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Steel Service Corp. v. City of Cincinnati

March 13, 2007


The opinion of the court was delivered by: S. Arthur Spiegel United States Senior District Judge


This matter is before the Court on Defendant City of Cincinnati's Motion for Summary Judgment (doc. 14), Plaintiff's Response in Opposition (doc. 17), Plaintiff's Cross-Motion for Partial Summary Judgment (doc. 18), Defendant's Reply to Plaintiff's Response to Motion for Summary Judgment (doc. 21), Defendant's Response in Opposition to Plaintiff's Cross-Motion for Partial Summary Judgment (doc. 22), and Plaintiff's Reply to Defendant's Response in Opposition to Plaintiff's Cross-Motion (doc. 23).

For the reasons stated herein, the Court DENIES Defendant's Motion for Summary Judgment (doc. 14) and DENIES Plaintiff's Cross-Motion for Summary Judgment (doc. 22).

I. Facts

On February 13, 2004, Plaintiff Steel Service Corporation entered into a contract with Defendant City of Cincinnati (doc. 1). The contract required Plaintiff to detail, fabricate, and erect a steel superstructure for the expansion and renovation of the Cincinnati Convention Center (Id.). The parties to the contract experienced three delays potentially affecting Sequence 5 of the project, the crux of the instant motions (doc. 14).

Sequence 5, initially scheduled to begin August 18, 2004 and for completion by August 24, 2004, required the erection of heavy columns upon which T-4 trusses were suspended (doc. 17). Initiation of Sequence 5 was postponed due to a delay in the delivery of heavy columns by their site of manufacture in Europe, and due to a halt to construction because of visits by Presidential candidates Bush and Kerry. Further, Defendant claims that delay in this sequence was also due to a delay in the delivery of T-4 trusses due to problems with subcontractor.

The size of the project called for heavy column steel available from only two suppliers in the world-Corus Steel in London and Arcelor International America ("Arcelor") in Luxembourg, Belgium (doc. 17). Plaintiff states that Corus Steel did not have the materials available for the order, so on March 29, 2004, Plaintiff ordered the columns from Arcelor (Id.). On August 10, 2004, Plaintiff orally notified Defendant of shipping delays, such that the heavy columns would not arrive on site until August 24th (Id.). The written correspondence indicated that such delays were most likely due to hurricane conditions in the Gulf preventing timely arrival at Plaintiff's New Orleans plant (Id.). The columns ultimately arrived onsite and were erected on August 27, 2004 (Id.).

Sequence 5 also required delivery of the T-4 trusses prior to the scheduled initiation date of August 18, 2004. The original subcontractor, Odom Industries ("Odom"), contracted with Plaintiff to fabricate and deliver the T-4 trusses by August 18, 2004 (doc. 14.). On August 10, 2004, Plaintiff notified Defendant of its intent to terminate Odom for failure to timely perform its contract with Plaintiff (Id.). On August 16th, 2004, Plaintiff notified Defendant that it had terminated its sub-contract with Odom and hired Indiana Bridge & Iron Company to complete the trusses (Id.). Although Indiana Bridge delivered the finished trusses to the job site on September 1, 2004, they were rejected by Defendant due to fabrication errors (Id.). The trusses were re-delivered to the job site September 3, 2004, and installed Saturday, September 4, 2004 (Id.).

Finally, on August 12, 2004, Hunt Construction Group ("Hunt"), the City's construction manager, at the direction of Defendant and the Secret Service, directed Plaintiff to remove workers, hazardous materials, and equipment from the job site due to the 2004 Bush/Kerry presidential campaign rallies scheduled at the Convention Center on August 16 and August 18, 2004 (doc. 17).

Steel Service complied with the order, and lost four working days between Friday, August 13 and Thursday, August 19, 2004 due to the impracticality of remobilizing the construction crew and equipment between the visits by the candidates (Id.). Defendant does not agree that it was impracticable to remobilize between the visits (doc. 14).

