Court Opinion

ID: 2695747
Source: CourtListenerOpinion
Date Created: 2014-08-02 00:12:35.872616+00
Date Added: 2024-06-11T09:14:32.552711
License: Public Domain

[Cite as Cent. Allied Ents., Inc. v. Adjutant General's Dept., 2010-Ohio-3229.]

                                                          Court of Claims of Ohio
                                                                                          The Ohio Judicial Center
                                                                                  65 South Front Street, Third Floor
                                                                                             Columbus, OH 43215
                                                                                   614.387.9800 or 1.800.824.8263
                                                                                              www.cco.state.oh.us

CENTRAL ALLIED ENTERPRISES, INC.

        Plaintiff/Counter Defendant

        v.

THE ADJUTANT GENERAL’S DEPARTMENT

        Defendant/Counter Plaintiff
        Case No. 2007-07841

Judge Joseph T. Clark

DECISION

        {¶ 1} Plaintiff/counter defendant, Central-Allied Enterprises, Inc. (CAE), brought
this action alleging breach of contract, unjust enrichment, and constructive change
order. Defendant/counter plaintiff, the Adjutant General’s Department (AGD), filed a
counterclaim for breach of contract. The issues of liability and damages were bifurcated
initially; however, prior to the commencement of trial and with the consent of the court,
the parties agreed to proceed to trial on both issues.
        {¶ 2} The case concerns a project to rebuild the helicopter apron at the Akron
Canton Army Aviation Support Facility. Initially, AGD hired Superior Asphalt Paving
Company to mill the existing asphalt; however, the milling operation was halted when
the surface began shifting due to excessive moisture in the soil. (Defendant’s Exhibit
B.) AGD then hired Whitworth Borta (WB), an engineering company that specialized in
the design of airports, to redesign the project and prepare the plans and specifications.
        {¶ 3} WB hired Hall’s Testing and Consulting (Hall) to assess the soil
composition and to determine whether the soil had the appropriate strength-bearing
characteristics necessary for airport construction.      Hall prepared a report which
concluded that the soil was suitable for construction “when brought to proper moisture
conditions.” (Plaintiff’s Exhibit 4.) The Hall report was available for review pre-bid and
was included as an addendum to the contract documents.
       {¶ 4} CAE’s field engineer, Joe Seck, testified that he read the Hall report and
that he walked over the construction site prior to the submission of CAE’s bid. CAE was
the low bidder and in July 2003, entered into a lump-sum contract with AGD. According
to Seck, CAE was to reconstruct the access road, to excavate and replace the apron as
designed, and to excavate the area located adjacent to the apron designated for a
detention pond.1 WB’s design included lengthening the taxiway and reconstructing the
apron. It is undisputed that the apron area spanned approximately 11 acres. WB’s
plans called for removal of the existing asphalt and excavation of the soil to a depth of
20 inches, to be replaced with 12 inches of aggregate topped with eight inches of new
asphalt in order to accommodate the heavier Chinook helicopters. Augustine Ubaldi,
WB’s principle and professional engineer, testified that WB was not the construction
manager but remained on site for quality assurance and to serve as the associate for
AGD. WB also provided the layout at the site and established the grades.
       {¶ 5} CAE asserts that during the apron reconstruction, isolated areas of
unsuitable soil were encountered in August and September 2004, such that CAE’s
subcontractor was required to excavate several more inches to reach stable soil and to
replace the excavated soil with additional aggregate. In some of these areas, CAE
layered “geo-fabric” with the aggregate in order to bring the soil to suitable strength.
CAE seeks reimbursement for the costs of this extra work not contemplated by the
contract as bid.
       {¶ 6} CAE asserts that during those times when the unsuitable soil was
discovered, representatives from WB and CAE were present but they were unable to
reach an agreement as to payment for the added excavation. CAE chose to proceed
with the work so as not to delay the project and both parties agreed that any additional
costs would be reconciled by a final change order to be prepared and submitted upon
CAE’s completion of the project. Seck testified that CAE’s work on the project was
substantially complete in December 2004. According to Seck, the only remaining tasks
included repair seeding, some asphalt paving, and a few electrical adjustments with the
gate openers. Seck testified that he had requested final quantities from WB and that he
was waiting for verification of quantities used for the excavation in order to prepare the
final change order; however, WB did not provide such numbers to CAE. Seck testified
that he completed his own calculations in reference to the undercuts and that he then
asked WB to submit the proposed change order in January 2006, but that WB did not
respond to that request either. (Plaintiff’s Exhibit 8.)
       {¶ 7} CAE eventually received an e-mail from Steve Potoczak, WB’s vice
president, sent January 25, 2006, which states as follow:
       {¶ 8} “Joe and Ken:
       {¶ 9} “Just thought I would give you a courtesy email and tell you that we have
stopped working on all work related to the AASF No.1 project because our contract is
and has been expired and we have not been paid for some time now. I know you know
about how it works to get back into the ‘system’ and get paid. So, bear with me on this
one. Hopefully things will get straightened out soon.
       {¶ 10} “I’ve gotten your pay requests and was working on the closeout package
(which includes a closeout change order for each of you) but have stopped for now. I
would advise that you both check with the [AGD] and see if your contracts are expired
too.” (Plaintiff’s Exhibit 9.) CAE subsequently instituted this action.
       {¶ 11} AGD contends that CAE’s claim is untimely, that CAE failed to submit a
written change order both before incurring additional costs and prior to completion of
CAE’s work on the project, and that AGD did not execute a written waiver of the
requirement for a written change order. Thus, AGD contends that CAE’s failure to
provide timely notice of the claim for extra work constitutes a waiver of such claim. In
addition, AGD asserts that CAE cannot prevail on a claim for unjust enrichment or
constructive change order when the work at issue is governed by the terms of an
express contract. Finally, AGD has asserted a counterclaim, wherein AGD contends
that although CAE may have excavated more soil and used more aggregate at the

