The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
ZP 360 HUNTSVILLE
MOUNTAIN, LLC, et al.,
Plaintiffs,
v. Case No. 5:23-cv-1178-CLM
AEC SITE SOLUTIONS, LLC,
Defendant.
MEMORANDUM OPINION
In early 2022, ZP 360 Huntsville Mountain, LLC (“ZP 360”) and ZP
361 Huntsville Research Park QOZB, LLC (“ZP 361”) (collectively,
“Zimmer”) set out to build two multi-family housing developments in
Huntsville. Zimmer hired a general contractor. The general contractor
then hired a subcontractor, AEC Site Solutions, LLC (“AEC”), and work
began. But within just a few months, things started to go wrong. The
general contractor failed to meet expectations, so Zimmer terminated its
contracts. And less than a year later, after Zimmer filled the general
contractor’s shoes, Zimmer also terminated AEC’s subcontracts. Zimmer
eventually managed to complete the projects. Still, the damage was done.
Constant delays and reworks cost Zimmer time and money.
So Zimmer sued AEC to recoup losses that, it says, are attributable
to AEC and its deficient performance. Zimmer brings two claims for
negligence and two for breach of contract. The parties now move for
summary judgment. AEC asks for summary judgment on each of
Zimmer’s claims. (Docs. 78, 79). Zimmer asks for partial summary
judgment on its breach of contract claims. (Doc. 88). And Zimmer also
seeks to strike AEC’s amended answer and affirmative defenses that it
filed after discovery ended. (Doc. 75). For the reasons stated below, the
court (1) GRANTS IN PART and DENIES IN PART AEC’s motions for
summary judgment, (2) DENIES Zimmer’s partial motion for summary
judgment, and (3) DENIES Zimmer’s motion to strike AS MOOT.
BACKGROUND
This case stems from AEC’s work as a subcontractor for two housing
development projects owned by Zimmer entities. ZP 360 is the owner and
developer of one of those projects, the Terraces at High Mountain (the
“Terraces”). ZP 361 is the owner and developer of the other project, the
Boardwalk at Research Park (the “Boardwalk”). The key facts for the two
projects, and Zimmer’s claims, largely overlap.
A. The Parties and Projects
On February 28, 2022, ZP 360 hired Huffman Contractors
(“Huffman”) to serve as general contractor on its Terraces project.1 (See
doc. 86-4). A little over a week later, on March 8, ZP 361 hired Huffman
to serve as general contractor on its Boardwalk project. (See doc. 80-2).
Huffman then signed subcontracts with AEC for both projects. (See docs.
84-3; 88-9).
1. The Terraces
The Terraces project called for the construction of six apartment
buildings and a clubhouse. Each building was assigned an identification
number, with A1-A6 denoting the apartment buildings and A7 the
clubhouse. Because the Terraces site is located on hillside terrain, the
buildings had to include a “lower-level pad” and an “upper-level pad.”2
(See doc. 85-2, p. 6). After the lower-level pads were completed, “stem
walls or retaining walls were required to be constructed” before the upper-
level pads could be built. (Docs. 81-1, p. 12; 84-2, p. 14). AEC’s job was to
perform site work, “including but not limited to, demolition, erosion
control, grading, paving, utilities and other related services.” (Doc. 6, pp.
4-5). Some of AEC’s tasks under these categories included: preparing the
1 Different Huffman entities served as the general contractors on the projects, but AEC’s
corporate representative confirmed during his deposition that AEC “just knew” them both as
“Huffman.” (See doc. 88-1, p. 46-47). So this opinion treats Huffman as one entity.
2 “Pads” are cleared and leveled areas of land that “allow for follow-on construction of each pad’s
underslab utilities.” (See doc. 85-2, p. 8). Once the underslab utilities are constructed, a concrete
slab goes on top so “vertical construction” can start. (See id.).
building pads, installing sanitary and storm sewers, and completing an
on-site water tie-in. A general layout of the Terraces site is shown below:
ee / J =, □ i ail hi
> UT eet (8 SE on 4 □□□
(Doc. 85-2, p. 7).
2. The Boardwalk
The Boardwalk project was divided into two phases. Phase 1 called
for the construction of four multi-story apartment buildings, Al-A4, and
Phase 2 called for the construction of two additional buildings, A5-A6.
Unlike the Terraces, the Boardwalk site was flat. But AEC’s scope of work
for the Boardwalk was largely the same as its scope of work for the
Terraces. So AEC was again tasked with, among other things: preparing
the building pads, installing sanitary and storm sewers, and completing
an on-site water tie-in. A general layout of the Boardwalk site is shown
below:
ss ili
= pen i 1 if aa 2 a 4 i I i i i
ey a a te) □□ ma i « Pat ~f a
(Id., p. 8).
3. Project Schedules
As general contractor, Huffman developed schedules for both
projects. These schedules purportedly included deadlines for AEC to
complete certain tasks within its scope of work. The parties dispute
whether AEC received some of these schedules or agreed to be bound by
them. But the record evidence shows that, at the very least, AEC received
a milestone chart for the Terraces project on July 20, 2022. The relevant
portion of that chart is below:
UFFMAN Co HC2111 Terraces at High Mountain Chart
Last Printed On: 07/19/2022
itll ett beeslii le: eataly [Telecieta4 pveltr-}| byes titty
— AEG 04/18/2022 04/78/2022 Made
® Building Padi AEC 07/18/2022
# Building Pad 2 □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□
© Building Pad 3 AEC 08/01/2022
# Building Pad 4 □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□
© Building Pad 5 ABC ~—~—~—“CwBNIVD—
* Building Pad 6 AEG 08/21/2022
© Building Pad 7 aC ogj2g2022—~” □□□ ———
#55 AEC 08/17/2022
+ Storm AEC 08/22/2022
Water □□□□□□□□□□□□□□□□□□□□□□□□□
(See doc. 88-10, p. 3). As shown, Huffman “forecast” that AEC would
complete general construction tasks for the Terraces no later than October
2022. Aside from this chart, Zimmer contends that Huffman provided
AEC two other schedules that “fixed” AEC’s construction milestones. (See
doc. 90, pp. 14, 17). One of those schedules applied to the Terraces project
and mostly tracks the deadlines shown in the chart above. (See doc. 88-
11). The other schedule applied to the Boardwalk project. According to
Zimmer, it included the following deadlines for AEC:
a. Building Al: September 12, 2022
b. Building A?: September 19, 2022
c. Building A3: September 26, 2022
d. Building A4: October 3, 2022
e. Building A5: October 10, 2022
f Sanitary Sewer: October 14, 2022
g. Building A6: October 17, 2022
h. Building A7: October 24, 2022
i. Building A8: October 31, 2022
j- Water System: November 9, 2022
k. Storm Drainage: April 18, 2023
1. Curbs/Roadways: February 17, 2023
(See doc. 90, p. 17; see also doc. 88-3). AEC’s owner and 30(b)(6) witness,
Bennett Steele, stated that he had “never [seen] .. . or agreed to” the above
schedule. (See doc. 88-2, pp. 326-27). But email correspondence between
Huffman personnel reflects that the schedule received “some input” from
an AEC employee named Don Byrd—someone Steele said that AEC
employed to assist with “project management” and “pricing.” (See id., p.