In response to the delays, Hunt issued a series of letters on August 12, 2004, directing Plaintiff to prepare and submit a recovery schedule to account for the impacts of the Arcelor column and T-4 late deliveries (Id.). The correspondence apportioned all costs of recovery to Plaintiff (Id.). Plaintiff submitted a recovery schedule proposal on August 25, 2004, which Hunt rejected August 26th, 2004 (Id.). Hunt directed Plaintiff to implement Hunt's recovery schedule, at Plaintiff's cost, starting August 30, 2004 (Id.). On August 27, 2004, by letter, Plaintiff agreed to begin Hunt's recovery schedule, but reserved the "right to discuss further the momentary impacts in the future" (Id.). Plaintiff completed the recovery schedule on or about October 6, 2004 (doc. 14).

Plaintiff notified Defendant that it was in the process of formulating a claim for all recovery costs due to impacts not within their control on September 28, 2004 (doc. 17). On October 19, 2004, Plaintiff submitted its claim in the total amount of $238,204.00 (Id.).

II. Plaintiff's Complaint

On July 27th, 2005, Plaintiff filed its complaint alleging breach of contract (doc. 1). Therein, Plaintiff claims that, in accordance with Paragraph 20.3 of the contract, the Defendant directed it to undertake "Extraordinary Measures" to avoid the impact of delays (Id.). Plaintiff contends that the delays were excusable, as they were due to acts of the City, acts of God, and events beyond the control and without the fault of Steel Service as specified in Paragraph 40.1 (Id.). As such, Plaintiff argues that Defendant is required, pursuant to Paragraph 20.3, to compensate Plaintiff for accelerating construction to overcome excusable delays (Id.).

As a proximate result of Defendant's directive to undertake the additional measures and refusal to pay for the additional costs, Plaintiff alleges damages totaling $232,455.00 (Id.). Plaintiff requests a judgment against Defendant for damages and pre- and post-judgment interest at the maximum legal rate (Id.).

III. Defendant's Motion for Summary Judgment

On May 15, 2006, Defendant moved for summary judgment on all claims alleged by Plaintiff (doc. 14). Therein, Defendant provides three bases on which it contends summary judgment is proper (Id.). First, Defendant asserts that Plaintiff's damage claims are barred by the terms of the contract (Id.). With regard to delays caused by the Bush/Kerry appearances, Defendant points specifically to Paragraph 39.1, which requires Plaintiff to provide "clear and convincing evidence that the cause of delay was within the control of the City" (Id.). Defendant contends the federal government required the Bush/Kerry shut down (Id.). As an act of the federal government pursuant to Paragraph 40.1, Defendant argues that Plaintiff is barred from damages or money adjustments (Id.).

Defendant similarly contends that delays due to a hurricane are also barred from damages or adjustment (Id.). Defendant argues that to the extent that Plaintiff can prove a hurricane actually delayed the steel shipment, Paragraph 40.1.4 of the contract only allows for time extensions as a remedy (Id.). Moreover, Defendant argues that the clause requires a direct impact, such that the weather directly affected or prohibited work under the contract (Id.). Defendant notes that Plaintiff's allegations do not include such a connection and cites Steel Service president Jim Simonson's testimony indicating that Plaintiff had other activities and projects to work on during the steel delay (Id.).

Defendant's second basis for summary judgment is that Plaintiff failed to provide timely notice of its claim (Id.). Paragraph 37.3 requires that notice of claims be made within three days of the event giving rise to the claim and made in writing within thirty days (Id.). Again citing the testimony of Jim Simonson, Defendant contends the event giving rise to the claim was Hunt's August 26, 2004 recovery order (Id.). Though Plaintiff sent a letter the following day, Defendant argues that it was not adequate notice, as it only "reserve[d] the right to discuss further the monetary impacts in the future" and did not provide notice of a claim (Id.). Defendant contends that actual notice came on September 28, 2004, thirty-three days late (Id.).

Even if the Court finds the August 27th letter to be sufficient notice, Defendant argues that the claim was untimely filed (Id.). The claim had to be filed by September 25, 2004, thirty days after the event giving rise to the claim (Id.). Defendant contends that the Plaintiff waited until November 1, 2004, that this filing was over the ...

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