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USA v. Walbridge Aldinger Company, 12-16220 (2013)

Court: Court of Appeals for the Eleventh Circuit Number: 12-16220 Visitors: 73
Filed: Nov. 01, 2013
Latest Update: Mar. 02, 2020
Summary: Case: 12-16220 Date Filed: 11/01/2013 Page: 1 of 14 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 12-16220 Non-Argument Calendar _ D.C. Docket No. 3:11-cv-00403-HES-TEM UNITED STATES OF AMERICA, for the use and benefit of W.W. Gay Mechanical Contractor, Inc., W.W. GAY MECHANICAL CONTRACTOR, INC., a Florida corporation, Plaintiffs - Appellees, versus WALBRIDGE ALDINGER COMPANY, a Michigan for profit company, TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,
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             Case: 12-16220     Date Filed: 11/01/2013   Page: 1 of 14


                                                             [DO NOT PUBLISH]


               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                 No. 12-16220
                             Non-Argument Calendar
                           ________________________

                    D.C. Docket No. 3:11-cv-00403-HES-TEM



UNITED STATES OF AMERICA,
for the use and benefit of W.W. Gay Mechanical Contractor, Inc.,
W.W. GAY MECHANICAL CONTRACTOR, INC.,
a Florida corporation,

                         Plaintiffs - Appellees,

versus

WALBRIDGE ALDINGER COMPANY,
a Michigan for profit company,
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,
a Connecticut corporation authorized to do business in the State of Florida,
FEDERAL INSURANCE COMPANY,
a foreign corporation authorized to do business in the State of Florida,

                         Defendants - Appellants.

                           ________________________

                   Appeal from the United States District Court
                       for the Middle District of Florida
                         ________________________
                              (November 1, 2013)
              Case: 12-16220     Date Filed: 11/01/2013   Page: 2 of 14


Before MARCUS, JORDAN and KRAVITCH, Circuit Judges.

PER CURIAM:

      The Walbridge Aldinger Company and its sureties (collectively,

“Walbridge”) appeal the district court’s partial grant of summary judgment in favor

of W.W. Gay Mechanical Contractor, Inc. (“W.W. Gay”) on W.W. Gay’s Miller

Act and breach of contract claims. Walbridge also appeals the district court’s

award of attorney’s fees under Fla. Stat. § 57.105(7). After review of the record

and the parties’ briefs, we affirm.

                                          I.

      This case involves a dispute between a subcontractor and a general

contractor, together with its sureties, over a construction project for the Navy. The

subcontractor, W.W. Gay, asserted a Miller Act claim for unpaid amounts

allegedly due under the subcontract, both for an unpaid retainage of $251,937.92

and for extra work performed costing $109,177. The general contractor,

Walbridge, claimed it was entitled to withhold payment from W.W. Gay because

Walbridge was assessed around $1.5 million in liquidated damages by the Navy

due to delays in project completion, for which W.W. Gay was allegedly at least

partly responsible. Walbridge is still in the process of administratively appealing

the liquidated damages assessment under the Contracts Disputes Act.




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      The district court partially granted W.W. Gay’s motion for summary

judgment, ruling that W.W. Gay was entitled to payment for the full amount of the

unpaid retainage and cost of extra work. The parties then entered into a stipulation

on the remaining issues, in particular whether Walbridge was entitled to offset

damages for W.W. Gay’s alleged delay in installing and completing the factory

startup of a water softener. In its summary judgment order, the district court

granted W.W. Gay attorney’s fees, based on a unilateral contract provision that

gave Walbridge the right to seek attorney’s fees under certain conditions. The

district court held that W.W. Gay could also seek attorney’s fees under Fla. Stat. §

57.105(7), which makes unilateral attorney’s fees provisions bilateral.

                                         II.

      We review a district court’s grant of summary judgment de novo, viewing

the evidence in the light most favorable to the non-moving party. Thomas v.

Cooper Lighting, Inc., 
506 F.3d 1361
, 1363 (11th Cir.2007). Summary judgment is

proper if “the movant shows that there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The

party opposing summary judgment must present more than “[t]he mere existence

of a scintilla of evidence in support of [its] position ...; there must be evidence on

which the jury could reasonably find for the [non-movant].” Anderson v. Liberty

Lobby, Inc., 
477 U.S. 242
, 252 (1986).