       1
          A detention pond is designed to collect and store storm water runoff which is then allowed to
leach into the ground.
apron area, it excavated less soil and placed less aggregate material at the detention
pond such that AGD is entitled to a rebate of approximately $11,000.
       {¶ 12} CAE disputes the counterclaim under the theory that this was a fixed-sum
contract and that CAE performed all that was required to complete the project along
with the extra work. CAE makes the distinction that the detention pond ended up being
smaller than originally designed and that the area required less excavation to achieve
the desired grade; however, such alterations were not accomplished by a change order
issued by AGD. Therefore, CAE asserts that AGD cannot prevail on the counterclaim.
In addition, CAE contends that AGD’s claim is untimely in that the proposed “deduct
change order” was issued November 15, 2007, during the course of this litigation and
well after the project was completed.
       {¶ 13} Differing site conditions are addressed in the contract under Article 7.
Thus, once CAE determined that there were subsurface concealed conditions that
differed materially from those described in the contract documents, the contract
provided instructions, specific to such event, that were necessary in order to request
additional payment.
       {¶ 14} In reference to extra or additional work not contemplated by the contract,
the parties are directed as follows. Article 7.3.2 requires that the “Contractor shall notify
the Architect/Engineer in writing of such conditions before they are disturbed.”
(Defendant’s Exhibit G.) Article 7.3.3 states that if the “Architect/Engineer finds that
such conditions do materially differ from those indicated or reasonably inferred from the
Contract Documents, the Architect/Engineer shall process an appropriate Change
Order.”2
       {¶ 15} Article 7 further states, in relevant part:
       {¶ 16} “7.3.3.1 The Contractor will only proceed with a proper authorization, in
writing, as provided by the Contract Documents.
       {¶ 17} “7.3.2.2 No claim of the Contractor under paragraph GC 7.3.3 shall be
allowed unless the Contractor provided the notice required in paragraph GC 7.3.2.”
(Defendant’s Exhibit G.)

