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J & H Reinforcing & Structural Erectors, Inc. v. Ohio School Facilities Commission

Court of Appeals of Ohio, Tenth District

September 5, 2013

J & H Reinforcing & Structural Erectors, Inc., Plaintiff-Appellee/ Cross-Appellant,
Ohio School Facilities Commission, Defendant-Appellant/ Cross-Appellee.

APPEAL from the Court of Claims of Ohio C.C. No. 2010-07644

Kegler, Brown, Hill & Ritter Co., LPA, Donald W. Gregory and Michael J. Madigan, for appellee/cross-appellant.

Michael DeWine, Attorney General, James E. Rook and David A. Beals, for appellant/cross-appellee.

Dinsmore & Shohl, LLP, Donald B. Leach, Jr. and Gregory P. Mathews, for amicus curiae Central Ohio Chapter, Associated Builders and Contractors, Inc.

O'Rourke & Associates Co., L.P.A., Daniel J. Myers and R. Russell O'Rourke, for amicus curiae American Subcontractors Association.



(¶ 1} Defendant-appellant/cross-appellee, Ohio School Facilities Commission ("OSFC"), appeals the judgment of the Court of Claims of Ohio in favor of plaintiff-appellee/cross-appellant, J&H Reinforcing & Structural Erectors, Inc. ("J&H").

(¶ 2} On May 28, 2010, J&H instituted this action against OSFC for breach of contract, equitable adjustment to the contract, and breach of express and implied warranties, seeking damages for delays and inefficiencies allegedly caused by OSFC during the course of a school construction project. OSFC filed a counterclaim for breach of contract and breach of warranties seeking damages for J&H's allegedly defective and incomplete work on the project.

(¶ 3} On June 6, 2010, J&H filed a motion pursuant to R.C. 2743.03(C) requesting that the Chief Justice of the Supreme Court of Ohio appoint a referee to hear and determine the action. R.C. 2743.03(C) requires the Chief Justice to make such an appointment upon request of either party to a dispute arising between the state and a contractor concerning a public improvement contract let by the state. Although the referee need not be an attorney, he or she must be "knowledgeable about construction contract law, a member of the construction industry panel of the American arbitration association, or an individual * * * deemed qualified by the chief justice to serve." R.C. 2743.03(C)(3). In accordance with this legislative mandate, the Chief Justice, by entry filed May 24, 2011, appointed Thomas R. Yocum, Esquire, to serve as the referee.

(¶ 4} The matter proceeded to trial over the course of nine days in November and December 2011. At that trial, numerous witnesses testified to the following facts.

(¶ 5} In 2006, J&H was awarded a $16, 026, 000 contract to perform general trades work, masonry, and interior casework for a project involving the construction of a K-12 school in the Wheelersburg Local School District ("Wheelersburg"). A separate site preparation package was awarded to J&H prior to the award on the multi-prime package. In addition, OSFC hired Tanner Stone Holsinger Donges & Company ("TSHD") as the project architect, Bovis Lend Lease Company ("Bovis") as the construction manager, and several additional prime contractors to perform other work on the project, including mechanical and electrical work.

(¶ 6} On October 2, 2006, Bovis issued a notice to proceed directing J&H to immediately commence work on the project. The notice designated March 17, 2008 as the project completion date.

(¶ 7} J&H immediately encountered problems with unstable soil conditions, which prevented it from beginning construction. OSFC directed J&H under its site package to perform additional soil-stabilization work. The delay caused by the unstable soil conditions extended the start of building construction to December 26, 2006. In a February 28, 2007 e-mail to other prime contractors, William Palonis, Bovis' project manager, acknowledged the soil-stabilization delay and the fact that such delay was not yet reflected in Bovis's construction schedule.

(¶ 8} After completing the soil-stabilization work, J&H's general trades work progressed steadily from January to July 2007. However, during this time, J&H learned that several Air Handling Units ("AHUs") to be supplied by the mechanical contractor, which were originally scheduled to be delivered in June or July 2007, were not going to arrive until September 2007. As a result, J&H had to leave large gaps in many of the masonry walls to accommodate ...

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