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                                         III.

      We first consider whether Walbridge was entitled to withhold all payment to

W.W. Gay because of the liquidated damages that the Navy assessed against

Walbridge. The answer, we conclude, is no.

      The Miller Act protects subcontractors on federal projects by requiring

contractors to post a bond to ensure payment to their subcontractors. 40 U.S.C.A. §

3133. See also U.S. for Use & Benefit of Krupp Steel Products, Inc. v. Aetna Ins.

Co., 
831 F.2d 978
, 980 (11th Cir. 1987). To establish a Miller claim, W.W. Gay

must show (1) that it supplied labor and materials for work in the particular

contract at issue; (2) that it is unpaid; (3) that it had a good faith belief that the

materials were for the specified work; and (4) that jurisdictional requisites are met.

See Aetna Ins. 
Co., 831 F.2d at 980
. To establish a breach of contract claim, W.W.

Gay must show must show that (1) there was a valid contract; (2) Walbridge

breached the contract; and (3) it suffered damages as a result of Walbridge’s

breach. See Rollins Inc. v. Butland, 
951 So. 2d 860
, 876 (Fla. 2d DCA 2006).

      Walbridge argues that it did not breach its subcontract with W.W. Gay – and

thus is not liable for any “amount unpaid” under the Miller Act, 40 U.S.C.A. §

3133 – because W.W. Gay did not complete performance on time; this delay

resulted in the Navy assessing liquidated damages against Walbridge; and

Walbridge was entitled to offset these damages against the amount owed to W.W.


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Gay. Walbridge relies on Article III of the subcontract, which provides that

Walbridge can withhold payment to W.W. Gay for any breach of the subcontract,

and Article V, which provides that “time . . . is of the essence” and that W.W. Gay

may be liable for liquidated and other damages if it fails to “prosecute the Work as

provided herein, thereby causing delay in the progress of the Project.”1

       The problem, however, is that Walbridge has failed to produce more than a

“scintilla of evidence” that W.W. Gay’s alleged delays resulted in the liquidated

damages assessed against it by the Navy. See 
Anderson, 477 U.S. at 252
.

Walbridge cites the deposition testimony of its corporate representative

Awadheshwari Prasad that “several correspondence [sic] exists that [W.W. Gay’s]

activities have caused delay in the performance of the work affecting the critical

activity,” D.E. 32-2, p.12, 66:16-19, but the mere alleged existence of

“correspondence” attributing delays to W.W. Gay is not proof that W.W. Gay

caused any delays. Indeed, elsewhere in his deposition testimony, Mr. Prasad

admits that it was the Navy that caused the delays and that these delays in turn

affected W.W. Gay and the other subcontractors. See D.E. 32-2, p. 17, 71: 12-20.


1
  Paragraph 16 of the “Project Special Conditions” document that forms part of the subcontract
also provides that W.W. Gay may be liable for liquidated damages and provides a schedule of
liquidated damages based on what “phase” of the project the delay occurs in. In its brief,
Walbridge does not claim a right to assess liquidated damages against W.W. Gay according to
this schedule and does not cite to any evidence regarding the phases during which W.W. Gay’s
alleged delays took place. Instead, Walbridge argues that W.W. Gay is partially liable for the
liquidated damages that the Navy assessed against Walbridge.


                                              5
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Significantly, the subcontract provides that W.W. Gay is only liable for liquidated

damages if its “failure to prosecute the Work . . . caus[es] delay in the progress of

the Project” (emphasis added). Prasad’s testimony only suggests that W.W. Gay

was delayed, not that it caused any delay, as required by the plain terms of the

subcontract.

      Walbridge also cites a letter from an alleged expert analyzing the project

delays that lead to the liquidated damages. This letter, however, does not even

mention W.W. Gay, much less attribute any delays to its work. Walbridge makes

much of the fact that one of the six areas in which the expert identified delays was

the “Comprehensive Interior Design,” or “CID,” and that W.W. Gay’s scope of

work included the operating rooms, which were part of the CID. Yet Walbridge

offers zero evidence that the CID delays stemmed from work on the operating

rooms, much less from W.W. Gay’s work on the operating rooms. In fact,

Walbridge’s expert attributes the CID delays to deficient drawings, which

apparently had nothing to do with W.W. Gay.

