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 specifications."

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.

 

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