Filed: June 11, 1992
Everett F. Thaxton
Charles M. Johnstone, II
Thaxton & Daniels
Charleston, West Virginia
Attorney for the Appellant
Sheila Kae Williams
Kingwood, West Virginia
Attorney for the Appellee,
Town of Rowlesburg
Alfred J. Lemley
Carol Ann Marunich
Furbee, Amos, Webb & Critchfield
Fairmont, West Virginia
Attorney for the Appellee,
Lennon, Smith & Souleret Engineering Company
This Opinion was delivered PER CURIAM.
"If there is no genuine issue as to any material fact
summary judgment should be granted but such judgment must be denied
if there is a genuine issue as to a material fact." Syllabus point
4, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New
York, 148 W.Va. 160, 133 S.E.2d 770 (1963).
This is an appeal by McKeny Construction Company, Inc.
from an order of the Circuit Court of Preston County granting the
Town of Rowlesburg and its engineer, Lennon, Smith & Souleret
Engineering, Inc., summary judgment in an action brought by McKeny
on three construction contracts. On appeal, McKeny claims that
there are genuine issues of material fact and substantial legal
questions in the case and that under the circumstances the trial
court erred in granting summary judgment. After reviewing the
record and the questions presented, this Court disagrees. The
judgment of the Circuit Court of Preston County is, therefore,
A flood which occurred in late 1985 severely damaged
water and sewer facilities owned by the Town of Rowlesburg, West
Virginia. To correct the damage, the Town of Rowlesburg contracted
with Lennon, Smith & Souleret Engineering Company, Inc., to design
new facilities. Pursuant to the contract, Lennon, Smith & Souleret
Engineering Company developed a proposal which called for three
separate construction projects, one for sewer repair, one for a
river intake, and one for the construction of a chlorine tank.
After receiving Lennon, Smith & Souleret Engineering Company's proposals, the Town of Rowlesburg invited bids on the three proposed construction projects. The appellant, McKeny
Construction Company, Inc., was the lowest responsible bidder and
was granted contracts to complete the projects.
The construction contracts, among other things, provided
that the Town of Rowlesburg or Lennon, Smith & Souleret Engineering
Company could make minor changes in the projects, provided that the
changes were of a character as would not materially affect the unit
cost of the work involved. The contracts also provided that
additional work, not specified in the contracts, could be required
by the Town of Rowlesburg and that in the event such additional
work was required, the appellant would receive additional
compensation. The provision covering additional work stated:
No claim for an addition to the contract sum shall be valid unless so ordered in writing. Where the work is of such character as provided in (a) above, the Contractor will receive in full payment for such additional work the unit prices shown in the Contract, and in the same manner as if such had been included in the original Contract . . . .
The contracts additionally provided:
Neither the Contractor nor the surety shall be entitled to present any claim or claims to the Owner either during the prosecution of the work or upon completion of the Contract, for additional compensation for any work performed which was not covered by the approved Drawings, Specifications, and/or Contract, or for any other cause, unless he shall give the Owner due notice of his intention to present such claim or claims as hereinafter designated.
The written notice, as above required, must have been given to the Owner, with a copy to the Engineer, prior to the time the Contractor shall have performed such work or that portion thereof giving rise to the claim
or claims for additional compensation; or
shall have been given within ten (10) days
from the date the Contractor was prevented,
either directly or indirectly, by the Owner of
[sic] his authorized representative, from
performing any work provided by the Contract,
or within ten (10) days from the happening of
the event, thing, or occurrence giving rise to
the alleged claim.
As work on the projects progressed, the appellant was
directed to make a number of changes and to do a substantial amount
of additional work. As a result of the changes, notices for eight
changes were given in accordance with the contract, and a total of
eight change orders were entered into by agreement and approval by
the Town of Rowlesburg, Lennon, Smith & Souleret Engineering
Company, Inc., and the appellant. Adjustments to the costs of the
contracts were made according to the change orders. The appellant
failed to give notices of certain other additional work, and no
written change orders were issued for that work.
In due course, the appellant completed the projects.
Thereupon, however, the Town of Rowlesburg paid for the work for
which it had contracted and for the work for which it had issued
change orders. It, however, refused to pay for the work of which
it had received no notice and for which no change order had been
The appellant accepted the payment tendered by the Town of Rowlesburg, and then, after it became clear that additional payment for the additional work would not be forthcoming,
instituted the present action. In its complaint, it sought a
substantial money judgment against both the Town of Rowlesburg and
Lennon, Smith & Souleret Engineering Company, Inc.
