PRESENT: HASSELL, C.J., KEENAN, KOONTZ, KINSER, LEMONS, and
AGEE, JJ., and CARRICO, S.J.
UPPER OCCOQUAN SEWAGE AUTHORITY
OPINION BY
v. Record No. 022528 JUSTICE G. STEVEN AGEE
OCTOBER 31, 2003
BLAKE CONSTRUCTION CO., INC./
POOLE & KENT
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Hon. Jane M. Roush, Judge
Upper Occoquan Sewage Authority ("UOSA") appeals rulings of
the Circuit Court of Fairfax County in proceedings which arose
out of a construction contract between UOSA and Blake
Construction Company/Poole & Kent ("the Joint Venture"). On
appeal, UOSA's multiple assignments of error essentially assert
the trial court erred by: (1) denying UOSA's application for
costs under Code § 2.2—4335(A); (2) denying UOSA's motion to
strike certain Joint Venture claims on the basis of filing
appeals more than six months after UOSA's final written
decisions denying the claims; and (3) denying UOSA's motion to
strike and motion for judgment notwithstanding the verdict on
the basis that certain Joint Venture notices of claim or time
impact analyses either were not filed or were filed late.
For the following reasons, we will affirm in part and
reverse in part the judgment of the trial court.
I. BACKGROUND
This litigation involves multiple disputes arising out of a
contract for construction of a waste water treatment facility
located in Fairfax County (the "Project"). UOSA, the owner of
the facility, is a public authority created pursuant to the
Virginia Waste and Water Authorities Act, Code § 15.2-5100
through -5158, to provide waste water reclamation for its member
jurisdictions, the counties of Fairfax and Prince William and
the cities of Manassas and Manassas Park. As a public
authority, UOSA is subject to the Virginia Public Procurement
Act, Code § 2.2-4300 through -4377 1 (the "VPPA").
Blake Construction Co., Inc. and Poole & Kent Corporation
formed the Joint Venture in order to submit a bid for the
Project. The Joint Venture's bid was successful, and the Joint
Venture agreed to furnish all labor, materials, and equipment
for the Project in a contract dated December 10, 1996 (the
"Contract"). The Contract allows the Joint Venture to obtain an
increase in the contract price and/or an extension of time to
complete certain work upon written application to UOSA pursuant
to procedures set forth in the Contract.
The Joint Venture began work on the Project in January 1997
which is ongoing at the time of this appeal. During the course
of the work, numerous changes were made to the original
1
At the time the claims at issue in this appeal arose in
the trial court, the VPPA was codified at Code § 11-35 et seq.,
but was recodified at Code § 2.2-4300 et seq. by the General
Assembly in 2001. We will refer to the corresponding provisions
of the current Code of Virginia in this opinion.
2
contract, some of which are in dispute and resulted in the
proceedings now at bar.
Procedures set forth in the Contract allow the Joint
Venture to obtain an increase in the contract price and/or an
extension of time to complete certain work upon written
application to UOSA. If UOSA issues an adverse final decision
on the claim (i.e. denies the claim), the VPPA allows the Joint
Venture to appeal that final decision to the circuit court
"within six months of the date of the final decision on the
claim by the public body" for a de novo determination of its
claim. See Code § 2.2-4363(D). 2 As the Project remains ongoing,
this has engendered litigation by the parties while their
contractual relationship continues.
The Joint Venture filed six lawsuits appealing adverse
claim decisions by UOSA which were eventually consolidated by
order of the trial court (collectively, the "consolidated
cases"). UOSA filed a plea in bar to approximately sixty of the
claims pled by the Joint Venture in the consolidated cases. The
plea in bar alleged that the Joint Venture failed to comply in a
2
Code § 2.2-4363(D) provides:
The decision of the public body shall be
final and conclusive unless the contractor
appeals within six months of the date of the
final decision on the claim by the public
body by invoking administrative procedures
meeting the standards of § 2.2-4365, if
available, or in the alternative by
instituting legal action as provided in
§ 2.2-4364.
