Following the construction industry and related legal topics in the United States.

Friday, September 7, 2007

Even without contractually-required change order, contractor recovers additional HVAC costs against owner on summary judgment

The North Carolina Court of Appeals recently upheld a summary judgment decision in favor of Inland Construction Company, a general commercial contractor, for additional HVAC costs on a job where no change order was issued or executed. The Court agreed with the trial judge, Hon. Howard E. Manning, Jr., that despite an e-mail from Inland’s project manager to the defendant/property owner stating that “[t]he cost for these revisions will be resolved between [Inland/plaintiff] and [the architect.] The owner will have no cost associated with this change in the mechanical system,” the contractor’s claim was enforceable as a matter of law. Inland Construction Company v. Cameron Park II, Ltd, LLC., 640 S.E. 2d 415, 417 (N. C. App. 2007.)

The defendant/owner had refused to pay based upon the e-mail, alleging equitable estoppel, among other affirmative defenses. The Court rejected the owner’s assertion that the e-mail created an obligation not to charge for the additional work on the part of Inland Construction because there was no consideration. Furthermore, both parties had tendered evidence by way of affidavit, indicating that the owner had actually initiated the additional HVAC work. There was no dispute that the “project was organized in a traditional method of project delivery wherein Defendant contracted separately with an architect for design services and with Plaintiff for construction services.” Id. at 419. Finally, the owner had “failed to demonstrate any prejudicial change in position as a result” of the e-mail,” and was ordered to pay the additional cost to general contractor. Id. The full opinion may be accessed here. (This blog entry was published by Liz Riley, a member of Womble Carlyle's construction and real estate development practice group.)


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