement agreement. Id. Rather than holding that BP’s
fraudulent-inducement claim was governed by state law (despite BP’s
argument that Louisiana law, not federal law, applied), we held that because
the appellee “alleged causes of action under general maritime law and the
Jones Act against BP, federal contract law governs the validity and
enforceability of [the appellee’s] putative settlement agreement with BP.” Id.
at 354; see id. at 354 n.14.
      Here, the rights and liabilities of the parties allowing Fisk to sue DQSI
and Western for delay damages incurred in a federal construction project
derive from the Miller Act, and thus federal law applies. See In re Schooler,
725 F.3d at 508; Deepwater Horizon I, 786 F.3d at 354. “[F]ederal contract law
is largely indistinguishable from general contract principles under state
common law.” Deepwater Horizon I, 786 F.3d at 354. “A court may set aside a
settlement agreement induced by fraud,” and “[t]he essential elements of
fraudulent inducement into a settlement are no different from any action on
fraud.” Id. at 362 (quoting 15B Am. Jur. 2d Compromise & Settlement § 32 (2d
ed. 2014)). The elements of fraudulent inducement are that:
      (1) a material representation was made; (2) the representation was
      false; (3) when the representation was made, the speaker knew it
      was false or made it recklessly without any knowledge of the truth
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      and as a positive assertion; (4) the representation was made with
      the intention that it be acted upon by the other party; (5) the party
      acted in reliance on . . . the representation; and (6) the party
      suffered injury.
Id. at 363 (emphasis added) (quoting O’Hare v. Graham, 455 F. App’x 377, 379–
80 (5th Cir. 2011)). “For common law fraud, we look to justifiable reliance as
the common law standard for reliance.” Lake Eugenie Land & Dev., Inc. v. BP
Expl. & Prod., Inc. (In re Deepwater Horizon), 643 F. App’x 377, 382 (5th Cir.
2016) (Deepwater Horizon II) (unpublished) 7 (citing Field v. Mans, 516 U.S. 59,
71–75 (1995)).
      Having determined that federal law applies, we must next decide
whether the party alleging fraud must engage in active investigation to satisfy
the standard of justifiable reliance.       Although the district court initially
determined that federal law applied, it later incorporated Louisiana law on
justifiable reliance into the federal standard. DQSI contends that there is no
meaningful difference between federal law and Louisiana law on the
requirements of justifiable reliance. Moreover, DQSI insists that there is no
genuine issue of material fact on the element of justifiable reliance because
Fisk is a sophisticated party that did not actively investigate whether DQSI
was engaged in fraud.
      DQSI fails to apprehend the requirements of justifiable reliance under
federal law. Supreme Court precedent—on which both Fisk and DQSI rely—
shows that federal contract law relating to fraudulent inducement does not
require active investigation to demonstrate justifiable reliance. In Field v.
Mans, the Supreme Court defined justifiable reliance by looking to the

      7  Pursuant to Fifth Circuit Rule 47.5.4, unpublished opinions issued on or after
January 1, 1996, generally are not precedent, although they may be cited as persuasive
authority pursuant to Fed. R. App. P. 32.1(a).
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Restatement (Second) of Torts as “the most widely accepted distillation of the
common law of torts.” 516 U.S. at 70; see also 516 U.S. at 61 (holding that
§ 523(a)(2)(A) of the Bankruptcy Code requires not a standard of reasonable
reliance but the “less demanding one of justifiable reliance”). The Court stated
that “[t]he Restatement expounds upon justifiable reliance by explaining that
a person is justified in relying on a representation of fact ‘although he might
have ascertained the falsity of the representation had he made an
investigation.’” Id. at 70 (quoting Restatement (Second) of Torts § 540 (1976)).
       The Court found instructive the Restatement’s illustration of a seller
who claims his land is free of encumbrances: “according to the Restatement, a
buyer’s reliance on this factual representation is justifiable, even if he could
have ‘walked across the street to the office of the register of deeds in the
courthouse’ and easily have learned of an unsatisfied mortgage.” Id. (quoting
Restatement (Second) of Torts § 540 illus. 1). Under a standard of justifiable
reliance, “the plaintiff is entitled to rely upon representations of fact of such a
character as to require some kind of investigation or examination on his part
to discover their falsity, and a defendant who has been guilty of conscious
misrepresentation can not offer as a defense the plaintiff’s failure to make the
investigation or examination to verify the same.” Id. at 72 (quoting 1 Fowler
V. Harper & Fleming James, Jr., The Law of Torts § 7.12, pp. 581–83 (1956)). 8