3
timely manner with various contractual and statutory procedural
requirements.
On September 28, 2001, the jury returned a verdict in the
plea in bar proceeding on a special verdict form noting separate
adjudications for each claim. 3 Pursuant to that verdict, the
trial judge, Judge Roush, entered an order on October 24, 2001
("the October 24th order"), denying UOSA's plea in bar on
twenty-nine of the Joint Venture's claims. The October 24th
order also included this stipulation: "The parties also
stipulate that the Amended Motion for Judgment and Declaratory
Judgment filed in Law 193766 contains no claim for unspecified
delays or manipulation of schedule other than as may be included
in any specific claim itemized therein." 4
Both parties made post-trial motions to set aside portions
of the verdict, which the trial court denied. The remaining
issues in the consolidated cases were set for a trial on the
merits to begin June 17, 2002.
While the plea in bar trial primarily dealt with the notice
and timely filing procedural requirements of certain claims,
separate issues were raised by the Joint Venture through the
amended motion for judgment and declaratory judgment in Law
3
During the trial, the Joint Venture withdrew some claims
as premature and non-suited others.
4
Law #193766 is one of the consolidated cases.
4
#193766. The Joint Venture asserted, in part, a violation of
the VPPA regarding a bar on damages for unreasonable delay,
which is the subject of the companion appeal, Blake Construction
Co., Inc./Poole & Kent v. Upper Occoquan Sewage Authority, 266
Va. ___, ___ S.E.2d ___ (2003) (today decided). The declaratory
judgment action also requested a declaration that UOSA
materially breached the Contract and the Joint Venture was thus
entitled to "[r]ecover the reasonable value of its services
performed to the date of termination, plus a reasonable
allowance for overhead and profit."
In supplemental responses to interrogatories prior to the
scheduled trial date, the Joint Venture calculated its damages
"[b]ecause UOSA is in material breach of the Contract." The
Joint Venture's measure of damages was "its reasonable costs
incurred in prosecuting the work plus the Joint Venture's
[General & Administrative] overhead less that which has already
been paid." As of February 28, 2002, the Joint Venture
represented its material breach damages to be $63,258,497.
UOSA filed a motion to strike damages for material breach
on January 25, 2002. After a hearing on February 8, 2002, Judge
Roush denied the motion. Ruling from the bench, she said the
Joint Venture's declaratory judgment pleading "is a classic use
of a declaratory judgment action, I think it's appropriate."
That same day, Judge Roush entered an order ("the February 8th
order"), memorializing the bench ruling which provides in
5
pertinent part: "[i]t appearing that the motion to strike the
Joint Venture's damages for material breach should be denied, it
is therefore ORDERED that UOSA's motion to strike the Joint
Venture's damages for material breach be and hereby is denied."
Judge Finch, substituting for Judge Roush, opined from the
bench during a May 23, 2002, pretrial hearing that "material
breach is no longer an issue . . . therefore, the effect is that
all damages regarding material breach are to be excluded from
the trial of these consolidated cases." No order appears in the
record to implement or explain Judge Finch's remarks from the
bench. The Joint Venture non-suited the material breach claim
and all remaining claims in the consolidated cases on May 29,
2002.
UOSA subsequently filed an application for costs pursuant
to Code § 2.2-4335(C) seeking $2,962,715.13. The trial court
held an evidentiary hearing on UOSA's application for costs and
subsequently granted the Joint Venture's motion to strike.
We granted UOSA this appeal.
