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EASTLINE CORPORATION v. MARION APARTMENTS

MAY 04, 1988

EASTLINE CORPORATION
v.
MARION APARTMENTS, LTD. and DWAYNE SHARP



BEFORE ROY NOBLE LEE, SULLIVAN and GRIFFIN

ROY NOBLE LEE, CHIEF JUSTICE, FOR THE COURT:

Eastline corporation filed its complaint in the Chancery Court of Rankin County, Mississippi, against Marion Apartments, Ltd. and Dwayne Sharp *fn1 claiming money due

it under the terms of a construction contract. Evidence introduced at trial indicated that the contract provided for a specific procedure whereby additional or extra work would be approved by appellee prior to the performance of such work. Eastline's claim was based in part upon additional or extra work which it performed without following the approval procedure. For that reason, the chancellor refused to allow testimony concerning sums expended by Eastline on the additional/extra work. Eastline contended that the chancellor's action was error, and the chancellor granted Eastline's motion for Interlocutory appeal to this Court for determination of admissibility of such testimony.

 Since the chancellor excluded the evidence mentioned above, judgment could have been entered and the matter would be before us on direct appeal. The issue is the same, whether on direct appeal or interlocutory appeal, and was framed by the chancellor as follows:

 Should the Plaintiff [appellant] be allowed to adduce testimony of damages sustained in a construction contract as a result of extra work performed at the direction of the owner or the owner's agent when the written contract between them states that all changes must be in writing?

 Facts

 On January 19, 1984, Eastline Corporation, a general contractor, entered into a contract with Marion Apartments, Ltd., a partnership, for the construction of a five-building forty-unit apartment complex in Columbia, MS. The project was financed by Farmers' Home Administration, and the contract was a standard FmHA form. The contract price was $955,570.

 Eastline agreed to complete construction within 212 days after April 26, 1984, thus establishing a completion deadline of November 24, 1984. Eastline additionally agreed to pay liquidated damages of $351.00 per day of delay beyond the completion deadline. Finally Eastline agreed to the following clauses regarding additional or extra work:

 I. CHANGES IN WORK. - The owner may at any time, with the approval of the official designated by the Farmers Home Administration (hereinafter called the Representative), make changes in the drawings and specifications, within the general scope thereof. If such changes cause an increase or decrease in the amount due under this contract or in

 the time required for its performance, an equitable adjustment will be made, and this contract will be modified accordingly by a" Contract Change order ". No charge for any extra work or material will be allowed unless the same has been ordered on such contract change order by the Owner with the approval of the Representative, and the price therefor stated in the order.

 * * *

 VI. NOTICES AND APPROVAL IN WRITING. - Any notice, consent, or other act to be given or done hereunder will be valid only if in writing.

 The construction project was hampered by several delays. The completion deadline was extended at least twice with final performance apparently due by July 24, 1985. The project architect finally certified construction as substantially complete on September 23, 1985.

 Eastline blamed the delay on four main difficulties. First, the property boundaries indicated on the plans provided by Marion did not conform to the actual boundaries of the construction site. Second, the topographical survey provided by Marion did not conform to the actual topography of the construction site. Third, Marion's plans called for the use of two existing 24-inch drainage culverts, but it was later discovered that municipal regulations would require the installation of new 30-inch culverts. Fourth, Marion's plans indicated that an old water tower on the property ...


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