Publisher Debra A. Levy; twitter:@keycomm;  
Extension 111 •  
Editor Ellen Rogers  
Extension 118 •  
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Extension 131 •  
A Ruling with Legs  
Special Projects Megan Headley  
Editor Extension 114  
Contributing Tara Taffera, vice president  
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Trey Barrineau  
n interesting opinion by the Court of Appeals in the United States Seventh Cir-  
cuit came out in mid-April and it’s directly on point for contract glaziers.  
The opinion was in response to a decision by a U.S. District Court in  
Extension 130 •  
Casey Flores  
Extension 120 •  
Jenna Reed  
Wisconsin to grant a motion of summary judgement (agree to dismiss a lawsuit)  
in favor of Permasteelisa North America (PNA). PNA was the defendant in a case  
brought by general contractor C.G. Schmidt Inc. (CGS) in which CGS contended  
that PNA had walked away a from a contract at the last minute, leaving CGS to  
find an alternative glazing contractor at a higher price. CGS had alleged breach of  
contract and promissory estoppel.  
I know what breach of contract means, but I had to look up primary estoppel.  
It’s a principal of law that says,basically“I relied on your promise; now you are not  
keeping it and that hurts me.”The particulars of the case provided an illuminating  
insight into the fancy-dancing between the GC and glazing sub as they attempt to  
come to agreement on a job. In this case, CGS sent a blank contract and a manual  
that stated the bidder must accept all terms of the standard CGS subcontract as  
a condition for submitting a bid. Cute, but no atypical. PNA submitted a bid with  
a base price, pricing schedule, alternate pricing and project scope signed by a VP.  
In May 2013, CGS selected PNA, but said it was not ready to go to contract yet as  
it did not have finalized, signed contracts with the owner.  
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During the next 12 months, there was a lot of back-and-forth with value-engi-  
neering changes,price changes and discussions about some of the contract terms,  
which PNA raised a number of times.This continued for almost a year.A kick-off  
meeting attended by both sides was held in late March 2014.  
Producer Extension 121  
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Interestingly, a lot of the delay was because CGS had to continue to negotiate a  
Guaranteed Maximum Price Amendment with the owners of the project at 833  
East Michigan St. in Milwaukee. The amendments have become more and more  
popular with owners who try to insure a maximum cost to their building. From  
what I’ve seen over the past few years, mostly what they serve to do is give a  
GC an excuse to come back and re-negotiate a job with its subs after its been  
awarded.Negotiations over these amendments,more than other terms,have been  
the major hold-ups in a fair amount of construction work in the recent past.  
Anyway, court documents showed that CGS needed the amendment finalized  
and in place before it would commit to pay PNA. That finally happened but there  
was still discussion about some of the terms, including the usual big two: liqui-  
dated damages and delay damages. On June 13, 2014, CGS sent over a contract.  
The pricing around the job is also indicative of what happens in during the  
GC-CG dance in which half the value of the job somehow disappears. PNA origi-  
nally submitted a bid to construct the curtainwall for $12,675,421.After CGS had  
agreed to the guaranteed price amendment with the owner and consulted with  
PBA, PNA’s revised bid was sent out at $8,047,368. Yet, six days later the general  
sent over a revised draft with a price about $220,000 less and then another revi-  
sion eight days later for about $27,000 less. So on a job that was originally bid at  
nearly $13 million, the general contractor now had an expectation of purchasing  
it for $7.8 million.  
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continued on page 86  
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continued from page 4  
tainwall in Thailand, which was no longer a viable option due to civil unrest  
there, PNA refused to honor the bid and CGS sued.  
A U.S. district court judge ruled for PNA saying there was no contract to be  
breached, that both sides had never come to a meeting of the minds, and that  
CGS kept asserting it could not sign an agreement until all its terms were in  
place.The claim of promissory estoppel was thrown out because the court said  
that it was clear both sides intended to be bound by a final written agreement.  
The facts of every case are unique of course,but this one is a good reminder  
of how fuzzy, messed up and fragile the negotiation process is. In this case,  
both sides could not even agree on whether or not there was an agreement.  
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USGlass, Metal & Glazing | July 2016