Uy v. Public Estates Authority
REITERATIONFacts
The Antecedents: The Public Estates Authority (PEA), as project manager for the Bases Conversion Development Authority (BCDA), contracted Elpidio S. Uy (Uy), doing business as Edison Development and Construction (EDC), for landscaping works on a 105-hectare lot. The contract price was ₱355,080,141.15, with a completion period of 450 days. EDC commenced work on January 7, 1997, after PEA's delay in delivering work areas due to ongoing horizontal works by another contractor (MDC). PEA's continuous delay in turnover extended the contract period to 693 days and resulted in a portion of the area being excluded due to squatters. Procedural History: EDC claimed additional costs of ₱181,338,056.30 due to delays, including equipment rental for idle equipment, idle manpower, additional topsoil hauling costs, and mobilization of water trucks. PEA's Project Management Office (PMO) evaluated the claim at ₱146,484,910. The Performance Audit Committee (PAC) recommended termination of the contract due to EDC's 20% delay, which BCDA adopted, leading PEA to terminate the agreement on November 29, 1999. PEA paid progress billings but not EDC's additional claims. Uy filed a complaint with the Construction Industry Arbitration Commission (CIAC), which awarded Uy ₱19,604,132.06 for idle equipment, ₱2,275,721.00 for idle manpower, ₱6,050,165.05 for a nursery shade net area, and ₱605,016.50 for attorney's fees. Uy filed a motion for correction of computation, which CIAC later denied. Uy appealed to the Court of Appeals (CA), which consolidated his petition with PEA's appeal. The CA dismissed both petitions, affirming the CIAC decision. The CA also issued a resolution permanently enjoining CIAC from proceeding with another case filed by Uy (CIAC Case No. 03-2001) based on litis pendentia and forum shopping. The Petition: Uy appealed to the Supreme Court, raising issues on the CA's dismissal of his petition for being belatedly filed, the substantive denial of his claims, and the CA's issuance of an injunction against CIAC Case No. 03-2001.
Issue(s)
Whether the Court of Appeals erred in dismissing petitioner Uy's petition on the ground of belated filing. Whether the Court of Appeals erred in affirming the CIAC decision which denied certain claims of petitioner Uy. Whether the Court of Appeals acted with grave abuse of discretion in enjoining the proceedings in CIAC Case No. 03-2001.
Ruling
The Supreme Court partially granted the petition, affirming the Court of Appeals' Joint Decision and Joint Resolution with modifications. The Court ordered PEA to pay Uy ₱55,680,492.38 for equipment rentals on standby (comprising the CIAC award for idle equipment plus additional award for owner-caused delay), ₱2,275,721.00 for the cost of idle manpower, and ₱6,050,165.05 for the construction of the nursery shade net area. Interest at 6% per annum from the filing of the complaint until finality, and 12% per annum thereafter, was awarded. PEA was also ordered to pay Uy 10% of the total award as attorney's fees. The CA's injunction against CIAC Case No. 03-2001 was affirmed.
Ratio Decidendi
On the issue of belated filing: The Court found that Uy's petition for review with the CA was not belatedly filed. Uy received the CIAC decision on June 7, 2000. He filed a motion for correction of computation on June 16, 2000, which, according to Section 9, Article XV of the CIAC Rules, interrupted the period for appeal. Although CIAC failed to resolve the motion within 30 days, Uy considered it denied and filed his petition for review on July 24, 2000. The Court noted that the period to appeal was still interrupted when Uy filed his petition, as CIAC only issued its order denying the motion on August 1, 2000. Therefore, the CA's dismissal on technical grounds was erroneous. On the substantive claims: The Court found no admission of liability by PEA regarding Uy's claims. The PEA-PMO memorandum was merely an evaluation, subject to further review and approval, and not a binding admission. The Court modified the award for standby equipment cost, increasing it from ₱19,604,132.06 to ₱55,680,492.38. This increase accounted for the owner-caused delay in the turnover of work areas, which CIAC had ignored. The Court affirmed the awards for idle manpower and nursery shade net construction as Uy did not raise issues regarding them in his petition. However, Uy's claims for additional topsoil hauling costs and mobilization of water trucks were denied. The Court cited Article 1724 of the Civil Code and the contract provisions requiring written approval from PEA's general manager for any change of work or extra work. Uy admitted he did not secure such written approval for these claims. The Court also found no basis for Uy's claim for attorney's fees at 20% of the total amount claimed, as the contract provision cited applied only to complaints filed by PEA, and the 10% awarded by CIAC and affirmed by the CA was reasonable. On the injunction against CIAC Case No. 03-2001: The Court affirmed the CA's issuance of a permanent injunction against CIAC Case No. 03-2001. The CA correctly applied the doctrine of litis pendentia and the prohibition against forum shopping. The CA found that Uy's claims in CIAC Case No. 03-2001 arose from the same Landscaping and Construction Agreement and involved the same parties and cause of action as CIAC Case No. 02-2000. Allowing the second case to proceed would render the resolution of the first case inutile and undermine the efficient administration of justice. The Court reiterated that a party cannot escape the effects of res judicata by varying the form of action or impleading additional parties if the facts and cause of action remain the same.
Main Doctrine
A contractor cannot recover additional costs for work not covered by a written change order or extra work order, as required by the contract and Article 1724 of the Civil Code, even if such costs were incurred due to delays caused by the owner. Furthermore, the filing of multiple suits for the same cause of action may be enjoined to prevent forum shopping.