       2
         Seck testified that approximately five change orders were processed during the course of the
project and that the change orders were resolved within two weeks to two months.
        {¶ 18} Ohio law allows contractors to recover additional costs when differing site
conditions negatively affect their work. Sherman R. Smoot Co. v. State (2000), 136
Ohio App.3d 166. “Differing site conditions claims arise from two separate and distinct
circumstances, usually referred to as Types I and II differing site conditions. H. B. Mac,
Inc. v. United States (C.A.Fed., 1998), 153 F.3d 1338, 1343; Cushman, Jacobsen &
Trimble, Proving and Pricing Construction Claims (2d 1996), Section 7.2. A Type I
differing site condition occurs where actual site conditions differ from the conditions
indicated in the contract. A Type II differing site condition occurs where actual site
conditions differ from conditions normally encountered in work of the character provided
for in the contract. Youngdale & Sons Construction Co., Inc. v. United States (1993), 27
Fed. Cl. 516, 528; H. B. Mac, Inc., supra.” Id. at 173.
        {¶ 19} The Hall report states that the “general soil stratum consists of very soft to
stiff completely weather decomposed siltstone, clay stone, and sandstone shale with
poor drainage properties underlying 1" to 18" of glacial till. These soils were never
excavated and compacted prior to previous hot mix asphalt placement and are virgin
soils. Provisions were not made for site drainage. Evidence that there were some
underlying problems originally is indicated in the variable thickness of asphalt. * * * All
values are typical of glaciated deposits in the area; however throughout the site varying
fractions of silt, clay and sand may require additional field verification during
construction.” (Defendant’s Exhibit B.) In the instant case, the court finds that there
was insufficient evidence adduced at trial to establish that the actual nature of the soil
differed from the type of soil normally encountered during excavation in that region of
Ohio.
        {¶ 20} To prevail on a Type I claim, CAE must prove:          “(1) that its contract
contains an affirmative indication regarding the subsurface or latent physical condition
that forms the basis of the claim; (2) that the contractor interpreted the contract as
would a reasonably prudent contractor; (3) that the contractor reasonably relied upon
the contract indications regarding the subsurface or latent physical condition; (4) that
the contractor encountered conditions at the job site which differed materially from the
contract indications regarding the subsurface or latent physical condition; (5) that the
actual conditions encountered by the contractor were reasonably unforeseeable; and (6)
that the contractor incurred increased costs which are solely attributable to the
materially different subsurface or latent physical condition. Youngdale & Sons, at 528;
Weeks Dredging & Contracting, Inc. v. United States (1987), 13 Cl. Ct. 193, 218;
Cushman, Jacobsen & Trimble, at Section 7.4.” Id. at 174.
      {¶ 21} Seck testified that CAE’s work on the project was underway in June 2004,
that Potoczak was WB’s field representative, and that Potoczak directed CAE’s work.
After CAE completed the excavation of the apron, the area was “proof-rolled” meaning
that a loaded truck was driven over the site and areas of unstable soil were staked and
marked for further excavation.    According to Seck, CAE’s subcontractor excavated
those select areas an additional 12 to 24 inches and that additional aggregate was
brought in for the fill. Seck stated that in some areas his crew had to layer geo-fabric
and aggregate to achieve suitable stability and grade.
      {¶ 22} As owner, defendant was required to supply sufficient plans and
specifications such that a contractor can perform under the contract. According to CAE,
the occurrence of unsuitable soil was a concealed condition that was not known or
disclosed in the contract documents or during the bid process. Conversely, defendant
contends that the contract documents included the Hall report which references
subsurface water running freely into the test hole that had been dug by a backhoe
during Hall’s investigation of the soil. In addition, photographs taken at the pre-bid
meeting depict the presence of water pooling on the pavement surface. (Defendant’s
Exhibits E, F, and I.) Potoczak testified that he was the project manager for WB and
that he worked with Ubaldi in preparing the project plans.       Potoczak testified that
undercuts were necessary in three major areas of the apron and that this was not a
materially different condition than that which was represented in the Hall report
inasmuch as water was known to collect in the subsurface and the plans included
drainage measures to divert the subsurface water to catch-basins.         Indeed, Seck
testified that CAE installed catch-basins and drainage pipes after the initial excavation
was completed by the subcontractor. According to Potoczak, the design included the
use of “geo-fabric” and that this is a “red flag” to bidders that substandard soil may be
encountered in some areas.
       {¶ 23} Upon review of the evidence presented, the court is not convinced that the
actual conditions encountered by CAE differed materially from the contract indications
regarding the subsurface or that such conditions were not reasonably foreseeable.
Based upon the information provided to bidders in the Hall report, the presence of
standing water in various areas of the apron on the day of the pre-bid meeting, and the
architect’s inclusion of catch basins and a detention pond to facilitate drainage, the court
finds that the presence of excessive moisture and drainage problems in the subsoil was
disclosed to bidders. The inclusion of geo-fabric in the design also served as notice of
the possibility that substandard soil existed in select areas. Thus, the court concludes
that the conditions encountered by CAE were not materially different from those outlined
in the contract and that they were reasonably foreseeable.3
       {¶ 24} Even assuming the court were to find that CAE encountered concealed
subsurface conditions which differed materially from those described in the contract
documents, CAE failed to abide by the contract provisions regarding notice and written
authorization to proceed. Seck testified that he and Potoczak discussed the cost of the
extra work but that they could not reach an agreement in the field. Rather than delay
the process, they agreed that a final reconciliation would be done upon CAE’s
completion of the work. Potoczak testified that Seck agreed to proceed with the work
rather than to seek approval of a change order, that a final change order would be
submitted at the end of the project, and that he did not consider this to be an unusual
procedure. Nonetheless, Potoczak testified that a number of change orders had been
executed by the parties throughout the project, that WB’s role in the process was to
make a recommendation to the owner as to a proposed change order, but that WB was
not to prepare change orders.        In addition, Potoczak testified that according to the
provisions in Article 8 of the contract, CAE’s claim for additional work should have been
submitted in writing to WB prior to the expiration of the contract. Finally, Potaczak
stated that CAE itself could have initiated a change order through AGD.
       {¶ 25} “It is universally recognized that where a building or construction contract,
public or private, stipulates that additional, altered, or extra work must be ordered in
writing, the stipulation is valid and binding upon the parties, and no recovery can be had

