{"id":900901,"date":"2023-03-01T15:23:38","date_gmt":"2023-03-01T22:23:38","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900901"},"modified":"2023-03-01T15:23:43","modified_gmt":"2023-03-01T22:23:43","slug":"contract-provision-might-be-enforced","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/","title":{"rendered":"Beware What Your Contract Says: It Just Might Be Enforced"},"content":{"rendered":"\n

Matthew Grashoff and Sonja Rice | Hahn Loeser & Parks<\/a><\/p>\n\n\n\n

When reviewing a contract, how often have you had the following thoughts: \u201cThat provision is so one-sided, there\u2019s no way it will be enforced the way it\u2019s written!\u201d Or \u201cI won\u2019t worry about negotiating that provision; a court would never enforce it as written.\u201d<\/p>\n\n\n\n

A recent decision from Ohio\u2019s Tenth District Court of Appeals illustrates the risks of that kind of thinking.\u00a0 The procedural history of the dispute is complex, but worth digesting for one important reminder: it\u2019s always better to negotiate troublesome provisions<\/a> yourself rather than counting on a judge or arbitrator to do it for you in the future.\u00a0 \u00a0\u00a0<\/p>\n\n\n\n

THE CLEVELAND CONSTRUCTION v. RUSCILLI CONSTRUCTION <\/em>CASE<\/strong><\/p>\n\n\n\n

In Cleveland Construction, Inc. v. Ruscilli Construction Co., Inc.<\/em>, 10th Dist. Franklin No. 18AP-480 and 21AP-375, 2023-Ohio-363, the Tenth District confronted a long-running construction dispute between a general contractor, Ruscilli Construction Company (\u201cRuscilli\u201d), and its subcontractor, Cleveland Construction, Inc. (\u201cCleveland\u201d).  The subcontract at issue contained an indemnification provision that stated, in relevant part, that Cleveland would \u201cindemnify and hold harmless [Ruscilli] from any against claims, damages, losses and expenses, including but not limited to its actual attorneys\u2019 fees<\/u><\/strong> incurred, arising out of or resulting from performance of\u201d the subcontract.  Id. at \u00b6 23 (emphasis added). The provision further stated: \u201cThis indemnity shall include, but not be limited to, the following: . . . The prosecution<\/u><\/strong> of any claim by [Ruscilli] against [Cleveland] or any of its subcontractors or suppliers for breach of contract, negligence or defective work [or] . . . The defense<\/u><\/strong> of any claim asserted by [Cleveland] against [Ruscilli] whether for additional compensation, breach of contract, negligence, or any other cause.\u201d  Id.<\/em> (emphasis added).<\/p>\n\n\n\n

Stated plainly: Cleveland agreed that if it ever brought a claim against Ruscilli, or Ruscilli brought a claim against Cleveland, Cleveland would pay all of Ruscilli\u2019s attorneys\u2019 fees. Surely no court or arbitrator would ever enforce such a provision, right? Well, dear reader, do you think you\u2019d be reading this article right now if that were the case?<\/p>\n\n\n\n

Various disputes arose between the parties and the case was ultimately tried to a three-member arbitration panel.  Ruscilli asserted claims against Cleveland for over $900,000 in damages resulting from Cleveland\u2019s alleged breach of contract, while Cleveland asserted various counterclaims totalling just under $1.4 million.  Of particular note, both sides requested an award of attorneys\u2019 fees. <\/p>\n\n\n\n

The arbitration panel ultimately determined that Cleveland was entitled to an award of just over $100,000 on its claims but was not entitled to an award of attorney fees.  However, the panel determined that Ruscilli was<\/u><\/strong> entitled to such an award. Relying on the indemnification language quoted above, the panel reasoned that \u201c[t]he Parties are two sophisticated commercial entities that entered into a negotiated, lengthy Subcontract agreement that included several specific provisions that shifted the risk of [Ruscilli\u2019s] attorneys\u2019 fees and costs onto [Cleveland] in any dispute between the parties<\/u><\/strong>.\u201d (Emphasis added.) Interestingly, while the indemnification provision provided for fee-shifting in Ruscilli\u2019s favor for both prosecuting and defending claims, the panel\u2019s award specifically cited only the provision for prosecuting claims. Accordingly, the panel directed Ruscilli to submit a petition for fees. Ruscilli submitted a total of $837,387 in attorneys\u2019 fees, expert fees, and related costs, of which the panel awarded $624,087.45 to Ruscilli.  After several years of further post-arbitration proceedings which are too complex to summarize here, Ruscilli was awarded an additional $86,805.96 by a magistrate judge. <\/p>\n\n\n\n