       8 DQSI leans heavily on the statement in Field that “it is only where, under the
circumstances, the facts should be apparent to one of [the victim’s] knowledge and
intelligence from a cursory glance, or he has discovered something which should serve as a
warning that he is being deceived, that [a victim of alleged misrepresentation] is required to
make an investigation of his own.” 516 U.S. at 71–72 (quoting William L. Prosser, Law of
Torts § 108, p. 718 (4th ed. 1971)). On this record, however, there is a genuine issue of
material fact as to whether it should have been apparent to Fisk “from a cursory glance” that
it was required to investigate further and whether Fisk “discovered something which should
[have] serve[d] as a warning that [it was] being deceived.” See id. Importantly, the
settlement negotiations occurred after Fisk’s FOIA request, and Fisk’s supervisor of
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        We have held the same. In Deepwater Horizon II, we applied federal
law in a maritime case involving an oil spill settlement program. 643 F. App’x
at 381. We held that the administrators of the oil spill settlement program
justifiably relied on misrepresentations even though they “failed to investigate
the claims more thoroughly.”           Id.    This was because “the requirement of
justifiable reliance does not impose a duty of active investigation on a plaintiff,
and does not entitle a defendant to exploit a plaintiff’s foolishness with
impunity.” Id. at 382–83 (quoting Restatement (Third) of Torts: Liab. for Econ.
Harm § 11 cmt. d (2014)). 9
       Here, there is a genuine issue of material fact on the element of
justifiable reliance. 10     DQSI emphasizes that Clyne, Fisk’s supervisor of
operations, obtained through the FOIA request copies of all the contract

operations stated that DQSI’s representations during negotiations “laid to rest” his previous
concerns.

       9 DQSI fails to address Deepwater Horizon II in its response brief, although Fisk relies
on this case extensively in its opening brief.

       10 Based on Hobbs v. Alcoa, Inc., 501 F.3d 395 (5th Cir. 2007), DQSI contends that the
integration or merger clause in the settlement agreement barred Fisk’s fraudulent-
inducement claim as a matter of law. Assuming arguendo that this argument was not
forfeited, the integration- or merger-clause cases DQSI cited at oral argument do not
undermine our holding that there is a genuine issue of material fact on the element of
justifiable reliance. Hobbs, like Armstrong v. American Home Shield Corp., 333 F.3d 566
(5th Cir. 2003), and U.S. Quest Ltd. v. Kimmons, 228 F.3d 399 (5th Cir. 2000), is a diversity
case that applies Texas law on the effect of integration or merger clauses on potential fraud
claims. See Hobbs, 501 F.3d at 397–98. Even under Texas contract principles, “a merger
clause can be avoided based on fraud in the inducement and . . . the parol evidence rule does
not bar proof of such fraud.” Armstrong, 333 F.3d at 571 (quoting Schlumberger Tech. Corp.
v. Swanson, 959 S.W.2d 171, 179 (Tex. 1997)). Where an agreement does not reflect the
“requisite clear and unequivocal expression of intent necessary to disclaim reliance on the
specific representations,” a fraudulent-inducement claim may proceed. See Dunbar Med. Sys.
Inc. v. Gammex Inc., 216 F.3d 441, 451 (5th Cir. 2000) (quoting Schlumberger, 959 S.W.2d at
179) (determining that a merger clause was insufficient to bar a fraudulent-inducement
claim). Simply put, here Fisk has not shown the “clear and unequivocal expression of intent”
necessary to disclaim reliance on DQSI’s alleged misrepresentations during mediation and
settlement negotiations.
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modifications months before mediation. DQSI contends that Fisk could have
contacted the Corps directly to determine whether the unsigned contract
modifications it had obtained represented finalized, binding documents. As a
subcontractor, however, Fisk had no direct relationship with the Corps.
Moreover, the affidavit of Glenn A. Price supports Fisk’s contention that it
reasonably believed at settlement that negotiations with the Corps were
ongoing and thus that the 464-day delay damages claim was still viable. 11
Price, an expert with significant experience in federal construction projects,
states that “the modifications received by Fisk in response to its FOIA Request
were not fully executed” because “DQSI was required to sign the modifications”
but had not done so. Price also notes that DQSI could have protected its
subcontractors by striking the “Closing Statement” of the contract
modifications that waived any future claim for delay damages.
       In addition, the summary-judgment record contains affidavits stating
that    DQSI     made      representations       during     mediation       and    settlement
negotiations that the Request for Equitable Adjustment for the 464-day delay
damages claim was still viable. Clyne, Fisk’s supervisor of operations, states
in an affidavit that “[b]ased on the representations made at mediation by
DQSI, my concerns about the [Request for Equitable Adjustment] expressed in