       3
       The court accorded little weight to the opinions offered by CAE’s engineering expert, Ronald
for such work without a written directive therefor in compliance with the terms of the
contract, unless waived by the owner or employer.” Foster Wheeler Enviresponse, Inc.
v. Franklin County Convention Facilities Auth., 78 Ohio St.3d 353, 360, 1997-Ohio-202.
According to defendant, CAE failed both to provide timely written notice and to follow
the terms and procedures as outlined in the contract. According to the contract, such
failure constitutes a waiver of any claim for increased costs to perform.
       {¶ 26} Article 7.1.1 states that the “Department, without invalidating the Contract,
may order changes in the Work consisting of additions, deletions or other revisions,
including without limitation revisions resulting from an extension granted in accordance
with Paragraph GC 6.4. To the extent the time for Contract Completion or the Contract
Price is affected, the Contract will be equitably adjusted by Change Order in accordance
with this Article and the Change Order Procedure and Pricing Guidelines (CO).” In
addition, the contract provides, as follows:
       {¶ 27} “ * * *
       {¶ 28} “7.1.1.3    The Contractor shall not proceed with any change in the Work
without the required written Authorization.
       {¶ 29} “7.1.1.4    The Contractor understands and agrees that agreement to a
Change order is final and without reservation of any rights.
       {¶ 30} “7.1.1.5    The Department reserves the right to cancel or modify any
Change Order authorization.” (Defendant’s Exhibit G.)
       {¶ 31} Any change in the cost of the work was governed by the provisions of
Article 7.2, which states as follows.
       {¶ 32} “7.2      PRICE DETERMINATION
       {¶ 33} “7.2.1 The maximum cost or credit resulting from a change in the Work
shall be determined in accordance with the Change Order Procedure and Pricing
Guidelines and as described below.
       {¶ 34} “* * *
       {¶ 35} “7.2.3 In the event that no agreement can be reached between the
Contractor and the Department as to the cost or credit resulting from a change in the
work, said cost or credit shall be determined by the Department, upon the

