MARC T. TREADWELL, District Judge.
Defendant GSC and Defendant Allied World f/k/a Darwin move for summary judgment on Defendant Yearout's claims against GSC and Allied World for GSC's alleged breach of contract. For the following reasons, that motion (Doc. 83) is
This case arises from a consolidation of two cases, both involving a renovation project of Hangar Dock Building 54 at Robins Air Force Base in Warner Robins, GA ("the Project"). Docs. 20; 29. The United States Army Corps of Engineers was the owner of the Project, GSC was the general contractor, and Defendant Yearout subcontracted with GSC to perform "complete mechanical and plumbing work in accordance with the RFP [Request for Proposal]." Doc. 20-1 at 1, 12. The "RFP," or Request for Proposal, is a comprehensive document detailing the work to be performed on the Project as part of the prime contract between GSC and the Corps of Engineers. See Doc. 88 at 211:1-13, 110-139. The RFP notes that "[t]hese specifications and drawings are at a 40-60% development stage." Doc. 88 at 115.
The subcontract included a base bid award of $380,390. Doc. 20-1 at 12. It also noted that an option "to include remaining mechanical/plumbing work in contract may be forthcoming." Id. It further specified that once that option was awarded to GSC, Yearout would "accept option at a cost increase of $3,436,009 to complete turnkey mechanical and plumbing system." Id. The subcontract was dated February 3, 2015. Doc. 20-1 at 3.
In June and July of 2015, GSC received bids for structural work, including a catwalk, from a company called Steel Fab. Doc. 91 at 36:5-37:18, 57. The final bid by Steel Fab was for $359,468. Id. A contract to provide catwalks—whether to remedy Yearout's failure to provide catwalks or as a subcontract on a different scope of work is disputed—somehow ended up going to a company called CDM on July 21, 2015, for $2,189,000. Doc. 93 at 21:22-23:16. CDM then subcontracted the same scope of work to Steel Fab for the amount of its original bid to GSC, $359,468. Id. at 25:5-27:16, 30; Doc. 91 at 51. The difference between the $2,189,000 and the $359,468 was apparently compensation for the idea of stacking the MAUs, which was CDM's idea. Doc. 93 at 17:4-18:20, 27:2-16.
Yearout sued Allied World under the Miller Act to recover on the payment bond for GSC's alleged failure to pay Yearout for its work under the subcontract. Yearout, 5:16-cv-568, Doc. 1 at 3-5. Yearout cross-claimed against GSC for breach of contract, arguing that the cost of the MAUs increased due to design changes and that GSC never issued change orders, as it allegedly promised it would, to compensate Yearout for the added cost. Docs. 90 at 143:7-12; 28 at 7-10. Yearout also claims it incurred costs due to delays attributable to GSC. Doc. 28 at 10. GSC also cross-claimed against Yearout for breach of contract, including abandonment of the Project, failure to properly install the MAUs, and cost increases for GSC relating to ductwork structural support and demolition. Doc. 18 at 11-12.
GSC and Allied World now jointly move for summary judgment on Yearout's claims against them, arguing that Yearout materially breached its contract and is thereby barred from recovering against GSC or Allied World for their alleged breach of contract. Doc. 83-1 at 2; Yearout, 5:16-cv-568, Doc. 6 at 6.
A court must grant summary judgment "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). A factual dispute is not genuine unless, based on the evidence presented, "`a reasonable jury could return a verdict for the nonmoving party.'" Info. Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002) (quoting United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1437 (11th Cir. 1991)); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant may support its assertion that a fact is undisputed by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1)(A). "When the nonmoving party has the burden of proof at trial, the moving party is not required to `support its motion with affidavits or other similar material negating the opponent's claim[]' in order to discharge this `initial responsibility.'" Four Parcels of Real Prop., 941 F.2d at 1437-38 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Rather, "the moving party simply may `show[]—that is, point[] out to the district court—that there is an absence of evidence to support the nonmoving party's case.'" Id. (alterations in original) (quoting Celotex, 477 U.S. at 324). Alternatively, the movant may provide "affirmative evidence demonstrating that the nonmoving party will be unable to prove its case at trial." Id.
The burden then shifts to the non-moving party, who must rebut the movant's showing "by producing . . . relevant and admissible evidence beyond the pleadings." Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315 (11
GSC and Allied World argue that any breach of contract claim Yearout asserts against them arising out of the Project is barred by Yearout's failure to perform. Doc. 83-1 at 1. They argue that Yearout was obligated under the subcontract to install catwalks for the maintenance of the MAUs;
Movants GSC and Allied World have not carried their burden for two reasons, each independently sufficient to preclude summary judgment. First, the contract contains an ambiguity which cannot be resolved except by extrinsic evidence, which in this case requires a jury. Second, even if Yearout did breach the contract, GSC and Allied World have not proved that breach was material.
A question of fact remains on whether installing catwalks was within Yearout's scope of work—that is, whether Yearout had a contractual duty to install the catwalks. In interpreting contracts under Georgia law,
The contractual provisions at issue here state, in relevant part,
Doc. 20-1 at 12. Catwalks are not mentioned. Id. Yearout is clearly responsible for "complete mechanical and plumbing work in accordance with the RFP." Id. The question is whether catwalks fall within that scope of work.
The parties differ on how the RFP should be interpreted. GSC and Allied World maintain the catwalks were part of Yearout's scope of work, pointing to design requirements in the RFP under the section heading of "Mechanical Design." Docs. 83-1 at 9; 88 at 125. Within that section, a subsection entitled "E. Space Allocation for Maintainability and Functionality" states the following: ". . . 4) Position equipment so that required ladders to reach devices have a clear location on the floor for placement. If space is insufficient to safely use a step ladder, provide a vertical ladder and catwalk to provide access." Docs. 83-1 at 9; 88 at 126. According to the movants, that reference to catwalks in the mechanical design section implies that catwalks were within the mechanical scope of work, which was Yearout's scope of work. Doc. 83-1 at 9.
