Court of Appeals of Ohio, First District, Hamilton
Appeal From: Hamilton County Court of Common Pleas Trial Nos.
Appealed From Is: Affirmed in Part, Reversed in Part, and
Boggs Muething, City Solicitor, Joseph C. Neff, Assistant
City Solicitor, and Taft Stettinius & Hollister, LLP,
Earl K. Messer and Nicolas J. Pieczonka, for the City of
& Harbison, PLLC, William G. Geisen and Andrew J.
Poltorak, for Triton Services, Inc., Ohio Farmers Insurance
Company, and Majid H. Samarghandi.
Appellant Triton Services, Inc., ("Triton") appeals
several orders entered against it in favor of appellee city
of Cincinnati ("the city") in two consolidated
cases. We find merit in four of Triton's eight
assignments of error. We therefore affirm the trial
court's judgment in part and reverse it in part.
The record shows that in April 2008, Triton entered into a
contract with the city, acting on behalf of the Metropolitan
Sewer District ("MSD"). Under the contract, Triton
was the general contractor performing sewer work for the
Wesselman Road Interceptor Sewer Phase 1A-3 and 1B project
("Wesselman Project"). Subsequently, Triton entered
into another contract with the city to perform the Carroll
Avenue Sewer Replacement Project ("Carroll
Project"). Ohio Farmers Insurance Company provided
surety bonds for both projects.
In June 2011, the city issued three checks totaling $496,
256.09 to Triton for the work it had performed on the
Wesselman and Carroll Projects. Triton deposited the checks
into its bank account. Several months later, the city
discovered that Pavement Management, one of Triton's
subcontractors, had not been paid. The city took steps to
stop payment on the checks it had issued to Triton. The city
was erroneously informed by its bank that the payment had
Subsequently, Pavement Management filed suit against Triton
and the city, seeking the money that it was owed for its work
on the projects. To resolve that lawsuit, the city paid $396,
756.09 to Triton and $99, 500 to Pavement Management.
In January 2014, the city discovered that the checks for the
original payments of $496, 256.09 had not been stopped
because the stop-payment orders had been issued too late.
After the city discovered the accidental double payment, it
sent numerous letters to Triton requesting the return of the
original payment of $496, 256.09. Triton never returned the
Subsequently, in the case numbered A-1405757, the city filed
a complaint against Triton alleging unjust enrichment and
breach of contract. The city also named Ohio Farmers
Insurance Company ("Farmers") as a defendant and
made a claim under the surety bonds on the projects. In
conducting discovery, it learned that Triton knew that the
city's checks were fully deposited into Triton's
checking accounts and that the relevant funds were never
returned to the city. In fact, the overpayment was
transferred between numerous bank accounts.
Consequently, the city amended its complaint to add claims
for fraud and punitive damages against Triton and Majid H.
Samarghandi, Triton's CEO. In response, Triton and
Samarghandi asserted counterclaims for abuse of process and
frivolous conduct, in which they alleged that the city had
filed the fraud claim to harass them and force them to
surrender the payment.
Eventually, the city withdrew its fraud and punitive-damages
claims. The trial court granted summary judgment in favor of
the city on its unjust-enrichment claim and awarded the city
$496, 256.09. The court also granted summary judgment in
favor of the city on Triton's claim for abuse of process.
As to the claim for attorney fees for frivolous conduct, the
court found that the issue should have been raised by motion
rather than in Triton's counterclaim. The court stated
that the evidence related to frivolous conduct should not be
presented to the jury, but that it would allow Triton to
raise the issue by motion after the trial of the other issues
raised in a consolidated case.
In July 2011, Triton entered into a contract with the city to
perform work on the Sagebrush Lane, Susanna Drive, and
Yellowstone Drive sewer project ("Sagebrush
Project"). The original contract amount was $2, 698,
440. The contract incorporated the bid booklet, the State of
Ohio Department of Transportation Construction and Material
Specifications ("ODOT CMS"), and the city of
Cincinnati's supplement to the ODOT CMS.
A geotechnical report was incorporated into the bid booklet.
It provided that "excavations for the sewer are
anticipated to primarily encounter cohesive soils interbedded
occasionally with cohesionless soils." The report stated
that no water was found at a majority of the test borings,
which led to the recommendation that trench excavations be
performed in 50-foot sections with each section being
backfilled before proceeding to the next trench excavation.
The bid booklet stated that the geotechnical report was for
informational purposes only and that the report was not a
substitute for actual site inspection.
Triton began work on the Sagebrush Project in September 2011.
Soon after, it discovered differing soil conditions than it
had expected. Triton claimed that it had encountered
sloughing soils, trench cave-ins, excessive groundwater, and
extremely wet conditions, which caused it to incur
substantial increased expenses.