Both the arbitration panel and the magistrate judge\u2019s rulings were ultimately upheld by the Tenth District. Despite Cleveland\u2019s insistence that the post-arbitration attorneys\u2019 fees did not \u201carise out of or result from performance of the Subcontract,\u201d the court did not agree that the provision was limited to fees incurred in the arbitration proceedings themselves.  Id.<\/em> at \u00b6 26.  The court also relied on the broad phrasing of the provision that Cleveland\u2019s indemnity obligations \u201cshall include, but not be limited to,\u201d the listed categories.  Id.<\/em> at \u00b6 27. The net result? Cleveland was awarded just over $100,000 on its claims but ordered to pay over $700,000 in Ruscilli\u2019s attorney fees.<\/p>\n\n\n\n

LESSONS LEARNED<\/strong><\/p>\n\n\n\n

While the history of the case is convoluted, one thing is clear: Cleveland certainly wishes it had negotiated to remove\u2014or at least put limitations on\u2014the troublesome indemnification provision in the subcontract. What can a party do if it is confronted with an indemnification provision similar to the one in the Cleveland-Ruscilli subcontract? There are several options. Most obvious would be to remove an obligation for either party to pay the other\u2019s attorneys\u2019 fees in any claims brought by one party directly against the other, but that is not always feasible. As a compromise, the obligation to cover attorneys\u2019 fees could be limited in various ways.  For instance, the obligation could be limited to paying attorneys\u2019 fees incurred in defending claims that are ultimately determined to be frivolous, or if the other party prevails on more of the claims than the claimant does.  Certainly, a common and reasonable compromise in any fee-shifting provision is to limit the obligation to \u201creasonable\u201d attorneys\u2019 fees, as opposed to any and all \u201cactual\u201d fees.  Cleveland was fortunate that the arbitrators only awarded Ruscilli its reasonable fees, despite the subcontract\u2019s allowance for actual fees. <\/p>\n\n\n\n

