Contractor Prevails on Appeal with Respect to Delay Claim Against State

Kegler Brown Construction Newsletter

Many Ohio construction professionals have been closely watching the case of J&H v. Ohio State Facilities Commission, including Associated Builders and Contractors (ABC) and American Subcontractors Association (ASA), who filed amicus briefs in favor of the contractor. For the first time in many years, the Tenth Appellate District (Franklin County) found for the contractor against the state and ruled that technical deviations in notice and documentation of the claim could be overcome by the Fairness in Construction Contracting Act, waiver and the state’s own poor behavior (No. 12AP-588, rendered Sept. 5, 2013). Some of the key findings in this case that will help contractors include:

  1. The specific description of a change order (the “change in the work”) on the state’s form trumps the broad boilerplate release language at the bottom of the form.
  2. When the state fails to follow the Article 8 process in the contract, the contractor is relieved from his notice requirements (with respect to Articles 6 and 8).
  3. §4113.62 (Fairness in Construction Contracting Act) invalidates contractual provisions that preclude liability for delay – when the delay is caused by the owner’s act or failure to act.
  4. When the construction manager obscures the impact of delays by manipulating the schedule, the contractor is excused from any alleged late notice.
  5. THE STATE and ITS CONSTRUCTION MANAGER demonstrated A LACK OF GOOD FAITH and FAIR DEALING when dealing with the contractor’s claim, including when they tried to put the contractor in a bad light and pit the prime contractors against each other. 
  6. A contractor can recover his extended home office overhead under the ODOT HOOP formula.

This case demonstrates that the State cannot hide behind legal technicalities when it mismanages a construction project and mistreats the contractors. Mike Madigan and Don Gregory tried the case and handled the appeal for the winning contractor.