RDP Royal Palm Hotel, L.P. v. Clark Construction Group, Inc. , 168 F. App'x 348 ( 2006 )

CORRECTED [DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 04-16203 February 17, 2006
THOMAS K. KAHN
CLERK
D. C. Docket No. 01-03130 CV-DMM
RDP ROYAL PALM HOTEL, L.P.,
a Florida limited partnership, by and
through its general partner, PADC
Hospitality Corporation I,
Plaintiff-Counter-Defendant-
Appellant
Cross-Appellee,
versus
CLARK CONSTRUCTION GROUP, INC.,
a foreign corporation,
Defendant-Counter-Defendant-
Counter-Claimant-Third-Party
Plaintiff-Appellee
Cross-Appellant,
versus
ARQUITECTONICA INTERNATIONAL CORPORATION,
CORNERSTONE ENGINEERING PARTNERSHIP,
f.k.a. Riva Klein & Timmons, Inc.,
Third-Party Defendants-
Counter-Claimants-
Appellees,
MCHUGH CONCRETE CONSTRUCTION,
Third-Party Defendant-
Third-Party Plaintiff-
Appellee.
_____________
No. 05-11713
_____________
D.C. Docket No. 01-03130 CV-TEB
RDP ROYAL PALM HOTEL, L.P.,
a Florida limited partnership, by and through
its general partner, PADC Hospitality
Corporation I,
Plaintiff-Counter-Defendant-
Appellee,
versus
CLARK CONSTRUCTION GROUP, INC.,
a foreign corporation,
Defendant-Counter-Defendant-
Counter-Claimant-Third Party-
Plaintiff-Appellant,
versus
ARQUITECTONICA INTERNATIONAL CORPORATION,
2
CORNERSTONE ENGINEERING PARTNERSHIP,
f.k.a. Riva Klein & Timmons, Inc.,
Third-Party-Defendants-
Counter-Claimants-
Appellees,
MCHUGH CONCRETE CONSTRUCTION,
Third-Party Defendant-
Third-Party Plaintiff-
Appellee.
Appeal from the United States District Court
for the Southern District of Florida
(February 17, 2006)
Before DUBINA and KRAVITCH, Circuit Judges, and STROM*, District Judge.
PER CURIAM:
RDP Royal Palm Hotel, L.P., (“RDP”) appeals an adverse judgment in favor
of Clark Construction Group, Inc. (“Clark”) on RDP’s suit for breach of the
construction contract between the parties. RDP seeks reversal of the district
court’s judgment denying its claims against Clark and granting the claims asserted
by Clark in its counterclaim. RDP also appeals the district court’s order awarding
_________________
*Honorable Lyle E. Strom, United States District Judge for the District of Nebraska, sitting by
designation.
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Clark damages, attorney’s fees, costs, and litigation expenses. Clark cross-appeals
the district court’s judgment denying its claim for extended general conditions
costs. In addition, Clark appeals the district court’s order denying its motion
seeking modification of the award of prejudgment interest.1 After careful review
of the record, reading the parties’ briefs, and after hearing oral argument, we
affirm and remand the district court’s judgment.
I. BACKGROUND
These cases arise from a multi-million dollar contract dispute over the
construction of the Royal Palms Crowne Plaza Resort (“Resort”) on Miami Beach.
In May 1998, RDP, the developer and hotel owner, entered into a contract with
Clark, the general contractor, for the construction of the Resort. Arquitectonica
International, Inc. (“ARQ”), the lead architect, was designated as RDP’s
authorized agent in the contract and was required to prepare design development
and construction documents. According to the contract, Clark agreed to construct
the Resort for an amount not to exceed a Guaranteed Maximum Price (“GMP”) of
approximately $30.4 million. The deadline for substantial completion of the
Resort was 518 days from the date of commencement. RDP was permitted to
require additional work from Clark within the general scope of the contract by
1
Although these appeals have not been formally consolidated, for good cause shown, we sua
sponte consolidate them.
4
issuing a change order or construction change directive. Under the contract, the
GMP and substantial completion deadline were to be adjusted accordingly in light
of change orders and construction change directives. Additionally, in the event
that Clark failed to complete its work on or before the substantial completion date,
RDP had a right to recover liquidated damages.
On September 28, 1998, RDP issued a formal notice to proceed to Clark,
establishing the date for substantial completion as February 28, 2000. Clark
commenced work but faced many setbacks during the construction. For example,
Clark discovered a buried sea wall and contaminated soil which delayed
excavation and sheet piling operations; RDP determined that the existing hotel,
which was scheduled to be renovated, was too deteriorated for renovation and had
to be demolished and reconstructed in its entirety; and dilemmas developed from
the construction drawings. Consequently, hundreds of change orders and
construction change directives were issued by RDP and ARQ, requiring Clark and
its subcontractors to perform additional and different work from that shown on the
contract construction documents.
