C.L. Maddox, Inc. v. Coalfield Services, Inc.

51 F.3d 76 (7th Cir. 1995)

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Nature of the Case

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Facts

P made a contract with Old Ben Coal Company for P to demolish a loading facility in a coal mine, haul the demolished steel structure to the surface, fabricate a new loading facility and install the new facility. P decided to fabricate the new structure but subcontracted all the rest of the work. D offered to demolish the steel structure and haul the remnants to the surface for $230,000. D didn't even need to inspect the facility, because it had done this sort of work before. D was confident his crew could do the job in three weeks it allowed to work on the project 24-7. D's crew traveled to the mine and D faxed a proposed contract to P. It specified a price of $230,000 and completion within three weeks if D was allowed to work day and night seven days a week. It required biweekly progress payments. P's president called D's president the same day, requesting the inclusion of a noncompetition clause; this was done by return fax. P said they would sign. They never did. D began work the next day. They encountered problems with the work and with P signing. Repeated requests to sign produced no results. On April 8, D ordered its crew to stop work and come to the surface with its tools and equipment. D faxed a letter stating that it would not proceed with the work without acceptance of the proposed contract and payment of an invoice for $103,500 enclosed with the letter. This was 45 percent of the contract price. P responded and agreed to pay less a 10 percent retention. P's letter extended the deadline for completion of the work from three weeks to four in recognition of the fact that the crew had not been permitted to work on Sundays. P also added a liquidated-damages clause for D to pay $1,000 for every day that the job took beyond the four-week deadline. D refused because it was clear that the deadline would not be met. D faxed a rejection of the liquidated damages. D's rejection accepted the1-week extension but also refused to complete the project unless P not only paid the $103,500 invoice but also accepted the terms in D's offer of May 19, with an exception for the date of completion. D stated that a realistic date of completion would be approximately five (5) to six (6) weeks. D also informed P that he had removed his crew and it would take 8 days to get them back into the site for work. P told D to restart work by April 9th or be in breach. P never resumed work and P sued for damages. D counterclaimed for its $103,500 invoice. Both parties moved for summary judgment. P's motion for summary judgment was initially granted, and D's was denied. The judge changed his mind and agreed with D that he had jumped the gun in deciding that D had been the one to break the contract. The case was tried before a magistrate judge, who ruled that P had broken the contract. D was awarded the $103,500. P appealed.