43).
Despite AEC’s apparent communication with Huffman regarding
the schedules, Steele maintains that “AEC never agreed to a schedule and
no schedule was ever made a part of” the subcontracts. (See docs. 86-1, p.
2; 86-2, p. 2). Both subcontracts show that an “Exhibit C” would provide a
“progress schedule.” (See docs. 84-2, p. 150; 88-9, p. 28). But as best the
court can tell, no filed version of the subcontracts includes an Exhibit C.
And according to AEC, “no schedule was incorporated into Exhibit C.”
(Docs. 91, p. 4; 93, p. 5).
B. The Relevant Contracts
Two sets of contracts are important here: (1) Zimmer’s general
contracts with Huffman and (2) the subcontracts between Huffman and
AEC.
The general contracts required Huffman to “prepare and submit …
critical path schedules showing the relative times for performance of all
significant tasks” assigned to Huffman and its subcontractors. (Doc. 80-2,
p. 73). At minimum, those schedules were to include “permit dates;
procurement dates … and the start/finish dates for construction of all
critical path activities.” (See id.). In § 16.10, Huffman warranted, as the
general contractor for both projects, that it was “qualified and licensed to
perform construction services” in Alabama. (See id., p. 27). Despite these
warranty provisions, the general contracts allowed Zimmer, which is not
a licensed general contractor, to take assignment of any subcontracts
Huffman entered if Zimmer terminated the general contracts and notified
the subcontractors of the assignment in writing. (See id., p. 90).
The subcontracts recognized Huffman’s general contracts with
Zimmer and stated that AEC “agree[d] to perform, as an independent
contractor, the portion of Huffman’s work under the [general contracts] as
set forth in [the subcontracts’] scope of work.” (See docs. 84-3, p. 3; 88-9,
p. 3). To that end, the subcontracts laid out AEC’s scope of work as
described above. (See docs. 84-3, pp. 35-38; 88-9, pp. 35-40). The
subcontracts contained a contingent assignment clause that permitted
Zimmer to fill Huffman’s shoes as the general contractor if Zimmer
terminated Huffman’s general contracts. (See docs. 84-3, p. 25; 88-9, p.
24). The subcontracts also contemplated project scheduling. They required
AEC to “prosecute” its subcontract work “in strict accordance with [the
general contractor’s] schedule and sequencing directives and to otherwise
prosecute the work diligently and in cooperation with others contributing
to the work … so as to not hinder in any way [the general contractor’s]
compliance with its project schedule, milestone dates, and completion
deadlines.” (Docs. 84-3, p. 12; 88-9, p. 11). Art. 3.4 of the subcontracts
required AEC to pay $1,000 in liquidated damages “per calendar day for
each day [AEC] fails to meet the portion of the schedule[s] attributed to
its work or for each calendar day beyond allotted contract time that [AEC]
is not complete with its work.” (Docs. 84-3, p. 12; 88-9, p. 12).
The subcontracts also imposed workmanship and warranty
obligations on AEC. For example, the subcontracts required AEC to
“promptly correct” nonconforming work and bear the costs of correction:
If [the general contractor] rejects the Subcontract Work or
the Subcontract Work is not in conformance with the
Subcontract Documents, [AEC] shall promptly correct the
Subcontract Work whether it has been fabricated,
installed, or completed. [AEC] shall be responsible for the
costs of correcting such Subcontract Work, any additional
testing, inspections, and compensation for services and
expenses of [the general contractor] made necessary by the
defective work.
(Docs. 84-3, p. 9; 88-9, p. 9). Moreover, Exhibit A required AEC to bear all
remedial and corrective costs for work not done in accordance with the
subcontracts. (See docs. 84-3, p. 31, 88-9, p. 31). If AEC failed to comply
with these requirements, then § 7.1.2 of the subcontracts provided a two-
notice termination procedure, which permitted the general contractor to
terminate AEC for cause after a second 48-hour cure period passed.
In the event of termination for cause, the subcontracts allowed the
general contractor “to recover from [AEC] all associated costs, expenses,
and other damages, including but not limited to associated legal fees and
any amounts paid to correct and/or complete the Subcontract Work (plus
15%) that, together with all other funds paid to complete any portion of
the Subcontract Work, exceed the Subcontract Amount established under
[the subcontracts].” (Docs. 84-3, p. 23; 88-9, p. 23).
C. Construction Delays and Contract Terminations
By September 2022, both projects had problems. Construction of the
Terraces’ pads lagged months behind schedule. Progress on the Terraces’
utilities and paving also stalled. Similar problems plagued the Boardwalk
project. The pads for A1 and A2 at the Terraces site were delayed for a
minimum of twelve weeks, and after rock was uncovered under pad A3,
its construction was delayed too. Because the pads were foundational
parts of the projects, vertical construction was hindered.
Unsurprisingly, Zimmer was displeased with the delays. So on
September 16, 2022, Zimmer terminated Huffman from both the Terraces
and Boardwalk projects “for convenience.” (See docs. 87-13, p. 2; 87-14, p.
2). The termination letters noted that Zimmer would “review all
subcontracts … that [were] in place for [the] project[s],” so it could
“determine if any should be assigned to [Zimmer] or simply terminated.”
(Id.). According to Zimmer’s corporate representative, Charles Tucker,
Zimmer terminated Huffman because of its poor management and
because it partly caused the delays. A month later, Zimmer took
assignment of AEC’s subcontracts and effectively filled Huffman’s shoes
as the general contractor. Zimmer notified AEC of the assignment on
October 12, 2022.
Firing Huffman apparently didn’t improve things because Zimmer
contends that, by January 2023, AEC had fallen nearly five months
behind schedule on several items at the Terraces, including pad A1, the
clubhouse pad, the pool pad, the sanitary sewer, and water lines. Similar
delays stalled the Boardwalk project. Zimmer also identified foundational
issues at the Terraces site, “including over-excavation,
unsuitable/reworked fill, and a large deleterious soil/rock stockpile
requiring export.” (Doc. 90, p. 15). Testing showed that the clubhouse pad
at the Terraces “required reworking due to moisture and improper
compaction.” (Id.). And the discovered rock under pad A3 continued to
impede construction.
By April 2023, Zimmer had enough of the delays. So as the assignee
of the subcontracts, Zimmer issued a detailed written notice to AEC for
both projects under § 7.1.2 of the subcontracts. The notices identified
performance, testing, and schedule deficiencies and demanded cure. They
also provided AEC with a new schedule “to keep the project moving.” (See
doc. 89-19, p. 5). After two days passed, Zimmer issued AEC a follow-up
notice reiterating the demand to cure and providing notice of an intention
to terminate the subcontracts. And four days after that, Zimmer sent AEC
a second formal notice of intent to terminate for cause due to AEC’s
default and apparent abandonment of the projects. AEC never cured the
defaults identified in Zimmer’s notices, so on May 3, 2023, Zimmer
terminated AEC for cause on both projects. By the termination date, AEC
had received approximately $4.5 million in payments. Of that total,
Zimmer had paid AEC roughly $3.2 million after it took the assignment
of the subcontracts.