In instituting legal action, the appellant ignored an
arbitration clause contained in the contracts. That clause stated:
All claims, disputes and other matters in question arising out of, or relating to, this contract or the breach thereof except for claims which have been waived by final payment in accordance with Section 46, shall be decided by arbitration. This agreement to arbitrate shall be specifically enforceable.
The Board of Arbitrators shall consist of
three members. Each party shall appoint one
arbitrator and shall advise the other party
thereof in writing, sent by registered mail.
Thereafter, a third member shall be selected
by the two so appointed.
The arbitrators shall proceed with
diligence to hear the matter and the parties
shall have a full opportunity to present
testimony. The award shall be made by the
arbitrators, or a majority of them, and shall
be binding upon the parties, subject to appeal
to the courts as provided by the laws of
Following institution of the legal action, both the Town
of Rowlesburg and Lennon, Smith & Souleret Engineering Company,
Inc., filed answers and moved for summary judgment. Subsequently,
extensive documentation was submitted to the trial court and the
parties argued their motions before the court.
On May 14, 1991, the trial court granted the motions for
summary judgment and dismissed the action brought by the appellant
with prejudice. In so doing, the court concluded that the
appellant was not entitled to additional compensation either from
the Town of Rowlesburg or Lennon, Smith & Souleret Engineering
Company, Inc., because the appellant had failed to comply with the
written notice of additional work requirement of the contracts.
The court also found that the contract required that questions
relating to additional compensation be arbitrated and that the
appellant had failed to submit them to arbitration. The
appellant's claims against Lennon, Smith & Souleret Engineering
Company, Inc., were, in effect, dismissed because the appellant was
not a third party beneficiary to contracts between Lennon, Smith &
Souleret Engineering Company, Inc. and the Town of Rowlesburg.
Finally, the court found that, under provisions of the contract,
final payment by the Town of Rowlesburg to the appellant
constituted the release of all claims for additional compensation
by the appellant against both the town and against Lennon, Smith &
Souleret Engineering Company, Inc.
The court's conclusion that a release had occurred was
based on a clause of the contracts which provided that:
The acceptance by the Contractor of the Final Payment shall be and shall operate as a release to the Owner of all claims and of all liability to the Contractor for all things done or furnished in connection with this work and for every act and neglect of the Owner and others relating to or arising out of this work, excepting the Contractor's claims for
interest upon the Final Payment, if this
payment is improperly delayed. No payment,
however final or otherwise, shall operate to
release the Contractor or his sureties from
any obligation under this Contract or the
In the present proceeding, the appellant first claims
that the circuit court erred in granting summary judgment and that
there were questions of material fact remaining in the case.
Specifically, the appellant argues that factual issues existed as
to whether the Town of Rowlesburg and Lennon, Smith & Souleret
Engineering Company, Inc., had waived the right to written notice
required under the contract and were estopped from claiming the
appellant's alleged noncompliance with contract provisions
regarding written notice. The appellant also claims that questions
of fact exist as to the extent of compensation to which it is
entitled and questions of material fact exist as to whether the
appellant had accepted final payment on two of the contracts.
The basic rule on summary judgment in this State is set
forth in syllabus point 4 of Aetna Casualty & Surety Co. v. Federal
Insurance Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963), as
If there is no genuine issue as to any material fact summary judgment should be granted but such judgment must be denied if there is a genuine issue as to a material fact.
In the present case, it appears to this Court that the
trial court concluded that, based upon the records before it, the
contracts between the Town of Rowlesburg and the appellant were
clear and unambiguous. Those contracts required the appellant to
submit written notices of proposed change orders. The trial court
concluded that the appellant had not submitted such written change
orders for the monies which it was claiming.
It rather clearly appears from the record that the
parties entered into extensive, unambiguous written contracts and
that those contracts required the appellant to submit written
notices of changes altering the contract prices. It also appears
that the appellant did submit certain written change orders for
which it received compensation. It does not appear that during the
proceedings before the trial court the appellant produced any
record evidence to establish that the town waived the change order
requirement or that the town engaged in such conduct as would
justify its being estopped from relying upon the provisions of the
written contract. The fact that written change notices were
submitted for some changes suggests that there was adherence to the
protocol of the written agreements and that there was not such a
disregard for it to justify the conclusion that the Town of
Rowlesburg had abandoned it.
