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CITY OF MOUND BAYOU v. ROY COLLINS CONSTRUCTION CO.

DECEMBER 03, 1986

CITY OF MOUND BAYOU
v.
ROY COLLINS CONSTRUCTION CO., INC. AND D. D. FREELAND CONSTRUCTION CO. d/b/a A JOINT VENTURE



BEFORE HAWKINS, P.J., DAN LEE AND SULLIVAN, JJ.

HAWKINS, PRESIDING JUSTICE, FOR THE COURT:

Roy Collins Construction Company, Inc., and D. D. Freeland Construction Company brought this action against Barrett Engineering, Inc., and the City of Mound Bayou for sum due under contract. The circuit court, Second Judicial District, Bolivar County entered a judgment for the contractors in a bench trial before Hon. Elzy J. Smith. The circuit court awarded the contractors $159,759.14 plus pre-judgment interest for work completed by the contractors to which Mound Bayou appeals. Finding no error, we affirm.

FACTS

 The City of Mound Bayou (City) received Federal EDA funds to make street and drainage improvements for the city. The city hired Barrett Engineering, Inc. (Barrett), to prepare plans and oversee the project. Roy Collins Construction Co., Inc., and D. D. Freeland Construction Co. (hereinafter contractors) formed a joint a venture to bid on the project. On April 6, 1977, the city awarded the contract to the joint venture as low bidders. The contractors began work on April 11, 1977.

 The contract was divided into sections which provided the contractors with monthly progress payments. In order to get paid the contractors broke down the work into schedule values and prepared pay requests based on the work that they completed to date. Before and after requesting payments, the contractors consulted R.A. Scott, Barrett's resident engineer. Scott inspected the work, kept a daily diary and determined whether the pay request conformed with the completed work. Collins and Freeland of the contractors then signed the application and sent it to Barrett in Memphis for its approval. Palmer Bartlett, project engineer for Barrett, examined the application, determined if it was satisfactory, then certified it for payment and sent it Mound Bayou.

 Until his departure on September 26, 1978, Scott served as Barrett's on-site engineer. Scott testified he worked on all pay requests through Pay Request No. 12. Scott claimed he thoroughly checked all the work the contractors did so as to leave the project with up-to-date records on the state of completion of the project. At the time Scott left, the project was 98.86% complete and the contractors had completed $3,037,411.34 worth of work. All that remained on the contract was clean-up work. The city kept $303,741.13 retainage and paid the contractors $413,196.48, based upon Pay Request No. 12. Upon completion the contractor was to receive the retainage kept by the city.

 The contract specifically required that all alterations in construction would be authorized by a written change order signed by the project engineer. Roy Collins testified that despite the requirement, Mayor Lucas asked the contractors to make certain alterations before the engineer wrote a change order. Collins testified that Change Orders Nos. 1, 2 and 3 were forthcoming after the mayor orally requested more work. Collins also stated the contractors completed at least 60% of the extra work before the engineer executed the change order.

 Part of the dispute in this case arose from work performed which the mayor orally requested, but did not pay for. Part of this extra work appeared in change Order No. 4. The parties also disagree as to the final amount due on the original contract.

 The parties began to disagree about what was owed after Scott left. After Scott's departure as resident engineer, the contractor submitted Pay Request No. 13 on February 20, 1979, requesting payment of $502,269.99, this included the $303,741.13 retainage. All the work on the contract was complete when the contractors made Pay Request No. 13. At this time the contractors claimed $198,528.86 for work completed between Scott's departure on September 26, 1978 and February 20, 1979. Bartlett altered Pay Request No. 13 without consulting the contractors or adequately checking what was done. His alteration reduced the current payment due by $200,000 and required a continued retainage in the amount of $200,000.

 Thereafter the city and Barrett ordered additional work. Some of which appeared on Change Order No. 4. The additional work in Change Order No. 4 included emergency work to repair a water main crossing Lampton Street bridge, installation of 1,400 liner feet of water main on McGiness and Lampton streets, additional piping laid, additional

 inlets installed, and more concrete streets laid. The contractors submitted Pay Request No. 14 on March 27, 1979, to Barrett for current payments due in the amount of $201,618.65. At that time Barrett did not question the total amount due on Pay Request No. 14, nevertheless he altered Pay Request No. 14 to provide a retainage of $100,000 and a current payment due of $101,613.65. The city failed to pay any of this pay request, telling the contractors instead, if they paved the parking lot at City Hall, installed more pipe around the mayor's house, and paved the street where the pipe had been, the city would finally pay the contractors the amount they claimed was due.