      The only other specific instance of delayed work that Walbridge attributes to

W.W. Gay is the installation and factory startup of a water softener. Again,

however, Walbridge points to no evidence that this alleged delay had anything to

do with the liquidated damages assessed against it. In fact, Walbridge stipulated

that it had no such evidence. As the district court noted, Walbridge has failed to


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show “it has sustained a substantial injury due to the breach,” which is required to

show material breach. See Bland v. Freightliner LLC, 
206 F. Supp. 2d 1202
, 1210

(M.D. Fla. 2002).2

       Even if we applied the alternative definition of a material breach as non-

performance that “go[es] to the essence of the contract,” Sublime, Inc. v.

Boardman's Inc., 
849 So. 2d 470
, 471 (Fla. Dist. Ct. App. 2003), and we accepted

that “time is of the essence” of the subcontract pursuant to Article V, Walbridge

would still not be excused from payment. Walbridge offers no evidence that W.W.

Gay failed to install the water softener “at such time and in such order and

sequence as Contractor may direct;” that it “interfere[d] with or delay[ed] the work

of the Owner, Contractor or other subcontractors;” or that it failed to comply with

the project’s “progress schedule,” as required by Article V. The only evidence to

which Walbridge points regarding W.W. Gay’s alleged delay in installing the

water softener is a conclusory statement by Walbridge’s assistant vice president

that “[a]ccording to Walbridge’s contract with the Navy, Walbridge was required
2
   The two cases that Walbridge cites for the proposition that untimely performance by a
subcontractor can preclude it from recovering contract damages are unavailing. In both cases, the
general contractor established that the subcontractor substantially delayed project completion and
thereby caused injury, something for which Walbridge has presented no evidence. See United
States for Use & Benefit of Clark Eng'g Co. v. Freeto Const. Co., Inc., 
547 F.2d 537
, 541 (10th
Cir. 1977) (upholding district court’s finding that 252-day delay, resulting in over $20,000 in
liquidated damages assessed against general contractor, was “due solely to [subcontractor’s]
untimely performance”); Pub. Health Trust of Dade Cnty. v. Romart Const., Inc., 
577 So. 2d 636
, 637 (Fla. Dist. Ct. App. 1991) (upholding liquidated damages provision where jury found
that subcontractor “fail[ed] to substantially complete the project on time,” resulting in delayed
construction of a medical center).


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to complete the Project by January 21, 2011” and that W.W. Gay completed the

water softener six months later, which delayed Walbridge’s performance. See D.E.

35-1, ¶¶ 4-9. Without more details or documentation regarding the timing of this

massive construction project (e.g., whether the project completion date was ever

modified or compromised by factors independent of W.W. Gay, whether the

installation of the water softener required the prior completion of work that W.W.

Gay did not control, in what specific ways W.W. Gay’s alleged delay set back the

project, etc.), we need not credit such self-serving, conclusory assertions. See

Evers v. Gen. Motors Corp., 
770 F.2d 984
, 986 (11th Cir. 1985) (“conclusory

allegations without specific supporting facts have no probative value”).

      Because Walbridge offers no evidence that W.W. Gay was in any way

responsible for the liquidated damages that the Navy assessed, or for any other

injury to Walbridge, we hold that Walbridge was not entitled to withhold payment

from W.W. Gay for the “labor and materials” that it indisputably provided

pursuant to the subcontract. See 40 U.S.C.A. § 3133. Given this holding, we do not

reach the issue of whether the Miller Act precludes a surety from enforcing the

contract provisions relied on by Walbridge, since we find that these provisions,

even if enforced, do not absolve Walbridge of its payment duties.

                                        IV.




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       We next address whether W.W. Gay is entitled to $109,177 in compensation

for the extra work it performed in rerouting an underground storm pipe. We

conclude that it is.

       The undisputed record establishes that W.W. Gay learned of a potential

problem regarding the planned location of a storm pipe and notified Walbridge.

