General Federal Construction, Inc. v. D. R. Thomas, Inc.

Lowe, J., delivered the opinion of the Court. This is an appeal from the Circuit Court for Prince George’s County which culminated in a $38,000 verdict for a subcontractor, D. R. Thomas, Inc. (Thomas), against the general contractor, General Federal Construction, Inc. (General) and, under a "payment” bond, The Hartford Accident & Indemnity Company (Company). — limitations — One of the issues, which gives us but momentary pause, arises from the fact that the suit regarding the insurer arose ⁷⁰² under the "Little Miller Act”, Md. Ann. Code, Art. 21, § 3-501, which has a one year period of limitations from the date of final acceptance of the work performed under the contract. Appellants complain that appellee initially sued only General and The Hartford Insurance Group (Group) but did not include Company until May 28, 1981 which, they allege, was over one year after final acceptance of the work performed under the contract. It follows, they contend, that as to Company, limitations was not tolled until the amended declaration adding Company was filed.

Factually they contend, that final acceptance of the work performed under the contract took place in March of 1980, "when the necessary electrical inspection was completed”, pointing to extracted testimony as follows: "Q. Has there ever been a final acceptance on the Social Science Building, to your knowledge? A. I don’t know whether the final acceptance has ever been given but, to the best of my recollection, they accepted the building when they moved into the building as far as substantial completion goes. There was one item wherein we had to give an electrical certificate, and we couldn’t get that because there had been some pipes run over a switch gear, and I believe that was resolved sometime in March of 1980. And I would assume that that was by the State final acceptance because they at that time, I believe, agreed to pay us any and all monies.

Q. Only after this final acceptance; is that correct? A. After the certificate was obtained.” "Final acceptance”, for purposes of the accrual of a cause of action, is like the discovery rule, a mixed question of law and fact.-The trial judge must determine factually when that occurred in order to apply the appropriate limitations law. Here the uncertainty of appellants’ witness as to the facts relating to final acceptance was given calendrical certainty on cross-examination when appellee produced the electrical inspection certificate dated August 15, 1980. ⁷⁰³ "MR. HAYES [of counsel for appellants]: I will object.

THE COURT: Is that the electrical certificate for the Social Science Building? THE WITNESS: Yes, sir, that is the certificate that we resolved, I believe, in March of 1980. THE COURT: It wasn’t issued until August? THE WITNESS: From the date on that — THE COURT: From the date on that, you have to assume it was issued in August?

THE WITNESS: Yes. THE COURT: All right, 17 is admitted. MR. KERNS [counsel for appellee]: Thank you.

(Plaintiffs Exhibit No. 17 Admitted in evidence.)” Although appellants did not inform us whether the court specifically addressed the limitations issue we infer from the result that the defense of limitations was rejected by the court. The evidence we have noted is clearly sufficient to support a holding that the cause of action did not accrue until August 15, 1980, Md. Rule 1086; Moy v. Bell, 46 Md. App. 364, 370 (1980), and limitations did not preclude the inclusion of appellant Company prior to that date, one year hence. We need not address appellee’s supportive argument that the amendment including Company along with Group was simply a specification that fell within the umbrella trade name Hartford Insurance Group, encompassing Company among others. — demurrers — Appellants next allege that their demurrers should have been sustained because the respective counts of the Declaration lacked "the sufficiency of substance required by the Maryland Rules in that they do not provide facts sufficient to inform the defendant and the court of the claims advanced .. ..” The Declaration set forth in separate counts ⁷⁰⁴ that appellant General had subcontracted with appellee to supply labor and material subsidiary to General’s contract with the State of Maryland. The labor and materials to be supplied under the subcontract (which was appended to, and incorporated in, the Declaration) were supplied by appellee.

The breach alleged was that General had not paid either as contracted or for additions and changes under the contract. Appellee further alleged a breach by General in a portion of the appended contract which gave appellee the opportunity to be present and submit evidence in any matter involving appellee’s rights.. That, said appellee, was breached when General sued the State under its prime contract involving appellee’s labor and material, then dismissed the action against the wishes of appellee. The counts involving Company added that it was responsible for General’s nonpayment under its bond required pursuant to Md. Real Prop.

Code Ann., § 9-113 (the "Little Miller Act”). 1 It further alleged that Hartford was contractually responsible because it had taken control of General and made all management decisions, thus assuming responsibility for the ensuing indebtedness. Relying on Continental Masonry v. Verdel Constr., 279 Md. 476 (1977), appellants complain that the complexities of this case required a more detailed contention by appellee. They point in retrospect to the evidentiary facts proving the charges alleged and the apparent reasons underlying the failure to pay which were shown to be the delays by General which interfered with Thomas’s work. "In essence, the Court permitted the case to go to trial based upon an Amended Declaration which, because of its lack of sufficiency of substance or specificity permitted DRT [Thomas] to offer proof on any alleged breach which DRT [Thomas] thought of at any time up to the close of its case.” Therein lies appellants’ error.

"To withstand a demurrer a party need only allege facts which, if proven, would entitle him to relief.” Hooke v. Equitable Credit Corp., 42 Md. App. ⁷⁰⁵ 610, 616 (1979). There is no requirement of "specificity” which appellants equate with the "substance” requirement. Appellee alleged facts that would have proven a contract, its compliance and appellants’ respective liabilities thereunder and General’s breach by nonpayment. That clearly set forth a cause of action: If appellants desired specifics before demurring under Rule 345, they should have turned the page of the Maryland Rules to Rule 346, which provides that: "A party may demand, in writing, a bill of particulars whenever a pleading is so general as not to give sufficient notice to him of the claim or defense asserted by such pleading.” Having failed to do so, however, appellants still had all of the multitude of discovery procedures available to them to provide in detail the specifics of the claim.

