Traco Steel Erectors, Inc. v. Comtrol, Inc.

175 P.3d 572

2007 UT App 407

TRACO STEEL ERECTORS, INC., Plaintiff and Appellant, v. COMTROL, INC.; GOS's Welding Inc.; and DWAMCO, Inc., Defendants and Appellee.

No. 20060916-CA.

Court of Appeals of Utah.

December 28, 2007.

Ralph R. Tate and Stephen B. Doxey, Salt Lake City, for Appellant.

Cass C. Butler and Michael D. Stanger, Salt Lake City, for Appellee.

Before Judges BILLINGS, DAVIS, and McHUGH.

OPINION

BILLINGS, Judge:

¶ 1 Traco Steel Erectors, Inc. (Traco) appeals the trial court's order granting partial summary judgment to Comtrol, Inc. (Comtrol). Traco also appeals the trial court's calculation of damages awarded to Comtrol and the trial court's determination that Traco could not recover for certain change orders. Further, Traco appeals the trial court's interpretation of two subcontractor lien releases. Finally, Traco appeals the trial court's determination that Comtrol is the prevailing party for the purpose of awarding attorney fees. We affirm.

BACKGROUND

¶ 2 Comtrol is a general contractor and Traco is a steel erector subcontractor. Comtrol and Traco entered into similar subcontractor agreements for the construction of three separate projects: (1) the United States Army Reserve Center (the Army Reserve Project), (2) the Utah Valley State College Student Center Expansion (the UVSC Project), and (3) the Weber State University Visual Arts Center (the Weber State Project). We discuss each project in turn.

The Army Reserve Project

¶ 3 On October 28, 1998, Comtrol and Traco entered into a subcontract agreement (the Army Reserve Agreement) for steel erection on the Army Reserve Project in Salt Lake City, Utah. The contract amount for the Army Reserve Project was $42,100. The Army Reserve Agreement also provided that $3900 would be added to the subcontract amount if Traco provided a crane to perform its work.

¶ 4 Traco rented a crane from a rental agency for approximately one to three days and then returned the rented crane. For the remainder of its work on the job, Traco used Comtrol's crane and Comtrol's crane operator. On November 7, 2000, Comtrol issued Change Order 4258, back charging Traco $13,345 for crane usage and additional work Comtrol had to perform to complete Traco's obligations under the Army Reserve Agreement. In response to Change Order 4258, Traco admitted that Comtrol had performed some of Traco's work, but disputed the back charge amounts in Change Order 4258. Specifically, Traco disputed the back charges relating to crane usage because Comtrol was to supply the crane under the Army Reserve Agreement. Traco never signed Change Order 4258. Prior to disputed Change Order 4258, various other change orders had been approved. The last change order approved prior to disputed Change Order 4258 indicated a contract total of $64,218.90.

¶ 5 On November 28, 2000, Comtrol issued Change Order 4263, which Tracy Bronson, president of Traco, signed. Change Order 4263 included a back charge of $850 and revised the Army Reserve Agreement total to $50,023.90. Although it was not specifically stated in Change Order 4263, the revised total represented a deduction of the disputed back charge in Change Order 4258 in the amount of $13,345. Change Order 4263 also stated:

It is understood and agreed that the acceptance of this contract modification by the subcontractor constitutes an accord and satisfaction, and represents the final adjustment of any and all costs, delays, time extensions or other equitable adjustment, if any, arising out of, or incidental to, the work herein revised. NOTE: This Change Order becomes part of and in conformance with the existing contract.

At his deposition on February 10, 2005, Bronson testified that he understood that Change Order 4263 revised the contract amount to $50,023.90.

¶ 6 For Traco's work on the Army Reserve Project, Comtrol paid Traco $59,201.95 in seven payments. Comtrol sought summary judgment with respect to the Army Reserve Project, contending that Change Order 4263 was a valid accord and satisfaction of the parties' agreement regarding the Army Reserve Agreement amount. However, in opposing Comtrol's summary judgment motion, Traco submitted an affidavit from Bronson stating that he made a mistake in signing Change Order 4263. Bronson's affidavit asserts that he signed Change Order 4263 approving a back charge of $850, but failed to notice that Comtrol had inserted into Change Order 4263 a revised contract balance of $50,023.90, which had been changed to deduct the disputed back charge of $13,345.

¶ 7 The trial court granted Comtrol's motion for partial summary judgment and ruled that Change Order 4263 was a valid accord and satisfaction entitling Comtrol to summary judgment for the $9178.05 it had overpaid Traco for the Army Reserve Project.