 The contractors were anxious to be paid what the city owed them, but before they could be finally paid, Bartlett had to complete a final audit of the job. Barrett failed to prepare the "as-builts," which is essentially an audit of the contractors' work. The contractors hired Murphy, an independent engineer, to prepare the as-builts. The contractors were not paid for this service.

 Bartlett reviewed Murphy's as-builts and checked some of Murphy's measurements against some Bartlett compiled. Bartlett admitted he did not check all the work completed, but only made a cursory survey at Mound Bayou.

 Instead of paying the contractors on August 6, 1979, Bartlett requested additional information on the extra work the contractors completed. The contractors responded that they had already provided the information on Pay Request 14.

 By August, 1979, the contractors claimed $261,000 was due. This amount included the unpaid retainage of $100,000 and the additional work the City had requested, but not paid for. The contractors submitted this claim for payment in Pay Request 14-final on August 8, 1979.

 The contractors and A.B. Hicks, president of Barrett, met with Mayor Lucas and the governing board of Mound Bayou on August 8, 1979, in an effort to conclude the dispute. The mayor directed Barrett and the contractors to work out their differences and he would "cut a check" for the amount due the contractors.

 The next day Freeland, A.B. Hicks and Palmer Bartlett met in Memphis and arrived at an agreed compromise figure of $249,013.10. At the end of the meeting the parties called Mayor Lucas. During the conversation Bartlett told the mayor that he authorized Mound Bayou to pay $236,000 of the $249,013.10 compromise figure. Bartlett added that the city

 should pay the balance of the $249,013.10 when Barrett finished the final paperwork and submitted the contractors' last pay request to the city. The mayor of Mound Bayou agreed to comply.

 Bartlett, however, ignored the compromise figure of $249,013.10. On August 24, 1979, Bartlett wrote the City and recommended Mound Bayou pay the contractors $176,203.91 and keep a $20,000 retainage from the $76,203.91. In making this recommendation, Bartlett ignored the as-built audit and relied upon his incomplete check of the job.

 Mound Bayou failed to pay the contractors until February 18, 1980, when the city paid the contractors $72,578.47. The city made no further payments on the contract, so the contractors filed suit against Mound Bayou in the circuit court of the 2nd Judicial District of Bolivar County. Originally the contractors claimed Mound Bayou owed them $177,123.10 plus interest. However, in discovery the contractors amended their complaint and claimed the City owed them $159,759.94.

 In anticipation of litigation, the contractors employed W.M. Thomas, a duly qualified and licensed engineer. Thomas took the Barrett audit and measured, checked and classified all items subject to measurement which were in dispute by the parties. Mr. Thomas testified that he used all of the contract documents including the as-built drawings of the project as prepared by Murphy, another independent engineer. Murphy's as-builts were prepared prior to additional work being completed. Collins and Freeland testified they made a note of additional work on the as-built drawings. Thomas felt that Barrett's audit was inaccurate and used inappropriate engineering methods. Thomas's audit considered only those items capable of measurement and concluded the completed work reflected a value of $3,246,719.80. The parties stipulated that $3,108,518.67 was paid to the contractors, leaving a balance due, based on Thomas's measured quantities, of $138,201.13. The contractors also presented proof of claims which were not capable of measurement.

 Both parties waived trial by jury. The trial judge relied heavily on the testimony of Scott in addition to the testimony of the plaintiff contractors. The only witness that the defendant presented was Bartlett. Bartlett lacked 12 hours from completing his engineering degree at Christian Brothers College in Memphis, Tennessee. He went to work for Barrett in December, 1976, and had five years' experience when his company was hired by the City of Mound Bayou. Mr.

 Bartlett was on probation for impersonating a licensed engineer based upon a complaint filed in the general sessions criminal court of Memphis, Tennessee. The trial court did not accept Mr. Bartlett's testimony as an expert.

 The trial judge awarded the contractors $159,759.94 based on the contract values determined by Mr. Thomas's audit. The trial judge found that Mound Bayou owed the contractors $138,201.13, based upon the Thomas audit. He also found that the contractors had shown that they were due an additional $30,776.67 for work they did which Thomas could not measure. But because the contractors ...


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