II. ANALYSIS
A. UOSA's Application for Costs
Code § 2.2-4335(C) provides protection to a public body for
delay claims made by contractors which are false or without
factual or legal basis. The mechanism chosen by the General
Assembly is the in terrorem effect of recovering litigation
6
costs from the contractor which are attributable to a frivolous
delay claim. The statute provides in pertinent part:
A contractor making a claim against a public body
for costs or damages due to the alleged delaying
of the contractor in the performance of its work
under any public construction contract shall be
liable to the public body and shall pay it for a
percentage of all costs incurred by the public
body in investigating, analyzing, negotiating,
litigating and arbitrating the claim, which
percentage shall be equal to the percentage of
the contractor's total delay claim that is
determined through litigation or arbitration to
be false or to have no basis in law or in fact.
Code § 2.2-4335(C) (emphasis added).
The trial court denied UOSA's application for costs under
the statute finding insufficient evidence of "a determination
within the meaning of the statute or to show that the delay
claims had no basis in law or fact." For the following reasons,
we will affirm the judgment of the trial court.
UOSA contends that the Joint Venture's claim for material
breach damages of $63,000,000 was, in actuality, a claim for
delay damages. The Joint Venture responds that its damages lay
in quantum meruit and thus its claim was not one for delay
damages.
UOSA argues the material breach claim was really a delay
damages claim that was effectively stipulated out of the case
through the October 24th order and verified by Judge Finch's
later bench ruling. UOSA reasons that the continued litigation
of the material breach claim by the Joint Venture thereafter was
7
essentially a de facto "determination" under the statute that
the material breach claim was a false act not based on law or
fact. UOSA thus concludes it is entitled to a percentage of its
litigation costs incurred in opposing the material breach claim. 5
However, UOSA's argument runs into an immediate roadblock.
Nothing in the October 24th order addresses the material
breach claim as set out in Law #193766. More importantly, UOSA
cannot avoid the unmistakable clarity of the record which
contains the uncontradicted, succeeding and specific February
8th order finding material breach damages were in the
consolidated cases to be tried.
As we noted in Hill v. Hill, 227 Va. 569, 578, 318 S.E.2d
292, 297 (1984), it is fundamental that "a court of record
speaks only through its written orders." UOSA has not assigned
error to the February 8th order which specifically denied UOSA's
motion to strike material breach damages. Accordingly, the
February 8th order is the law of the case. See Searles v.
Gordon, 156 Va. 289, 294-96, 157 S.E. 759, 761 (1931).
5
As a tangential matter, we note the voluminous
documentation regarding UOSA's application for costs is
difficult to decipher and may well contain costs for non-delay
items. We also note UOSA offered no evidence at the hearing on
its application for costs except to introduce its cost records
and refer to the existing record in the case as evidence that a
"determination" within the meaning of the statute had already
occurred. Although we have reservations about UOSA's ability to
carry its initial burden under Code § 2.2-4335(C) with this
evidence alone, the trial court made no finding in that regard
so we will assume, for purposes of appeal, that UOSA's claimed
8
As in Hill, no order appears in the record to modify or
vacate the February 8th order. For whatever purpose Judge Finch
may have remarked on material breach damages from the bench on
May 23, 2002, those remarks do not change the law of the case
and the binding effect of the February 8th order. Hill, 227 Va.
at 578, 318 S.E.2d. at 297.
It strains credulity that UOSA would ask the trial court to
clarify that it had already ruled the material breach claim was
stipulated out of the case over three months earlier in the
October 24th order, but not make that argument to the court at
the February 8th hearing or in its written motion. That
invitation, if extended outside the record, was unequivocally
rejected by the trial judge through the plain and unmistakable
language of the February 8th order.
The law of the case thus directs the finding that material
breach damages were very much in the consolidated cases until
the filing of the May 29, 2002, nonsuit. Accordingly, UOSA's
argument that the material breach claim was out of the case
fails. There is thus no evidence in the record of a false or
statutorily baseless delay damages claim upon which UOSA can
anchor its application for statutory costs. The trial court's
judgment denying UOSA's cost application was therefore correct.
litigation costs were limited to the items it alleged were
related to delay damages claims.