The record also suggests that the Town of Rowlesburg tendered to the appellant a check on January 6, 1988, and that
other checks were submitted on later dates. The documents
submitted indicate that the town made complete payment to the
appellant on two of the three contracts. Further, all outstanding
amounts due on the third contract were paid, with the exception of
$1,000.00, which was withheld because the appellant had failed to
complete the third contract by installing a switch. The $1,000.00
was to be paid upon the installation of that switch.
Given the overall circumstances of the record as it has
been developed, this Court cannot conclude that the appellant has
shown that there is a genuine issue as to any material fact in the
case. Accordingly, the Court cannot say that the trial court erred
in awarding summary judgment in this case.
The appellant further claims that its claims for payment
for extra work should not effectively be barred by the contract
provision requiring written notice of intent to present claims for
compensation when the parties waived such notice.
This Court has indicated that where parties lawfully
enter into a contract and their contract is free from ambiguity or
doubt the contract furnishes the law which governs their
relationships. See Magnus v. Halltown Paper Board Company, 143
W.Va. 122, 100 S.E.2d 201 (1957).
It appears that in the present case the parties lawfully
entered into the contracts in question and the contracts clearly
required that the appellant submit a notice of intent to present
claims for compensation beyond that specifically provided by the
contracts. On at least eight occasions the appellant complied with
those provisions and was paid for the additional claims. As
previously indicated, there is nothing in the record to suggest
that the Town of Rowlesburg abandoned the written agreements.
In this Court's view, given the plain and unambiguous
language of the contracts which the parties clearly entered into,
the appellant has failed to demonstrate circumstances which would
justify this Court's allowance of a deviation from the unambiguous
language of the contracts.
The appellant also claims that it is a member of a class
intended to rely upon the plans prepared by Lennon, Smith &
Souleret Engineering Company, Inc., and, therefore, may state a
claim against Lennon, Smith & Souleret Engineering Company, Inc.,
As previously indicated, a provision of the contracts entered into by the appellant and the Town of Rowlesburg provides that acceptance of final payment constitutes a release of obligations of the parties. Careful reading of that provision also indicates that acceptance of final payments constitutes a release
of all claims, even those of parties other than the Town of
Rowlesburg relating to or arising out of the work. The language
The acceptance by the Contractor of the Final Payment shall be and shall operate as a release to the Owner of all claims and of all liability to the Contractor for all things done or furnished in connection with this work and for every act and neglect of the Owner and others relating to or arising out of this work . . . . (Emphasis supplied.)
In this Court's view, Lennon, Smith & Souleret Engineering Company,
Inc., in this case is properly encompassed in the term "others"
since the claims which the appellant is attempting to assert are
clearly claims relating to or arising out of the work which was the
subject of the contracts. In conjunction with this, this Court
notes that in a somewhat similar case it has been recognized that
a release of an owner operates to release an engineer in tort. In
that case, Transpac Construction Co. v. Clark & Groff, Engineers,
Inc., 466 F.2d 823, 829 (9th Cir. 1972), the court held that:
[W]hen a contractor releases the owner upon settlement of a dispute over the amount owed under the contract, the owner's engineer or other supervisory agent is also absolved from like claims, in tort as well as contract.
See Cox v. City of Freeman, Mo., 321 F.2d 887 (8th Cir. 1963).
Lastly, the appellant claims that Lennon, Smith & Souleret Engineering Company, Inc., is not entitled to rely upon any of the provisions contained in the contract between the appellant and the Town of Rowlesburg, since Lennon, Smith &
Souleret Engineering Company, Inc., was not a party to that
As previously indicated, although Lennon, Smith &
Souleret Engineering Company, Inc., was not a direct party to the
contract between the appellant and the Town of Rowlesburg, by
language in that contract the appellant undertook to release all
claims against not only the Town of Rowlesburg, but from others
relating to or arising out of the work by accepting final payment
for the work under the contracts. In line with the thinking of the
Court in Transpac Construction Company v. Clark & Groff, Engineers,
Inc., supra, this Court believes that the language of the contract,
read in conjunction with the actions of the parties, absolves
Lennon, Smith & Souleret Engineering Company, Inc., from all claims
and that consequently, this last assertion by the appellant is
For the reasons stated, the judgment of the Circuit Court
of Preston County is affirmed.