The UVSC Project

¶ 8 On May 24, 2000, Comtrol and Traco entered into another subcontract agreement (the UVSC Agreement) for steel erection on the UVSC Project, located in Orem, Utah. The UVSC Agreement contract amount was $111,000. The contract amount was reduced to $108,406.22 by various approved change orders and by Owner Controlled Insurance Program (OCIP) adjustments. Over the course of the UVSC Project, Comtrol made multiple payments to Traco totaling $97,488.05. This left a balance on the UVSC Agreement in the amount of $10,918.17.

¶ 9 In addition to the approved change orders, Comtrol issued back charges against Traco relating to work that Traco was to perform under the UVSC Agreement, but that Comtrol had to perform because Traco either did not provide an adequate work force, used Comtrol's crane and forklift to unload steel that had arrived at the job site, or refused to perform the work. These back charges totaled $20,748.17.

¶ 10 The work on the UVSC Project required tight coordination with the other subcontractors, inasmuch as there was a very limited staging area and Traco's work had to be performed in four discrete stages. To complete its obligations under the UVSC Agreement, Traco was required to break up the timing of its work. However, during the course of the UVSC Project, Traco personnel did not attend the weekly meetings that Comtrol held to coordinate the timing of the work among subcontractors. The trial court determined that Traco's absence from these meetings seriously impacted coordination among the subcontractors, particularly with respect to the coordination of steel deliveries by Dwamco, the steel fabricator.

¶ 11 Traco performed its first portion of the work, Phase I, in June and July of 2000. Twice during this period, July 18 and July 28, 2000, Traco asked for permission to use Comtrol's crane, forklift, and manpower to unload steel. Traco understood that it might be charged for the use of Comtrol's services. Eugene Cook, Comtrol's superintendent, noted potential back charges on daily reports and on time cards of Comtrol employees who helped unload the steel. Change Order 4268 was issued to reflect those back charges.

¶ 12 By January 2001, Traco began its work on the other phases of the project. On April 4, 2001, Comtrol advised Traco that Traco was behind schedule and was impacting other trades. Traco had been using two-to-four-man crews over the prior three weeks, which was insufficient to maintain adequate progress on the project. Comtrol wrote a letter reminding Traco of the liquidated damages UVSC would impose on Comtrol if the project was not completed on time. Comtrol directed Traco to return to work immediately and regain the lost time.

¶ 13 On May 30, 2001, Traco executed a Subcontractor Lien Waiver (the UVSC Release) that waived and released Traco's right to any claims for labor and materials provided to the UVSC Project on or before April 30, 2001. This release was in exchange for Comtrol's payment of $56,923.05 to Traco.

¶ 14 Throughout 2001, Traco continued to use Comtrol's crane and forklift to unload steel for the UVSC Project. In one case, this was done without Comtrol's permission, as Traco came to the job site on Sunday, May 6, 2001, when Comtrol was not on the job. Cook continued to note Traco's use of Comtrol's forklift and crane on time cards and daily reports, resulting in Change Orders 4569 and 4700.

¶ 15 With the exception of railings and punch list items, which were within the scope of Traco's work under the UVSC Agreement, Traco's work was completed by the end of September 2001. In early January 2002, Comtrol advised Traco orally that railing materials had been delivered to the job site and requested that Traco return to install the railings according to the UVSC Agreement. Traco refused to do so. On January 3, 2002, Comtrol gave Traco a written 48-hour notice to report to the project, initiate work, and perform diligently. Comtrol advised Traco that if it did not return, Comtrol would have the work performed by others and back charge Traco. Traco responded that it would not return until it was paid "all outstanding Contract Draws and Change Orders." Traco further demanded that the hand railings be made part of a change order.

¶ 16 The UVSC Agreement provided that in the event of a dispute as to the scope of the work, Traco would still be required to "promptly follow [Comtrol's] written orders," and the "dispute [would] be settled later." The UVSC Agreement also stated that Traco "will not interrupt or delay its work because of any dispute with [Comtrol], but will continue to perform its subcontract work diligently to completion, and will later negotiate in good faith for settlement of the dispute." Traco refused to return and abandoned the job.

¶ 17 Thereafter, Comtrol and another subcontractor performed the hand railing work, as well as other uncompleted Traco work. To complete the work, Comtrol back charged Traco $17,279.73. However, the trial court found this amount to be excessive and reduced the back charged amount to $8900, which the trial court found to be a reasonable, fair-market amount for Comtrol's completion of Traco's work.

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