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SMR, Inc. v. Cianbro Corp.

Superior Court of Maine, Cumberland

November 7, 2019

SMR, INC., Plaintiff
v.
CIANBRO CORP., et al., Defendants

          ORDER

          Thomas D. Warren, Justice.

         In this action plaintiff SMR Inc. claims that defendant Cianbro Corp, failed to pay SMR monies due under a subcontract providing for SMR to install siding and membrane roofing as part of a larger project in which Cianbro was the general contractor for the demolition and renovation of a portion of the Sappi papermill in Westbrook, Maine.

         SMR has asserted claims for breach of contract, enforcement of a mechanics lien, and violations of the Prompt Payment Act, 10 M.R.S. § 1114. Because SMR's claims are based on an express contract, the court previously dismissed claims for unjust enrichment and quantum meruit.

         Cianbro has denied SMR's claims and asserted a counterclaim alleging that SMR defaulted on its contractual obligations and seeking damages representing the amount it had to pay to other subcontractors to complete the work after it terminated the SMR subcontract.

         A jury-waived trial was held on June 17-21, 2019 and the parties thereafter filed post-trial submissions.[1]

         The court issues the following findings of fact and conclusions of law:

         1. In early 2016 Cianbro entered into a contract with Sappi North America to demolish and remodel a portion of the Sappi paper mill in Westbrook. Specifically, the contract called for Cianbro to demolish the existing roof over the portion of the Sappi mill known as Building 37, leaving three existing walls standing (referred to as the west, north, and east walls) and an opening to the south.

         2. Once the roof had been demolished, the east and west walls were to be replaced by new steel structural frame walls. The north wall was brick and was to remain in place. On the lower half of the north wall a new structural steel wall was to be built approximately fourteen feet out from the existing brick wall, with a sloping shed roof running back to the brick wall.

         3. The new structural steel walls and the existing top half of the north wall were to be covered with insulated steel siding. The existing Building 37 floor (which covered a basement area) was to be covered with a membrane roof.

         4. Cianbro's contract with Sappi also called for the building of a small addition (the "employee entrance') at the south end of the east wall. Finally, there was a smaller roof area over the East Wall that was also to be covered with a membrane roof.

         5. On May 25, 2016 after considering various bids from other potential subcontractors, Cianbro entered into a subcontract with SMR under which SMR was to furnish and install the insulated steel siding on the west, north, and east walls and the employee entrance area and was to furnish and install a membrane roof on the existing floor and on the area over the east wall. The contract also contemplated some repair work on the west wall roof.

         6. SMR's bid was for a total of $ 500, 124.00, which was almost $ 500, 000 below the next lowest bid. Before the SMR subcontract was let, Rick Bartucca of Cianbro met with Steve McBrady, the owner and chief executive of SMR at the site. The demolition of the Building 37 roof was complete or almost complete at that time, and Bartucca gave McBrady an opportunity -now that the existing walls and the work to be done were more visible - to verify that his bid prices were still good. After a cursory look from the construction trailer, McBrady said he was "all set."

         7. Plaintiffs Ex. 1 consists of both the SMR subcontract and a subcontract purchase order. Although the subcontract and subcontract purchase order were signed on May 25, 2016, the purchase order included language that the subcontract was to be performed during the time period from May 10 to July 31, 2016. That time period had been overtaken by events. Cianbro's work had been delayed for various reasons, and at the time the subcontract and purchase order were signed, both Cianbro and SMR understood that the time period set forth in the purchase order was inoperative.[2]

         8. Cianbro's standard subcontract form, used in this case, also potentially included a "Project Schedule" as Exhibit D. The SMR subcontract, however, included a notation that Exhibit D was "not used."

         9. Before he even signed the subcontract, Steve McBrady had informed Cianbro that SMR was committed to certain school projects throughout the summer of 2016, and the parties understood that the siding work would begin in the early fall.[3] This suited both parties because Cianbro had experienced a number of problems and delays on the job at that time and had not yet installed the structural steel necessary for SMR to hang the insulated steel siding.

         10. SMR contends that Cianbro violated 10 M.R.S. §1114(2) by not disclosing the due dates for Cianbro's receipt of payments from Sappi before the contract was entered. However, the subcontract documents expressly included the prime contract, noted as available on request. Plaintiffs Ex. 1 § 1.1 l(j). The prime contract specified when Cianbro would be paid. Defendant's Ex. 2 § 10(b). This constituted adequate disclosure. Moreover, in entering the subcontract, SMR expressly represented and warranted that prior to entering the subcontract it had carefully examined the subcontract documents. Plaintiff s Ex. 1. § 2.2(a). As the court found at trial, there was no violation of 10 M.R.S. § 1114(2).

         11. Cianbro expected that SMR would order the siding so that it could begin work after Labor Day and was surprised and concerned when, in an email on September 6, 2016, Steve McBrady asked what color siding should be ordered. This indicated that the siding had not been ordered. In a September 7 email Gary Parker of Cianbro responded, informed McBrady the color that had been chosen by Sappi, and added, "I need to know reality on lead time for the siding."

         12. McBrady answered by email that he would "call in color and get you a time." Parker responded almost immediately, asking McBrady if he knew the quantities he needed and whether he would get a lead time that day.

         13. Parker then sent an email on the following day, Thursday September 8, stating:

Steve:
Do you have a lead time for the siding and is the color that the owner pick readily accessible? How many sq. ft. of siding have you ordered? When will you have a crew here to start the Roof and what do you need from use [sic] to get started? I don't want your guys waiting around for us to do something that I may have missed. Remember I think you should be able to start end of next week.

Defendant's Ex. 15.

         14. When McBrady did not respond, Parker sent a further email on Monday September 12, attaching his earlier email and stating:

Steve:
Please respond to these Question right away It is important.

Id.

         15. McBrady responded by email on Thursday September 15, apologizing for the delay in responding and stating that he had been waiting for the siding manufacturer (Kingspan) to give him an accurate estimate. His email went on to state:

The wall panels ship from Florida and have an estimated arrival date of 10/15/16. The roof panels ship from California and have an estimated arrival date of 10/25/16.
These dates assume that there are no issues in trucking .... They will be able to firm up the delivery dates as they get closer.

Defendant's Ex. 17.

         16. Cianbro responded the same day with an email asking McBrady how long it would take him to complete the work and a second email asking, "How many Sq, feet of siding have you ordered?" and when McBrady could start on the west wall roof repair, 17. McBrady did not respond to Cianbro's inquiry as to how long it would take SMR to complete the work.

         18. On the quantity issue, McBrady responded (email on September 15 at 3:44 pm), "We have @15000 sq ft of wall panel and 3000 sq ft of roof panel," adding that he would stop by Monday to go over the roofing with Gary Parker.

         19. These email exchanges are quoted in some detail because, contrary to McBrady's testimony at trial, his responses to Cianbro represented that he had ordered the siding and roofing panels and that those were estimated to arrive on October 15 and 25, 2016. Although McBrady testified he had been providing a hypothetical lead time, his email is not worded as a hypothetical. McBrady's listing of quantities in response to the question "How many Sq. feet of siding have you ordered?" (emphasis added) also demonstrates that he intended Cianbro to think that he had placed the order.

         20. In fact, McBrady did not place the order for siding until a month ...


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