9
B. Special Verdicts on the Individual Claims
The trial court conducted a plea in bar hearing from
September 17-28, 2001, at the conclusion of which forty-six
claims relating to time extensions were submitted to the jury.
The jury recorded its verdict on a special verdict form and
found that the Joint Venture was prohibited from pursuing
seventeen of its claims because it had either not complied with
the requirements for submitting claims under the Contract or had
failed to file suit within six months. The jury found that
twenty-nine of the Joint Venture's claims were not procedurally
or time barred. UOSA filed motions to strike and a motion
notwithstanding the verdict challenging the jury's findings.
The trial court denied those motions and entered an order
confirming the jury's verdict.
UOSA assigns error to the denial of its motions to strike
and motion for judgment notwithstanding the verdict.
Specifically, UOSA asserts the trial court erred in:
(1) denying its motion to strike and motion for judgment
notwithstanding the verdict with respect to Work Orders 12,
30, 39, 41, 64, 70, 71, 76, 106, 152, Claim 18, and PCO 115
because the evidence showed the Joint Venture failed to
file appeals of these claims within six months as required;
(2) denying its motion to strike and motion for judgment
notwithstanding the verdict with respect to Work Orders 113
10
and 175 because the Joint Venture expressly waived these
claims by signing a change order;
(3) denying its motion for judgment notwithstanding the
verdict with respect to Work Orders 88, 106, 127, 193, and
Claim 252 for lack of evidence that the Joint Venture
timely submitted a time impact analysis as required; and
(4) denying its motion for judgment notwithstanding the
verdict with respect to Claims 240 and 280 for lack of
evidence that the Joint Venture submitted a timely notice
of claim as required.
Under familiar principles of appellate review, we review
the evidence and all reasonable inferences flowing therefrom in
a light most favorable to the Joint Venture, which prevailed in
the trial court on the claims UOSA now contests. WJLA-TV v.
Levin, 264 Va. 140, 146, 564 S.E.2d 383, 386 (2002) (citing RF&P
Railroad v. Metropolitan Wash. Airports Auth., 251 Va. 201, 208,
468 S.E.2d 90, 94 (1996)). We will uphold the judgment of the
trial court unless it appears from the evidence that the
11
judgment is plainly wrong or without evidence to support it. 6
Code § 8.01-680; Nationwide Mut. Ins. Co. v. St. John, 259 Va.
71, 76, 524 S.E.2d 649, 651 (2000) (citing RF&P Corporation v.
Little, 247 Va. 309, 319, 440 S.E.2d 908, 915 (1994)).
During the plea in bar trial the jury was asked to decide
whether the Joint Venture appealed certain claims within six
months, waived certain claims, submitted time impact analyses
for certain claims, and timely submitted a notice of claim for
other claims. The jury determined the Joint Venture complied
with the Contract's requirements in each of the claims now
before us on appeal. The jury's verdicts, in all but one
6
The standard under which a trial court
should review the evidence adduced at trial before
granting a motion to strike the case at the end of a
plaintiff's evidence is well settled under prior
decisions of this Court. That standard requires the
trial court to accept as true all the evidence
favorable to the plaintiff as well as any reasonable
inference a jury might draw therefrom which would
sustain the plaintiff's cause of action. The trial
court is not to judge the weight and credibility of
the evidence, and may not reject any inference from
the evidence favorable to the plaintiff unless it
would defy logic and common sense.
Austin v. Shoney's, Inc., 254 Va. 134, 138, 486 S.E.2d 285, 287
(1997).
