Fairfax County Redevelopment And Housing Authority v. Worcester Brothers Company, Inc.

514 S.E.2d 147 (1999)

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Nature of the Case

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Facts

Fairfax (D) entered into a contract with Worcester (P) for site renovations and improvements of Washington Plaza and Lake Anne Village in Reston. There was a tight schedule in the bid with completion to be in 150 days from the notice to proceed. The contract was eventually awarded to P, and the completion date was moved back in time to mid-February 1996. At the time, P started work D had not yet obtained the necessary clearances from an adjoining property owner to allow work to proceed on part of the project site. Those clearances were not obtained until March 6, 1996. When the work was finished, P filed notice of potential change #15 with D’s architect seeking additional payment for field office expenses incurred on the job site due to the delay in D’s obtaining the clearances. P also claimed unabsorbed home office expenses from this delay. D’s architect denied the claims. P sued D seeking damages for a breach of contract for the failure to pay the #15 expenses. D defended on grounds that “Eichleay” home office damages were prohibited by Virginia law. P showed proof at trial that its actual field office expenses from the delay amounted to $46,359.11. P’s accounting system did not allocate its home office expenses to particular contracts. P’s president testified that home office expense for the delay amounted to $34,495.89. P’s accountants reflecting the total general and administrative expenses of P during the relevant contract period applied the Eichleay formula to those expenses calculated this sum from statements. D contended that P had no actual damages as a result of the delay and that the Eichleay formula did not constitute proof of actual damages to a reasonable degree of certainty. D contends that the Eichleay formula was merely a method for determining unabsorbed home office expenses attributable to a particular contract once the existence of such damages had already been proven by other evidence. D contends that there was no proof that P’s workforce was idle as a result in the delay in obtaining the clearances. The trial court ruled that it was the burden of P to show that D caused the delay, that its workforce was placed on standby as a result, and that it was unable to engage in other work projects during the delay. The trial court then ruled that D was responsible for the delay, it was egregious and inexcusable, that P’s workforce had been on standby because D could not get its act together and give a precise date but instead D created a rolling deadline. The court found that this rolling deadline prohibited P from seeking other work to minimize the damages from the delay. The court then ruled that D did not contend that any specific expenses were inappropriate under the Eichleay formula nor did D present any evidence as to why the formula was inappropriate. P got the verdict and D appealed.