Morse/Diesel, Inc. v. Trinity Industries, Inc.

General contractor Morse/Diesel, Inc. (plaintiff) sued subcontractor Trinity Industries, Inc. (Trinity) (defendant) in federal district court for losses resulting from the delayed completion of a major construction project. Trinity counterclaimed for monetary damages due to Morse/Diesel’s own mismanagement. The trial highlighted four issues. The first issue was whether two contract provisions barring Trinity’s counterclaim controlled or were overridden by another contract provision permitting the counterclaim and purporting to control notwithstanding any provision to the contrary. The court ruled that the interplay of the three provisions was an ambiguity for the jury to resolve. The second issue concerned whether the contract empowered the project architect to direct or merely advise Trinity as to Trinity’s work methods. The court ruled that several contract provisions gave the architect clear authority to control Trinity’s work and overrode other contract language suggesting that the architect’s role was only advisory. The third issue questioned whether the contract provision excusing bad-weather delays and using the phrase “inclement weather” applied to any bad weather or only to unusually severe events. The court ruled that the phrase was ambiguous and that the jury should determine what the parties intended. Finally, the trial questioned whether Morse/Diesel’s subsequent behavior enforced, relaxed, or actually waived the contract’s strictly worded requirements for written notice of excusable delays. The court instructed the jury that the evidence could support the relaxation theory but not the waiver theory. Based on the jury’s verdict, the court entered judgment for Morse/Diesel. Trinity appealed to the Second Circuit.