Walbridge directed W.W. Gay to proceed with the installation of the storm pipe

anyway. Walbridge then waited nearly six weeks to send a request for information

to the Navy, who ultimately responded with instructions to reroute the storm pipe.

By letter dated February 5, 2009, Walbridge directed W.W. Gay to reroute the

storm pipe “in accordance with Article VII of our Subcontract.” The letter stated

that an adjustment to the contract price would be made “in accordance with

applicable provisions of the Agreement between Walbridge and the Owner.” D.E.

29-25, p. 62.

       W.W. Gay responded that it was willing to reroute the pipe but that it “will

not assume any cost or liability,” “fully expect[ed] to be reimbursed all costs,” and

proposed to use time sheets to keep track of time on the project. 
Id. at 63.
Walbridge replied: “It is our intention to pay W.W. Gay as stated in our 2/5/09

letter. We do not have a problem with keeping track of time on time sheets. Time

sheets will be verified by Ted or Dave.” 
Id. W.W. Gay
then completed the work,

whose undisputed cost was $109,177. W.W. Gay submitted an invoice to


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             Case: 12-16220     Date Filed: 11/01/2013   Page: 10 of 14


Walbridge, who forwarded it to the Navy. The Navy agreed only to pay a fraction

of the total cost because Walbridge initially ordered the work despite being aware

of a potential problem.

      The subcontract provisions dealing with extra work are Articles II and VII.

Article II(b) of the subcontract provides that the subcontract price may be

“adjusted by change order as a result of changed work as provided in Article VII.”

Article VII in turn provides:

      Contractor may, without invalidating the Subcontract or any bond given
      hereunder, order extra and/or additional work, deletions, or other
      modifications to the Work, such changes to be effective only upon written
      order of Contractor. Any adjustment to the Subcontract Price or the time for
      completion of the Work shall be made in accordance with the applicable
      provisions of the Agreement between Owner and Contractor and the lump
      sum or unit prices set forth in Exhibit E or, in the absence of such provisions
      on an agreed, equitable basis. Notwithstanding any inability to agree upon
      any adjustment or the basis for an adjustment, Subcontractor shall, if
      directed by Contractor, nevertheless proceed in accordance with the order,
      and the Subcontract shall be adjusted as reasonably determined by the
      Contractor with any dispute to be resolved after the completion of the Work.
      If requested by the Contractor, the Subcontractor shall perform extra work
      on a time and material basis, and the Subcontract price shall be adjusted
      based on time records and materials checked by the Contractor on a daily
      basis.

      Walbridge argues that, even though it directed W.W. Gay to perform the

extra work and stated its “intention to pay W.W. Gay as stated in our 2/5/09 letter,”

this letter specifically limited any adjustment in the subcontract price to that

allowed by “applicable provisions of the Agreement between Walbridge and the

Owner.” Walbridge, though, has not disclosed what those applicable provisions
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may be or how they differ, if at all, from W.W. Gay’s expectations. Interpreting the

evidence we have before us in the light most favorable to Walbridge, we find only

one reasonable interpretation of the parties’ agreement: that W.W. Gay would be

compensated for its work, pursuant to Article VII of the contract, “on a time and

material basis” as tracked by the timesheets approved by both parties. See Orkin

Exterminating Co., Inc. v. F.T.C., 
849 F.2d 1354
, 1360 (11th Cir. 1988) (contract

interpretation is question of law where contract is subject to only one reasonable

interpretation).

      Even assuming that the interpretation of the contract raises issues of material

fact, Walbridge is still liable, as the district court found, under the duty of good

faith and fair dealing implied in all contracts. See Fernandez v. Vazquez, 
397 So. 2d
1171, 1174 (Fla. 3d DCA 1981). Walbridge ordered W.W. Gay to install the

storm pipe despite the problem that W.W. Gay had promptly called to Walbridge’s

attention; Walbridge then waited six weeks to ask the Navy for advice; and after

W.W. Gay had already finished installing the pipe, Walbridge ordered W.W. Gay

to reroute the pipe. W.W. Gay understandably insisted that it receive full

compensation for its work, and Walbridge accepted, or at least manipulatively

encouraged, this expectation. Moreover, the only reason that the Navy did not pay

for W.W. Gay’s work is because of Walbridge’s initial error in judgment. Thus,

Walbridge cannot now invoke the Navy’s refusal to pay to avoid its obligations to