The same day Zimmer terminated AEC, it hired Buffalo Builders,
LLC to step in as the general contractor for the Terraces and Boardwalk.
The projects were eventually corrected and completed.
D. Zimmer’s Alleged Damages
During discovery, Zimmer estimated damages across both projects
to be $69,589,985.41. Here’s how Zimmer calculates damages for Terraces:
HUNTSVILLE: HIGH MOUNTAIN - DAMAGES
SUM PAR TOTAL
Interest Expense 3 840,512.51
Loss of Rants 3 §,496,4397.14
Opportunity Cost 3 20,474,072.22
Construction Replacement Oo a1 3 5,384, 500.50
onstruction Corrective Work 3 4, 94) Bt
Insurance Expense 3 291,827.00
200 Mgmt 3 175,000.00
Travel Expange 3 13,606.08
Legal Expense 3 549,090.40
Outside Consultants. 3 178,362.52
(Doc. 98-1, p. 6). And here’s how Zimmer calculates damages for the
Boardwalk:
HUNTSVILLE: RESEARCH - DAMAGES
bette Expe née 5 B33,117.79
Loss of fants 5 4,117,127.85
Opportunity Gast 5 28,303, 672.22
Construction Replacenvent Cost 3 1.411, 766.66
Construction Conrective Work 5 141,487.16.
Inéurance Expense 5 84,407.40
Mgmt 3 175,000.08)
Travel Expense 5 13,606.07
Legal Expense 5 549,056.92
Outside Consultants. 5 232,600.39
(Doc. 98-1, p. 25).
Some of these figures are straightforward and don’t require much
explanation. Others are more complex. Using the Terraces as an example,
Zimmeyr’s interest expense category consists of a “preferred” interest
return to an investor and LLC member, CK Management. (See doc. 86-8,
pp. 36-37). Zimmer calculated the “loss of rents” category by assuming an
apartment occupancy rate at 95%, calculating a net operating income
based on projected rents, dividing it by twelve to get a monthly figure, and
then multiplying the remaining value by eighteen (i.e., the number of
months Zimmer claims AEC delayed completion). (See id., pp. 39-40). And
Zimmer calculated its largest category of damages, “opportunity cost,” by
generating a net value for the properties had they been completed on time
with a 4.5% capitalization rate and subtracting the actual net value for
the properties when they were completed with a 6% capitalization rate.
(See id., pp. 41-42; see also doc. 98-1, p. 23). According to AEC’s corporative
representative, the applicable market capitalization rate increased from
4.5% to 6% during the 18-month construction delay, and that rate increase
reduced the value Zimmer could have received by selling the properties
on the open market.?
3 Tucker said during his deposition that Zimmer had received “emails from brokers” inquiring
about the properties. (See doc. 86-3, p. 42). But at the time of Tucker’s deposition, Zimmer was
not actively attempting to sell either the Boardwalk or the Terraces. (See id.).
10
E. Claims and Pending Motions
Zimmer sued AEC on September 5, 2023. AEC answered and
counterclaimed. (See doc. 17). In December 2023, Zimmer filed third-party
claims against Huffman and Travelers Casualty and Surety Company of
America. (See doc. 24). The parties settled those third-party claims, (see
docs. 67, 68), leaving only Zimmer and AEC suing each other.
This order deals with Zimmer’s four claims; two brought by ZP 360
related to the Terraces and two by ZP 361 related to the Boardwalk:
• Count 1: Breach of Contract. As assignee of the Terraces
subcontract, ZP 360 contends that AEC breached its obligations
under the subcontract by performing defective work, failing to
complete its scope of work, overbilling for work not performed,
causing damage to the Terraces site and adjacent properties, failing
to perform timely work, and removing materials from the Terraces
site without permission. (See doc. 6, pp. 8-9).
• Count 2: Negligence. As owner of the Terraces, ZP 360 claims that
AEC owed it a duty to perform work “in a reasonable and prudent
manner and in accordance with the applicable standard of care
exercise[d] by general contractors on the same or similar projects,
and in accordance with applicable Legal Requirements.” (Id., pp. 9-
10). ZP 360 says that AEC breached that duty and caused it to suffer
damages. ZP 360 also contends that AEC’s failure to comply with
applicable Legal Requirements “constitutes negligence per se under
Alabama law.” (Id.).
• Count 3: Breach of Contract. As assignee of the Boardwalk
subcontract, ZP 361 claims that AEC breached its contractual
obligations in the same manner described in Count 1. (See id., pp.
10-11).
• Count 4: Negligence. As owner of the Boardwalk, ZP 361 contends
that AEC breached its duty of care in the same manner described in
Count 2. (See id., pp. 11-12).
LEGAL STANDARD
Summary judgment is appropriate when the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, show there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving
party bears the initial burden of stating the basis for its motion and
identifying those portions of the record showing the absence of genuine
issues of material fact. Celotex, 477 U.S. at 323. The burden can be
discharged if the moving party can show the court that there is “an
absence of evidence to support the nonmoving party’s case.” Id. at 325.
When the moving party has carried its burden, the nonmoving party must
then designate specific facts showing that there is a genuine issue of
material fact. Id. at 324. Issues of fact are “genuine only if a reasonable
jury, considering the evidence present, could find for the nonmoving
party,” and a fact is “material” if it may affect the outcome of the case
under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-
49 (1986). In determining whether a genuine issue of material fact exists,
the court must consider all the evidence in the light most favorable to the
nonmoving party. Celotex, 477 U.S. at 323.
The standard of review on cross-motions for summary judgment is
no different from the standard applied when only one party files a motion.
Torres v. Rock & River Food Inc., 244 F. Supp. 3d 1320, 1327 (S.D. Fla.
2016) (citing Am. Bankers Ins. Grp. v. United States, 408 F.3d 1328, 1331
(11th Cir. 2005)). “Cross-motions for summary judgment will not, in
themselves, warrant the court in granting summary judgment unless one
of the parties is entitled to judgment as a matter of law on facts that are
not genuinely disputed.” United States v. Oakley, 744 F.2d 1553, 1555
(11th Cir. 1984) (internal quotation marks and citation omitted). Thus, “a
court must consider each motion on its own merits, resolving all
reasonable inferences against the party whose motion is under
consideration.” Torres, 244 F. Supp. 3d at 1327-28 (citing Am. Bankers
Ins. Grp., 408 F.3d at 1331).
DISCUSSION
Both parties move, at least partially, for summary judgment on
Zimmer’s four claims. Zimmer also moves to strike AEC’s amended
answer and affirmative defenses. The court starts by analyzing AEC’s
motions and then moves to Zimmer’s motions.
I. AEC’s Motion for Summary Judgment on Zimmer’s Claims
AEC moves for summary judgment on ZP 360 and ZP 361’s claims
on the same grounds. Those grounds are: (1) Zimmer cannot meet the
elements of negligence per se or negligence and (2) Zimmer’s breach of
contract claims fail under Alabama law.
