Preview:

Pursuant to Ind.Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

FILED
Dec 29 2010, 9:02 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEY FOR APPELLANT: CARA W. STIGGER Kaufman, Stigger & Hughes Louisville, Kentucky

ATTORNEYS FOR APPELLEE: VAN T. WILLIS CRYSTAL G. ROWE New Albany, Indiana

IN THE COURT OF APPEALS OF INDIANA
E-Z CONSTRUCTION COMPANY, INC., Appellant-Respondent, vs. SELLERSBURG STONE CO., INC., Appellee-Petitioner. ) ) ) ) ) ) ) ) ) ) )

No. 10A01-1002-PL-110

APPEAL FROM THE CLARK SUPERIOR COURT The HonorableVicki L. Carmichael, Judge Cause No. 10D01-0810-PL-941

December 29, 2010 MEMORANDUM DECISION - NOT FOR PUBLICATION

VAIDIK, Judge

Case Summary This a contract dispute between a plaintiff supplier and defendant prime contractor. The defendant appeals an award of service charges to the plaintiff. We conclude that the trial court did not err in assessing service charges. We affirm. Facts and Procedural History E-Z Construction Company was awarded a contract by the Clark County Board of Commissioners to complete an expansion of the Clark-Floyd Landfill. E-Z contracted with Sellersburg Stone Company for the provision of necessary dirt, stone, and clay. Pursuant to the parties' supplier agreement, SSC would provide its fill materials at a rate of $66.00 per load and add a service charge of 18% per annum to any accounts thirty days overdue. Each of SSC's shipments came with a written disclaimer indicating that the seller made no warranties of any kind on the product's fitness for a particular purpose. Between August 2007 and May 2008, SSC delivered 4377 loads of fill material to the project site at a total price of $256,946.47. At some point, however, E-Z took issue with the quality of SSC's fill materials and the rate at which SSC delivered them. E-Z allegedly had to rework certain parts of the project due to SSC's sub-standard materials and slow delivery. E-Z maintained that SSC was responsible for associated costs. E-Z deducted these sums from SSC's invoice amounts and withheld total payment in the amount of $101,777.64. SSC filed a Verified Claim for Payment with the Board of Commissioners. SSC claimed that E-Z failed to fully pay its invoices, so SSC asked the Board to withhold

2

payment to E-Z until E-Z paid SSC. As a result of the filing, the Board withheld a sum of $110,823.24 from its final payment to E-Z. SSC next filed a complaint in Clark Superior Court. SSC alleged that E-Z

contracted for and accepted shipments of materials but failed to pay for them. E-Z asserted that the supplied materials did not comply with contract specifications. The case was tried to the bench, and in January 2010, the trial court entered judgment in favor of SSC. The court found that SSC disclaimed any warranties

respecting the fitness of their product for a particular purpose. The court also found no showing that the rate at which the fill materials were delivered was unreasonable. The court awarded SSC $101,777.64 for the materials that were delivered and accepted. The court also found that SSC's 18%-per-annum service charge was spelled out clearly in the parties' written agreement. Accordingly, the court awarded SSC an additional

$38,665.02 in service charges. E-Z now appeals. Discussion and Decision E-Z argues that the trial court erred in awarding SSC service charges. SSC responds that E-Z's appeal is frivolous and that SSC should now be entitled to appellate attorneys' fees. I. Service Charges E-Z argues that the trial erred in awarding SSC service charges totaling $38,665.02. E-Z characterizes the service charges as "prejudgment interest" and

maintains that "a claimant on a public construction project is not entitled to an award of prejudgment interest when the actions of the claimant have caused contract funds to be 3

held in trust by a public contracting entity pending a final determination of the merits of the claim." Appellant's Br p. 4. In the alternative, E-Z argues that the award is excessive for being based in part on non-ascertainable sums. Indiana Code section 5-16-5-1 establishes procedures to help subcontractors, suppliers, and laborers recover payment from prime contractors for services rendered on public works projects. Section 5-16-5-1 provides that, upon the timely filing of a claim, the State agency involved shall "withhold final payment to the contractor until such contractor has paid to the subcontractor or subcontractors, materialmen for material furnished, labor employed in such construction or those furnishing any service in relation to or in connection with such construction, erection, alteration or repair, all bills due and owing the same." Where no dispute exists between the parties interested in the funds withheld, the State agency pays off the claim and deducts that money from the amount owed to the prime contractor. But "[w]here there is a dispute between any of the parties claiming to be entitled to such funds so withheld, or any part thereof, sufficient funds shall be retained by such board, commission, trustee, officer or agent acting on behalf of said state or commission created by law until such dispute is settled and the correct amount is determined, when payment shall be made as aforesaid . . . ." Ind. Code

Download E-Z Construction, Co., Inc. v. Sellersburg Stone Co., Inc..pdf

Indiana Law