Erb.
recommendation of the Architect/Engineer.”          (Defendant’s Exhibit G.)      (Emphasis
added.)
       {¶ 36} The contract provides in Article 8 as follows.
       {¶ 37} “8.1.1 Whenever the Contractor intends to seek additional compensation *
* * whether due to delay, extra Work, additional Work, breach of Contract, or other
causes arising out of or related to the Contract or the Project, the Contractor shall follow
the procedures set forth in this Article. To the fullest extent permitted by law, failure of
the Contractor to timely provide such notice shall constitute a waiver by the Contractor
of any claim for additional compensation * * *.
       {¶ 38} “8.1.2 The Contractor shall make a claim in writing filed with the
Architect/Engineer and prior to Contract Completion, provided the Contractor notified
the Architect/Engineer, in writing, no more than ten(10) days after the initial occurrence
of the facts, which are the basis of the claim.
       {¶ 39} “8.1.3 In every such written claim submitted in accordance with this
Article, the Contractor shall submit three (3) copies of its claim, within thirty (30) days of
the notice required by Subparagraph GC 8.1.2, detailing the amounts claimed and
providing the following information to permit timely and appropriate evaluation of the
claim, determination of responsibility and any remaining opportunity for mitigation. If the
Contractor is unable to calculate any amount claimed in detail, the Contractor shall use
its best efforts to provide a reasonable estimate of such amount.
       {¶ 40} “8.2.1 The Contractor shall submit three (3) copies of the claim; one (1) to
the Architect/Engineer and two (2) to the Department. Upon submission of the claim by
the Contractor, the Architect/Engineer and the Department will meet to review and
discuss the claim.” (Defendant’s Exhibit G.)
       {¶ 41} The court finds that the terms of the contract are clear and unambiguous.
As such, the court notes that if no ambiguity exists, the terms of the contract must
simply be applied without resorting to methods of contract construction and
interpretation. See Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241;
Freiling v. Ohio Lottery Comm’n, Ct. of Cl. No. 2003-11275, 2004-Ohio-6583, ¶14.
       {¶ 42} In the instant case, CAE seeks to be excused from compliance with the
notice and change order provisions of the contract. Seck testified that the undercuts
were performed in August and September 2004, and that CAE’s work was 95 percent
complete by December 2004. At trial, CAE produced a written change order dated
January 11, 2006, and AGD submitted a one-page document that Seck identified as the
change order that was prepared for CAE’s counsel, dated September 20, 2006.
(Plaintiff’s Exhibit 8, Defendant’s Exhibit A.) Ubaldi testified that he was aware that
Potoczak had directed CAE to perform additional excavation work in the field and that a
final change order would be submitted to WB.          Ubaldi stated that WB would then
reconcile the costs by comparing the specifications for the work and the quantities of
material called for in the contract against the calculations of the work performed and the
materials used.
       {¶ 43} Seck testified that CAE asked WB to calculate the final sums for the
change order and to submit the change order to AGD.               Nonetheless, WB never
provided CAE with the final numbers before both CAE’s and WB’s contracts expired.
The January 2006 e-mail from Potoczak states that WB had received CAE’s pay
requests and that it had been working on a closeout package before its own contract
expired. Ubaldi testified that WB’s contract expired sometime in the fall of 2005.
       {¶ 44} The testimony and evidence presented at trial was insufficient to establish
a usable timeline for the court to determine with any specificity when CAE’s contract
expired, the date that WB’s contract expired, the date that a written change order was
submitted to WB, and the corresponding date that a change order was presented to
AGD.    The court further finds that Seck’s testimony was inconsistent and at times
contradictory. At one point in the trial, Seck testified that in 2005 he had been waiting to
receive figures from WB in reference to work performed by his electrical subcontractors
before he could prepare and submit a final change order. Seck later testified that he
could not submit a final change order prior to 2006 because he had been waiting for
verification from WB as to the dimensions excavated in excess of the contract
specifications and the corresponding amounts of aggregate used to fill these areas.
This purported reliance on WB is belied by the fact that Seck testified that he had kept
his own records of such measurements and that he was able to obtain from CAE a
computer printout of the daily deliveries of aggregate to the site for use in compiling the
change order he prepared in 2006. (Plaintiff’s Exhibits 7, 10.)
       {¶ 45} In addition, Seck failed to establish that the pay requests referenced by