Faced with the construction changes, Clark requested numerous extensions
of the substantial completion deadline and increases to the GMP. RDP repeatedly
assured Clark that the substantial completion deadline would be extended
appropriately. Despite these assurances, RDP and Clark never resolved the
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extension requests, increased the GMP nor established a new substantial
completion deadline.
Eventually, the substantial completion deadline of February 28, 2000,
passed and construction continued. RDP and ARQ uninterruptedly issued
hundreds of change orders and construction change directives. In turn, Clark
continued to construct the Resort in accordance with those modifications, and
RDP accepted Clark’s continued performance. However, the constant
construction modifications disrupted Clark’s construction schedule, resulting in
coordination problems with various subcontractors, further delays to construction,
and increased construction costs. Consequently, on March 1, 2002, Clark filed a
mechanic’s lien in the amount of $8 million for work performed by four
subcontractors.
On March 12, 2002, RDP received a temporary certificate of occupancy,
allowing RDP to staff and occupy the Resort in preparation for the opening.
Around this time, Clark ceased its work on the Resort because RDP discontinued
paying Clark for work completed in the change orders. In turn, RDP hired another
contractor to complete the Resort and ultimately opened the Resort for business on
May 15, 2002.
In July 2001, RDP sued Clark for breach of contract, intentional
misrepresentation/fraud in the inducement, negligent misrepresentation, violation
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of the Florida Deceptive and Unfair Trade Practices Act, fraudulent and wrongful
lien, and tortious interference with a contract. RDP asserted that Clark caused the
two year delay in the Resort’s completion date. Clark filed a counterclaim against
RDP for fraudulent inducement, quantum meruit and breach of contract, alleging
that RDP caused the delay by providing incomplete and erroneous construction
drawings and submitting numerous design changes. Clark also filed a third-party
complaint presenting pass-through claims of three subcontractors for damages
caused by RDP’s breach of contract and construction delays. In another third-
party complaint, Clark sued ARQ and Cornerstone Engineering (“Cornerstone”),
ARQ’s structural engineering consultant, for negligence, indemnity and
contribution.
Following a bench trial, the district court2 entered detailed findings of fact
and conclusions of law denying all of RDP’s claims against Clark.3 The district
court found that RDP failed to establish a breach of the contract based on untimely
performance because it waived the February 28, 2000, substantial completion date
by accepting Clark’s continued performance. The district court also found that, in
2
The parties consented to the jurisdiction of the United States Magistrate Judge for all
purposes including trial and entry of final judgment pursuant to 28 U.S.C. § 636(c).
3
Prior to trial, the district court dismissed most of RDP’s claims; only the breach of contract
and fraudulent lien claims survived. On appeal, RDP does not challenge the district court’s
dismissal of those claims, and therefore, it has abandoned any argument on those claims. See, e.g.,
Greenbriar, Ltd. v. City of Alabaster, 881 F.2d 1570, 1573 n.6 (11th Cir. 1989).
7
the absence of a contractual completion date, RDP was not entitled to recover any
damages, liquidated or otherwise, from Clark and failed to prove that Clark’s lien
was fraudulent. In relation to Clark’s counterclaim, the district court found that
Clark waived any breach of the contract resulting from the construction drawings,
but was entitled to fair and reasonable payment for the construction work
completed. The district court awarded Clark the contract balance, damages for the
pending change orders, additional general conditions costs, and a 3.75% mark-up
on those costs. Notwithstanding these awards, the court denied Clark’s requests
for extended general conditions costs and extended home office overhead.
Moreover, the district court found that Clark was entitled to reasonable
subcontractor costs for its pass-through claims against RDP. Further, the district
court dismissed Clark’s third-party claims against ARQ and Cornerstone.
On August 4, 2004, the district court entered a final judgment denying
RDP’s claims against Clark in their entirety, denying Clark’s claims against ARQ
and Cornerstone in their entirety, granting Clark’s claims against RDP in the
amount of $5.5 million, and granting Clark’s pass-through claims against RDP in
the amount of $5.9 million.4 Having reserved jurisdiction for the purpose of
awarding interest, attorney’s fees, and expenses, the district court subsequently
4
RDP appealed, and Clark cross-appealed, the final judgment. This court dismissed that
appeal because the final judgment was not a final appealable order.
8
entered an order on November 4, 2004, awarding Clark and its subcontractors over
$2.4 million in attorney’s fees and $1.5 million in costs and expenses. On
November 17, 2004, the district court issued a supplemental judgment awarding
Clark a total judgment of approximately $16.7 million with postjudgment interest.