       11  DQSI contends that Price’s affidavit “consists of little more than conclusory
statements” and is therefore insufficient as summary-judgment evidence. The authorities
DQSI cites to support this assertion show that “unsupported affidavits setting forth ‘ultimate
or conclusory facts and conclusions of law’ are insufficient to either support or defeat a motion
for summary judgment.” Orthopedic & Sports Injury Clinic v. Wang Labs., Inc., 922 F.2d
220, 223–25 (5th Cir. 1991) (quoting Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th
Cir. 1985)) (determining that an expert’s affidavit in a case involving a gross-negligence claim
was “wholly or almost wholly conclusory” where the expert’s affidavit stated that defendant
was “grossly negligent”). Price’s affidavit, however, offers more than such ultimate or
conclusory facts and conclusions of law. As demonstrated above, his affidavit contains
specific statements that are intermediary points along the road to evaluating justifiable
reliance.
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my December 10, 2013 letter were laid to rest.” According to Clyne, “[w]ithout
the representations made by Mr. Lee and Mr. McCumsey and the
understanding that Fisk had a viable option to present its claims to the Corps,
I would not have accepted the settlement agreement.” Thomas, Fisk’s in-house
general counsel who executed the settlement agreement on Fisk’s behalf,
states in his affidavit that during negotiations he “was specifically told by
representatives of DQSI that DQSI had not received payment for the work
done by Fisk or for its delay damages and therefore Fisk could present a
request for adjustment (REA) to obtain payment.” According to Thomas, “Fisk
relied on this fundamental representation by DQSI in accepting the settlement
agreement . . . .” 12
       In the settlement agreement, DQSI agreed “to submit a Request for
Equitable Adjustment (‘REA’) presented by Fisk to [the Corps].” DQSI insists
that there is a significant distinction between “a” Request for Equitable
Adjustment and “the” Request for Equitable Adjustment. This argument is
meritless. 13 If submitting any Request for Equitable Adjustment for delay
damages stemming from the 464-day delay was impossible—and if DQSI but
not Fisk knew this at the time of settlement negotiations—then it is a small
wonder that the district court found “very convincing evidence of fraud by
[DQSI].” On this record, applying the correct legal standard, there is a genuine
issue of material fact regarding whether Fisk justifiably relied on DQSI’s
representations about Fisk’s Request for Equitable Adjustment at settlement.

       12Fisk contends that “[t]he district court erred by evaluating the credibility of the
witnesses and the weight of the evidence.” We need not reach this issue to determine that
granting summary judgment was unwarranted here.

        Indeed, in the memorandum of agreement, which the settlement agreement was
       13

“meant to formalize,” DQSI agreed “to submit to [the Corps] the Request for Equitable
Adjustment presented by Fisk . . . .” (emphasis added).
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                                   IV.
     Accordingly, we REVERSE the judgment of the district court and
REMAND for further proceedings consistent with this opinion.

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