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E.W. Burman, Inc. v. Bradford Dyeing Association, Inc.

Superior Court of Rhode Island, Washington

June 21, 2018

E.W. BURMAN, INC.
v.
BRADFORD DYEING ASSOCIATION, INC.

          Washington County Superior Court

          For Plaintiff: Christopher C. Whitney, Esq. R. Thomas Dunn, Esq.

          For Defendant: Marc DeSisto, Esq.

          DECISION

          K. RODGERS, J.

         This dispute between Plaintiff E.W. Burman, Inc. (Plaintiff or E.W. Burman) and Defendant Bradford Dyeing Association, Inc. (Defendant or Bradford) arises out of plans for Plaintiff to rebuild portions of Defendant's Westerly, Rhode Island facility following a fire in 2007. Plaintiff alleges that the parties had an oral contract for Plaintiff to construct the permanent replacement roof on the facility, that Defendant breached that oral contract, and that Plaintiff is entitled to damages for its out-of-pocket expenses as well as its lost profits.

         Following a non-jury trial, this Court requested the parties to submit post trial briefs. Having reviewed said briefs, this Court now will render a Decision.

         Jurisdiction is pursuant to G.L. 1956 §§ 8-2-13 and 8-2-14(a). For the reasons set forth herein, judgment shall enter for Defendant.

         I Findings of Fact

         Upon assessing the credibility of the witnesses, weighing all the evidence presented, and considering the undisputed facts as submitted by the parties, the Court makes the following findings of fact.

         In May 2007, a fire ravaged Defendant's factory in Westerly, causing significant damage to its equipment and roof. The reconstruction of the facility was slated to proceed in two phases: Phase I involved fashioning a temporary roof in order to allow Defendant to resume operations; Phase II involved the construction of a permanent replacement roof. Liberty Mutual Insurance Company (Liberty Mutual) insured Defendant for its business interruption and contributed to Phase I expenses as a result of the fire. Defendant also expected that Liberty Mutual would contribute to Phase II repairs.

         Defendant engaged Commonwealth Engineers & Consultants, Inc. (Commonwealth) to design the new roof. In July 2007, Commonwealth sent a request for proposals to several general contractors, which included plans for the new roof it had designed for Defendant's facility, and indicated that Defendant planned to award a contract by approximately August 8, 2007. The plans called for construction of a sawtooth-style roof, which matched the original roof prior to the fire.

         In early August 2007, Plaintiff submitted a bid to complete the Phase II reconstruction. Defendant accepted Plaintiff's bid, which came in approximately $400, 000 lower than the next lowest bid. Plaintiff and Defendant had never worked with each other previously.

         On August 27, 2007, Plaintiff's president, Edward Burman (Burman), met with engineers Steven Clarke (Clarke) and Bruce Bartel (Bartel) from Commonwealth, as well as Charles Doherty (Doherty) from Liberty Mutual to discuss the scope of the roof repair project (the Project). Liberty Mutual had engaged an independent engineering firm, Simpson, Gumpertz & Heger, to verify the Phase II plans, and to ensure Plaintiff fully understood the scope of the work on which it had bid-a particularly important consideration, given that Plaintiff's bid was significantly lower than any other bid.

         At the scope of work meeting, Liberty Mutual's engineer, along with Clarke and Bartel, asked Burman specific questions about the structure of the facility and the Project to ensure Plaintiff understood the size of the materials being used and the processes necessary to rehabilitate the facility. Burman inquired what form of contract would be used and offered to start with an American Institute of Architects (AIA) form contract. Before the meeting concluded, Burman shared Plaintiff's contractor license number with Commonwealth, which was necessary to obtain building permits, as well as its insurance certificate and payment and performance bonds. None of Defendant's employees or officers was present at this meeting.

         Within a few hours of the conclusion of the scope of work meeting, Burman sent Clarke a particular AIA form contract (the AIA contract) with the proposed terms for Plaintiff's relationship with Defendant. Burman created a schedule and forwarded the same to Clarke on August 30, 2007. That schedule called for submittals and reviews to begin on September 3, 2007 and be completed by September 21, 2007, materials procurement to begin on September 17, 2007, and the Project to be complete on December 31, 2007. Joint Ex. 18. Plaintiff made some adjustments to the schedule at Commonwealth's request to address inclement weather issues as the Project would not be completed until the winter. The revised schedule again called for the same submittal and review timeline, the same materials procurement start date, and the same completion date. Joint Ex. 20.

         On September 6, 2007, Plaintiff authorized Reliable Truss and Components, Inc. (Reliable Truss) to begin preparing shop drawings for the roof trusses. Joint Ex. 28. Several days later, on September 11, 2007, Plaintiff ordered $63, 000 worth of stainless steel angles and flat bars from Shawmut Metal. Joint Ex. 108. On September 13, 2007, Burman forwarded Reliable Truss' completed shop drawings to Bartel for his review and comment.[1] The transmittal from Burman to Bartel noted that "[Plaintiff] will verify count [and] dimensions once we're able to access [the] facility." Joint Ex. 38.

         For over six weeks between September 10 and October 23, 2007, the parties did not progress in their negotiations over the terms of their proposed written agreement. On September 13, 2007, Burman contacted Bartel seeking access to the site so that he, his project manager, and the demolition contractor could familiarize themselves with the building and surrounding area. Bartel replied approximately two hours later and stated:

"We have been directed by Bradford's attorney to wait on any [site] visits or other work activities until contract issues are worked out with the insurance company.
"So, wait on any site visits until there is a contractual relationship between [E.W.] Burman and Bradford Dye." Joint Ex. 41.

         Burman followed up with Bartel several days later, on September 17, 2007, via email: "Any movement on the legal end? We need to get on site ASAP to verify dimensions." Joint Ex. 48. Bartel replied several hours later: "As there is no signed contract, all work done to date and until a contract is signed, is at your own risk." Id. (emphasis added).

         That same day, Clarke informed Burman that there was an issue between Defendant and Liberty Mutual which prevented the Project from progressing at that time and prevented Plaintiff's employees from accessing the site. Thus, Plaintiff's involvement with the Project was on hold during this time as it remained unable to verify the truss dimensions, which Commonwealth had required prior to proceeding.

         On October 23, 2007, Burman emailed Bartel indicating that Clarke had called to inform him that the project was ready to move forward. Contract negotiations thereafter resumed, and Burman and Clarke exchanged revised versions of the AIA contract.

         On October 25, 2007, Plaintiff's employees gained access to the facility and confirmed the various measurements which Commonwealth required be verified before proceeding with the truss work. However, the terms of Plaintiff's relationship with Defendant were still the subject of negotiation. Defendant sought a substantial price adjustment because its own employees performed a significant amount of demolition work during the six-week unexpected downtime. Notwithstanding these continued negotiations, and Bartel's September 17, 2007 email directing Plaintiff that all work was at its own risk until there was a contractual relationship between the parties, Plaintiff began ordering fasteners on ...


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