A. Zimmer’s Negligence Claims: Counts 2 and 4
To begin, AEC contends that Zimmer cannot sustain claims for
negligence per se. While Zimmer does allege in Counts 2 and 4 that AEC’s
deficient work “constitutes negligence per se under Alabama law,”
Zimmer clarified in its response briefs that it only brings claims for
common law negligence. (See doc. 6, pp. 10, 12; see also doc. 101, p. 34).
Because Zimmer has abandoned any claims for negligence per se, the
court will grant AEC’s motion for summary judgment on Counts 2 and 4
as much as they raise claims for negligence per se. With that said, Zimmer
adequately pleads common law negligence. So the court will examine
those claims.
To establish negligence under Alabama law, Zimmer must provide
evidence to support the standard elements: (1) duty, (2) breach, (3)
causation, and (4) damages. See Albert v. Hsu, 602 So. 2d 895, 897 (Ala.
1997). In the operative complaint, Zimmer pleads that (1) AEC owed a
duty “to perform its work in a reasonable and prudent manner in
accordance with the applicable standard of care exercise[d] by general
contractors on the same or similar projects”; (2) AEC “breached its duty of
care … by performing defective work, causing damage to the [projects] and
adjacent properties, … and performing its work on the [projects] in
violation of applicable Legal Requirements”; and (3) as a “direct and
proximate result of [AEC’s] negligence, [Zimmer incurred] substantial
additional construction and repair costs, property damage, and delay
damages[.]” (Doc. 6, pp. 9-10, 12-13).
AEC contests the breach, causation, and damages elements.
Specifically, AEC argues that Zimmer’s negligence claims fail because
(a) AEC cannot be held to Zimmer’s pleaded standard of care (i.e., that of
“general contractors on the same or similar projects”), (b) Zimmer failed
to produce evidence from a licensed subcontractor in AEC’s line of work
that AEC breached the standard of care, (c) Zimmer failed to produce
evidence of defective work, and (d) Zimmer failed to produce evidence
reflecting costs that it incurred from the alleged project damage or
completion costs. (See docs. 91, pp. 18-21; 93, pp. 17-20). AEC also
contends in its reply brief that Zimmer’s negligence claims fail because
they are incompatible with Zimmer’s breach of contract claims. (See doc.
106, p. 14).
1. Standard of Care Argument. Zimmer pleads that AEC owed a
duty “to perform its work in a reasonable and prudent manner and in
accordance with the applicable standard of care exercise[d] by general
contractors on the same or similar projects[.]” (See doc. 6, pp. 9, 12)
(emphasis added). AEC contends this assertion is “problematic” because
“AEC was not the general contractor on the project, rather it was a
subcontractor[.]” (Docs. 91, p. 18; 93, p. 17). AEC is correct that the
applicable standard of care for its conduct is that of a subcontractor—not
a general contractor. But whatever difference that label yields is
inconsequential for purposes of summary judgment. Zimmer’s complaint
makes clear that AEC was a subcontractor and that Zimmer seeks to hold
AEC liable for negligence as a subcontractor. So, looking at the complaint
in its entirety, the court finds no reason to grant AEC summary judgment
based on the technical language Zimmer used in Counts 2 and 4. See
Smith v. Commissioner, Ala. Dep’t of Corr., 2021 WL 4916001, at *2 (11th
Cir. Oct. 21, 2021) (refusing to “prioritize the form of the pleadings over
their substance”); see also Fed. R. Civ. P. 8(e) (“Pleadings must be
construed as to do justice.”).
2. Expert Qualifications Argument. Next, AEC argues that
Zimmer has “failed to meet its burden to maintain its negligence claims”
because it didn’t “produce[] evidence from a licensed subcontractor, who
works in the same line of work of AEC, that AEC breached any standard
of care” on the projects. (See docs. 91, pp. 18-19; 93, pp. 17-18). This
argument fails.
Zimmer’s expert, David Marsh, opined that AEC provided defective
work at both project sites. (See doc. 80-3, pp. 9-14). And while Marsh is
not a “licensed subcontractor,” that gap in his qualifications isn’t
disqualifying. Indeed, courts determine an expert’s qualifications by
assessing his knowledge, skill, education, training, and experience—not
solely his professional licensure. See United States v. Frazier, 387 F.3d
1244, 1260-61 (11th Cir. 2004) (en banc). Marsh is a licensed professional
engineer in Alabama with over 19 years of experience in engineering and
project management. (See doc. 83-1, pp. 4-5). He’s familiar with relevant
industry standards applicable to AEC’s workmanship. And he works for
Engineering Consulting Services, a construction firm in Huntsville that
was involved with the Terraces and Boardwalk projects. So his overall
qualifications render him fit to provide opinions in this case.
At bottom, “a witness is qualified as an expert if he is the type of
person who should be testifying on the matter at hand.” Moore v. Intuitive
Surgical, Inc., 995 F.3d 839, 852 (11th Cir. 2021). Because Marsh fits that
bill, the court will deny AEC’s motion for summary judgment based on
Marsh’s qualifications. AEC, of course, can argue any shortcomings it
perceives in Marsh’s qualifications to a jury.
3. Defective Work Argument. AEC also contends that, even if
Marsh is qualified to provide opinions on defective work, he did not
sufficiently identify property damage caused by AEC at either the
Terraces or Boardwalk sites.
AEC is wrong. According to Marsh’s expert report, AEC inflicted
physical damage to the Boardwalk site by “clearing beyond authorized
construction limits.” (See doc. 80-3, p. 12). More specifically, Marsh says
that AEC left a shear cut in the Boardwalk Phase 2 area and that this cut
is “not stable long-term and should be anticipated to erode and slough.”
(Id.). While Marsh couldn’t quantify how much Zimmer would be forced
to spend to correct this defective work, he noted that it could impose a
“very significant cost” to “restore the area to the pre-development
condition.” (Id.).
Marsh identified even more examples of AEC’s defective work at the
Terraces site. For example, Marsh says in his report that AEC removed
“soil overburden that was suitable for reuse as fill” from the Terraces site.
(Id., p. 13). This was problematic, according to Marsh, because it led to “a
significant deficit in soil material quantity as the final grading
progressed.” (Id.). Marsh also says that AEC damaged the Terraces site
by, once again, “clearing beyond authorized construction limits.” (Id.).
According to Marsh, AEC “cleared and partially graded” a vegetative
buffer at the eastern side of the Terraces site, which “create[d] more
susceptibility of the site to erosive forces” and resulted in “run off faster
than the Civil Engineer designed the site to handle.” (Id.). Finally, Marsh
notes in his report that AEC “overexcavat[ed]” rock beyond the basement
walls for Buildings A1, A2, and A3. (Id.). Marsh says this defective work
“required far greater volume of fill to backfill the [basement] walls and
[caused] significant delay to replace the excessive excavation.” (Id.).
As shown, Marsh identified specific examples of “defective work” by
AEC that delayed the projects and caused Zimmer to bear remediation
costs. So AEC is not entitled to summary judgment based on its argument
that Marsh failed to identify property damaged caused by AEC.
