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Jess Howard Electric Co. v. Ohio School Facilities Commission

Court of Claims of Ohio

April 26, 2013


To S.C. Reporter August 22, 2013

David A. Beals, James E. Rook, Matthew L. Westerman, Assistant Attorneys General



(¶ 1} Plaintiff, Jess Howard Electric Company (JHE), brought this action against defendant, Ohio School Facilities Commission (OSFC), alleging breach of contract and seeking a declaratory judgment. The issues of liability and damages were not bifurcated and the case proceeded to trial on both issues.[1]

(¶ 2} In 2007, OSFC and the Columbus Public School District (the Owner) solicited bids for the construction of a new building known as the Livingston Avenue Elementary School (the project). The project called for multiple prime contractors. Harris Design Services acted as the architect on the project. Smoot Elford Resource (SER), an agent of the Owner, acted as the construction manager on the project. Pursuant to the contract's General Conditions (GC), SER was responsible for scheduling the project and coordinating the work of the contractors. (Joint Exhibit A4.) Michael Kray, III, was SER's project manager on the project from November 2007 until project completion. William Green, Jr., an employee of SER for approximately five years, was SER's on-site supervisor until September 2008, and he reported to Kray. Tom Sisterhen was SER's project executive. FH Martin was the general contractor. The project was a two-storied building comprised of four distinct areas, which were referred to as Areas A, B, C, and D throughout the construction schedules.

(¶ 3} JHE bid for and was awarded a contract with the Owner as the prime contractor for the electrical work on the project. According to JHE, in its bid it estimated its labor for the project to be 822 man-days. (Plaintiffs Exhibit 25.) Jonathan Howard is JHE's president, but at the time of the bid, he was executive vice president and he reviewed the bid that was prepared by JHE's estimators. Howard testified that he believed that the bid was reasonable. The man-days component of the bid was based on the default schedule, which was the schedule presented to those bidding on the project in 2007. JHE's total bid was $1, 093, 747. (Plaintiffs Exhibit 33.) On September 4, 2007, the parties signed the contract and the total price for the prime contract for electrical work was $1, 113, 747. (Plaintiffs Exhibit 3.)

(¶ 4} As testified to by Green, when a project is bid, the contractors are given a default schedule. Pursuant to GC 4.3, the default schedule governs the project until a construction schedule is issued. After the contracts are awarded, a construction schedule is then developed by SER with the input of the contractors; this schedule was also referred to as the contractor's schedule. Even after the construction schedule is developed, it continues to be adjusted throughout the project.

(¶ 5} At a November 7, 2007 Progress Meeting, Kray addressed the issue of moving from the default schedule to the input schedule. (Defendant's Exhibit FF.) Kray testified that when he became the project manager for SER in November 2007, he looked at the default schedule and learned that there was no subsequent schedule, which was a "problem." According to Kray, the default schedule that was presented to the contractors during the bidding process, was in effect until March 2008 when the contractors signed the "contractor's schedule."

(¶ 6} On September 10, 2007, SER issued a "Notice to Proceed" to JHE. (Plaintiffs Exhibit 4.) As stated in the Notice to Proceed, the contract completion date was December 30, 2008. During the course of the project, all of the contractors were granted a nine-day extension of the contract completion date to January 9, 2009. Change Order 007, dated May 28, 2008, granted a time extension of nine days, but JHE refused to sign the change order. (Joint Exhibit A2.)

(¶ 7} JHE alleges that its work on the project was encumbered by numerous delays at the beginning on the project. Greg Rudduck, who has been employed by JHE for over 30 years, was JHE's project manager and was at the construction site several times a week during the course of the project. Initially, Rudduck testified that there was a delay in obtaining the temporary power on the project site. According to Rudduck, JHE was unable to obtain the temporary power permit until the Owner received the building permit. While Rudduck testified that the building permit was obtained approximately eight weeks after the issuance of the Notice to Proceed, the court finds that the building permit was issued on October 5, 2007, which was almost one month after the Notice to Proceed was issued. (Defendant's Exhibit CC.) According to both Rudduck and Kray, obtaining the building permit was the responsibility of the Owner, while obtaining the electrical permit was JHE's responsibility.

(¶ 8} Rudduck applied for the electrical permit on October 10, 2007. (Defendant's Exhibit GG.) As of October 31, 2007, JHE was authorized to choose either American Electric Power or City of Columbus to provide the temporary power to the project site. According to the testimony of both Large and Green, temporary power to the job site was in place around December 7, 2007. Green testified that he handwrote his daily job entries until power was on site. Green's handwritten notes continued until nearly the end of November 2007, at which time he began to make his entries in Prolog, a computer program used by the Owner and contractors to track their work. (Plaintiffs Exhibit 47.)

(¶ 9} Rudduck also testified about additional delays into December 2007, which included a water line issue caused by the Owner not paying the "tap fee, " and a soil issue which precluded JHE from installing the underground electrical lines. Robert Large is employed by JHE as an electrical foreman, a position he has held for approximately seven years. On the project, he was JHE's on-site foreman. Large explained that in late December 2007 and early January 2008, JHE was delayed on certain activities because the plumbing contractor had not completed its work; however, he admitted that JHE was performing other productive contract work during this time period. Large also testified that there were various delays in January and February 2008 caused by the masonry contractor and FH Martin. However, Large admitted that there are always "some" delays on a construction project.

