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Piasa Commercial Interiors, Inc. v. J.P. Murray Company

March 11, 2009


The opinion of the court was delivered by: Herndon, Chief Judge


I. Introduction

Now before the Court is a Motion for Summary Judgment (Doc. 38) filed by Defendant J.P. Murray Company, Inc. d/b/a/ Murray Company ("Murray Company"). Plaintiff has filed an opposing Response (Doc. 69). Defendant has filed a reply (Doc. 77). For the following reasons, the Court DENIES Defendants' Motion (Doc. 38).

II. Factual Background

The undisputed facts presented state that sometime before April 14, 2006, Defendant entered into a contract with Richmond Memorial Hospital as a general contractor. Plaintiff entered into a contract on or about April 14, 2006 to perform drywall frame and board, spray-on fireproofing, acoustical and E.I.F.S. work which Defendant was obligated to perform for Richmond. The original subcontract amount was for $446,713.00. On June 21, 2007, Defendant issued a notice of termination, terminating Plaintiff's subcontract with Defendant.

From the period between the date Plaintiff entered into the contract and when Defendant terminated the contract on June 21, 2007, the parties present two different versions of events.

Plaintiff contends that it performed the subcontract with Defendant to the extent that performance of the overall project by Defendant permitted Plaintiff to perform its subcontract. (Doc. 2 ¶10). The subcontract work involved work to both the existing hospital building and a new section of the hospital added as part of the hospital project. (Doc. 69, Ex. 1 ¶35). The vast majority of Plaintiff's subcontract work involved work on the new building, while a small part involved work on the existing building. (Id.).

Part of Plaintiff's job was to install spray-on fireproofing material on the roof deck. Prior to applying the material, Plaintiff warned Defendant that the material shouldn't be applied on the underside of the roof deck until all work on the roof was completed because substantial roof traffic could affect the finished product as specifically warned in the installation specifications. (Doc. 2 ¶14; Doc. 70, p.4 ¶14). Roof traffic could cause the fireproofing to delaminate and fall from the underside of the roofing deck. (Doc. 70, p.4 ¶14; Doc. 69, Ex. 1, ¶¶29-31). After Plaintiff added the spray-on material, Plaintiff contends that Defendant's roofing subcontractor worked extensively on the roof leading to extensive roof traffic and Defendant and its roofing subcontractor failed to place roof padding or plywood sheets or take other precautionary methods while the extensive roof traffic occurred (Doc. 2 ¶15-16).

On May 2, 2007, Defendant suspended work on the new building part of the project while it investigated the cause of spray-on fireproofing that had fallen from the roof deck (Doc. 70, p. 2 ¶6; Doc. 69, Ex. 1 ¶¶33-34, 38-44). Defendant did not inform Plaintiff either in writing or orally that Defendant believed that Plaintiff had improperly installed the spray-on fireproofing and Defendant further refused to give Plaintiff copies of two reports of Thermal Consulting, the company retained by Defendant to examine the spray-on fireproofing on the roof deck, issued on May 19, 2007 and July 27, 2007. (Doc. 70 p. 2 ¶7; Doc. 69 Ex. 1 ¶¶33-34, 38-44, 46-50). Plaintiff contends it was merely notified that the spray-on fireproofing had fallen and that Defendant had retained a consultant to determine the cause. (Doc. 69, Ex. 1 ¶13; Doc. 38, Ex. K&L). Plaintiff performed little work between May 2 and May 18, 2007 because, it alleged, almost all of its work described on the 3-week schedule consisted of work on the new building project and the work had been suspended as of May 2, 2007. (Doc. 69, Ex. 1 ¶¶60, 62 & 69-70; Doc. 70, p. 4 ¶¶12 &13). Plaintiff repeatedly offered to perform the small amount of remaining work in a piece mill fashion if Defendant would be willing to pay extra costs that would result from working in that fashion. (Id. at ¶62; Doc. 38, Exhibits H, J, & Q).