Sommers v. Wilson Bldg. & L. Ass’n, 270 Md. 397 (1973). Demurrers are not demands for specifics. They are solely to provide a minimization test for a cause of action either where a question of law may be decisive of litigation or the facts alleged do not constitute a cause of action. The "precise rubric” itself provides that a mere informal statement of a cause of action will suffice and that it shall be "brief and concise and contain only such statements of facts as may be necessary to constitute a cause of action .. ..” Md. Rule 301 b.

Appellants’ argument suggests that they are more concerned in retrospect with a variance; however, absent particulars which would have bound the pleader, Md. Rule 346 e, it would have been difficult to sustain an objection to evidence submitted as having gone beyond the allegations. Upon that question, however, having not been asked, we render no opinion. — sufficiency of the evidence of damages — Appellee’s proof of damages consisted primarily of testimony indicating its estimate of minimal losses occasioned by ⁷⁰⁶ the delay allegedly caused by appellant General. Although the delay was nearly 9 months, it elected to attribute only 150 days, or 5 months delay to General. The total damages claimed were broken down into categories and each was explicated either by an office employee or the president of appellee.

Appellee explained item by item how it computed the costs of the job to establish a bid price for performance within a designated contract period; then it sought to show, item by item, the difference occasioned by the delay. A loss was claimed for materials amounting to $21,609 predicated upon a 11% increase in material costs arrived at by comparing prices within the contract period against those during the delay period. Another component of the claim was a $43,193.40 figure comprising a production loss on the job. That was derived by showing what the craftsmen employees could be expected to produce uninterruptedly and what was actually produced by virtue of the delay frequently causing skilled employees to do menial and unproductive make-work marking time until the obstacles were removed.

Utilizing the expertise endemic to preparing bids and estimating costs, that loss was estimated at 25% of the labor costs, but reduced to 20% for purpose of computing damages. Supervision losses were estimated at $20,000, and justified despite salaried supervisors because their salaries were paid during the delay period, notwithstanding the reduced labor force. Supervision was required regularly not only for the limited employee force of appellee, but to determine day to day what could be done the morrow as General gradually removed the impediments deterring appellee’s progress. Other items, of which appellants complain, include overhead loss computations, including an item arrived at by what is "commonly known” as the Eichleay formula.

As explained by appellants: "This formula is used to derive the home office overhead costs which are associated with a particular job. Under the Eichleay formula, overhead costs are computed by taking the ratio of the company’s total billings for the contract period to ⁷⁰⁷ the billings for this particular contract. That percentage is then applied to the company’s total overhead for the period to arrive at a per day figure of overhead allegedly attributable to this project. That per day figure is then multiplied by the total number of days of delay alleged to compute the total damages attributable to overhead.” Item by item appellants undercut by argument (as they attempted by cross-examination at trial to undercut) the basis upon which these claims were presented.

Their contentions vary from indicating the inappropriateness of the item to this case, to the minimal evidentiary substantiation of an item, and complain between that some may even be overlapping. In short, for each of the items they claim that "the trial court should not have considered them.” (Emphasis added). But that is not the issue they raise on appeal. Whether these items were properly admitted to show damages is an evidentiary question, and we are not aware from the briefs here, or extract of the trial, that appellants object now, or ever objected below, to the admissibility of this evidence.

Even if improperly admitted without objection, once the evidence comes in — without objection — the factfinder can and should properly "consider them.” What consideration he gives them, however, is subject to appellants’ ability to dissuade him by cross-examination, argument and contrary evidence. Appellants skillfully utilized all three. The fact that the judge only allowed $38,000 damages of the $139,837 claimed indicates that they were quite persuasive. We cannot interfere with the trial judge’s weighting of evidence, nor do we even know the weight he ascribed to what items.

Clearly more were discarded as unpersuasive than were adopted as convincing. Even if that were reversed, we can look only to whether the judge was clearly erroneous, and then must give due regard to his opportunity to judge the credibility of the witness. Md. Rule 1086. Because he was not called upon to decide the legal issue of admissibility of ⁷⁰⁸ these items of evidence he committed no error of law.

Because he had evidence before him from which he could have arrived at his verdict, his judgment was not clearly in error. Ibid. Since the next two questions relate solely to Company’s individual liability, it seems appropriate first to address appellee’s cross-appeal which, simply stated, is that it did not get enough. What we have said regarding appellants’ complaint on sufficiency of the damages evidence is a quick answer to appellee as cross-appellant.

Beyond that, we note that cross-appellant admits that while the constituent elements comprising the judgment are not discernible, "the $38,000 judgment may bear some relation to the $80,000 settlement obtained by General Federal from the State of Maryland in satisfaction of its suit ...”, the suit in which cross-appellant’s promised participation was precluded. To the extent that either party is hampered by the inability to discern the basis of the trial judge’s damage determination, we note that they point to no effort made to obtain a statement of grounds or the basis he utilized to determine the damages as is required of him by Md. Rule 18 b. Absent such motion, neither appellants nor cross-appellants may complain upon appeal, Gerard C. Wallace Co. v. Simpson, 267 Md. 702 (1973), and are practically hampered in arguing that a judge improperly considered, or failed to consider, items which we know not to have been overlooked or to have been included in the judgment. The plague of inertia falls upon both their houses.

The two final issues of which appellants complain primarily concern Company as the insurer under the bond. By semantic evolution appellant contends initially that it is not liable for "delay damages” under the Little Miller Act presumably because such damages as here proven are "nothing more than” lost profits, which according to Company have never been permitted even under the federal act upon which the Maryland Act is predicated. ⁷⁰⁹ Maryland