In case number 04-16203, RDP and Clark pursue their respective appeal
and cross-appeal of the supplemental judgment. Clark moved for relief from the
supplemental judgment under Fed. R. Civ. P. 60(b), seeking modification of the
prejudgment interest award. The district court denied Clark’s Rule 60(b) motion,
and, in case number 05-11713, Clark appeals that denial.
II. DISCUSSION
RDP challenges the district court’s findings of fact and conclusions of law,
contending that the district court erred in finding that (1) RDP waived its right to
liquidated damages; (2) RDP was liable to Clark on the pass-through claims; and,
(3) Clark was entitled to recover from RDP an excessive amount of damages.
RDP also challenges the district court’s order on attorney’s fees, costs, and
litigation expenses. On cross-appeal, Clark challenges the district court’s findings
of fact and conclusions of law, arguing that the district court erroneously failed to
award damages for extended general conditions costs. In the second appeal, Clark
challenges the district court’s order denying its Rule 60(b) motion to modify the
prejudgment interest award. We address these issues in turn.
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A. Liability and Damages
RDP argues that the district court erroneously found that RDP waived its
claim for liquidated damages and asserts that Clark should be held liable for the
delays caused by its subcontractors. RDP also argues that the district court erred
in awarding Clark and its subcontractors excessive amounts of damages by failing
to apportion responsibility for the total delay. RDP further argues that, in
calculating damages, the district court failed to apply the contract’s provision
allowing Clark to recover delay-related damages for reasonable subcontractor
costs attributable to RDP more than thirty days after the contractual date for
substantial completion. Finally, RDP argues that the district court’s finding as to
the substantial completion date is incorrect, resulting in an erroneous calculation
of prejudgment interest.
We review de novo the district court’s conclusions of law and its application
of the law to the facts. Merrill Stevens Dry Dock Co. v. M/V Yeocomico II, 329
F.3d 809, 813 (11th Cir. 2003). However, “[w]e review the district court’s factual
findings for clear error.” Commodity Futures Trading Comm’n v. Sidoti, 178 F.3d
1132, 1135 (11th Cir. 1999). “If the district court's account of the evidence is
plausible in light of the record viewed in its entirety, we must uphold the factual
findings even if we would have weighed the evidence differently.” Id. (internal
10
quotations and citation omitted). “The district court's findings need only be
plausible.” Id. (internal quotations and citation omitted).
After reviewing the record, we conclude that the district court was correct in
its conclusion that RDP waived its right to enforce the substantial completion date
and “time is of the essence” provision of the contract. According to the record,
RDP allowed the substantial completion date of February 28, 2000, to pass
without setting a new deadline and continued issuing change orders and
construction change directives requiring Clark to perform additional work. [R.
Vol. 22 at 128.] RDP’s conduct in issuing hundreds of change orders and
construction change directives after expiration of the substantial completion date
of February 28, 2000, constituted waiver of the “time is of the essence” provision
of the contract. See Horovitz v. Levine, 755 So. 2d 687, 688 (Fla. Dist. Ct. App.
1999) (purported “time is of the essence” proviso in the agreement was waived by
the conduct of the parties subsequent to the agreed upon date of completion). In
addition, RDP failed to set a new substantial completion date, thus it failed to
reserve its right to enforce the liquidated damages provision for any date after
February 28, 2000. See McNeal v. Marco Bay Assocs., 492 So.2d 778, 781 (Fla.
Dist. Ct. App. 1986) (“When time has not been made essential to the contract or
has been waived, the party entitled to insist on performance must fix a definite
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date in the future for performance . . . .”). Accordingly, we agree with the district
court’s conclusion that RDP waived its right to liquidated damages.
In addition, the district court did not err in holding RDP liable for Clark’s
pass-through claims and awarding damages. The record shows that some delays
were caused by Clark’s subcontractors, but those delays did not substantially
postpone the eventual completion of the Resort. Rather, the substantial delays
which severely impacted the Resort’s construction (i.e., contaminated soil,
incomplete and inaccurate construction documents, multiple design changes by
RDP, and delays in plan approvals) were all attributable to RDP and not the fault
of Clark’s subcontractors. Although RDP asserts that the district court
erroneously failed to apportion the total delay among the contributing parties, we
find no error because RDP has not established a reasonable basis for such
apportionment nor shown that apportionment was required. See Gesco, Inc. v.
Edward L. Nezelek, Inc., 414 So. 2d 535, 538 (Fla. Dist. Ct. App. 1982) (evidence
must establish a reasonable basis for apportioning responsibility for the total
delay); Tuttle/White Constructors, Inc. v. Montgomery Elevator Co., 385 So.2d 98,
100 (Fla. Dist. Ct. App. 1980) (loss resulting from breach of contract need not be
segregated proportionately among the contributing factors causing the injury).
