Board of Public Works v. L. Cosby Bernard and Co.

The Board of Public Works of Hammond, Indiana (Board) (defendant) hired L. Cosby Bernard and Co. (Cosby) (plaintiff) to design a building for the city. The architectural services contract provided that Cosby would receive a 6.5 percent commission on the total cost of construction, which was estimated to be $1.5 million. Cosby made preliminary drawings of the building and was paid for the work. The next step was for Cosby to complete final construction documents. The City Engineer, however, learned that federal funds might be available for the project and had Cosby design a fancier building with the advice of the City Engineer, the mayor, and various other officials. Because of the enhanced project design, however, Cosby submitted an additional claim that would have nearly doubled its fee. However, Cosby only received payment based on the original $1.5 million cost estimate. The City Controller refused to pay the additional amount because the Common Council had only appropriated enough funds to pay Cosby’s commission on the original $1.5 million construction estimate. Cosby sued. The parties disputed whether the Common Council and the Board knew about the project’s expansion or authorized the federal funding application. The trial court granted summary judgment in favor of Cosby on the basis that the contract obligated the city to pay the commission. The Board appealed.