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Fairfax County Redevelopment and Housing Authority v. Worcester Brothers Co.

257 Va. 382 (1999)

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Fairfax County Redevelopment and Housing Authority v. Worcester Brothers Co.

Virginia Supreme Court

257 Va. 382 (1999)

Facts

The Fairfax County Redevelopment and Housing Authority (defendant) awarded a construction contract to Worcester Brothers Co. (plaintiff) in 1995. Under the contract, the project should have been substantially complete by mid-February 1996. However, the housing authority failed to obtain necessary clearances for a significant portion of the work, causing a substantial delay. Worcester Brothers sued the housing authority, seeking to recover damages incurred as a result of the delay. Worcester Brothers submitted evidence of incurring over $46,000 in direct expenses based on the delay, and Worcester Brothers sought recovery of a portion of its overhead expenses, also called home-office expenses. Although Worcester Brothers did not specifically allocate overhead expenses to each construction project in its accounting system, Worcester Brothers requested over $34,000 in overhead expenses, based on the Eichleay formula. The Eichleay formula provides a reasonable approximation of overhead expenses attributable to a construction project by averaging those expenses out. The trial court agreed and awarded the requested damages to Worcester Brothers. The housing authority appealed.

Rule of Law

Issue

Holding and Reasoning (Koontz, J.)

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