HILLSBOROUGH CTY. AVIATION A. v. Cone Bros. Contr. Co.
285 So. 2d 619 (1973)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A contract may permissibly contain clauses for both liquidated damages and actual damages, provided that each clause applies to a different type of breach or covers distinct elements of damages, and does not result in a double recovery for the same injury.
Facts:
- Hillsborough County Aviation Authority (the Authority) entered into a contract with Cone Brothers Contracting Company (Cone) for construction work at the Tampa International Airport.
- The contract contained a liquidated damages clause (Section 4) that specified daily monetary damages for delays in the substantial completion of the entire project.
- The contract also included a separate clause (Section 5) related to a 'critical path' schedule for certain essential phases of the work.
- This 'critical path' clause stated that if Cone failed to complete specific work elements within the allotted time, Cone would be liable for 'additional costs' incurred by the Authority.
- These 'additional costs' were described as payments the Authority might have to make to other subcontractors who were delayed by Cone's failure to adhere to the critical path schedule.
- Cone allegedly failed to complete its work on time, triggering both the overall delay provision and the critical path provision.
Procedural Posture:
- Hillsborough County Aviation Authority sued Cone Brothers Contracting Company in a Florida trial court.
- The Authority's complaint included two counts: Count I sought liquidated damages for general delay, and Count II sought actual damages for failing to meet critical path deadlines.
- The trial judge granted summary judgment for Cone on Count II, holding that the liquidated damages clause and the actual damages clause were incompatible.
- The Authority, as appellant, appealed the summary judgment on Count II to the District Court of Appeal of Florida, Second District, with Cone as the appellee.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a contract clause allowing for the recovery of actual damages for failing to meet specific, critical milestone dates irreconcilably conflict with a separate clause providing for liquidated damages for overall project completion delays?
Opinions:
Majority - Mann, Chief Judge
No. A clause providing for actual damages for specific performance failures is not incompatible with a liquidated damages clause for general delay, so long as they address different elements of damage. Parties competent to contract may agree that certain damages difficult to estimate are covered by a liquidated damages provision, while other elements are ascertained in the usual manner. Courts must interpret contracts in a way that gives effect to every provision, assuming each clause has a purpose. Here, the liquidated damages clause (Section 4) was intended to cover damages sustained by the Authority from a delay in the use of the new airport. The actual damages clause (Section 5) was intended to cover a separate harm: the 'additional costs' the Authority might incur by having to pay other subcontractors who were impacted by Cone's failure to follow the critical path schedule. Enforcing both is permissible, provided the trial court ensures the Authority does not recover twice for the same element of damages.
Analysis:
This decision clarifies that liquidated damages clauses are not automatically exclusive remedies. It establishes that parties can contractually create separate remedies for different types of breaches within a single project, such as general completion delay versus specific milestone failures. The ruling reinforces the principle of contract interpretation that presumes all clauses have a purpose and should be read harmoniously if possible. This precedent gives contracting parties, especially in complex construction projects, more flexibility to manage different risks with tailored remedies, but places a burden on trial courts to prevent double recovery.
