United States District Court, D. Nevada
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND
M. Navarro, United States District Court Chief-Judge
on May 15, 2017, the Court conducted a ten-day bench trial
relative to the dispute between Plaintiff Armada Concrete,
LLC, and Third-Party Defendant Liberty Mutual Insurance
Company (“Liberty Mutual”) (collectively
“Armada”) and Defendants Jaynes Corporation and
Western Surety Company (“WSC”) (collectively
December 22, 2014, Armada filed its Complaint, (ECF No. 1),
asserting the following causes of action against Jaynes: (1)
recovery on its Miller Act bond; (2) breach of contract; (3)
breach of the implied covenant of good faith and fair
dealing; and (4) quantum meruit/unjust enrichment. Shortly
thereafter, on January 30, 2015, Jaynes filed a Third Party
Complaint, (ECF No. 10), against Liberty Mutual for payment
on its bond. That same day, Jaynes filed a Counter Claim,
(ECF No. 11), against Armada, asserting the following claims:
(1) breach of contract; (2) breach of the implied covenant of
good faith and fair dealing; and (3) payment on the bond.
reviewed each of the motions, related briefs, exhibits
thereto, and having considered the oral argument of each of
the parties, the Court hereby makes the following findings of
fact and conclusions of law.
FINDINGS OF FACT
or about June 20, 2011, the United States Army Corps of
Engineers issued a Solicitation, Offer and Award to Jaynes
Corporation (the “Prime Contract”) as the design
build contractor for construction of the Fire Crash Rescue
Station at Creech Air Force Base (the “Project”).
(See generally Ex. 61).
United States Army Corps of Engineers (the “Corps,
” “Government, ” or “Owner”) is
the Owner of the Project. (Id.).
September 5, 2012, Armada submitted its Proposal to Jaynes to
complete certain concrete installations for the Project.
(See Exs. 304.10-13).
September 21, 2012, the parties met and held a
pre-construction meeting. (See Ex. 304.2-.4).
During that meeting, Jaynes' estimator completed his
pre-construction notes which included a marked up copy of
Armada's Proposal and Jaynes' Vendor Scope Checklist.
(Id.). Both of these documents constitute
Pre-Construction Meeting Notes. (See Trial Tr.
Crampton 122:17-19, 135:18-23, ECF No. 124).
Proposal excludes all testing of Armada's work and
provides that Armada was “[n]ot responsible for
drainage problems on flatwork designed with 1% or less of
fall.” (Ex. 304.12); (see also Ex. 304.7);
(Trial Tr. Crampton 109:14, 111:9-15, ECF No. 124).
Pursuant to the Vendor Scope Checklist, Armada agreed to
cover cold weather costs associated with the Project. (Ex.
304.9); (see also Trial Tr. Crampton 15:21-24, ECF
September 24, 2012, Jaynes and Armada entered into the
Standard Subcontract Agreement for Use On Federal Government
Construction Projects (the “Subcontract”).
(See Ex. 501).
Exhibit A to the Subcontract Agreement incorporates the
parties' Pre-Construction Meeting Notes as part of the
Subcontract Agreement. (See Ex. 510.033).
Pursuant to the Subcontract, Armada agreed to install the
slab-on-grade in Area A and Area B of the Project.
(See Exs. 510.40-45; 36.2).
Armada also agreed to complete the following work: provide
sloped slabs as indicated on plans; provide layout and
equipment as necessary to complete the saw-cutting of
required control joints; and place Type II for the building
slab upon following laying of underground utilities by other
subcontractors. (See id.).
Jaynes was the design-build general contractor for the
Project, and as a design-build contractor was responsible for
the design and engineering of the Project, including the
design and engineering of the Area B slab-on-grade. (Trial
Tr. Crampton 77:4-7, ECF No. 1).
Jaynes retained Wright Engineers and Dekker Perich Sabatini
Architects to prepare designs and plans for construction of
the Project. (Trial Tr. Brooke 124:5-11, ECF No. 130).
Subcontract documents as defined by the Subcontract are: the
Subcontract; the Prime Contract; change orders and written
amendments; drawings, specifications, and addenda; general
and other conditions; approved submittals; the prime
contract; and Federal Acquisition Regulations
(“FARs”) (collectively the “Contract
Documents”). (Ex. 510.033); (see also Trial
Tr. Crampton 15:17-20, ECF No. 126).
original amount of the Subcontract was $397, 413.00. (Ex.
During the Project, Jaynes issued three change orders to
Armada for additional work which increased the Subcontract
amount to $441, 255.26. (Exs. 116-18).
date, Jaynes has paid Armada $316, 075.41. (See
Trial Tr. Gundrum 213:20- 21, 213:25-214:4, ECF No. 214).