4. Damages Argument. AEC next contends that Zimmer “failed
to provide any other form of credible evidence reflecting costs it incurred
from the alleged site damage or completion costs.” (Docs. 91, p. 20; 93, p.
19). AEC argues that Zimmer’s claimed damages, reflected in a
spreadsheet and informed by remediation costs submitted by Buffalo
Builders, are speculative and do not specifically identify the costs Zimmer
incurred to fix AEC’s defective work.
AEC is correct that Zimmer’s experts can’t precisely determine the
amount of damages Zimmer incurred because of AEC’s allegedly defective
work. Marsh, for example, attributes blame for the defective shear cut at
the Boardwalk site to AEC but states that Huffman’s “lack of oversight
and control” also contributed to Zimmer’s remediation costs. (See doc. 80-
3, p. 12). But that’s where Alabama rules on tort liability kick in. Under
Alabama law governing joint and several liability, “[a] tort-feasor whose
negligent act or acts proximately contribute in causing an injury may be
held liable for the entire resulting loss.” Holcim (US), Inc. v. Ohio Cas.
Ins. Co., 38 So. 3d 722, 729 (Ala. 2009) (quoting Nelson Bros., Inc. v. Busby,
513 So. 2d 1015, 1017 (Ala. 1987)). Because Zimmer has provided evidence
that AEC engaged in defective work that proximately caused Zimmer to
suffer remediation and delay costs, AEC can be held liable for the entire
resulting loss. Thus, AEC is not entitled to summary judgment based on
Zimmer’s failure to pinpoint the damages AEC caused.
5. Reply Brief Argument. Finally, AEC contends in its reply
brief that Zimmer cannot sustain negligence claims because they arise
from a “breach of promise within the [subcontracts].” (Doc. 106, p. 14).
This argument fails for two reasons. First, AEC waived the argument by
waiting to raise it until the reply brief. See In re Egidi, 571 F.3d 1156,
1163 (11th Cir. 2009) (“Arguments not properly presented in a party’s
initial brief or raised for the first time in the reply brief are deemed
waived.”). Second, even if AEC hadn’t waived the argument, it would still
likely fail because Zimmer can pursue negligence claims based on AEC’s
negligent affirmative conduct in its performance of the subcontracts. See
Morgan v. S. Cent. Bell Tel. Co., 466 So. 2d 107, 114 (Ala. 1985) (stating
that while there is “no tort liability for nonfeasance for failing to do what
one has promised,” there can be tort liability “for misfeasance, or negligent
affirmative conduct in the performance of a promise”). Here, Zimmer
claims that AEC engaged in misfeasance by damaging the project sites.
Those claims sound in tort and are actionable under Alabama law.
——
In sum, the court will grant AEC’s motions on Counts 2 and 4 as
much as Zimmer raises claims for negligence per se. But the court will
deny AEC’s motions as applied to Zimmer’s common law negligence
claims.
B. Zimmer’s Breach of Contract Claims: Counts 1 and 3
AEC next challenges Zimmer’s breach of contract claims in Counts
1 and 3. To prove a breach of contract under Alabama law, Zimmer must
establish (1) the existence of a valid contract binding the parties; (2) its
own performance under the contract; (3) the defendant’s nonperformance;
and (4) damages. S. Med. Health Sys., Inc. v. Vaughn, 669 So. 2d 98, 99
(Ala. 1995).
Zimmer asserts its breach of contract claims as the assignee of the
subcontracts between Huffman and AEC. See Nissan Motor Acceptance
Corp. v. Ross, 703 So. 2d 324, 326 (Ala. 1997) (“A valid assignment gives
the assignee the same rights, benefits, and remedies that the assignor
possesses.”). As assignee, Zimmer claims that AEC breached both
subcontracts by: (a) performing defective work; (b) failing to complete its
scope of work; (c) overbilling ZP for work that was not performed; (d)
causing damage to the project sites and adjacent properties; (e) failing to
timely perform its work; (f) removing materials from the site without
approval; and (g) performing its work in violation of “Legal
Requirements.” (See doc. 6, pp. 8-12).
AEC challenges Zimmer’s breach of contract claims on the following
grounds: (1) Zimmer is prohibited under Alabama law from acting as its
own general contractor; (2) Zimmer’s “contract damages” are misplaced;
(3) Zimmer cannot assert delay damages as assignees of the subcontracts;
(4) AEC was not bound by a project schedule; (5) Zimmer is not entitled to
attorneys’ fees; and (6) Zimmer’s delay damages are barred by accord,
satisfaction, and release. (See docs. 91, p. 2; 93, p. 2). The court walks
through each argument in turn.
1. Legal Prohibition Argument. To start, AEC contends that
Alabama Code § 34-8-1(a) prohibited Zimmer from taking assignment of
the subcontracts because Zimmer lacks an appropriate license to engage
“in the business of general contracting.” (See docs. 91, p. 22; 93, p. 21).
Because AEC’s argument rests on the interpretation of an Alabama
statute, the court starts with its text. When the parties signed the
subcontracts, the Alabama Code defined a “general contractor” as follows:
(a) For the purpose of this chapter, a ‘general contractor’ is
defined to be one who, for a fixed price, commission, fee, or
wage undertakes to construct or superintend or engage in
the construction, alteration, maintenance, repair,
rehabilitation, remediation, reclamation, or demolition of
any building, highway, sewer, structure, site work,
grading, paving or project or any improvement in the State
of Alabama where the cost of the undertaking is fifty
thousand dollars or more, shall be deemed and held to have
engaged in the business of general contracting in the State
of Alabama.
Ala. Code § 34-8-1(a).4 Building on this definition, Ala. Code § 34-8-6(a)
makes it a crime for any person or entity without a valid general
contracting license to engage in the business of general contracting:
(a) Any person, firm, or corporation not being duly
authorized who shall engage in the business of general
contracting in this state, except as provided for in this
chapter, and any person, firm, or corporation presenting or
attempting to file as its own the license certificate of
another, or who shall give false or forged evidence of any
kind to the board, or to any member thereof, in obtaining
a certificate of license, or who falsely shall impersonate
4 The Alabama Legislature amended this provision in 2024 and raised the statutory threshold
from $50,000 to $100,000.
another, or who shall use an expired or revoked certificate
of license shall be deemed guilty of a Class A misdemeanor
and for each offense for which he or she is convicted shall
be punished as provided by law[.]
Alabama courts have applied versions of the above provisions in cases
where an unlicensed contractor seeks to recover against an owner in
contract. See, e.g., Architectural Graphics and Const. Servs., Inc. v.
Pitman, 417 So. 2d 574, 576-77 (Ala. 1982). In those cases, courts have
consistently refused to enforce commercial contracts that exceed the
statutory threshold because, according to the courts, the parties entered
into the contracts illegally. See id.; see also Hawkins v. League, 398 So. 2d
232, 237 (Ala. 1981) (reversing a judgment for an unlicensed general
contractor because it did not have a valid general contractor’s license).
