No Damages for Delay Clause Means No Damages for Delay
In Everman Electric Co., Inc. v. Evan Johnson & Sons Construction, Inc., No. 2005-CA-01544-COA (Miss. Ct. App. May 8, 2007), the Mississippi Court of Appeals enforced a “no damages for delay” clause in a construction contract relating to the construction of the new Biloxi High School in Harrison County, Mississippi. The Biloxi Public School District (“BPSD”) entered into direct contracts with Evan Johnson & Sons Construction, Inc. (“Johnson”), W.G. Yates Construction Company (“Yates”) and Everman’s Electric Co., Inc. (“Everman”) for the construction of the new school. As co-prime contractors, they were charged with completion of the project with Yates taking the role of construction manager.
As the project progressed, scheduling confusion caused Everman to have delays to its work and caused it to have to rework some of the previously completed wiring. Everman filed suit against Johnson and Yates alleging that their negligence caused damages in the form of delay costs and liquidated damages under the construction contract documents. Johnson and Yates responded asserting that (1) it did not owe a duty to Everman; (2) the no damages for delay clause barred Everman’s claims; and (3) Everman had waived its claim by accepting final payment from BPSD. The trial court agreed with the defendants that Everman had waived its claims and granted summary judgment
The Court of Appeals examined the each argument, and concluded that Yates was entitled to summary judgment but Johnson was not. The Court rejected the waiver argument concluding that acceptance of final payment from BPSD waived only claims Everman may have had against BPSD, not Johnson or Yates. The Court found that Everman was entitled to bring claims against Johnson and Yates as a third party beneficiary to their contracts with BPSD. However, the Court found that Yates was entitled to summary judgment as a result of the “no damages for delay” clause in Everman’s contract with BPSD. The Everman contract specifically included Yates in the no damages for delay clause but did not mention Johnson. As a result, the Court affirmed the dismissal of Yates, but on other grounds, and reversed the trial court’s grant of summary judgment to Johnson and remanded the claims against Johnson for trial.
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