Window Specialists, Inc. v. Forney Enters., Inc.

106 F.Supp.3d 64

Window Specialists, Inc., Plaintiff,

v.Forney Enterprises, Inc., et al., Defendants.

Civil Action No. 11–1610 (RMC)

United States District Court, District of Columbia.

Signed May 14, 2015

Shawn C. Whittaker, Whittaker & Associates, PC, Rockville, MD, for Plaintiff.

Robert Dixon Windus, Brian F. Wilbourn, Jason Constantine, Moore & Lee, LLP, McLean, VA, for Defendants.

OPINION

ROSEMARY M. COLLYER, United States District Judge

This case involves claims between Window Specialists, Inc. (WSI) and Forney Enterprises, Inc. (FEI). FEI, a subcontractor on an Army project at Fort McNair in Washington, D.C., contracted with WSI for the installation of windows and doors on the project. The Army found deficiencies and when the deficiencies remained uncured, FEI and WSI were terminated. WSI sues for breach of contract and unjust enrichment, claiming that it was wrongfully terminated because the deficiencies were caused by the prime contractor, not WSI. FEI countersues for breach of contract, seeking lost profits.

The parties agree that the Army identified deficiencies with regard to the window installation on the Project; that the deficiencies were not corrected; that the prime contractor terminated FEI; and that FEI terminated WSI. The question of whether FEI or WSI is liable to the other is a matter of dispute. A bench trial was held from July 14 through 21, 2014, and the parties submitted post-trial briefs. Based on the entire record, the Court determines that WSI breached the WSI/FEI Subcontract and thus FEI is excused from payment. Even though WSI breached, FEI will be awarded only nominal damages because it failed to prove lost profits.

I. FINDINGS OF FACT

Based on the entire record, including the credibility of the witnesses, the Court makes the following findings of fact:

A. Contracts for Work on the Project

1. The U.S. Army decided to improve historic homes for officers at Fort McNair in Washington, D.C., namely Quarters 1, 3 through 13, and 15 (the Project).¹ Pl.Ex. 1 (Prime Contract) at 4.

On September 22, 2010, the Army hired IIU Consulting Institute, Inc. (IIU) as its general contractor on the Project. Pl.Ex. 1 (Prime Contract).² The Army and IIU executed the Prime Contract, which required IIU to provide labor and materials for the installation of windows and doors, for the cost of $1,678,889. Id . at 1–2. The Prime Contract noted that the Quarters are "Historic Category III Facilities and exterior repairs must comply with the National Capital Planning Commission requirements." Id . at 4.

3. The Prime Contract required the installation of "window sash units" that "shall be vinyl (PVC) or aluminum wrapped wood" and "jambliner in heavy duty white vinyl." Prime Contract at 4. The Prime Contract required the "installation of new window sashes plumb and square." Id . at 5.

4. The Miller Act, 40 U.S.C. §§ 3131 –3134, requires a payment and performance bond on all federal government construction projects costing over $100,000. IIU applied for a bond with Hanover Insurance Company (Hanover). Pl.Ex. 5 (Application for Bond).

5. IIU asked FEI to assist in obtaining the bond, and FEI agreed to do so for a fee. See Pl.Ex. 2 (Forney Email 10/18/10); Pl.Ex. 16 (Carlson Email 1/10/11) ("FEI provided the bonding ... the third week of December.").

6. IIU, as principal, and Hanover, as surety, entered into a bond agreement. See, e.g ., Compl. [Dkt. 1], Ex. 1 (Performance Bond 12/17/10). Under the standard terms of such a bond, the principal and the surety agree to be bound jointly and severally. Id .

7. FEI and its President, Keith Forney, were indemnitors on the bond. Tr. 7/21/14 at 49 (Forney).³

8. In October 2010, IIU proposed that WSI subcontract for the installation of the windows and doors on the Project for the price of $961,482. Pl.Ex. 3 (Letter of Intent). A subcontract on these terms was drafted but never executed. Pl.Ex. 4 (Unexecuted Subcontract). The Unexecuted Subcontract parroted the language of the Prime Contract and called for the installation of "window sash units" that "shall be vinyl (PVC) or aluminum wrapped wood" and "jambliner in heavy duty white vinyl."⁴ Id . at 2.

9. IIU's President is Frank Ukoh. IIU has been in the construction business since 2001, but it is not a window contractor and most of IIU's past contracts were for lead and asbestos abatement at schools. Tr. 7/17/14 at 4 (Ukoh).

10. WSI is a window installation contractor; it has installed hundreds of thousands of windows in every condition from new construction to retrofitting occupied buildings. Pl.Ex. 27 (Carlson Letter to Ukoh 6/5/11).

11. Robert Carlson, President of WSI, has been in the construction business for 40 years, and has concentrated on the installation of doors and windows for 20 years. Tr. 7/14/14 at 37 (Carlson).

12. WSI's initial bid was for the installation of all vinyl "pocket windows," also known as "pocket fit" or "double hung" windows. A pocket/double hung window is one that has two sashes that slide up and down in a frame. Tr. 7/14/14 at 38, 39 (Carlson).

