Black Hills Hydro-Turf, Inc. v. Glenn C. Barber & Associates, Inc. et al

Filing 56

ORDER adopting in part, modifying in part, and rejecting in part 51 Report and Recommendation; sustaining 52 Objection to Report and Recommendation; granting in part and denying in part 31 Motion for Summary Judgment. Signed by Chief Judge Jeffrey L. Viken on 3/26/13. (SB)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
BLACK HILLS HYDRO-TURF,
INC.,
Plaintiff,
vs.
GLENN C. BARBER &
ASSOCIATES, INC., and
LIBERTY MUTUAL INSURANCE
CO.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)

CIV. 10-5085-JLV

ORDER

INTRODUCTION
Pending before the court is defendants’ motion for partial summary
judgment. (Docket 31). The court referred the motion to United States
Magistrate Judge Veronica L. Duffy for resolution. (Docket 46). On
December 19, 2012, Magistrate Judge Duffy filed a report recommending
the court deny defendants’ motion for partial summary judgment. (Docket
51). Defendants timely filed objections. (Docket 52). Plaintiff filed a
response to defendants’ objections.1 (Docket 55).
The court reviews de novo those portions of the report and
recommendation which are the subject of objections. Thompson v. Nix, 897
F.2d 356, 357-58 (8th Cir. 1990); 28 U.S.C. § 636(b)(1). The court may then

1

Fed. R. Civ. P. 72(b)(2) allows a party to respond to an opposing party’s
objections.

“accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1).
For the reasons stated below, defendants’ objection is sustained. The report
and recommendation is adopted in part, modified in part, and rejected in
part as explained by this order.
DISCUSSION
A.

MAGISTRATE JUDGE’S FINDINGS OF FACT
Plaintiff filed no objections to the report and recommendation and

defendant did not object to the magistrate judge’s findings of fact. See
Dockets 52 & 55. The magistrate judge’s findings of fact are adopted by the
court in accordance with 28 U.S.C. § 636(b)(1).
B.

MAGISTRATE JUDGE’S CONCLUSIONS OF LAW
Defendants’ objection to the magistrate judge’s conclusions of law and

recommendation is:
The Magistrate Erred in Finding that the Subcontract Does Not
Require a Written Change Order as a Condition Precedent to Extra
Work under the Subcontract.
(Docket 52 at p. 4). The court finds the magistrate judge erred for the
following reasons.
Glenn C. Barber & Associates (“GBA”) “was awarded a government
contract to perform certain residential construction on Ellsworth Air Force
Base in South Dakota.” (Docket 51 at p. 3). Liberty Mutual Insurance
Company (“Liberty”) provided the performance bond for GBA. Id. Liberty
agreed to pay any GBA subcontractor who was entitled to payment but
2

which GBA refused or failed to pay. Id. “GBA subcontracted the turf
establishment part of its Ellsworth AFB contract to plaintiff BH Hydro-Turf.”
Id.
The dispute presented by defendants’ motion for partial summary
judgment is whether BH Hydro-Turf is entitled to additional compensation
for turf it established. “BH Hydro-Turf alleges that it completed turf
establishment on 2,466,945 square feet whereas the parties both
contemplated at the beginning of the contract that the total square footage
would be 1,740,000.” Id. at pp. 36-37. BH Hydro-Turf alleges it is entitled
to an additional $269,065.97 from GBA. Id. at p. 4.
The subcontract (“subcontract”) between GBA and BH Hydro-Turf was
a multiple document agreement. Id. at p. 5. The subcontract was “for a
fixed, lump-sum price.” Id. at p. 22. “[T]he subcontract is unambiguous
. . . .” Id. at p. 24.
Article 7 of the subcontract addressed “CHANGES IN THE
SUBCONTRACT WORK.” (Docket 36-6 at p. 14). Section 7.1 provided:
When [GBA] orders in writing, the Subcontractor, without
nullifying this Agreement, shall make any and all changes in the
Subcontract Work which are within the general scope of this
Agreement. Any adjustment in the Subcontract Amount or
Subcontract Time shall be authorized by a Subcontract Change
Order. No adjustments shall be made for any changes performed
by the Subcontractor that have not been ordered by [GBA]. A
Subcontract Change Order is a written instrument prepared by
[GBA] and signed by the Subcontractor stating their agreement
upon the change in the Subcontract Work.
3

