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).
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