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Further, since the district court’s factual findings relating to the substantial
completion date of March 12, 2002, and thirty-day damages grace period are
plausible, we affirm the court’s findings. See Sidoti, 178 F.3d at 1135.
B. Attorney’s Fees, Costs, and Expenses
RDP argues that the district court erred in computing and awarding
attorney’s fees, costs, and litigation expenses. We review a district court’s award
of attorney’s fees and costs for abuse of discretion. Tire Kingdom, Inc. v. Morgan
Tire & Auto, Inc., 253 F.3d 1332, 1335 (11th Cir. 2001). In this case, we find no
basis for concluding that the district court abused its discretion. First, there was
no error in relation to the attorney’s fees for the subcontractors’s claims against
ARQ and Cornerstone because the subcontractors did not allege any claims
against ARQ and Cornerstone. Clark brought its fraud and negligence claims
against ARQ and Cornerstone solely on its own behalf, not as pass-through claims.
[R. Vol. 3, Tab 99.] Second, there was no error in the award of fees pertaining to
the law firm of Jenkins & Gilchrist. Although Jenkins & Gilchrist discounted its
hourly rates, the district court found that the usual billing rate was reasonable and
approved that rate absent any discount. Accordingly, the district court did not
abuse its discretion in its award of attorney’s fees, costs, and litigation expenses.
Notwithstanding, the above discussion, both parties agree that the district
court erred in its computation of the award of attorney’s fees, costs, and litigation
13
expenses. Specifically, the parties agree to the following errors: (1) a “double
counting” error of $58,954.14 in costs on the pass-through claim of subcontractor
McHugh Concrete Construction; and (2) an oversight of $20,239.69 in the
attorney’s fee award for the pass-through claim of subcontractor Talmac, Inc.
Because the parties agree to these errors, this court remands the judgment to the
district court for the ministerial act of correcting these clerical mistakes. See Fed.
R. Civ. P. 60(a).
C. Extended General Conditions Costs
On cross-appeal, Clark argues that the district court erred in denying its
request for extended general conditions costs because the evidence as to that issue
was sufficient as a matter of law. We review the “district court’s account of the
evidence under a clear error standard, and must affirm the district court’s
determination so long as it is plausible in light of the record viewed in its
entirety.” See Merrill Stevens, 329 F.3d at 816 (internal quotations and citation
omitted). Our review of the record indicates that the district court’s finding of
insufficient evidence is plausible. Thus, we affirm the denial of extended general
conditions costs.
D. Rule 60(b) Motion
In the second appeal, Clark seeks reversal of the district court’s order
denying its Rule 60(b) motion to modify the prejudgment interest award, arguing
14
that the district court improperly used the final judgment date of August 4, 2004,
rather than the supplemental judgment date of November 17, 2004, in calculating
the award.
“An appeal of a ruling on a Rule 60(b) motion . . . is narrow in scope,
addressing only the propriety of the denial or grant of relief and does not raise
issues in the underlying judgment for review.” Am. Bankers Ins. Co. of Fla. v. Nw.
Nat’l Ins. Co., 198 F.3d 1332, 1338 (11th Cir. 1999). “Because of this limitation,
the law is clear that Rule 60(b) may not be used to challenge mistakes of law
which could have been raised on direct appeal.” Id.; see also Jackson v. Seaboard
Coast Line R.R. Co., 678 F.2d 992, 1021 (11th Cir. 1982) (“[A]n appeal from
denial of Rule 60(b) relief does not bring up the underlying judgment for review . .
. . An appellant may attack the underlying judgment only on direct appeal from
the judgment itself.”) (internal quotations and citations omitted). Moreover, a
district court's order under Rule 60(b) is reviewable only for abuse of discretion.
Am. Bankers Ins., 198 F.3d at 1338.
We conclude from the record that the district court did not abuse its
discretion. Clark cross-appealed the supplemental judgment, but did not raise the
prejudgment interest issue in its briefs. Given that the district court decided this
issue in the supplemental judgment, Clark cannot now raise the issue in a
subsequent appeal from the district court’s denial of relief under Rule 60(b). See
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Am. Bankers, 198 F.3d at 1338. Therefore, Clark’s challenge to the district court’s
prejudgment interest calculation is untimely and insufficient to establish an abuse
of discretion.
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s judgment but
remand the case for the district court to correct the clerical mistakes pointed out in
this opinion.5
AFFIRMED.
5
We also DENY the Motion for Review of District Court Orders Requiring Appeal Bond.
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