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Fortney & Weygandt, Inc. v. Lewiston Dmep IX, LLC

Supreme Court of Maine

December 30, 2019

FORTNEY & WEYGANDT, INC.
v.
LEWISTON DMEP IX, LLC, et al.

          Argued: October 7, 2019

          Michael R. Bosse, Esq., and Conor M. Shankman, Esq. (orally), Bernstein Shur, Portland, for appellant Lewiston DMEP IX, LLC, et al.

          David P. Very, Esq., Norman, Hanson & Detroy, LLC, Portland, Gavin G. McCarthy, Esq., Pierce Atwood LLP, Portland, and Michael L. Fortney, Esq. (orally), Stark & Knoll, Akron, Ohio, for appellee Fortney & Weygandt, Inc.

          Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

          HJELM, J.

         [¶1] In three cases arising from a set of commercial construction projects, Lewiston DMEPIX, LLC, et al. (collectively, GBT), [1] a group of real estate developers, appeal from a combined judgment entered in the Business and Consumer Docket [Murphy, J.) after a consolidated jury-waived trial. In the judgment, the trial court determined that, in addition to damages for breach of contract, the general contractor, Fortney & Weygandt, Inc. (F&W), was entitled to remedies, including attorney fees, pursuant to Maine's prompt payment statutes, 10 M.R.S. §§ 1111-1120 (2018); that F&W was also entitled to attorney fees pursuant to the terms of the parties' contract; and, addressing GBT's counterclaims, that GBT was estopped from seeking to enforce a contractual right to liquidated damages against F&W. We affirm the judgment with respect to GBT's counterclaims for liquidated damages. As to the prompt payment remedies allowed to F&W, we affirm in part but vacate in part and remand for reconsideration of damages. Finally, although F&W is entitled to an award of attorney fees and costs pursuant to the prompt payment statutes, we vacate the portion of the judgment allowing F&W any separate recovery of attorney fees pursuant to the parties' contract.

         I. BACKGROUND

         [¶2] We draw the following account of this case from the procedural record and from the facts as found by the trial court, which are supported by competent evidence in the record. See Vt. Mut. Ins. Co. v. Ben-Ami, 2018 ME 125, ¶2, 193A.3d 178.

         [¶3] In 2014, GBT, a commercial real estate developer based in Tennessee, entered into a contract with F&W, a general contractor based in Ohio, for F&W to construct five retail-store buildings in Maine. The terms of the parties' agreement included a date by which each building project would reach "substantial completion," a term defined in the agreement as "sufficiently complete in accordance with the Contract Documents so that the Owner may occupy or utilize the Project... for the use for which it is intended, without unscheduled disruption." According to the contract documents, if a project had not reached substantial completion by the contracted date, F&W would owe GBT liquidated damages calculated at a specific rate.

         [¶4] For a number of reasons, including unusually harsh winter weather conditions and delays caused by GBT's own conduct, none of the five projects reached substantial completion by the contracted dates. As delays arose, F&W employees notified GBT and requested extensions of the substantial completion dates. At the same time, throughout the construction process, F&W employees also submitted a succession of revised schedules to GBT for each project, often indicating substantial completion dates that were later than the contracted dates. Frequently, GBT did not respond to these notifications and updated schedules.[2] In some of its communications with F&W, however, GBT signaled its acknowledgement that the substantial completion dates had been extended.[3] In addition, several times, GBT's vice president of construction told F&W representatives that time extensions would be addressed after the projects were complete, with GBT to issue a final, no-cost change order that would extend the contracted substantial completion dates for all five projects.[4]

         [¶5] Even after the contracted substantial completion dates had passed and continuing as late as August of 2015, GBT issued dozens of change orders for the projects, expanding the scope of F&W's work for a number of reasons, including unforeseen site issues, weather conditions, and changes to landscaping plans.

         [¶6] Previously, GBT had entered into contracts for F&W to construct nine stores in Pennsylvania and Ohio, which would be used by the same third-party retailer that was to occupy the Maine stores. The contract documents for those out-of-state projects were the same as the ones used for the Maine projects. Although most of the Pennsylvania and Ohio projects reached substantial completion after the contracted dates had passed, GBT did not seek liquidated damages in any of those instances.