13. After WSI's initial bid, the Government Contracting Officer's Technical Representative (COTR) Kevin Fleming, changed the Project requirements from vinyl pocket windows to vinyl-clad wood sash pack windows. Tr. 7/14/14 at 38–40 (Carlson); Tr. 7/16/14 PM at 65, 71 (Fleming).

14. A sash pack window kit usually includes: (1) upper and lower sashes, i.e ., the glass that slides up and down; (2) two jambliners, i.e ., the track system that mounts to the sides of the existing window frame; (3) a head stop; and (4) a sill dam. Tr. 7/14/14 at 38 (Carlson); Def. Ex. 52 (Donnelly Letter 9/2011) at 4.⁵ A sash pack window is a window without a frame. Tr. 7/14/14 at 38 (Carlson).

15. The installation of a sash pack window allows sash replacement while keeping the window framing and exterior casing in place. See New Window Replacement, http://homerenovations.about.com/od/windowtips/qt/sash.replacement kit.htm (last visited Apr. 28, 2015).

16. Mr. Fleming testified he had observed the successful installation of sash pack windows at Ft. Myer, Tr. 7/16/14 at 63 (Fleming), and he wanted to install sash pack windows because it would better preserve the historic look of the Officer Quarters, Tr. 7/16/14 PM at 71 (Fleming).

17. Sash pack windows are more expensive and difficult to install than vinyl pocket windows. Tr. 7/14/14 at 40 (Carlson).

18. Mr. Carlson personally has installed many thousands of windows; hundreds, or even thousands, of the windows were sash packs. Tr. 7/14/14 at 45, 47, 78 (Carlson).

19. However, WSI had never before performed any contract for the installation of sash pack windows at an historic site. Tr. 7/14/14 at 165 (Carlson).

20. On December 21, 2010, WSI increased its price on the contract due to the change in Project requirements, and sent a revised schedule of values to IIU in the amount of $1,091,462, which included the purchase of sash pack windows instead of double-hung windows, see Pl.Ex. 11 (Schedule of Values).

21. Mr. Carlson knew that the Quarters where "rather old" and that "an existing perfect [window] opening [was] just not reality." Pl.Ex. 27 (Carlson Letter 6/5/11).

22. There is no evidence that WSI objected to the substitution of sash pack windows or informed the Army, IIU, or FEI that sash pack windows would be problematic or unsuitable for the Project.

23. Before work on the Project could begin, the windows had to be measured and ordered. WSI took field measurements over several days starting November 1, 2010. Tr. 7/14/14 at 37 (Carlson).

24. On November 1, 2010, Mr. Carlson himself visited the Project and instructed his crew on how to measure the windows. Tr. 7/14/14 at 37, 177 (Carlson).

25.Mr. Carlson told WSI Assistant Project Manager Aurelis Garcia to review and confirm the measurements, warning that "[i]f we go to sash pack units, the measurements need to be perfect as there is very little room for error ... I'm uncomfortable that there are so many different sizes (well over 200 different sizes)...." Def. Ex. 8 (Carlson Email 12/3/10 and Field Measurements).

26. The windows were not a uniform size. All of the windows had to be "custom made," and Mr. Carlson fronted money for supplies. Pl.Ex. 21 (Carlson Email 4/20/11).

27. WSI sent the data to a window manufacturer, ABC Manufacturing, Inc. d/b/a Malta Windows & Doors (Malta), for the manufacture of sash pack replacement windows. Tr. 7/14/14 at 44 (Carlson); Pl.Ex. 50 (Malta Invoice).

28. WSI "intentionally order[ed] the windows to the smallest (level) square opening." Def. Ex. 34 (Carlson Email 6/2/11); see also Pl.Ex. 27 (Carlson Letter 6/5/11).

29. Malta's President, Wade Benjamin, testified that the Quarters were so old that no two frames were the same and all of the sash packs had to be ordered undersized. Tr. 7/15/14 PM at 43 (Benjamin).

30. Mr. Carlson believed that he would be able to install windows that would look and function as intended despite the condition of the old window openings. Pl.Ex. 27 (Carlson Letter 6/5/11).

31. On December 14, 2010, IIU subcontracted a portion of its work on the Project to FEI. Pl.Ex. 9 (IIU/FEI Contract). The IIU/FEI Contract required FEI to supply labor, materials, and equipment for the installation of 684 windows and 66 doors on the Project for the price of $1,225,542. Id . at 1.

32. On January 12, 2011, FEI entered into a subcontract with WSI whereby WSI agreed to install 684 sash pack windows and 66 doors at Fort McNair for the price of $1,091,462. Pl.Ex. 17 (WSI/FEI Subcontract). The WSI/FEI Subcontract provides that "Subcontractor [WSI] shall perform all work and furnish and pay for all supervision, labor, materials, ... tools, equipment, supplies, and anything necessary for the construction and completion of all work described in Exhibit A" and "Forney Enterprises, Inc. (FEI) shall pay Subcontractor for the performance of the Work...." Id .

33. Exhibit A to the WSI/FEI Subcontract defines the Work as replacement of windows and doors on Quarters 1, 3 through...