Michael T. Callahan on Greg Opinski Construction, Inc. v. City of Oakdale

In this Analysis, Michael T. Callahan discusses Greg Opinski Construction, Inc. v. City of Oakdale, 199 Cal. App. 4th 1107 (Cal. App. 5th Dist. 2011) [enhanced version available to lexis.com subscribers], in which the California Court of Appeal held that a contractor could not defend an owner's claim for liquidated damages because the contractor had not requested a time extension while the project was in progress. Mr. Callahan provides valuable insight into the implications of the case for any party asserting or defending a claim for delay. The author writes:

     Opinski sued the City of Oakdale for its outstanding contract balance. The City responded that Opinski owed $54,000 in liquidated damages for lateness, $10,000 for defective conditions, and interest. Opinski believed it should be able to defend the imposition of liquidated damages by showing that the late completion was caused by actions of the City. The court refused to allow Opinski to dispute the City's liquidated damage claim and awarded the City $54,000 plus interest for lateness.

     In Opinski, the General Conditions had provided that "[n]o claim for an adjustment in the Contract Price will be valid if not submitted in accordance with this paragraph 11.2." Paragraph 12.1 included a similar provision about claims for adjustment to the contract time. "'[C]laims under Articles 11 and 12 in respect [to] changes in the Contract Price or Contract Time' were to be 'referred initially to Engineer in writing with a request for a formal decision ... .'" Paragraph 9.11 provided a process by which the engineer could be asked to rule on claims by the parties for changes in the time or price. The party making the claim was required to give written notice of the claim to the engineer and to the other party "promptly (but in no event later than thirty days) after the occurrence of the event giving rise thereto ... ."

     The trial court explained that to alter the contract time-regardless of the reason-the contract required the party seeking the alteration to obtain a change order either by mutual agreement or by submitting a claim to the engineer with a request for a formal decision in writing. Opinski had used neither procedure, so the time was not extended, regardless of which party was to blame for the late completion. Opinski could not challenge the assessment of liquidated damages with evidence to the City's delays.

     The court's decision applied "to the party seeking alteration of time." The contractor is "the party seeking alteration of time" when it disputes the application of liquidated damages. But it is the owner who is "the party seeking alteration of time" when it defends a contractor's delay claim, at least when the owner claims it is entitled to set off contractor concurrent delays against it own.

     Practice Point: Concurrent Delays. Concurrent delays are independent events that occur during the same time period. Excusable delays are those events that justify an extension of time. Concurrent delays are excusable. If Opinski could prove a concurrent City delay during the period it delayed the project, the City would not be entitled to collect liquidated damages because Opinski's damages would be excused. Barry B. Bramble and Michael T. Callahan, Construction Delay Claims § 1.01 et seq. (4th Ed. 2010).

(citations omitted)

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