Id. Based on § 7.1, the magistrate judge concluded that while a change
order is required under the subcontract, a change order is not required
before additional work is performed. “Notably, although [§ 7.1] of the
subcontract requires change orders to be in writing by GBA, it does not
require that the written change order precede the work to be done or that
BH Hydro-Turf halt work before embarking upon additional work that the
parties have not reached agreement as to.” (Docket 51 at p. 6) (emphasis in
original). “[A]lthough [§ 7.1] requires that any change order be in writing by
GBA, the provision does not require that a written change order from GBA is
a condition precedent to any extra work done by BH Hydro-Turf.” Id. at p.
36.
This conclusion of law is in error and is contrary to the language of an
additional provision of the subcontract. Section 7.7 NO OBLIGATION TO
PERFORM provides:
The Subcontractor shall not perform changes in the Subcontract
Work until a Subcontract Change Order has been executed or
written instructions have been issued in accordance with
Paragraph 7.2 or 7.9.
(Docket 36-6 at p. 15).
Defendants’ reply brief specifically identified § 7.7 of the subcontract
as being critical to the analysis being performed by the magistrate judge.
The subcontract specifically states that “[n]o adjustments shall be
made for any changes performed by the Subcontractor that have

4

not been ordered by the Design-Builder.”2 It also provides that the
“Subcontractor shall not perform changes in the Subcontract
Work until a Subcontract Change Order has been executed or
written instructions have been issued in accordance with
Paragraph 7.2 or 7.9.”3
(Docket 42 at p. 9 & n. 28).
The court finds as a matter of law that the subcontract specifically
requires a written change order be executed by GBA and BH Hydro-Turf
before the performance of any work not contemplated by the original
language of the subcontract or other previously executed written change
orders. BH Hydro-Turf is not entitled to be compensated for any additional
work allegedly performed.4 “If labor and material is furnished under express
contract, the contract will ordinarily measure the sum justly due.” D & L
Const. Co. v. Triangle Electric Supply Co., 332 F.2d 1009, 1012 (8th Cir.
1964) (a Miller Act case); see also Wm. Collins, Inc. v. South Dakota State
Board of Transportation, 264 N.W.2d 491, 496 (S.D. 1978) (“approval of a
construction change order prior to performing the work is a condition
precedent to [plaintiff’s] recovery of its claim for payment . . . .”).

2

Referencing § 7.1 of the subcontract. (Docket 36 at p. 14).

3

Referencing § 7.7 of the subcontract. (Docket 36 at p. 15)

4

Plaintiff’s only claim is a Miller Act claim, 40 U.S.C. § 3133 et seq.
(Docket 51 at p. 14). “It has not specifically pleaded a separate state-law
breach of contract claim.” Id. Nor did plaintiff “allege that GBA breached a
contractual covenant of good faith and fair dealing.” Id. at p. 39. The deadline
for making any motions to amend pleadings, including a further amendment to
the complaint, was April 15, 2011. (Docket 18 at ¶ 3).
5

Defendants’ objection is sustained and the conclusions stated in the
report and recommendation are modified consistent with this order.
The defendants did not object to the other findings of the report and
recommendation which are critical to resolving defendants’ motion for
partial summary judgment. “There were four change orders executed by the
parties.” (Docket 51 at p. 37). “Neither GBA nor BH Hydro-Turf explain . . .
whether those change orders account for all or any part of the additional
square footage asserted by BH Hydro-Turf.” Id. “Since neither party
adequately explains where the extra square footage came from, the court is
also unable to assess whether BH Hydro-Turf had a right to be paid for the
extra work.” Id. at p. 38.
There are genuine questions of material fact concerning whether BH
Hydro-Turf did extra work not contemplated by the original contract but
which may be included in one or more of the change orders. Finally, “GBA
has not shown that it is entitled to a defense judgment as a matter of law
where GBA admits it still owes BH Hydro-Turf additional monies under the
contract.” Id. at p. 44. “GBA admits that it still owes BH Hydro-Turf
$57,655 on the original fixed-price of the contract (after taking into account
the four change orders agreed to by both parties).” Id. at pp. 43-44.
ORDER
Based on the above analysis, it is hereby

6

ORDERED that defendants’ objection (Docket 52) is sustained
consistent with this order.
IT IS FURTHER ORDERED that the report and recommendation
(Docket 51) is adopted in part, modified in part, and rejected in part
consistent with this order.
IT IS FURTHER ORDERED that defendants’ motion for partial
summary judgment (Docket 31) is granted in part and denied in part
consistent with this order.
Dated March 26, 2013.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
CHIEF JUDGE

7