With that background law in mind, AEC contends that Zimmer’s
claims for breach of the subcontracts must fail because, when Zimmer took
assignment of the subcontracts from Huffman, it did not hold a valid
general contractor’s license. Put differently, AEC asks the court to find
the assignments (and by extension, the subcontracts) void because
enforcing them would be to enforce illegal contracts.
AEC is right that Zimmer didn’t hold a general contractor’s license
when it took assignment of the contracts. But that doesn’t matter.
Remember, Ala. Code § 34-8-1(a) defines a “general contractor” as one who
“for a fixed price, commission, fee, or wage” undertakes construction
projects in Alabama above the statutory threshold cost. Zimmer didn’t
take assignment of the subcontracts and then charge itself a “fixed price,
commission, fee or wage[.]” So it doesn’t meet the statute’s definition of a
“general contractor” “engaged in the business of general contracting.” And
since it doesn’t meet that definition, the illegality provisions found in § 34-
8-6(a) don’t apply to the assignments.
This interpretation is strengthened by a neighboring “owner’s
exemption” provision found in Ala. Code § 34-8-7(a)(3). That provision
exempts “a person, firm, or corporation constructing a building or other
improvement on his, her or its own property” from licensing requirements
“provided that any of the work contracted out complies with the definition
in this chapter for general contractor.” Zimmer, while assignee of the
subcontracts, still maintained its status as an entity “constructing a
building or other improvements” on its own property. Coupled with the
plain reading of § 34-8-1(a)’s definition of a general contractor, this
provision shows that Alabama’s statutory scheme doesn’t invalidate the
subcontract assignments.
Likely sensing that the statute’s language cuts against its position,
AEC latches on to Ala. Admin. Code r. 230-X-1-.07, which provides:
A person, firm, or corporation which undertakes to
construct a building or other improvements on his/her own
real property (Exception--is long term lease with option to
extend/or purchase as in an Industrial Development Board
situation) is not required to be licensed as a general
contractor if the person, firm or corporation’s own forces
(non-contractual) are used. An owner/builder may only let
and/or award contracts for work in the amount of $50,000
($5,000 for swimming pools) or greater to a properly
licensed prime contractor.
According to AEC, this administrative code provision makes Zimmer an
unlicensed general contractor because, at the time it took assignment of
the subcontracts, the project work was being performed by subcontractors
rather than Zimmer’s employees.
The court rejects this argument for a few reasons. First, the
Alabama Supreme Court has cautioned courts from reading
administrative codes in a way that narrows or alters statutes, and
adopting AEC’s reading of the administrative code would do exactly that
here. See Ex Parte Jones Mfg. Co., 589 So. 2d 208, 210-11 (Ala. 1991) (“[A]
regulation cannot subvert or enlarge [a] statutory policy” and a general
grant of regulatory authority “cannot override the specific provision” of a
statute). Second, AEC cannot point to any binding Alabama case law that
adopted and applied AEC’s view of the administrative code on a similar
set of facts. And third, Alabama case law suggests that courts shouldn’t
enforce the licensing statutes to void contracts unless it’s shown that an
unlicensed general contractor intended to circumvent licensing
requirements. See Med Plus Props. v. Colock Const. Grp., Inc., 628 So. 2d
370, 375 (Ala. 1993). AEC hasn’t made that showing here.
To sum up, the court finds that Zimmer’s assignment of the
subcontracts is not voided by Alabama’s general contractor licensing
requirements. So the court will deny AEC’s motion for summary judgment
on that ground.
2. Misplaced Damages Argument. AEC next contends that
Zimmer cannot recover certain categories of damages it claims because
the damages “do not flow from its capacity as assignee to the
[subcontracts]” but instead “reflect financial losses which are uniquely
limited to [Zimmer’s] capacity as the project owner.” (See docs. 91, p. 25;
93, p. 24). These challenged damages categories include: (1) interest
expense for an investor in Zimmer; (2) loss of rents that may have been
earned had the projects been completed on time; (3) opportunity costs
Zimmer incurred because of market condition changes that occurred
between the projected date of completion and the actual date of
completion; and (4) increased management costs incurred by Zimmer
between the projected date of completion and the actual date of
completion.
AEC is right that Zimmer can’t recover these damages. Under
Alabama law, “a valid assignment gives the assignee the same rights,
benefits, and remedies that the assignor possesses.” Nissan Motor Corp.,
703 So. 2d at 326. So Zimmer, as assignee, gets the “same rights, benefits,
and remedies” that Huffman would have possessed if Huffman had
remained the general contractor. See id. Section 7.1.2 to the subcontracts
expressly permits the general contractor to recover from AEC “all
associated costs, expenses, and other damages, including but not limited
to associated legal fees and any amounts paid to correct and/or complete
the Subcontract Work (plus 15%) that, together with all other funds paid
to complete any portion of the Subcontract Work, exceed the Subcontract
Amount established under [these] agreement[s].” (See docs. 84-2, p. 144;
88-9, p. 23). Exhibit A to the subcontracts also states that AEC is
“responsible [for] all remedial/corrective costs” if its work fails to comply
with the subcontracts. (See docs. 84-2, p. 152; 88-9, p. 31). But nothing in
the subcontracts permits Zimmer—standing in Huffman’s shoes as the
subcontractor assignee—to recover damages only relevant to Zimmer’s
role as the owner of the Terraces and Boardwalk.
Zimmer admits that completion and correction costs “are the
strongest category of damages because they are explicitly contemplated
by the [subcontracts] that AEC assigned.” (See doc. 102, p. 33). Yet
Zimmer still contends that “AEC’s challenges to [Zimmer’s] recovery of
consequential damages such as lost rents, interest expenses, or
opportunity costs go the measure of damages at trial—not to whether
[Zimmer] is entitled to any recovery.” (Id.). That’s not entirely correct.
While it’s true that certain categories of damages being unavailable
doesn’t doom Zimmer’s breach of contract claims, it’s not true that all
“consequential damages … go to the measure of damages at trial.” (See
id.). Zimmer filled Huffman’s shoes under the subcontracts, so Zimmer
can only recover what Huffman could’ve recovered had the subcontracts
not been assigned and Huffman sued AEC. See Nissan Motor Corp., 703
So. 2d at 326 (“A valid assignment gives the assignee the same rights,
benefits, and remedies that the assignor possesses.”) (emphasis added).
Because Huffman couldn’t have recovered opportunity costs or any other
damages unique to Zimmer as the owner of Terraces and Boardwalk,
Zimmer can’t either. The court will therefore grant in part AEC’s motion
for summary judgment on Counts 1 and 3. Zimmer may not seek to recover
breach of contract damages at trial except those that are specifically
available to it as assignee of the subcontracts.
