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Trane U.S. Inc. v. Yearout Service LLC

United States District Court, M.D. Georgia, Macon Division

December 13, 2018

TRANE U.S. INC., Plaintiff,
v.
YEAROUT SERVICE, LLC, et al., Defendants.

          ORDER

          MARC T. TREADWELL, UNITED STATES DISTRICT COURT JUDGE.

         Defendant GSC and Defendant Allied World f/k/a Darwin move for summary judgment on Defendant Yearout's claims against GSC and Allied World for GSC's alleged breach of contract. For the following reasons, that motion (Doc. 83) is DENIED.

         I. BACKGROUND

         This case arises from a consolidation of two cases, both involving a renovation project of Hangar Dock Building 54 at Robins Air Force Base in Warner Robins, GA (“the Project”). Docs. 20; 29. The United States Army Corps of Engineers was the owner of the Project, GSC was the general contractor, and Defendant Yearout subcontracted with GSC to perform “complete mechanical and plumbing work in accordance with the RFP [Request for Proposal].” Doc. 20-1 at 1, 12. The “RFP, ” or Request for Proposal, is a comprehensive document detailing the work to be performed on the Project as part of the prime contract between GSC and the Corps of Engineers. See Doc. 88 at 211:1-13, 110-139. The RFP notes that “[t]hese specifications and drawings are at ¶ 40 - 60% development stage.” Doc. 88 at 115.

         The subcontract included a base bid award of $380, 390. Doc. 20-1 at 12. It also noted that an option “to include remaining mechanical/plumbing work in contract may be forthcoming.” Id. It further specified that once that option was awarded to GSC, Yearout would “accept option at a cost increase of $3, 436, 009 to complete turnkey mechanical and plumbing system.” Id. The subcontract was dated February 3, 2015. Doc. 20-1 at 3.[1] The option was later accepted. Doc. 88 at 213:2-25. The subcontract contemplated Yearout purchasing “stacked internally supported MAU's and humidifiers” from Trane for a negotiated price of $1, 645, 000. Doc. 20-1 at 12. At the time the subcontract was signed, however, the design and placement of the MAUs were subject to change. See Doc. 90 at 138:14-16. In the original design, the upper MAUs were on a raised platform, but the design later changed so that they were stacked on top of the lower ones, without the intervening platform. Doc. 87 at 166:2-20. The MAUs would require occasional maintenance and service, necessitating a catwalk to access them. See Doc. 94 at 45:14-52:18. During May 2015 and June 2015, there were ongoing discussions about how to design the MAUs, catwalks, and roof systems. Doc. 94 at 65:23-70:4, 111:18-112:20.

         In June and July of 2015, GSC received bids for structural work, including a catwalk, from a company called Steel Fab. Doc. 91 at 36:5-37:18, 57. The final bid by Steel Fab was for $359, 468. Id. A contract to provide catwalks-whether to remedy Yearout's failure to provide catwalks or as a subcontract on a different scope of work is disputed-somehow ended up going to a company called CDM on July 21, 2015, for $2, 189, 000. Doc. 93 at 21:22-23:16. CDM then subcontracted the same scope of work to Steel Fab for the amount of its original bid to GSC, $359, 468. Id. at 25:5-27:16, 30; Doc. 91 at 51. The difference between the $2, 189, 000 and the $359, 468 was apparently compensation for the idea of stacking the MAUs, which was CDM's idea. Doc. 93 at 17:4-18:20, 27:2-16.[2] McKnight, GSC's owner and president, testified that everyone agreed to this solution. Doc. 88 at 8:25-9:3, 133:23-134:19.

         Yearout sued Allied World under the Miller Act to recover on the payment bond for GSC's alleged failure to pay Yearout for its work under the subcontract. Yearout, 5:16-cv-568, Doc. 1 at 3-5. Yearout cross-claimed against GSC for breach of contract, arguing that the cost of the MAUs increased due to design changes and that GSC never issued change orders, as it allegedly promised it would, to compensate Yearout for the added cost. Docs. 90 at 143:7-12; 28 at 7-10. Yearout also claims it incurred costs due to delays attributable to GSC. Doc. 28 at 10. GSC also cross-claimed against Yearout for breach of contract, including abandonment of the Project, failure to properly install the MAUs, and cost increases for GSC relating to ductwork structural support and demolition. Doc. 18 at 11-12.

         GSC and Allied World now jointly move for summary judgment on Yearout's claims against them, arguing that Yearout materially breached its contract and is thereby barred from recovering against GSC or Allied World for their alleged breach of contract. Doc. 83-1 at 2; Yearout, 5:16-cv-568, Doc. 6 at 6.

         II. DISCUSSION

         A. Standard

         A court must grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A factual dispute is not genuine unless, based on the evidence presented, “‘a reasonable jury could return a verdict for the nonmoving party.'” Info. Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002) (quoting United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1437 (11th Cir. 1991)); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant may support its assertion that a fact is undisputed by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). “When the nonmoving party has the burden of proof at trial, the moving party is not required to ‘support its motion with affidavits or other similar material negating the opponent's claim[]' in order to discharge this ‘initial responsibility.'” Four Parcels of Real Prop., 941 F.2d at 1437-38 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Rather, “the moving party simply may ‘show[ ]-that is, point[ ] out to the district court-that there is an absence of evidence to support the nonmoving party's case.'” Id. (alterations in original) (quoting Celotex, 477 U.S. at 324). Alternatively, the movant may provide “affirmative evidence demonstrating that the nonmoving party will be unable to prove its case at trial.” Id.

         The burden then shifts to the non-moving party, who must rebut the movant's showing “by producing … relevant and admissible evidence beyond the pleadings.” Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315 (11th Cir. 2011) (citing Celotex, 477 U.S. at 324). The non-moving party does not satisfy its burden “if the rebuttal evidence ‘is merely colorable, or is not significantly probative' of a disputed fact.” Id. (quoting Anderson, 477 U.S. at 249-50). Further, where a party fails to address another party's assertion of fact as required by Fed.R.Civ.P. 56€, the Court may consider the fact undisputed for purposes of the motion. Fed.R.Civ.P. 56€(2). However, “credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. … The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.

         B. Analysis

         GSC and Allied World argue that any breach of contract claim Yearout asserts against them arising out of the Project is barred by Yearout's failure to perform. Doc. 83-1 at 1. They argue that Yearout was obligated under the subcontract to install catwalks for the maintenance of the MAUs;[3] that Yearout failed to do so; that this failure constituted a material breach; and that because Yearout materially breached the contract, Yearout is “preclude[d] . . . from bringing any claims on the contract.” Id. It is undisputed that Yearout did not install the catwalks. Docs. 83-2 ¶ 35; 96 at 13-14.

         Movants GSC and Allied World have not carried their burden for two reasons, each independently sufficient to preclude summary judgment. First, the contract contains an ambiguity which cannot be resolved except by extrinsic evidence, which in this case requires a jury. Second, even if Yearout did ...


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