The contract spelled out what should occur if Triton
encountered differing site conditions. ODOT CMS ¶
During the progress of the Work, if subsurface or latent
physical conditions are encountered at the site differing
materially from those indicated in the Contract Documents or
if unknown physical conditions of an unusual nature,
differing materially from those ordinarily encountered and
generally recognized as inherent in the Work provided for in
the Contract Documents, are encountered at the site, notify
the Engineer as specified in 104.05 of the specific differing
conditions before they are disturbed or the affected Work is
Upon notification, the Engineer will investigate the
conditions and if it is determined that the conditions
materially differ and cause an increase or decrease in the
cost or time required for the performance of any Work under
the Contract, the Department will make an adjustment and
modify the Contract as specified in 108.06 and 109.05. The
Engineer will notify the Contractor of the determination
whether or not an adjustment of the Contract is warranted.
"Engineer" was defined as a "[d]uly authorized
agent of the Department acting within the scope of its
authority for purposes of engineering and administration of
the Contract." ODOT CMS ¶ 101.03.
ODOT CMS 104.05(D), as amended by the city supplement,
required the contractor to:
Give written notice of any circumstance or dispute on the
project that may result in a claim. Give early notice by the
end of the second working day following the discovery of the
occurrence of the circumstance or dispute. Maintain records
on the Superintendent's daily report of the additional
labor, equipment, and materials used on the disputed work or
made necessary by the circumstance. Begin record keeping when
the project personnel are aware of the circumstance of
dispute. Submit these records on a weekly basis.
section further states that "[f]ailure to give early
notice or keep and submit cost records will be a sufficient
reason for the City to deny the claim."
According to Triton, Brian Gessner, Triton's director of
site development, discussed the differing site conditions
frequently with city representatives throughout the project,
including Steve Jones, the supervising engineer for the
Sagebrush Project. Triton also contended that it sent
numerous written notices to the city relating to the
differing site conditions.
On February 1, 2012, Gessner sent an email to Sara Cramer,
MSD's construction manager for the Sagebrush Project.
Gessner advised Cramer of the poor condition of the water
mains at the site and that there had been three water main
breaks at the site, causing "undue saturation" of
the "surrounding subsurface." He also expressed
concern about the future impact of the water mains on
On March 7, 2012, Gessner sent a letter to Cramer stating, As
I am sure you have witnessed by your numerous site visits,
review of the inspector's daily notes as well as Tritons
[sic] notifications both verbally and as was addressed in
last week's meeting, the bore and trench excavations have
exposed poor ground conditions at every excavation completed
on the upper subdivision part of the project and are
currently experiencing [m]ajor delays. The soil strata have
consisted of large seams of sand as well as groundwater that
are inconsistent with the bore reports. He stated that the
field operations should be delayed and asked for a meeting to
discuss the problems.
On March 15, 2012, Gessner sent another email to Cramer
discussing the wet site conditions. At that time, the
differing site conditions had brought Triton's work on
the project to a standstill, and it was waiting on a proposal
from MSD so that it could continue with its work on the
project. Gessner also stated that he had been in
"continuous communication" with Jones on those
On March 16, 2012, Gessner sent Cramer documentation
regarding additional trench protection that Triton's
crews would need to use due to the site conditions. He
advised her that the additional trench protection would cause
Triton to incur additional costs. As of March 19, 2012, work
remained at a standstill. Gessner sent an email to Cramer and
Jones requesting that they approve the extra costs associated
with more substantial trench boxes, the use of which was
necessitated by the sloughing and saturated soils. MSD agreed
to pay those costs, and Triton was able to continue work on
On May 21, 2012, Gessner sent an email to Cramer advising her
that soil conditions on the west end of Susanna Drive were
unsuitable due to saturated and sloughing soils and
approximately four inches of water, which would cause Triton
additional costs. He asked Cramer to confirm conditions with
MSD's field staff and to confirm that MSD would pay for
Triton's additional costs.
In early June 2012, Gessner and Cramer exchanged emails
regarding the deteriorated and unsuitable subbase on the
project. Gessner advised Cramer that the unforeseen
conditions had caused compromised trench walls during the
mainline pipe operations, causing Triton to incur costs for
additional materials and labor.
Gessner also indicated that work on the project had been
delayed. Triton contended that while work was stopped, Jones
had directed Gessner to wait and submit all costs incurred
due to differing site conditions at the end of the project.
The city contends that Jones only told him to submit costs
for certain discrete parts of the project.
On June 26, Gessner sent an email in which he requested that
Cramer visit the job site. He attached a photograph showing
sloughing soils, trench cave-ins and deteriorated subbase. In
July, he sent Cramer a series of photographs ...