12
instance, find evidentiary support in the record and cannot be
said to be plainly wrong. 7
UOSA's proposed verdict form for Work Orders 12, 30, 39,
41, 64, 70, 71, 76, 106, 152, Claim 18, and PCO 115 asked the
jury to decide whether the Joint Venture filed suit within six
months of "UOSA's written decision on this claim challenging
such decision." (Emphasis added). The verdict form submitted to
the jury substituted the word "final" for the word "written" but
otherwise mirrored UOSA's proposed language. The record
reflects that the jury had sufficient evidence before it to
determine when the Joint Venture's claims began to accrue for
purposes of calculating the six-month period. The jury's
findings on these issues cannot be said to be plainly wrong or
without evidentiary support. Accordingly, we will affirm the
trial court's denial of UOSA's motion to strike and motion for
judgment notwithstanding the verdict for Work Orders 12, 30, 39,
41, 64, 70, 71, 76, 106, 152, Claim 18, and PCO 115.
UOSA's proposed verdict form with respect to Work Orders
113 and 175 was adopted verbatim by the trial court. In both
instances the jury found that the Joint Venture did not waive
7
In response to UOSA's assignments of error regarding the
individual "special verdict" claims the Joint Venture asserts
that UOSA did not "move to strike Work Orders 12, 41, 64, 70,
71, 106, Claim 18 or PCO 115." (BIO at 31). Because we find
that the jury's verdict with respect to these claims is not
plainly wrong or without evidence to support it, we do not
address the Joint Venture's contentions in this regard.
13
any claim by signing Change Order 79. Given the evidence in the
record these findings cannot be said to be plainly wrong. As
such, we will affirm the trial court's denial of UOSA's motion
to strike and motion for judgment notwithstanding the verdict
for Work Orders 113 and 175.
The jury was asked to decide, with respect to Work Orders
88, 106, 127, 193 and Claim 252, whether the Joint Venture
timely submitted a time impact analysis as required by the
Contract. The trial court adopted wholesale UOSA's proposed
instructions. In each instance, the jury found that the Joint
Venture timely submitted a time impact analysis. The evidence
in the record supports the jury's finding as to Work Orders 88,
106, 193 and Claim 252 which are thus not plainly wrong.
However, the verdict on Work Order 127 is without support in the
record.
Work Order 127 was issued on August 16, 1999. The only
evidence in the record as to a time impact analysis from the
Joint Venture is dated October 3, 2001, obviously long past the
Contract's seven day filing requirement. During oral argument
before this Court the Joint Venture referenced a document that
would support the jury's finding with respect to Work Order 127.
However, the Joint Venture has since acknowledged this document
does not appear in the record and cannot be relied upon for
purposes of appeal. Accordingly, there was no evidence to
support the jury's finding that the Joint Venture timely
14
submitted a time impact analysis regarding Work Order 127. The
jury's verdict was therefore plainly wrong.
We will affirm the trial court's denial of UOSA's motion
for judgment notwithstanding the verdict for Work Orders 88,
106, 193 and Claim 252, but will reverse the trial court with
respect to Work Order 127.
Finally, with respect to Claims 240 and 280, the jury found
that the Joint Venture timely filed a notice of claim. The
jury's decision is supported by the evidence in the record and
cannot be said to be plainly wrong. We will affirm the trial
court's denial of UOSA's motion for judgment notwithstanding the
verdict for Claims 240 and 280.
III. CONCLUSION
For the foregoing reasons, we will affirm the trial court's
judgment denying UOSA's application for costs pursuant to Code
§ 2.2-4335(C). We will affirm the judgment of the trial court
in denying UOSA's motion to strike and motion for judgment
notwithstanding the verdict as to Work Orders 12, 30, 39, 41,
64, 70, 71, 76, 88, 106, 113, 152, 175, 193, Claim 18, Claim
240, Claim 280, Claim 252, and PCO 115. We will reverse the
judgment of the trial court in denying UOSA's motion for
judgment notwithstanding the verdict as to Work Order 127 and
enter final judgment.
Affirmed in part,
reversed in part,
and final judgment.
15
Upper Occoquan Sewage Authority v. Blake Construction Co.
Court: Supreme Court of Virginia
Date filed: 2003-10-31
Citations: 587 S.E.2d 721, 266 Va. 582
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