Yearout argues that the catwalks were within the structural steel scope of work. Doc. 96-1 at 14. It points to the "Structural Design" section of the RFP, which states the following: "A. Provide galvanized structural steel platform for upper MAUs." Doc. 88 at 124. That section also requires the platform to "have a minimum of 60[in.] access on the coil pull and 40[in.] outside air intake sides," presumably for maintenance. Id. Yearout claims the "`access' referred to in this section is the elevated walkway or `catwalks.'" Doc. 96 at 6. Yearout points to evidence to show that "galvanized steel platforms," as used here, include catwalks.
Docs. 90 at 97:6-10, 12:19-24; 96-1 at 14 n.3. Also, Curtis Williamson, a project manager for JLA, the engineering company on the Project, testified that the platform in the RFP included an area around the MAU for someone to walk on:
Doc. 87 at 7:15-25, 11:24-12:2, 166:2-9, 164:20-23. There is, therefore, evidence that the platforms required under the structural design section included a catwalk.
Under Yearout's interpretation of the RFP, therefore, the requirement to provide catwalks is in the structural design section of the RFP, and the catwalk is mentioned in the mechanical design section only to guide the designer on how to position the MAUs and allocate space. See Doc. 96 at 5.
"`Construction of ambiguous contracts is the duty of the court, and it is only after application thereto of the pertinent rules of construction, and they remain ambiguous, that extrinsic evidence is admissible to explain the ambiguity.'" Holcomb v. Word, 239 Ga. 847, 847-48, 238 S.E.2d 915, 916 (1977). Rules of construction do not resolve this ambiguity. Neither party, in its briefing, points to pertinent rules of construction for resolving contractual ambiguities. However, Georgia statutes provide some useful rules. First, in Georgia "[t]he cardinal rule of construction is to ascertain the intention of the parties." O.C.G.A. § 13-2-3. That intention is not clear from the RFP. Georgia law also provides that "[p]arol evidence is not admissible to vary a written contract, but ambiguities in the written contract "may be explained." O.C.G.A. § 13-2-2(1).
There is, however, extrinsic evidence that the parties considered catwalks to be outside of Yearout's scope of work. In an email dated June 26, 2015, Dozier indicated that he thought drawings for the catwalk were not in Yearout's scope of work. Doc. 90 at 123. Yearout has also adduced evidence that it never refused to provide catwalks because it did not receive notice until January 19, 2017 that GSC had expected Yearout to provide catwalks and that GSC believed Yearout had failed to do so.
On the other hand, George McKnight, owner of GSC, testified that a complete or "turnkey" mechanical system would have included catwalks.
Even if there were not a factual issue on whether the catwalks were in Yearout's scope of work, GSC and Allied World have not carried their burden of showing that the alleged breach was sufficiently material to completely relieve GSC of its contractual obligations. "A breach which is incidental and subordinate to the main purpose of the contract, and which may be compensated in damages, does not warrant a rescission . . . or termination nor does a mere breach of contract not so substantial and fundamental as to defeat the object of the parties in making the agreement." Mayor & City of Douglasville v. Hildebrand, 175 Ga.App. 434, 436, 333 S.E.2d 674, 676 (1985) (alteration in original) (quotation marks and citation omitted). Whether a breach is material may depend on several factors: the extent to which the injured party was deprived of the benefit of its bargain, the extent of performance by the breaching party, whether the breaching party can cure its failure, and whether the breaching party acted in good faith, among others. See Restatement (Second) of Contracts § 241 (1981). "The determination whether a material breach has occurred is generally a question of fact." 23 Williston on Contracts § 63:3 (4th ed.). "As such, the issue of materiality is `especially unsuited to resolution by summary judgment.'" Toler v. Engelhard Corp, 2006 WL 1133040, at *3 (M.D. Ga. 2006) (quoting Sahadi v. Cont'l Ill. Nat'l Bank, 706 F.2d 193, 196 (7th Cir.1983)). Because materiality is a question of fact, GSC and Allied World must show that no reasonable jury could conclude the breach was not material.
The movants have failed to carry that burden. They argue the object of the contract was "install a HVAC system with catwalks so the Army would accept the work." Doc. 83-1 at 11. However, catwalks were one item among many in the contract, and neither GSC nor Allied World claim that the lack of catwalks deprived them of the benefit of their bargain as a whole or defeated the main object of their contract. Doc. 20-1 at 12. In fact, there is evidence GSC found it acceptable to retain Yearout even without Yearout's providing catwalks, and that it even agreed to an arrangement whereby a different subcontractor would do catwalks. See Doc. 88 at 133:23-134:19. Additionally, as Yearout points out in its response, there is evidence that the catwalks "were a separate and divisible portion of work that was provided by the steel subcontractor for $359,468—less than 10% of the original Yearout subcontract price." Docs. 96 at 17; 96-3 at 78; 91 at 57. Although materiality is not a quantitative determination, those numbers are some evidence that GSC largely received the benefit of its bargain with Yearout, whether that bargain included catwalks or not. Viewing the facts in the light most favorable to Yearout, any alleged breach of an obligation to install catwalks was not material.
For the reasons discussed above, Defendant GSC and Defendant Allied World's joint motion for summary judgment (Doc. 83) on Defendant Yearout's claims against GSC and Allied World for GSC's breach of contract is