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J.H. Berra Construction Co., Inc. v. City of Washington

Court of Appeals of Missouri, Eastern District, Fourth Division

February 14, 2017

J.H. BERRA CONSTRUCTION CO., INC., Appellant,
v.
CITY OF WASHINGTON, Respondent.

         Appeal from the Circuit Court of Franklin County 14AB-CC00189 Honorable David L. Hoven

          GARY M.GAERTNER, JR, JUDGE.

         Introduction

         J.H. Berra Construction Co., Inc. (Berra) appeals from the trial court's judgment in favor of the City of Washington (the City) in Berra's contract dispute following a bench trial. On appeal, Berra argues the trial court erred in concluding Berra was liable for a certain amount of liquidated damages, because the trial court misapplied the law in interpreting terms of the contract in calculating liquidated damages and because those terms were ambiguous. We reverse and remand for further proceedings in accordance with this opinion.

         Background

         Berra and the City entered into a contract drafted by the City for the construction of an expansion to the existing Washington Sanitary Landfill in Franklin County, Missouri (the Project). The contract both specified that Berra would complete the Project by November 27, 2013, and provided for a penalty of $950.00 for "each working day[1]" that Berra was in default after the contracted completion date. The contract did not define the term "working day." Berra did not complete the Project until June 23, 2014. The City assessed liquidated damages of $133, 000.00 for 140 working days, which it calculated by counting each non-holiday Monday through Friday between November 28, 2013 and June 23, 2014.

         Berra filed a petition for damages claiming the City breached the terms of the contract by assessing and withholding $133, 000.00 in liquidated damages because, as relevant to the issues on appeal, the contract provided for a penalty only for each "working day, " but the City assessed a penalty for all non-holiday days Monday through Friday regardless of whether work was possible due to weather. Berra argued only days when work was possible due to weather conditions were "working day[s]." Moreover, Berra argued the City had agreed to suspend work between December 17, 2013 and April 17, 2014 due to frost permeation, and thus the City should not have considered those days as "working day[s]" for the purpose of accruing damages.

         At a bench trial, the parties presented the following evidence, as relevant to the issues on appeal. An engineer from the City testified that she did not suspend the Project between December and April, although Berra did not work during that time. As to the calculation of damages, she testified that based on the wording of other portions of the contract she believed the contract defined a "working day" as all non-holiday days Monday through Friday, irrespective of whether the contractor was able to perform productive work.

         For Berra, the foreman for the Project testified that the custom in the construction industry was to define a "working day" as only those days where the weather allowed productive work. Berra introduced exhibits showing that between November 28, 2013 and June 23, 2014, Berra was unable to complete productive work due to adverse weather conditions on November 29; December 12-13, 16; April 22, 25, 28-30; May 1-2, 13-16, 27-28, 31; and June 2, 4, 6, 9-16. Berra included in its list of nonproductive working days, days spent removing rain water from the construction site.

         The trial court concluded that Berra had materially breached its contract obligations by failing to complete the Project by November 27, 2013 and was liable for liquidated damages in the amount of $133, 000.00 for the delayed completion of the Project. The court found that Berra, and not the City, suspended work over the winter, and that, for the purposes of calculating liquidated damages, "working days" were every non-holiday week day. This appeal follows.

         Standard of Review

         In a court-tried case, we will affirm the judgment of the trial court unless it is not supported by substantial evidence or is against the weight of the evidence, or unless the trial court erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). We view the evidence in the light most favorable to the judgment and defer to the trial court's credibility determinations. Prop. Assessment Review. Inc. v. Greater Mo. Builders, Inc., 260 S.W.3d 841, 845 (Mo. App. E.D. 2008). Although we defer to the trial court's factual findings, we "independently evaluate its conclusions of law." Monsanto Co. v. Syngenta Seeds, Inc., 226 S.W.3d 227, 230 (Mo. App. E.D. 2007) (citations omitted). The interpretation of a contract and questions of contractual ambiguity are matters of law, which we review de novo on appeal without deference to the trial court's construction. Id.

         Discussion

         Berra raises two points on appeal, arguing that the trial court erred in finding Berra liable for liquidated damages of $133, 000.00 because, first, the trial court misapplied the law by defining "working day" as all non-holiday week days regardless of weather conditions, and second, the term "working day" as used in the contract was ambiguous and the trial court erred in failing to resolve the ambiguity in favor ...


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