         [¶7] As the result of GBT's apparent acquiescence to time extensions as manifested by a combination of its statements, conduct, and silence, F&W employees believed that GBT had agreed to the updated timelines and that GBT would not seek liquidated damages if the projects reached substantial completion after the originally-contracted dates. Because F&W relied on its belief that GBT was agreeing to these extensions, F&W continued to work until August of 2015 even though GBT had stopped making progress payments in June. For the same reason, F&W did not insist that GBT issue change orders extending the contracted substantial completion dates as delays arose. The court concluded that, given the totality of the circumstances, F&W's belief that GBT had agreed to the extended dates was reasonable and justified, as was F&W's reliance on those changes.

         [¶8] Although GBT stopped paying F&W in June, it actually had decided to discontinue payments two months earlier. GBT did not, however, notify F&W of its decision at that time. When F&W's president contacted GBT and asked why the payments had stopped and whether they would resume, he received no response. Because of GBT's nonpayment, F&W stopped working on the projects on August 7, 2015, after notifying GBT, but it remained ready and able to resume work if GBT were to pay the overdue invoices and issue change orders. Instead of doing that, GBT sent letters to F&W attempting to impose liquidated damages calculated on a per diem basis from the original contracted substantial completion dates.

         [¶9] In September and October of 2015, F&W commenced three separate actions against GBT in the Superior Court (Kennebec, Androscoggin, and Oxford Counties), alleging breach of contract and violation of the prompt payment statutes, and seeking enforcement of mechanic's liens. GBT filed counterclaims seeking liquidated damages and damages for breach of contract based on allegations that some of F&W's work was incomplete or defective.[5] The three matters were transferred in the interim to the Business and Consumer Docket.

         [¶10] GBT and F&W each filed multiple motions for summary judgment. After a hearing, the court [Murphy, J.) entered summary judgments in favor of F&W on its claims for breach of contract, concluding as a matter of law that F&W was entitled to payment on all of its unpaid invoices.[6] The court also entered summary judgments in favor of F&W on portions of GBT's counterclaims that alleged defective or incomplete work by F&W. The court denied the portion of F&W's motions seeking judgments on GBT's counterclaims for liquidated damages, which F&W asserted were barred by waiver and equitable estoppel, because the court concluded that there were issues of material fact concerning those affirmative defenses. The summary judgment proceedings also did not resolve F&W's claims for an award of prompt payment remedies or its claims for enforcement of mechanic's liens. On this appeal, neither party challenges any aspect of the court's summary judgment order.

         [¶11] In November of 2017 and January of 2018, the court held a nine-day consolidated jury-waived trial on the remaining issues. After being presented with the testimony of many witnesses and a mountain of documentary exhibits, the court issued a fifty-eight-page combined judgment containing detailed findings. The court determined that F&W was entitled to a judgment on GBT's counterclaims for liquidated damages because, through its statements, conduct, and silence, GBT had waived and was equitably estopped from asserting such claims; and that F&W was entitled to penalties, interest, and attorney fees, all pursuant to the prompt payment statutes.[7]

         [¶12] GBT did not file a motion for amended or additional findings, see M.R. Civ. P. 52(b), or any other post-judgment motion. For its part, F&W moved for the court to amend the judgment, see M.R. Civ. P. 59(e), by adding a determination that it was entitled to attorney fees and costs based not only on the prompt payment statutes but also pursuant to the terms of the parties' contract. Over GBT's objection, the court granted F&W's motion and amended the combined judgment accordingly.

         [¶13] GBT appeals to us from the combined judgment.

         II. DISCUSSION

         [¶14] GBT asserts that the trial court erred in three of its determinations: that the doctrines of equitable estoppel and waiver barred its claims against F&W for liquidated damages; that F&W was entitled to prompt payment remedies; and that the terms of the parties' contract allowed F&W to ...


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