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W.W. Gay. See S. Internet Sys., Inc. ex rel. Menotte v. Pritula, 
856 So. 2d 1125
,

1128-29 (Fla. Dist. Ct. App. 2003) (“It is a well-established principle of law that

one who prevents the happening of a condition precedent upon which his liability

is made to depend, cannot avail himself of his own wrong and thereby be relieved

of his responsibility to perform under the contract.”) Because Walbridge does not

contest that $109,177 is the reasonable cost of W.W. Gay’s work, it is liable for the

full amount. 3

                                              V.

       Finally, we consider whether W.W. Gay is entitled to attorney’s fees under

Fla. Stat. § 57.105(7).

       Flordia courts have read § 57.105(7) to provide for “reciprocity of prevailing

party attorneys’ fee provisions.” Placida Prof'l Ctr., LLC v. F.D.I.C., 
512 F. App'x 938
, 952 (11th Cir. 2013). It provides:

       If a contract contains a provision allowing attorney's fees to a party when he
       or she is required to take any action to enforce the contract, the court may
       also allow reasonable attorney's fees to the other party when that party
       prevails in any action, whether as plaintiff or defendant, with respect to the
       contract. This subsection applies to any contract entered into on or after
       October 1, 1988.



3
  Walbridge gets nowhere by invoking language at the end of Article VII of the subcontract
stating that the time for completion for W.W. Gay’s work could not be modified without a
change order. We find this language irrelevant here because the issue is the adjustment of the
subcontract price, not the time for completion (and as discussed above, Walbridge has presented
no evidence that W.W. Gay’s alleged late completion excused Walbridge’s payment
obligations).
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Despite this broad language, Florida courts have held that “[t]his reciprocity is

limited to the specific terms of the attorney’s fees provision in a contract.”

Escambia Cnty. v. U.I.L. Family Ltd. P'ship, 
977 So. 2d 716
, 717 (Fla. Dist. Ct.

App. 2008). However, where the action seeking attorney’s fees “differs from the

action envisioned in the contract only with respect to who sat on each side of the

courtroom,” then reciprocity must apply. 
Id. Here, on
its face, thee attorney’s fee provision in the subcontract is more

complex than an all-purpose fee-shifting clause in favor of Walbridge.

Nevertheless, a close look at the language of the provision reveals that it gives

Walbridge the right to obtain attorney’s fees for an action seeking to enforce any

provision of the subcontract. Article XIV of the subcontract provides in pertinent

part:

        If the Subcontractor . . . fails in the performance or observance of any of the
        provisions of this Subcontract . . . then Contractor, after giving the
        Subcontractor written or (oral, confirmed in writing) notice of such default
        and forty eight (48) hours within which to cure such default, shall have the
        right to exercise any one or more of the following remedies:
               ...
               (iv) Recover from Subcontractor all costs incurred by Contractor to
               complete the work plus a 10% mark-up for overhead and profit, and
               further recover from Subcontractor all losses, damages, penalties and
               fines, whether actual or liquidated, direct or consequential, and all
               reasonable attorneys' fees suffered or incurred by Contractor by
               reason of or as a result of Subcontractor's default.

Given that “the purpose of the statute is simply to ensure that each party gets what

it gives,” Inland Dredging Co., L.L.C. v. Panama City Port Auth., 
406 F. Supp. 2d 13
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1277, 1283 (N.D. Fla. 2005), and given that W.W. Gay has clearly given

Walbridge a broad right to seek attorney’s fees for any contract default (on the sole

condition that Walbridge provide written 48-hour notice), W.W. Gay gets that

same right in return. W.W. Gay submitted a final payment application on August

10, 201, see D.E. 29-27, p.4, and Walbridge has had well over 48 hours to cure its

default. Because W.W. Gay is uncontestably a prevailing party in this action, it is

entitled to “reasonable attorneys’ fees suffered or incurred by [W.W. Gay] by

reason of or as a result of [Walbridge]’s default” on its payment obligation to

W.W. Gay.

                                         VI.

      The district court’s rulings are affirmed.

      AFFIRMED.




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