WB concerned the excavation as opposed to adjustments in regard to CAE’s electrical
subcontractors. The record lacks any written documentation authored by CAE that
provided notice to WB or to AGD that the matter remained unresolved and there is a
paucity of evidence to verify what, if anything, CAE did to preserve its rights in
accordance with the terms of the contract. Even CAE’s argument that it had no ability to
submit a change order on its own does not square with the contract language in Article
8, specifically, Article 8.2.1.
       {¶ 46} Upon review of the evidence adduced at trial, the court finds that CAE
failed to submit a written change order to WB or to AGD prior to CAE’s completion of
the project. Indeed, the court is not convinced that CAE was actively seeking to assert
their claim throughout 2005. Regardless of the purported reliance on WB suggested by
Seck, CAE waited an entire calendar year after substantial completion of the project to
compile the change order and reduce it to written form.
       {¶ 47} To the extent that CAE argues that AGD through its agent, WB, waived
the notice provisions of the contract, AGD contends that any waiver of the contract
provisions was required to be expressed in writing in the form of a change order
pursuant to Article 7.
       {¶ 48} “‘Waiver is a voluntary relinquishment of a known right and is generally
applicable to all personal rights and privileges, whether contractual, statutory, or
constitutional.’ Glidden Co. v. Lumbermens Mut. Cas. Co., 112 Ohio St.3d 470, 2006-
Ohio-6553, ¶49, 861 N.E.2d 109. A party asserting waiver must prove it by establishing
a clear, unequivocal, decisive act by the other party, demonstrating the intent to waive.”
Maghie & Savage, Inc. v. P.J. Dick Inc., Franklin App. No. 08Ap-487, 2009-Ohio-2164,
¶27. (Additional citations omitted.)
       {¶ 49} CAE contends that WB agreed to CAE’s decision to proceed with the work
and to submit a final change order, and that such act constituted a waiver of the change
order and notice provisions of the contract. CAE asserts that it was unable to assert a
claim because WB did not respond with the figures CAE requested in order to compile
the change order prior to CAE’s completion of the project and prior to WB’s contract
expiration. Upon review, the court finds insufficient evidence in the record of a clear
and unequivocal act demonstrating AGD’s intent to waive the contractual notice, change
order, and claim review requirements.
       {¶ 50} AGD further contends that CAE’s claim for a constructive change order is
moot, in light of the opinion of the Supreme Court of Ohio in Dugan & Meyers Const.
Co., Inc. v. Ohio Dept. of Admin. Servs., 113 Ohio St.3d 226, 2007-Ohio-1687, wherein
the Supreme Court held that “when a contract has an express provision governing a
dispute, that provision will be applied; the court will not rewrite the contract to achieve a
more equitable result.” Id. at ¶39.
       {¶ 51} This court has recently addressed a similar argument and the court found
that “Dugan & Meyers does not hold that there are no circumstances under which there
may be a waiver of strict compliance with Article 8. Rather, the court in Dugan &
Meyers simply found that the contractor in that case had failed to demonstrate that it
was excused from strict compliance with the contractual claims process.” Stanley Miller
Constr. Co. v. Ohio Sch. Facilities Comm’n, Ct. of Cl. No. 2006-04351, 2010-Ohio-1528,
¶80. Nonetheless, in Stanley Miller, the court determined that the contractor “gave [the
owner] both oral and written notice that a claim was contemplated, and that [the owner]
was not unfairly prejudiced by the failure of [the contractor] to strictly comply with the
contractual dispute resolution process.” The court finds that the Stanley Miller case is
factually distinguishable in that the contractor in Stanley Miller was communicating with
the owner’s representative orally and in writing and when that avenue was unavailing,
the contractor repeatedly notified the owner that there were problems that would result
in additional costs.
       {¶ 52} Similarly, in Craft General Contractors, Inc. v. City of Urbana (Feb. 2,
1982), Franklin App. No. 81AP-346, the Tenth District Court of Appeals held that the
contractor’s “delay in filing [a] written claim beyond the one-week time period stipulated
in * * * the contract did not defeat its claim since [the owners] had independent
knowledge of the condition complained of and had oral notice of [the contractor’s]
complaint and [the owners] were not prejudiced by lack of earlier written notice.” Id. at
23. In another recent case, this court found that the contract allowed for an equitable
adjustment via change order to compensate the contractor for additional work. The
court determined that the parties had executed a change order but that the contractor
had placed a handwritten notation on the change order specifying that the sum
approved did not fully compensate the contractor for the additional work performed and
