GLF Construction Corp. v. Dallas Area Rapid Transit

Filing

UNPUBLISHED OPINION FILED. [12-11017 Affirmed ] Judge: EGJ , Judge: HRD , Judge: LHS Mandate pull date is 10/22/2013 [12-11017]

Case: 12-11017

Document: 00512392418

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Date Filed: 10/01/2013

IN THE UNITED STATES COURT OF APPEALS
United States Court of Appeals
FOR THE FIFTH CIRCUIT
Fifth Circuit

FILED
October 1, 2013

No. 12-11017

Lyle W. Cayce
Clerk

GLF CONSTRUCTION CORPORATION,
Plaintiff-Appellant
v.
DALLAS AREA RAPID TRANSIT,
Defendant-Appellee

Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:10-CV-2197-P

Before JOLLY, DeMOSS, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
GLF Construction appeals the district court’s grant of summary judgment
denying its breach of contract claims against Dallas Area Rapid Transit for
prejudgment interest, additional compensation for traffic barriers, and profit for
additional work performed. We AFFIRM.
This appeal involves a dispute arising out of a contract between Dallas
Area Rapid Transit (“DART”) and GLF Construction for the construction of a
light rail line. When GLF failed to complete the project on time, DART’s
*

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.

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Contracting Officer assessed liquidated damages in the amount of $3,598,400.
GLF appealed the Contracting Officer’s decision to DART’s Board pursuant to
the disputes clause of the contract. The case was submitted to an administrative
judge who reduced liquidated damages and awarded $488,352 to GLF based on
lost productivity attributed to inefficiencies caused by DART. The Board denied
GLF’s claims for additional compensation for movement of portable concrete
traffic barriers; its claims for overhead and profit on additional work performed
and prejudgment interest were also denied.
After exhausting its administrative remedies, GLF filed suit in the United
States District Court for the Northern District of Texas alleging breach of
contract and invoking the court’s diversity jurisdiction. GLF argued the Board
erred in (1) denying prejudgment interest on the liquidated damages reversed
by the Board, (2) refusing to award additional compensation relating to the
portable concrete traffic barriers, and (3) denying overhead1 and profit on the
amount of lost productivity. The district court granted summary judgment for
DART on each issue.
DISCUSSION
We review a district court’s grant of summary judgment de novo. Kariuki
v. Tarango, 709 F.3d 495, 501 (5th Cir. 2013).

Summary judgment is

appropriate where “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).

I. Prejudgment interest
Texas law provides for recovery of prejudgment interest by statute or
under general principles of equity. Johnson & Higgins of Tex., Inc. v. Kenneco
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Before the district court, GLF argued it was entitled to overhead and profit. On
appeal, GLF has abandoned its argument that it is entitled to overhead.

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Energy, Inc., 962 S.W.2d 507, 528 (Tex. 1998). At the same time, a strong public
policy favoring freedom of contract allows contracting parties to waive statutory,
or even constitutional rights. Interstate 35/Chisam Rd., L.P. v. Moayedi, 377
S.W.3d 791, 797 (Tex. App. – Dallas, 2012). Recognizing these principles and
applying the plain language of the contract, the district court concluded GLF had
contractually waived any right to collect prejudgment interest.
The court cited both Section 51(i) and Specification 18 from the contract
for the waiver of prejudgment interest.

Section 51(i) is determinative; it

provides that DART “shall not be liable for interest on any late or delayed
payment, . . . any claim or dispute, any discrepancy in quantities . . . or due to
any payment the authority had the right to withhold under the contract.”
GLF asks us to parse the language of Section 51(i) and focus on the end of
the provision prohibiting interest on “any payment the authority had the right
to withhold under the contract.” (emphasis added). GLF reasons that DART in
fact was in error when it withheld the disputed liquidated damages, that it
therefore had no right to do so, and that Section 51(i) does not apply. We need
not examine that interpretation because DART also has no liability for interest
on “any claim or dispute.” GLF is seeking prejudgment interest on the disputed
amount of liquidated damages. The district court did not err in refusing to
award prejudgment interest.

II. Bid Item 15D: Portable Concrete Traffic Barriers
GLF claims that under the terms of the contract it is entitled to payment
for the total linear feet of concrete traffic barriers taken and returned to the
state Department of Transportation stockpile and additional payment by the
linear foot for barriers moved to implement traffic control as progress on the
project was made. DART argues both parties understood that the contract was
limited to payment for the total linear feet taken and returned to stockpile; it did
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not include payment for interim movements. The district court concluded that
all parties understood GLF would not be compensated for interim movements of
the concrete barriers.
The terms of the contract provided for payment, at a unit price, “for
removing the barrier from the existing [Department of Transportation] stockpile,
resetting in the new location, connecting and disconnecting . . . and returning .
. . to a stockpile. . . ,” with payment to be made “by the linear foot complete-inplace.” GLF submitted a bid schedule including Bid Item 15D, titled “portable
concrete traffic barriers,” estimating the use of 5,750 linear feet of traffic
barriers, payment at $12 per linear foot. GLF submitted this bid after receiving
an estimate from its subcontractor, MICA, that the total linear footage of
concrete barriers necessary to complete the traffic control plan, including interim
movements, would be 69,100 feet. The district court found it notable that GLF’s
bid used a figure 63,350 linear feet less than the estimate it received from MICA,
but it failed to submit any increased figures on the bid schedule in Pay Item 1D
for “maintenance and control of traffic” to account for the discrepancy.
We agree with the district court’s conclusion that the terms of the contract
along with the estimates in the bid schedule were sufficient to inform GLF it
would not be compensated for interim movements of the concrete barriers. We
also note the contract provided that if some discrepancy between an amount on
the schedule and a bidder’s estimate became obvious during bid preparation, the
bidder was to notify DART of the discrepancy. Under this provision, GLF could
have notified DART during the bidding process of the discrepancy between the
linear footage estimate received from its subcontractor and the one reflected on
the bid schedule. GLF did not notify DART of this question.
It was proper to grant summary judgment as to additional compensation
for the concrete traffic barriers.

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III. Profit for additional work performed
The final issue before the court is GLF’s claim for profit on additional work
performed. The Board concluded GLF was entitled to an equitable adjustment
for loss of productivity in the amount of $488,352. Calculation of an equitable
adjustment is governed by procurement regulation Section 8-305 in the contract,
which provides “the measure of equitable adjustment for increased work is the
difference between the reasonable cost of the work . . . plus a reasonable amount
of overhead and profit.” (emphasis added). The district court concluded that
Section 8-305 defeats GLF’s claim for profit because the equitable adjustment
granted by the Board already included, by definition, profit.
GLF contends the calculation of the productivity factor by the Board did
not comply with the formula set out in Section 8-305 and did not include profit.
Nevertheless, when the language of a contract is plain, it must be enforced as
written. Addicks Servs., Inc. v. GGP-Bridgeland, L.P., 596 F.3d 286, 294 (5th
Cir. 2010). We agree with the district court’s conclusion that the plain language
of Section 8-305 bars any additional recovery of profit.
AFFIRMED

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