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Subcontractor who provided evidence of an exception to contract's "no damages for delays" clause can recover delay damages against contractor

The trial court erred by summarily dismissing the plaintiff-subcontractor's claims against the defendant-general contractor for $347,786 in "delay damages" because the plaintiff presented sufficient evidence of an exception to the subcontract's "no damages for delay" clause. Defendant-La Salle Group, the general contractor on a building project, hired plaintiff-Macomb Mechanical to provide plumbing and mechanical work for $270,000. After the project exceeded the original time estimate (from 6 months to 15 months), LaSalle refused to pay Macomb any additional compensation. The trial court dismissed all of Macomb's claims based on the subcontract's "no damages for delay" clause and its "pay if paid" clauses. It also denied Macomb's claims against the surety bond issued by defendant-Travelers Casualty and Surety Company of America, finding that "the bond's liability was coextensive with the bond holder." The court reversed summary disposition based on the subcontract's "no damages for delay" clause, concluding that Macomb raised "a genuine issue of material fact that an exception to the . . . clause had been met" - that LaSalle had "increased Macomb's costs" during the three-month delay imposed by the USACE by forcing it "to retain a presence on site and sit idle awaiting the restart of work," thus preventing Macomb from working on other jobs to mitigate its damages. Macomb raised questions of fact "whether the parties contemplated such an extensive delay in the flow of work" and "whether Macomb could have contemplated that LaSalle would prevent it from mitigating its damages during such a delay. Macomb also presented evidence that LaSalle's mismanagement of the project led to delays." However, the trial court did not err by granting the defendants summary disposition "with respect to the amount owed on the sub-subcontract itself because the 'pay if paid' clauses bar recovery for that amount until the USACE . . . compensates LaSalle." But the court concluded that Macomb "created a genuine issue of material fact that $172,049 of its requested compensation fell outside the parameters of the sub-subcontract. If this fact is ultimately proven, the sub-subcontract would not apply to those amounts, including the pay-if-paid clauses." It rejected LaSalle's alternative grounds to affirm the trial court's dismissal, and because the court reversed most of the trial court's summary disposition order, the defendants were "no longer prevailing parties entitled to attorney fees for their inconvenience."


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