that the contractor reserved the right to pursue additional compensation. Notably, in
that case the contractor submitted its written change order within 30 days of the
occurrence of the condition; the parties engaged in negotiations as to the cost and
scope of the work which were documented in writing; and the Article 8 process was
instituted in a timely manner. See R.E. Schweitzer Construction Co. v. University of
Cincinnati (May 18, 2010), Ct. of Cl. No. 2007-02114.
       {¶ 53} In this case, CAE communicated orally with the owner’s representative in
the fall of 2004 and at some point in 2005, but none of these interactions were
documented. CAE failed to submit a formal written change order to WB or to AGD
within the parameters outlined in the contract or even within a reasonable period of
time. CAE attributes the delay in submitting the change order to the fact that it was
waiting for WB to verify the quantities that were the subject of the proposed change
order, and that because WB’s contract with AGD expired prior to the change order
being submitted, CAE had no way to seek payment from AGD. The court finds that the
contract language does not support CAE’s argument. The court is constrained to permit
such a prolonged delay without placing some responsibility on the contractor to
preserve its claim in accordance with the contract provisions. Accordingly, the court
finds that CAE has failed to demonstrate that the parties executed a constructive
change order or that AGD waived compliance with the contractual claims process.
       {¶ 54} With respect to CAE’s claim for unjust enrichment, absent proof of bad
faith or fraud, an equitable action for unjust enrichment will not lie when the subject of
the claim is governed by an express contract. See Kucan v. Gen. Am. Life Ins. Co.,
Franklin App. No. 01AP-1099, 2002-Ohio-4290, ¶35, citing Rumpke v. Acme Sheet &
Roofing, Inc. (Nov. 12, 1999), Montgomery App. No. 17654. In Struna v. Ohio Lottery
Commission, Franklin App. No. 03AP-787, 2004-Ohio-5576, ¶22, the Tenth District
Court of Appeals stated that “[u]njust enrichment is an equitable doctrine to justify a
quasi-contractual remedy that operates in the absence of an express contract or a
contract implied in fact to prevent a party from retaining money or benefits that in justice
and equity belong to another. Turner v. Langenbrunner, Warren App. No. CA2003-10-
099, 2004-Ohio-2814, at ¶38, citing University Hospitals of Cleveland, Inc. v. Lynch, 96
Ohio St. 3d 118, 2002-Ohio-3748, at ¶60.” In the instant case, the subject matter of
plaintiff/counter defendant’s unjust enrichment claim was governed by the terms of the
contract between CAE and AGD. Consequently, the doctrine of unjust enrichment has
no application to this case. Accordingly, such claim is without merit.
       {¶ 55} Turning to the counterclaim asserted by AGD, the court makes the
following determination.
       {¶ 56} Article 7 - Changes in the work, provides:
       {¶ 57} “7.1   Change Order
       {¶ 58} “7.1.1 The Department, without invalidating the Contract, may order
changes in the Work consisting of additions, deletions or other revisions, * * *.
       {¶ 59} “7.1.1.3 The Contractor shall not proceed with any change in the Work
without the required written Authorization.” (Defendant’s Exhibit C.)
       {¶ 60} AGD presented CAE with a deduct change order in November 2007,
nearly three years after CAE’s work on the project was substantially complete, seeking
a rebate of approximately $11,000. AGD asserts that CAE committed a breach of the
contract in that CAE excavated less soil and correspondingly used less aggregate at the
site of the detention pond than was called for in the contract. CAE contends that AGD
cannot prevail on its claim because AGD did not order a change in the work as required
under Article 7 of the contract. In addition, CAE asserts that the deduct change order
was untimely, inasmuch as the work on the project was substantially completed more
than two years earlier.    Potoczak testified that, as the project unfolded, a significant
portion of the detention pond was not needed.         Potoczak also explained that CAE
excavated less soil because the grade at the detention pond site was found to be lower
than the design anticipated. Thus, as built, CAE used less aggregate and performed
less excavation. Both Potoczak and Ubaldi acknowledged that CAE completed what
was required but that the work at the detention pond site that is the subject of AGD’s
deduct change order was not accomplished in response to a change in the work that
was ordered by AGD. Upon review of the evidence adduced at trial, the court finds that
AGD did not order a change in the work and thus AGD’s counterclaim fails.
      {¶ 61} For the foregoing reasons, the court finds that AGD is not liable to CAE for
breach of contract, unjust enrichment, or as the result of a constructive change order.
Accordingly, judgment shall be rendered in favor of AGD, on the issue of liability and in
favor of CAE as to AGD’s counterclaim.