Above all, parties should remember that even if a provision seems unfair, unreasonable, or perhaps even unenforceable, there is always a risk that a judge or arbitrator will enforce it as written.\u00a0 This is especially true for sophisticated players such as Cleveland and Ruscilli, who may or may not be represented by in-house or outside counsel in the contract negotiation process. It is always better to confront such provisions head-on, rather than simply hoping they will not be an issue in the future or that a merciful judge or arbitrator will not enforce them as written. No one wants to find themselves in the situation of Cleveland: winning the battle (at least in part) but paying the other party for the privilege of doing so.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Matthew Grashoff and Sonja Rice | Hahn Loeser & Parks When reviewing a contract, how often have you had the following thoughts: \u201cThat provision is so one-sided, there\u2019s no way it will be enforced the way it\u2019s written!\u201d Or \u201cI won\u2019t worry about negotiating that provision; a court would never enforce it as written.\u201d A… Continue reading Beware What Your Contract Says: It Just Might Be Enforced<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,10891],"class_list":["post-900901","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract-provisions","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nBeware What Your Contract Says: It Just Might Be Enforced - Advise & Consult, Inc.<\/title>\n<meta name=\"description\" content=\"it\u2019s always better to negotiate troublesome provisions yourself rather than counting on a judge or arbitrator to do it for you in the future\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Beware What Your Contract Says: It Just Might Be Enforced - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"it\u2019s always better to negotiate troublesome provisions yourself rather than counting on a judge or arbitrator to do it for you in the future\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise & Consult, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-01T22:23:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-01T22:23:43+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:site\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\"},\"headline\":\"Beware What Your Contract Says: It Just Might Be Enforced\",\"datePublished\":\"2023-03-01T22:23:38+00:00\",\"dateModified\":\"2023-03-01T22:23:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/\"},\"wordCount\":1078,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"keywords\":[\"Advise & Consult\",\"Construction Contract Provisions\"],\"articleSection\":[\"Construction Contracts\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/\",\"name\":\"Beware What Your Contract Says: It Just Might Be Enforced - Advise & Consult, Inc.\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\"},\"datePublished\":\"2023-03-01T22:23:38+00:00\",\"dateModified\":\"2023-03-01T22:23:43+00:00\",\"description\":\"it\u2019s always better to negotiate troublesome provisions yourself rather than counting on a judge or arbitrator to do it for you in the future\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"name\":\"Advise & Consult, Inc.\",\"description\":\"Construction Expert Witnesses\",\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\",\"name\":\"Advise & Consult\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"contentUrl\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"width\":162,\"height\":75,\"caption\":\"Advise & Consult\"},\"image\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\",\"https:\/\/x.com\/adviseconsult\",\"https:\/\/www.linkedin.com\/company-beta\/204526\/\",\"https:\/\/www.youtube.com\/user\/MrConstructionExpert\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"caption\":\"admin\"},\"sameAs\":[\"http:\/\/www.expertwitnessinconstruction.com\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Beware What Your Contract Says: It Just Might Be Enforced - Advise & Consult, Inc.","description":"it\u2019s always better to negotiate troublesome provisions yourself rather than counting on a judge or arbitrator to do it for you in the future","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/","og_locale":"en_US","og_type":"article","og_title":"Beware What Your Contract Says: It Just Might Be Enforced - Advise & Consult, Inc.","og_description":"it\u2019s always better to negotiate troublesome provisions yourself rather than counting on a judge or arbitrator to do it for you in the future","og_url":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/","og_site_name":"Advise & Consult, Inc.","article_publisher":"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","article_published_time":"2023-03-01T22:23:38+00:00","article_modified_time":"2023-03-01T22:23:43+00:00","author":"admin","twitter_card":"summary_large_image","twitter_creator":"@adviseconsult","twitter_site":"@adviseconsult","twitter_misc":{"Written by":"admin","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/#article","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/"},"author":{"name":"admin","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7"},"headline":"Beware What Your Contract Says: It Just Might Be Enforced","datePublished":"2023-03-01T22:23:38+00:00","dateModified":"2023-03-01T22:23:43+00:00","mainEntityOfPage":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/"},"wordCount":1078,"commentCount":0,"publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"keywords":["Advise & Consult","Construction Contract Provisions"],"articleSection":["Construction Contracts"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/","name":"Beware What Your Contract Says: It Just Might Be Enforced - Advise & Consult, Inc.","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website"},"datePublished":"2023-03-01T22:23:38+00:00","dateModified":"2023-03-01T22:23:43+00:00","description":"it\u2019s always better to negotiate troublesome provisions yourself rather than counting on a judge or arbitrator to do it for you in the future","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.myconstructionexpert.com\/blog\/contract-provision-might-be-enforced\/"]}]},{"@type":"WebSite","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website","url":"https:\/\/www.myconstructionexpert.com\/blog\/","name":"Advise & Consult, Inc.","description":"Construction Expert Witnesses","publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization","name":"Advise & Consult","url":"https:\/\/www.myconstructionexpert.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","contentUrl":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","width":162,"height":75,"caption":"Advise & Consult"},"image":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","https:\/\/x.com\/adviseconsult","https:\/\/www.linkedin.com\/company-beta\/204526\/","https:\/\/www.youtube.com\/user\/MrConstructionExpert"]},{"@type":"Person","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","caption":"admin"},"sameAs":["http:\/\/www.expertwitnessinconstruction.com"]}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p2ztG6-3MmF","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/900901","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/comments?post=900901"}],"version-history":[{"count":1,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/900901\/revisions"}],"predecessor-version":[{"id":900902,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/900901\/revisions\/900902"}],"wp:attachment":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/media?parent=900901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/categories?post=900901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/tags?post=900901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}