3. Delay Damages Argument. AEC also attacks Zimmer’s claim
for “delay damages” on the grounds that it’s disallowed by Art. 3.4 of the
subcontracts. Art. 3.4 provides:
Delays Caused by Subcontractor. In the event
liquidated damages are provided for and assessed by
Owner against Huffman under the Prime Contract,
Huffman may, in addition to any other available remedies
or damages, assess against or otherwise recover from
Subcontractor a share of the damages in proportion to the
Subcontractor’s share of the responsibility for the
damages. Subcontractor may be assessed a minimum of
$1,000 per calendar day for each day the Subcontractor
fails to meet the portion of the schedule attributed to its
work or for each calendar day beyond allotted contract
time that Subcontractor is not complete with its work.
(Docs. 84-3, p. 12; 88-9, p. 12). AEC interprets this provision to limit
Zimmer’s right “to assert delay damages against AEC only to the extent
it asserted liquidated damages against Huffman.” (Docs. 91, p. 28; 93, p.
27). And because Zimmer didn’t assert liquidated damages against
Huffman before settling its claims with Huffman, AEC says that Zimmer
cannot seek delay damages now as assignee of the subcontracts.
Zimmer argues in response that its delay damages stem from §
7.1.2’s broad damages provision—not Art. 3.4’s narrow one. According to
Zimmer, § 7.1.2 applies in instances where the general contractor
terminates the subcontracts “for cause,” which is what happened here. So,
Zimmer says, AEC’s reading of Art. 3.4 “would render the termination-
for-cause remedies meaningless by eliminating delay damages in every
case where the owner settled with the general contractor without seeking
liquidated damages.” (See docs. 101, pp. 30-31; 102, p. 31).
Zimmer has the better argument. Art. 3.4, by its plain language,
only applies “in the event liquidated damages are provided for and
assessed by [Zimmer] against Huffman under the Prime Contract.” (Docs.
88-5, p. 3; 88-9, p. 12) (emphasis added). Further, Art. 3.4 specifically
notes that Zimmer (as assignee) may possess “any other available
remedies or damages.” (Id.). So Zimmer’s claim for delay damages isn’t
cabined by Art. 3.4.
AEC argues in the alternative that, even if “delay damages were
recoverable, … AEC is only responsible for its share of responsibility for
the same.” (Docs. 91, p. 28; 93, p. 27). According to AEC, Zimmer’s delay
expert John Dillon “could not allocate responsibility for delays at [the
projects],” so Zimmer can’t maintain claims for delay damages under the
subcontracts. Perhaps, but the court finds this issue is better suited for
resolution at trial because Dillon could identify certain delays caused
solely by AEC. (See doc. 85-2, p. 10). It may turn out that Zimmer can’t
attribute all (or even most) delays to AEC, but that doesn’t bar the delay
damages at the Rule 56 stage because Zimmer provides enough evidence
to allow a reasonable juror to assess some delay damages. So the court
will deny AEC’s motion for summary judgment on Counts 1 and 3 based
on its delay damages argument.
4. Project Schedule Argument. AEC separately argues that,
even if Zimmer can recover delay damages under the subcontracts, “AEC
was not bound by a schedule for the [projects],” so there is no basis to find
that a delay occurred. (See docs. 91, p. 29; 93, p. 28). This argument is also
best reserved for trial. The subcontracts contemplated that AEC would
“prosecute” its work “in strict accordance with [the general contractor’s]
schedule and sequencing directives and to otherwise prosecute the work
diligently and in cooperation with others contributing to the work … so as
to not hinder in any way [the general contractor’s] compliance with its
project schedule, milestone dates, and completion deadlines.” (See doc. 84-
2, p. 133). But there is conflicting evidence on whether the parties adopted
a binding schedule.
On one hand, Zimmer contends that Huffman provided AEC with
schedules for the Terraces and Boardwalk projects, and there are email
communications between Huffman and AEC personnel that show, at the
very least, Huffman and AEC exchanged “forecast” schedules. (See docs.
88-3, p. 2; 88-10, p. 3). On the other hand, AEC’s corporate representative,
Bennett Steele, states in his affidavit that “AEC never agreed to a
schedule and no schedule was ever made part of the [subcontracts].” (Docs.
86-1, p. 2; 86-2, p. 2). And when Zimmer’s corporate representative was
asked during his deposition whether he had seen any email
communications “where AEC agreed to be bound by any schedule(s) for
the time frame [Huffman] was on the job,” he said he had not. (See doc.
87-4, p. 18; see also doc. 86-3, p. 13). It could be the case that Huffman
should have provided AEC a definitive schedule for the projects and
neglected to do so. It could also be the case that Huffman treated the
circulated schedules as binding under the subcontracts. But that’s a
genuine fact question this court can’t answer. Instead, the court must
assume at the Rule 56 stage that the jury would side with Zimmer (the
nonmoving party). As a result, the court will deny AEC’s motion for
summary judgment on Counts 1 and 3 based on the argument that AEC
never agreed to project schedules.
5. Attorneys’ Fees Argument. AEC also argues that Zimmer
cannot recover attorneys’ fees for its breach of contract claims. A few
different provisions in the subcontracts discuss attorneys’ fees, so the
court outlines them below.
Art. 6.1 of the subcontracts acts as an indemnitee provision and
states, in relevant part:
Subcontractor agrees to defend, indemnify, and hold
harmless Huffman, Owner, General Contractor,
[collectively, “Indemnitees”]… from and against any and
all claims, actions, suits, causes of action, losses, damages,
fines, judgments (including amounts paid in settlement),
and all other costs, expenses, and charges of every kind
and nature whatsoever (including reasonable attorneys’
fees), incurred by or asserted against any of the
Indemnitees, which arise out of or relate to the
performance or nonperformance of the Subcontract Work
or any breach of this Agreement by Subcontractor, or any
other act, omission, or neglect by Subcontractor or any of
Subcontractor’s subcontractors, subsidiaries, or affiliates,
… in connection with or otherwise relating to the
Project[s], without regard to the cause or causes thereof[.]
(Docs. 84-3, p. 18; 88-9, p. 18). Section 7.1.2 also discusses attorneys’ fees
but in the termination for cause context:
[I]f Subcontractor fails to commence and diligently
continue correction to the satisfaction of [general
contractor] within 48 hours of [the second notice of breach]
[general contractor] may issue a notice terminating this
Agreement for cause and shall be entitled to recover from
Subcontractor all associated costs, expenses, and other
damages, including, but not limited to, associated legal
fees and any amounts paid to correct and/or complete the
Subcontract Work (plus 15%) that, together with all other
funds paid to complete any portion of the Subcontract
Work, exceed the Subcontract Amount established under
this Agreement.
(Docs. 84-3, p. 23; 88-9, p. 23). Finally, § 7.4.2 discusses attorneys’ fees in
the bankruptcy context:
If Subcontractor is not performing in accordance with the
Progress Schedule at the time a petition in bankruptcy is
filed, or at any subsequent time, [general contractor], while
awaiting the decision of the Subcontractor or its trustee to
reject or to assume this Agreement and provide adequate
assurance of its ability to perform, may avail itself of such
remedies under this Article as are reasonably necessary to
maintain the Progress Schedule. [General contractor] may
offset against any sums due to or become due to
Subcontractor all costs incurred in pursuing any of the
remedies provided including … attorneys’ fees.
(Docs. 84-3, p. 24; 88-9, p. 24).