                                              Court of Claims of Ohio
                                                                        The Ohio Judicial Center
                                                                65 South Front Street, Third Floor
                                                                           Columbus, OH 43215
                                                                 614.387.9800 or 1.800.824.8263
                                                                            www.cco.state.oh.us

CENTRAL ALLIED ENTERPRISES, INC.

      Plaintiff/Counter Defendant

      v.

THE ADJUTANT GENERAL’S DEPARTMENT

      Defendant/Counter Plaintiff
      Case No. 2007-07841

Judge Joseph T. Clark

JUDGMENT ENTRY

      This case was tried to the court on the issues of liability and damages. The court
has considered the evidence and, for the reasons set forth in the decision filed
concurrently herewith, judgment is rendered in favor of defendant/counter plaintiff on the
issue of liability and in favor of plaintiff/counter defendant on the counterclaim. Court
costs are assessed against plaintiff/counter defendant. The clerk shall serve upon all
parties notice of this judgment and its date of entry upon the journal.

                                                    _____________________________________
                                                    JOSEPH T. CLARK
                                                    Judge

cc:

Nada G. Faddoul                                             Scott Branam
Terrence L. Seeberger                                       William C. Becker
Thomas C. O’Connell                                         Assistant Attorneys General
3475 Ridgewood Road                                         150 East Gay Street, 18th Floor
Akron, Ohio 44333-3163                                      Columbus, Ohio 43215-3130

SJM/cmd/Filed June 18, 2010/To S.C. reporter July 7, 2010