Plaintiff last performed work on May 18, 2008. (Doc. 2 ¶18). At that time, Plaintiff had performed 97.95 percent of its subcontract work on the project. (Doc. 70, p. 2 ¶5). On June 6, 2007, Plaintiff received a facsimile memo which stated that Plaintiff should be performing work described in the 3-week schedule sent to it on May 31, 2007. (Doc. 69, Ex. 1 ¶77-78). The memo attached the 3-week schedule and stated that "It is imperative that this drywall work is started immediately. If Plaintiff does not start this work immediately, Murray Co. will have no recourse but to hire another firm to complete, and back-charge Piasa for the cost." (Doc. 69, Ex. F p. 8). Plaintiff contends that the drywall work could not have been performed while work on the new building was suspended and that much of the work on the work on the 3-week schedule could not be performed due to the suspension. (Doc. 69 ¶72 & 79; Ex. G pp.50-51). Plaintiff further contends that the memo did not mention termination and did not constitute a seven day advanced notice as required by the subcontract. (Doc. 70 p. 3 ¶11; Doc. 69, Ex. 1 ¶¶ 77-79).

On June 21, 2007, Defendant issued a notice of termination, terminating Plaintiff's subcontract with Defendant. (Doc. 2 ¶19). The letter stated that Plaintiff's subcontract was being terminated because it had failed to timely perform work on the 3-week schedule and had not performed work since May 2, 2007. (Doc. 69 ¶60). On June 22, 2007, Plaintiff responded to the notice with a facsimile memo offering to complete the work and begin working on June 25, 2007, but Defendant responded that the subcontract had been terminated and Plaintiff would be removed from the premises if it showed up at the site. (Doc. 2 ¶20-21, Ex. D &E; Doc. 69 ¶62 & 64; Doc. 32, Ex.V).

Plaintiff contends that the termination on June 21, 2007 was in violation of the subcontract because Defendant did not provide seven (7) days written notice and the Defendant terminated without certification by the architect that sufficient cause existed for such an action, as required by Section 14.2.2 of AIA 201 (1997 edition). (Doc. 19 ¶18). Plaintiff states that the contract unambiguously incorporates the project manual as part of the subcontract and the project manual in turn adopts A.I.A. 201. (Doc. 70, p. 2 ¶2; Doc. 69, Ex. 1 ¶¶4-5 & 9-10). Plaintiff contends that Defendant was required to file written notices of any complaints it had with Plaintiff's work with both Plaintiff and the architect. (Doc. 70, p. 3 ¶10; Doc. 69 Ex. 1 ¶¶10-14). Plaintiff further contends that the subcontract required Defendant to provide Plaintiff with seven days written advance notice and a written certificate from the architect showing that there was just cause for termination. (Doc. 70, p. 3 ¶11). Plaintiff alleges that it is disputed as to whether the June 6, 2007 memo constituted advance notice and the memo never mentioned termination. (Doc. 70, p. 3 ¶11; Doc. 69, Ex. 1 ¶77).

Plaintiff also alleges that Defendant had failed to pay Plaintiff amounts due under payment applications No. 8 and 9 in breach of the subcontract. Plaintiff submitted pay application No. 8 to Defendant on April 19, 2007 for work performed between March 20 and April 18, 2007. (Doc. 69, Ex. 1 ¶18). On May 18, 2007, Plaintiff submitted its pay application No. 9 to Defendant for work performed between April 19 and May 18, 2007. (Id. at ¶20). Both payments were due when Defendant received its payment for the same work from the owner (Id. at ¶¶18 & 20). Plaintiff contends that the pay application No. 8 would have been due during May 2007 while No. 9 would have been due sometime in June. (Id. at ¶¶ 21-22). On June 7, 2007, Plaintiff instructed its attorney to send Defendant a letter demanding payment on No. 8 and threatening a mechanic's lien for nonpayment, but Defendant never responded to the letter. (Id. at ¶19; Doc. 38, Ex. R). By the termination date of June 21, 2007 Defendant allegedly had been paid by owner for No. 8 and perhaps even for No. 9. Plaintiff alleges that this failure to pay the amounts due under both pay applications was a breach of the subcontract. (Id. at ¶27).

Defendant, however, presents a different version of the events. Defendant states that throughout the time Plaintiff worked on the project, Defendant experienced significant problems with Plaintiff's work. (Doc. 39, p. 5; Doc. 38, Ex. 1 ΒΆ4). Plaintiff's application of spray-one fireproofing material to the metal roof deck was defective, Plaintiff "repeatedly failed to provide sufficient manpower for the Project, and [Plaintiff] failed to timely complete its work." (Id.). Defendant contends that Plaintiff sent only two workers to the project from April 18, 2007 to May 2, 2007 and those workers were only on the site for three days ...

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