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RQAW Corp. v. Dearborn County

Court of Appeals of Indiana

September 6, 2017

RQAW Corporation, Appellant-Plaintiff,
v.
Dearborn County, Indiana, Appellee-Defendant.

         Appeal from the Ohio Circuit Court No. 58C01-1308-PL-3 The Honorable Clay M. Kellerman, Special Judge

          Attorneys for Appellant Matthew L. Kelsey James R. Williams Defur Voran LLP Muncie, Indiana

          Attorney for Appellee Mark J. Crandley Barnes & Thornburg LLP Indianapolis, Indiana

          Bradford, Judge.

         Case Summary

         [¶1] In September of 2010, Appellant-Plaintiff RQAW Corporation ("RQAW") entered into a contract ("the Contract") with Appellee-Defendant Dearborn County, Indiana ("the County"), for certain architectural services connected to a project to renovate and expand the Dearborn County Jail ("the Project"). The Contract provided that RQAW would complete a Pre-Design Study, which would evaluate how to best meet the County's then-current and future needs. In relation to the Pre-Design Study, the parties agreed that the County would pay RQAW the sum of $90, 000. The Contract further indicated that any further work and the cost for such work would be determined at a later time. RQAW completed the Pre-Design Study and the County paid RQAW the agreed-upon $90, 000. After completion of the Pre-Design Study, the County decided to seek proposals from a number of architectural firms in connection to the design, bidding, and construction phases of the Project. Although RQAW submitted a proposal for this work, the County ultimately decided to move forward on the Project with a different architectural firm.

         [¶2]RQAW subsequently filed suit, alleging that the County had breached its contract with RQAW. RQAW also alleged that it was entitled to recover damages under the equitable theory of unjust enrichment. As to RQAW's breach of contract claim, the parties filed competing motions for summary judgment. As to RQAW's equitable claim, the County filed a motion for judgment on the pleadings. Following a hearing, the trial court granted the County's motion for summary judgment, denied RQAW's motion for summary judgment, and granted the County's motion for judgment on the pleadings. RQAW challenges these rulings on appeal. We affirm.

         Facts and Procedural History

         [¶3] In 2010, the County was faced with the need to complete the Project, which would result in necessary updates and/or additions to the Dearborn County Jail. In an effort to determine how to best serve its then-current and future needs, on September 21, 2010, the County entered into a contract with RQAW for certain architectural services, including a Pre-Design Study. The Contract indicated that following completion of the Pre-Design Study, RQAW would provide the County with recommendations as to how RQAW believed the County could best meet its needs.

         [¶4]The parties' Contract was made up of two standard AIA documents, [1]

         Document B102-2007 and Document B201-2007. Document B102-2007 provided a generalized scope of RQAW's basic services and made only a general reference to the phases of the Project which would come after the Pre-Design Study was completed. Document B102-2007 also provided certain provisions relating to the termination or suspension of the Contract. As to termination of the Contract, Document B102-2007 provided, in relevant part, as follows:

§ 5.5 The [County] may terminate this Agreement upon not less than seven days' written notice to [RQAW] for the [County's] convenience and without cause.
§ 5.6 In the event of termination not the fault of [RQAW], [RQAW] shall be compensated for services performed prior to termination, together with Reimbursable Expenses then due and all Termination Expenses as defined in Section 5.7.
§ 5.7 Termination Expenses are in addition to compensation for [RQAW's] services and include expenses directly attributable to termination for which [RQAW] is not otherwise compensated, plus an amount for [RQAW]'s anticipated profit on the value of the services not performed by [RQAW].

         Appellant's App. Vol. III, p. 74. Document B201-2007 provided a detailed description of RQAW's obligations and the services that RQAW would provide under each of the phases of the project including: (1) the Pre-Design Study, (2) the schematic design phase, (3) the design development phase, (4) the construction documents phase, (5) the competitive bidding phase, and (6) the construction phase. It also detailed additional services that would be provided by RQAW throughout the project. Neither Document B102-2007 nor B201-2007 provided a detailed scope of work or specific cost for the phases of the Project that would come after the Pre-Design Study, stating that such information would be determined at a later date.

         [¶5] After completion of the Pre-Design Study, the Dearborn County Board of Commissioners, the arm of the County government which had been direct contact with RQAW during the Pre-Design Study, presented RQAW's recommendations to the Dearborn County Council. The Council is the fiscal body for the County and is the body responsible for appropriating funds to pay for the Project.[2] At the Council's insistence, the Commissioners sought and accepted proposals for the design, bidding, and construction phases of the Project from a number of architectural firms, including RQAW. Although it believed that the Contract covered these additional phases, RQAW submitted a proposal for the scope of work that would be included in the design, bidding, and construction phases. The proposal also included the cost to complete these phases.

         [¶6]Ultimately, the County chose the proposal submitted by another architectural firm. On July 19, 2012, the County sent a letter to RQAW informing RQAW that as RQAW had completed the Pre-Design Study and the $90, 000 fee had been paid in full, the parties' Contract would be "deemed closed as of July 26, 2012." Appellant's App. Vol. IV, p. 73. The July 19, 2012 letter further stated that "[a]s a matter of record, the Dearborn County Board of Commissioners does not wish to extend the contract nor negotiate any fees with RQAW for any future phases of the proposed project at this time." Appellant's App. Vol. IV, p. 73.

         [¶7] RQAW subsequently filed suit, alleging that the County had breached the parties' Contract. In alleging that the County had breached the parties' Contract, RQAW acknowledged that both RQAW and the County met their obligations in connection to the Pre-Design Study. RQAW also acknowledged that that under Section 5.5 of the Contract, the County could terminate the Contract at any time so long as it gave RQAW seven days notice of the termination and paid certain sums to RQAW. RQAW alleged, however, that because the Contract covered the entire Project, the County breached the Contract by failing to pay termination expenses as provided for in Sections 5.6 and 5.7 of the Contract. For its part, the County argued that it was not required to pay termination expenses because the Contract applied only to the Pre-Design Study phase of the Project. Thus, the County claimed that it had met all of its obligations under the terms of the Contract.

         [¶8] RQAW also alleged that it was entitled to recover damages under the equitable theory of unjust enrichment. In doing so, RQAW incorporated its assertions relating to its breach of contract claim and asserted the following:

23. The architectural and engineering services provided by [RQAW] to [the County] related to the Dearborn County Jail renovation and addition project resulted in benefit to the [County].
24. [RQAW] undertook these efforts with an expectation of payment for its services pursuant to the Contract.
25. It is unjust to allow [the County] to retain the benefit of [RQAW]'s architectural and engineering services without paying ...

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