Armada began its work on a 4-day workweek, which later
changed to a 5-day workweek. (Trial Tr. Crampton 111:2-6,
151:20-25, ECF No. 124; Trial Tr. Brooke 72:20-21, ECF No.
130); (see also 444.1-.13).
accordance with Jaynes' September 12, 2012 Project
Baseline Schedule, which Armada based it price for the work
upon, Armada was to commence its work on October 8, 2012, and
was to complete its work on approximately March 21, 2013.
(Ex. 510.63-.83); (Trial Tr. Crampton 130:1-3, ECF No. 124;
Trial Tr. Gundrum 102:21-25, ECF No. 142; Trial Tr. Eiman
36:1-3, ECF No. 133). According to the Project Baseline
Schedule, therefore, Armada's total project duration was
144 days. (See Ex. 510.63-.83).
Armada was not able to begin its work until November 5, 2012,
due to delays Jaynes suffered on the project totally
unrelated to Armada's performance. (Trial Tr. Crampton
136:7-17, ECF No. 124; Trial Tr. Gundrum 132:20-133:1, ECF
No. 126; Trial Tr. Brooke 52:2-17, ECF No. 131).
Jaynes' project supervisor acknowledged that Armada had
not delayed the schedule, “if anything Armada [did] a
lot to help with the schedule.” (Ex. 60.210); (Trial
Tr. Crampton 72:6-8, ECF No. 125).
Project schedule was updated and revised to reflect the
delays. (Trial Tr. Brooke 159:17-20, ECF No. 130);
(see Ex. 302).
initial delay Jaynes experienced on the project prior to
Armada's commencement of work not anticipated by the
parties when they entered into the Subcontract agreement.
(Trail Tr. Crampton 104:11-24, ECF No. 124). The cold weather
caused Armada to incur cold weather costs it would not have
incurred but for the delay and caused Armada's crew to
work less efficiently. (Trial Tr. Crampton 32:20-25, ECF No.
Since Armada's work was delayed into the colder months,
Jaynes directed Armada to provide it with a “cold
weather plan” for placing the concrete in such
inclement weather. (Exs. 38; 60.168-.169); (Trial Tr.
Crampton 139:8-16, ECF No. 124).
Armada's cold weather plan detailed three levels of
responses depending on the degree of cold weather. (Ex.
60.168-.169). Armada anticipated a Level I response,
requiring application of minimum insulation to the slab like
hay. (Trial Tr. Crampton 142:17-20, 147:18-20, ECF No. 124).
Jaynes also directed Armada to provide a lighting plan to
permit work during the shorter day-lengths. (Ex. 6.2); (Trial
Tr. Crampton 154:8-14, ECF No. 124). Armada did not
anticipate these costs as the baseline schedule called for
its work to be completed during these months. (Trial Tr.
Crampton 154:20-155:10, ECF No. 124).
November 29, 2012, Armada notified Jaynes in accordance with
Subcontract § 5.3 that it was suffering delays for which
it would seek compensation and an extension of time.
(Id. 156:17-25); (Ex. 2). The Notice identified
delays caused by other subcontractors, “caus[ing]
extended cold weathering procedures on [Armada's]
concrete operations that were not anticipated in the schedule
that was included as part of the contract.” (Ex. 2).
The Notice further provided that Armada would substantiate
the costs it was experiencing as a consequence of the delay
once such costs were determined. (Id.).
an ongoing delay, it would have been impossible for Armada to
provide substantiation of its delay claim until such costs
were fully known. (Trial Tr. Brooke 148:1-7, ECF No. 130;
Trial Tr. Crampton 161:5-9, ECF No. 124).
substantiate its claim for delay and impact damages, Armada
retained SDC & Associates Inc. (“SDC”), a
construction claims firm, to compile and substantiate
Armada's claim for Jaynes and the COE. (See
generally Ex. 60); (Trial Tr. Crampton 147:24-148:1).
Armada later retained SDC & Associates to compile a claim
related to the Area B slab. (See Ex. 60).
Armada submitted its claim for equitable adjustment to Jaynes
on June 12, 2014. (Trial Tr. Crampton 17:11-21, ECF No. 127).
Armada acknowledged that the schedule delays were “not
an increase in the scope of work” because Armada was
“still building the same project.” (Tr.
Transcript Crampton 124:25-125:12, ECF No. 125); (see
also Id. 127:18-20).
January 18, 2013, Jaynes issued a revised project schedule
which showed the project delayed by 44 days. (Ex. 60.180).
a consequence of the initial delay suffered by Jaynes, Armada
was ordered by Jaynes to complete its work out of the planned
sequence of work and in an accelerated manner which increased
the costs incurred by Armada to complete its work. (See
January 29, 2013, Armada again notified Jaynes in writing
that it was suffering delay and disruption costs from
Jaynes' subcontractors working out of the project
scheduled sequence. (Ex. 60.184). Armada through this
notification advised Jaynes that it would submit its ...