(¶ 10} On January 3, 2008, Large noted in his Prolog entries that the schedule was starting to be impacted from the delays. Large made similar notations throughout the winter of 2008, but the last mention of any schedule impact was on April 7, 2008. (Joint Exhibit A3.) While Large testified that the project was still behind schedule after that date and that he "got tired" of noting delays in Prolog, the court finds that the failure to include such indication is significant.

(¶ 11} Large testified that in the summer of 2008, JHE had to bring on additional, experienced electricians to assist with the electrical work. In summary, Large explained that JHE's work was behind schedule on the project due to the delayed work of predecessor trades.

(¶ 12} As early as November 26, 2007, SER, through Kray, began the process of establishing the construction schedule. On December 14, 2007, Kray emailed the "Proposed Contract Schedule" to the contractors. (Plaintiffs Exhibit 8.) Kray's email requested that the contractors provide their input and sign and date the schedule by December 28, 2007. At the December 19, 2007 Progress Meeting, the construction schedule was discussed and JHE "noticed they are providing a [Gantt] chart which indicates items to be completed at the same time. Jess Howard noted items on the schedule have moved up or back by as much as (2 1/2) months." (Defendant's Exhibit FF.) On January 2, 2008, Rudduck sent Kray an email that stated that JHE was being impacted by delays on the schedule. Rudduck wrote, "it is my opinion that Areas A and B are 4 to 5 weeks behind schedule." (Plaintiffs Exhibit 9.) Kray explained that JHE's response was relevant input for developing the construction schedule.

(¶ 13} According to Rudduck, he met with SER representatives on February 5, 2008, to discuss the delays on the project. During this meeting, JHE presented three Gantt charts to SER depicting the default schedule, the proposed contractor's schedule, and a revised default schedule. (Plaintiffs Exhibits 13A-13C.) Rudduck explained that he used this as a tool to show SER JHE's scheduling concerns. Rudduck testified that his concern was that the project was delayed at the beginning for various reasons and that JHE's completion date was going to stay the same such that JHE's work on the project would be compressed and stacking of trades would occur. Rudduck testified that Kray and Sisterhen acknowledged that there was a problem with the schedule at that time. Kray recalled the meeting and he testified that he did not agree with JHE's assumptions that stacking was going to occur on the project.

(¶ 14} On February 26, 2008, JHE wrote a letter addressed to Steve Volpe, of Columbus Public Schools stating, "This letter is to advise the Columbus Public School District that [JHE] is presenting a claim on Livingston Avenue Elementary School * * * [JHE] has no other choice but to ask for compensation on this project. Costs related to this claim can only be addressed when a workable schedule is obtained, and reviewed, to achieve an agreeable completion date." (Plaintiffs Exhibit 12.) Rudduck testified that this letter intended to raise the issue of stacking that JHE was experiencing.

(¶ 15} At a March 5, 2008 meeting with SER and Columbus Public Schools, JHE presented a list of approximately 50 project items that were behind schedule. (Plaintiffs Exhibit 14.) Rudduck testified that he believed these items were on the "critical path" to JHE but he did not know if the Owner was of the same opinion. According to Rudduck, at the time of this meeting, the schedule on the project indicated that certain work was complete when, in fact, it was not complete on the job site. Kray admitted that these items were behind schedule and that he understood that JHE wanted to correct the schedule. Further, Kray testified that the list of items provided by JHE was input to help develop the contractor's schedule.

(¶ 16} Kray testified that when a project is behind schedule, there are four options: 1) ignore the delay; 2) extend the contract time; 3) issue a notice to comply; or 4) work as a "team" to find a solution. Kray testified that when JHE showed him the items in Exhibit 14 that were behind schedule in February 2008, he chose to have the contractors work as a team to solve the issue as he developed the construction schedule that was signed off by the contractors in March 2008. Kray testified that the list of items that JHE provided was helpful input for the proposed schedule pursuant to GC and that JHE provided input from December through February, which he considered before issuing the schedule in March 2008.

(¶ 17} In a follow-up letter to the March 5, 2008 meeting, JHE sent a letter to Volpe which states that it unsuccessfully attempted to work with Kray on the scheduling issues and that the project "is behind schedule on approximately 54 activities on the default schedule, and approximately 33 activities on the updated default schedule." (Plaintiffs Exhibit 15.) SER responded with a letter on March 18, 2008, in which Kray writes, "you are correct in stating the project does not have a signed off schedule, but I disagree with the premise of your letter for why the schedule is not signed off." (Plaintiffs Exhibit 16.) Kray went on to write that SER had been working "diligently to have an approved Construction Schedule for the project" but that JHE has "applied the breaks due to the concern for the manpower available * * *." (Plaintiffs Exhibit 16.)

(¶ 18} On March 25, 2008, JHE wrote a letter addressed to Kray which again addresses JHE's concerns of the delays and lack of a schedule on the project. (Plaintiffs Exhibit 17.) The letter states, "I would like to provide you with an extent of impact these situations are causing [JHE], but at this point, it would not be practical or possible due to the status of the job in relationship to the schedule. * * * It is our claim that the job is a minimum of ninety (90) days behind." (Plaintiffs Exhibit 17.)

(¶ 19} On March 14, 2008, SER issued the construction schedule and the contractors signed off on the schedule; however, JHE signed the schedule under protest. (Plaintiffs Exhibit 18.) Once the construction schedule was released, it was updated monthly to show the progress of the various activities and JHE continued to ...

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