Interpreting the Plans
Ohio Court Limits Damage Claims on Plan Changes
A recent decision from the Ohio Supreme Court could limit construction
companies' abilities to collect damages for delays due to design
changes, according to the American Subcontractors Union (ASA).
"We're obviously disappointed with the decision by the Ohio
Supreme Court," said William Isokait, senior director and counsel,
Government and Industry Relations for ASA. "The court decision
applies only to site conditions. We don't think it's an accurate
adaptation of the Spearin Doctrine."
The Spearin Doctrine, established in a 1918 court case, awarded
damages to a contractor to for delays in a dry-dock project at the
New York City Brooklyn Navy Yard. In its recent decision (Dugan
& Meyers Construction Co., Inc. vs. Ohio Dept. of Administrative
Services), the Ohio Supreme Court said that Spearin could not be
applied because "site condition," rather than a deficiency
in construction plans, resulted in cause of construction delay.
The Ohio Court's decision held that Dugan & Meyers Construction
Company "was not entitled to additional compensation for changes
it was required to make during the construction process, or to mitigation
of liquidated damages for late completion of the project."
Dugan & Meyers was the lead contractor selected through a competitive
bidding process for construction of a $20 million, three-building
complex at The Ohio State University's Fisher College of Business
in Columbus, Ohio. While involved in the project, Dugan & Meyers
claimed significant delays and cost overruns due to a combination
of errors in the original blueprints and numerous changes the state
of Ohio made to construction plans.
Initially, Dugan & Meyers won its "breach of contract"
case while seeking compensation from Ohio Claims Court. The court
applied the Spearin Doctrine, which states a contractor "is
not responsible for the consequences of defects in the plans and
But the Ohio Supreme Court overturned that decision, saying that
Spearin is applied when "site condition" precludes completion
of a construction project.
"The [Ohio] Supreme Court restricted their opinions to site
conditions. We think the court interpreted it [Spearin Doctrine]
very narrowly, by applying it only to site conditions as opposed
to plans and specifications," Isokait said. "The court
basically said [design] plans had to be 'wholly inaccurate' as opposed
to just partially," he added.
As a result of the Ohio Court's ruling, Isokait suggested that
contractors will now have to pay much closer attention to the "constructability
of plans," and that they will have to identify any deficiencies
in plans early on to avoid project delays.