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Multiple-option Changes Clause Opens Multiple Routes To Relief

Thursday, March 01, 2012 04:43 am


Changes -- Delay Damages

Berger Enterprises v. Zurich American Ins. Co., 2012 U.S.Dist. Lexis 3097 (E. D. Mich. Jan. 11, 2012)

A changes clause and a no-damages-for-delay provisioncouldn't get the contractor off the hook for alleged mismanagement of the project schedule.

Subcontractor Berger Enterprises (Berger) claimed an overdue balance of more than $3 million for additional costs it incurred on a demolition project at a U.S. Air Force base. Berger alleged the costs were due to delays and disruptions caused by the general contractor, TolTest, Inc. (TolTest). Berger's contract breach and prompt payment violation charges against TolTest survived a motion to dismiss under Ohio law.

Because most of Berger's contract breach allegations involved TolTest's failure to request time extensions or additional compensation, the court focused on the parties' responsibilities with regard to work changes and associated compensations. TolTest's objection to Berger's claimsrelied on the contract's requirement of a specific change order process.

But the first line of the changes clause began: "Changes in the work may be accomplished ... by Change order." (Emphasis added.) The section went on to describe not a single process but several different procedures, not all of which explicit [...]

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