Neither Art. 6.1 nor § 7.4.2 offer Zimmer the option to recover
attorneys’ fees in this case. Art. 6.1 doesn’t apply because it is an
indemnitee provision that requires AEC to “defend, indemnify, and hold
harmless” the general contractor and Zimmer when they are sued for
damages caused by AEC’s performance under the subcontracts. And §
7.4.2 doesn’t apply because its sole application arises in the bankruptcy
context.
Section 7.1.2 is different. It broadly permits the general contractor
(here, Zimmer as the assignee) “to recover from [AEC] all associated
costs, expenses, and other damages, including but not limited to,
associated legal fees and any amounts paid to correct and/or complete the
Subcontract Work (plus 15%)” that relate to AEC’s termination and
defective work. (Docs. 84-3, p. 23; 88-9, p. 23) (emphasis added). For
relevant purposes, Zimmer sued AEC to recover costs it expended by
terminating AEC and hiring other contractors to repair and finish AEC’s
work. So Zimmer’s attorneys’ fees can fit within § 7.1.2’s gamut.5
To be sure, Zimmer’s corporate representative struggled to identify
how all of Zimmer’s claimed attorneys’ fees and legal expenses related to
AEC’s breach and termination. (See doc. 86-3, pp. 60-62). But that is not
a reason to grant summary judgment because the court finds that at least
some of Zimmer’s claimed attorneys’ fees may be recoverable. At trial,
Zimmer must be able to show how its claimed attorneys’ fees fit within §
7.1.2.
6. Accord, Satisfaction, and Release Argument. Finally, AEC
contends that Zimmer’s claims for delay damages are barred by accord,
5 ZP 361 did not respond to AEC’s attorneys’ fees argument. Even so, the court must examine
the evidentiary record—including the subcontracts—to determine whether AEC is entitled to
summary judgment. See Ogwo v. Miami Dade Cnty. Sch. Bd., 702 Fed. App’x 809, 810 (11th Cir.
2017) (“The non-movant’s failure to respond to a defendant’s motion for summary judgment is
not fatal; rather, the court must determine if the facts in the record illustrate that the movant
is entitled to summary judgment.”). Because the court finds that the record undercuts AEC’s
argument on attorneys’ fees, ZP 361’s failure to respond does not warrant summary judgment.
satisfaction, and release because Zimmer settled with Huffman rather
than asserting delay damages against Huffman.6 The court presumes that
AEC is relying on Art. 3.4 of the subcontracts, which provides a
mechanism for recovering liquidated damages if AEC caused delays. (See
supra part I.B.3). There are a few problems with this argument. For one,
the court has already determined that AEC can seek delay damages under
§ 7.1.2 of the subcontracts. For another, the settlement agreement
released Huffman—not AEC. AEC can be held independently liable for its
alleged breaches of the subcontracts.
——
In sum, the court will grant in part and deny in part AEC’s motion
for summary judgment on Counts 1 and 3. Counts 1 and 3 will proceed to
trial, but Zimmer may only seek to recover damages as permitted by the
subcontracts. The parties (and the court, if necessary) will work to define
the available damage categories in the pretrial order.
II. Zimmer’s Partial Motion for Summary Judgment on its
Claims
Zimmer moves for partial summary judgment on its breach of
contract claims in Counts 1 and 3. As a refresher, Zimmer must prove the
following breach of contract elements: (1) the existence of a valid contract
binding the parties; (2) Zimmer’s own performance under the contract; (3)
AEC’s nonperformance; and (4) damages. Vaughn, 669 So. 2d at 99.
As the court has found, genuine disputes of material fact preclude
summary judgment for AEC on Counts 1 and 3 (see supra part I.B). Those
genuine disputes of material fact likewise preclude summary judgment in
Zimmer’s favor. The court provides some examples below.
1. Fact Dispute: Binding Schedules. To start, there is a genuine
dispute whether binding schedules governed AEC’s subcontract work. As
discussed, Zimmer has provided emails showing that, at the very least,
6 AEC says that Zimmer’s “claims are barred by accord and satisfaction and release,” (docs. 91,
p. 32; 93, p. 31) (emphasis added), but its argument focuses on Zimmer’s claimed delay damages.
Huffman and AEC exchanged “forecast” schedules. But Zimmer’s
corporate representative admitted during his deposition that he had not
seen any proof that AEC agreed to a final schedule for its work. And AEC’s
corporate representative maintains that “AEC never agreed to a schedule
and no schedule was ever made part of the [subcontracts].” (Docs. 86-1, p.
2; 86-2, p. 2). So the court cannot say based on the current record whether
a definitive schedule governed the subcontracts. And because a reasonable
juror could go either way, the court must allow the delay issue to be tried.
2. Fact Dispute: Zimmer’s Damages. The parties also dispute
the availability and scope of Zimmer’s damages. Zimmer’s experts can’t
rule out whether Huffman or others contributed to or outright caused
certain delays. For example, the parties dispute when the necessary
“forms” to complete the Terraces’ retaining walls arrived. (Compare doc.
82-2, p. 40 with doc. 81-1, p. 49). This matters because Huffman was
supposed to build the retaining walls, and AEC could not complete the
upper-level pads without them. Under AEC’s version of events, the forms
didn’t arrive until April 2023—months after Zimmer claims that AEC
should have finished the upper-level pads. The parties’ expert reports
further lay bare disputes about whether AEC caused certain delays
Zimmer claims damages for.
3. Fact Dispute: AEC’s Defective Work. The parties also dispute
whether AEC engaged in defective work. For example, Zimmer’s damages
expert says in his report that AEC “overexcavat[ed]” rock beyond the
basement walls for Buildings A1, A2, and A3 at the Terraces, which
“required far greater volume of fill to backfill the [basement] walls and
[caused] significant delay to replace the excessive excavation.” (See doc.
80-3, p. 12). But AEC’s expert counters that AEC’s actions were justified
and necessary. (See doc. 82-2, p. 35).
——
The court could go on, but the point is made. Genuine disputes of
material fact prevent the court from deciding whether and to what extent
AEC breached the subcontracts and what damages Zimmer may recover.
Thus, the court will deny Zimmer’s partial motion for summary judgment
on Counts 1 and 38.
III. Zimmer’s Motion to Strike
Zimmer moves to strike AEC’s amended answer and affirmative
defenses because AEC added the affirmative defense of accord,
satisfaction, and release after its deadline to amend had passed. (See doc.
75). Because the court examined and rejected AEC’s accord, satisfaction,
and release argument, the court will deny Zimmer’s motion to strike as
moot.
CONCLUSION
For these reasons, the court (1) GRANTS IN PART and DENIES
IN PART AEC’s motions for summary judgment (docs. 78, 79); (2)
DENIES Zimmer’s partial motion for summary judgment (doc. 88); and
(3) DENIES Zimmer’s motion to strike AS MOOT (doc. 75). The court
will enter an accompanying order carrying out its ruling.
DONE and ORDERED on July 21, 2026.
COREY‘L. MAZE
UNITED STATES DISTRICT JUDGE
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