February 10, 2015

Construction Case Law Update - February 2015

Carlton Fields

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FLORIDA FEDERAL CASES

Delay Damages; “Total Cost” vs. “Modified-Total-Cost” Approach – A party may not establish delay damages under the “total cost” or “modified-total-cost” approach when uncontroverted record evidence attributes delay costs to that party and no accommodation for those costs is made. In a breach of contract dispute, an HVAC subcontractor sued a mechanical contractor who subsequently moved for partial summary judgment to preclude plaintiff-subcontractor from establishing its delay damages under a total cost or modified-total-cost approach. Under the total cost approach, the original bid is subtracted from the actual cost of the entire project; whereas the modified total cost approach permits adjustment to the total cost calculation to compensate for bid errors, specific costs attributable to the plaintiff, and specific costs attributable to other parties. A jury may consider the total-cost approach when there exists no other practicable means of calculating damages, the project bid was realistic, the incurred costs were reasonable, and the plaintiff did not cause any of the additional cost. The modified-total-approach requires the same elements, except that it subtracts any costs attributable to the plaintiff contractor. Here, even if the plaintiff could show genuine factual disputes existed under the first three criteria, record evidence conclusively demonstrated that plaintiff failed the fourth requirement: showing that it was either not responsible for the additional expenses or that it had reasonably accounted for those expenses for which it is responsible. Because plaintiff made no effort to account for its own delays, which were not isolated or discrete items easily quantified and subtracted from a damages reward, the District Court for the Southern District of Florida granted defendant’s summary judgment motion to preclude plaintiff from offering delay damages evidence under a total cost or modified-total-cost theory. Hill York Service Corp. v. Critchfield Mechanical, Inc., No. 14-60963-CIV, 2015 WL 410009 (S.D. Fla. Jan. 29, 2015).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.