Narrative Opinion Summary
In a breach of contract dispute, Tri-County Metropolitan Transportation District of Oregon (Tri-Met) appealed a trial court judgment favoring Contractors, Inc. (CI). CI had contracted to build a bus garage for Tri-Met, opting to deposit securities instead of cash retainage. When subcontractors demanded withheld amounts, CI sought release of retainage from Tri-Met, which was refused, prompting CI to sue for the retainage and interest. The court initially granted Tri-Met a directed verdict, but upon appeal, found CI had fulfilled contractual obligations, entitling it to retainage. In 1989, the retainage was paid, making that issue moot. On remand, the focus was on CI's entitlement to penalty interest, with CI arguing it had duly notified Tri-Met of work completion. The court confirmed CI's notification was adequate, warranting penalty interest, and established this as the law of the case. Tri-Met's arguments against the classification of securities as retainage and the interest calculation were barred as they were resolved in prior proceedings. The court ultimately affirmed the judgment, emphasizing that only notice of completion was necessary for penalty interest, not actual completion or acceptance, and ruled in CI's favor for significant penalty interest under the statute.
Legal Issues Addressed
Calculation of Penalty Interest under ORS 279.435(2)subscribe to see similar legal issues
Application: The court ruled that the difference between CI's earnings on the securities and the statutory interest should be awarded to CI.
Reasoning: Tri-Met further argues against the court's award to CI of the difference between CI's earnings on the securities and the statutory interest, claiming the statute does not allow for this calculation.
Contractual Obligation to Pay Retainagesubscribe to see similar legal issues
Application: Tri-Met's obligation to pay retainage was contractual and supported by evidence that CI fulfilled the contract's close-out provision.
Reasoning: Upon appeal, it was determined that Tri-Met's obligation to pay retainage was contractual, and evidence supported that CI fulfilled the contract's close-out provision, thereby entitling it to retainage.
Definition of Retainage under ORS 279.410subscribe to see similar legal issues
Application: The court found Tri-Met barred from contesting the classification of securities as retainage, as this issue was resolved in the previous appeal.
Reasoning: However, the court finds Tri-Met barred from raising this argument on appeal, as it was implicitly resolved in the prior appeal.
Law of the Case Doctrinesubscribe to see similar legal issues
Application: The court reaffirmed its previous ruling that CI's notice was sufficient, establishing it as the law of the case.
Reasoning: On remand, the court reaffirmed that CI's notice was sufficient, and this ruling is now established as the law of the case.
Notice Requirement under ORS 279.435(3) and Former ORS 279.575(3)subscribe to see similar legal issues
Application: The court ruled that CI had properly notified Tri-Met of work completion, which required Tri-Met's response within 15 days.
Reasoning: CI argued that it notified Tri-Met of work completion in its letters, which the trial court confirmed, ruling in favor of CI for significant penalty interest under the statute.