Case Digest (G.R. No. 168074)
Facts:
Empire East Land Holdings, Inc. v. Capitol Industrial Construction Groups, Inc., G.R. No. 168074, September 26, 2008, Supreme Court Third Division, Nachura, J., writing for the Court.On February 12, 1997, Empire East Land Holdings, Inc. (petitioner/owner) and Capitol Industrial Construction Groups, Inc. (respondent/contractor) entered into a Construction Agreement for the supply and installation of the building shell wet construction works of Gilmore Heights Phase I. The contract provided a 330-calendar-day completion period from "Day 1," initially proposed as February 20, 1997 but later fixed as February 25, 1997 after the contractor could not start because a prior bulk excavation contractor had not turned over the site.
During performance the parties agreed to multiple changes: petitioner directed respondent to undertake excavation and side trimmings previously not in respondent’s scope; monthly target accomplishment was reduced to P1,000,000 and to one floor per month; certain masonry and other items (masonry from 6th floor to roof deck, exterior masonry from 4th floor to roof deck, and garbage chute) were deleted from respondent’s scope; and the contract price was reduced to P62,828,826.53. The parties agreed that items not completed by February 28, 1999 would be deleted and that joint quantification would determine deductions and costs to complete punch list items.
Respondent submitted final billing and later filed a Request for Adjudication with the Construction Industry Arbitration Commission (CIAC) on September 14, 1999 claiming unpaid billings, payment for additional works (including foundation excavation), overhead and labor-cost escalation — totaling P22,770,976.66 in its prayer. On May 16, 2000 the CIAC rendered a decision largely in respondent’s favor, awarding net sums and ordering Empire East to pay Capitol a net P7,765,631.81 plus interest and apportioning arbitration expenses; CIAC denied petitioner’s counterclaims for masonry and liquidated damages but awarded petitioner P248,350.00 for punch list items.
Petitioner sought review in the Court of Appeals via Rule 43. On November 3, 2004 the CA affirmed the CIAC decision with modifications: it deleted the CIAC award for labor cost escalation for lack of factual basis and reduced the award for foundation excavation to P980,376.34, resulting in a net judgment ordering petitioner to pay respondent P6,632,555.00. Petitioner then...(Subscriber-Only)
Issues:
- Whether the Court of Appeals committed reversible error in ordering the release of retention money in favor of CICG.
- Whether the Court of Appeals committed reversible error in awarding CICG the cost of foundation excavation.
- Whether the Court of Appeals committed reversible error in affirming CIAC’s award for additional overhead expenses.
- Whether the Court of Appeals committed reversible error in denying Empire East’s claims for masonry and other works, liquidated damages, and costs for ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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