Hess Construction v. Francis O'Day Co.

Hess Constr. + Eng’g Servs., Inc. v. Francis O. Day Co., Inc.
No. 1116, Sept. Term 2023
Opinion by Leahy, J.

Contracts > Construction and Operation > General Rules of Construction >
Construction as a Whole
When a court engages in contract interpretation, it should endeavor to give effect to each
clause in order to prevent “an interpretation which casts out or disregards a meaningful part
of the language of the writing unless no other course can be sensibly and reasonably
followed.” Cochran v. Norkunas, 398 Md. 1, 17 (2007) (quoting Sagner v. Glenangus
Farms, 234 Md. 156, 167 (1964)).

Contracts > Construction and Operation > General Rules of Construction >
Application to Contracts in General > Existence of Ambiguity
When a court determines that contractual language is ambiguous, it will consider extrinsic
evidence, including parol evidence, in order to ascertain the parties’ intentions. See W.F.
Gebhardt & Co., Inc. v. Am. Eur. Ins. Co., 250 Md. App. 652, 666 (2012). We have
cautioned, however, that “a contract is not ambiguous merely because the parties do not
agree as to its meaning.” Maslow v. Vanguri, 168 Md. App. 298, 319 (2006). Rather,
language is ambiguous “if, to a reasonable person, the language used is susceptible of more
than one meaning or is of doubtful meaning.” Cochran v. Norkunas, 398 Md. 1, 17 (2007).

Contracts > Construction and Operation > General Rules of Construction >
Construction by Parties
Extrinsic evidence may include “negotiations of the parties, the circumstances surrounding
execution of the contract, the parties’ own construction of the contract and the conduct of
the parties.” Canaras v. Lift Truck Servs., Inc., 272 Md. 337, 352 (1974). “The court may
also consider the special meaning which trade custom or usage attaches to certain words or
terms.” Della Ratta, Inc. v. Am. Better Cmty. Devs., Inc., 38 Md. App. 119, 130 (1977).

Contracts > Construction and Operation > General Rules of Construction >
Language of Instrument > Construction to Give Validity and Effect to Contract
The law “leans against” declaring entire provisions of contracts unenforceable, Quillen v.
Kelley, 216 Md. 396, 407 (1958), and courts should not do so “unless no other course can
be sensibly and reasonably followed.” Cochran v. Norkunas, 398 Md. 1, 17 (2007)
(quoting Sagner v. Glenangus Farms, 234 Md. 156, 167 (1964)). This principle is
particularly important in the construction context, where contracts are often comprised of
a series of complex, interlocking documents, layered on top of each other like the concrete
blocks in a building’s foundation.

Contracts > Construction and Operation > General Rules of Construction >
Application to Contracts in General > Existence of Ambiguity
Asphalt Index Provision in construction subcontract purporting to adjust subcontract price
based on fluctuations in asphalt index is ambiguous because it is “susceptible of more than
one meaning or is of doubtful meaning,” given that it does not explicitly provide a method
for calculating pricing changes, and no other provision in the subcontract clarifies what
method the parties intended to use. Cochran v. Norkunas, 398 Md. 1, 17 (2007).

Evidence > Parol or Extrinsic Evidence Affecting Writings > Particular Subjects of
Parol or Extrinsic Evidence > Construction, Interpretation, or Application of
Writings; Ambiguity > Nature and Existence of Ambiguity in General
Instead of simply declaring the Asphalt Index Provision unenforceable, the circuit court
should have examined parol evidence to determine which of two interpretations offered by
the parties expressed their intentions at the time of the execution of the contract. Sy-Lene
of Wash., Inc. v. Starwood Urb. Retail II, LLC, 376 Md. 157, 167-68 (2003).

Limitation of Actions > Computation of Period of Limitation > Accrual of Right of
Action or Defense > Contracts in General > Breach of Contract in General
Correct accrual date for breach of contract claims relating to change orders under
construction subcontract was the first date on which subcontractor “reasonably should have
known” that contractor had determined not to pay subcontractor for all or part of the work
requested in a given change order. Est. of Adams v. Cont’l Ins. Co., 233 Md. App. 1, 25
(2017) (quoting Poffenberger v. Risser, 290 Md. 631, 636 (1981)); see also Patriot Constr.,
LLC v. VK Elec. Servs., LLC, 257 Md. App. 245, 265-66 (2023). In the instant case,
contractor failed to demonstrate that subcontractor’s claims accrued more than three years
prior to subcontractor’s suit. Accordingly, subcontractor’s breach of contract claims were
not barred by the applicable statute of limitations, Maryland Code (1973, 2020 Repl. Vol.),
Courts & Judicial Proceedings Article § 5-101.
Circuit Court for Montgomery County
Case No. 477883V

REPORTED*

IN THE APPELLATE COURT

OF MARYLAND

No. 1116

September Term, 2023
______________________________________

HESS CONSTRUCTION + ENGINEERING
SERVICES, INC. (n/k/a HESS
CONSTRUCTION COMPANY, LLC)

v.

FRANCIS O. DAY CO., INC.
______________________________________

Reed,
Leahy,
Ripken,

JJ.
______________________________________

Opinion by Leahy, J.
______________________________________

Filed: February 28, 2025

*Tang, J. did not participate in this Court’s
decision to report this opinion pursuant to Md.
Rule 8-605.1.
Pursuant to the Maryland Uniform Electronic Legal
Materials Act (§§ 10-1601 et seq. of the State
Government Article) this document is authentic.

2025.02.28
'00'05- 15:09:56
Gregory Hilton, Clerk
Large-scale public construction projects customarily involve a complex suite of

agreements between multiple parties that allocate design, construction, oversight, and

maintenance responsibilities, and which contain elaborate payment, indemnity, and

insurance provisions. These interlinking contracts and subcontracts generally add layers

of complexity by incorporating and referring to other documents, including specifications,

plans, indices, and codes. This appeal concerns alleged breaches of a subcontract for a

public works construction project known as the “Montgomery County Multi-Agency

Service Park – Public Safety Training Academy” (the “Project”). Appellant, HESS

Construction + Engineering Services, Inc. n/k/a HESS Construction Company, LLC

(“Hess”), served as the general contractor pursuant to a Fixed Price Construction Contract

(“the Prime Contract”) that it entered into with Montgomery County in October of 2014.

Then in 2015, Hess entered into a Master Subcontract Agreement (“Master Subcontract”)

and Subcontract Agreement Rider (“SAR”) (together, the “Subcontract”) with appellee

Francis O. Day Co., Inc. (“F.O. Day”) to provide asphalt paving and related services for

the Project.

Hess was obligated to pay F.O. Day for its work under the Subcontract in monthly

“progress payments” and a final payment, which together would equal “the total sum of

the Subcontract Price.” F.O. Day was entitled to propose changes to the Subcontract Price

for extra work through change orders. The Subcontract also provided for adjustments to

the Subcontract Price based on fluctuations in the price of liquid asphalt, which were to be

handled as change orders issued by Hess.
During the course of F.O. Day’s performance under the Subcontract, Hess denied

several of F.O. Day’s proposed change orders seeking upward adjustments of the

Subcontract Price for extra work. F.O. Day claimed that site conditions, including

problems with the grading and elevation of the Project site, required F.O. Day to complete

a substantial amount of predicate work before undertaking the asphalt paving work

assigned to F.O. Day under the Project specifications.

On the other side of the equation, Hess issued a series of “Asphalt Escalation Credit”

change orders by which it reduced the Subcontract Price based on decreases in the

Maryland State Highway Administration’s asphalt index. F.O. Day’s ensuing protests of

these change orders ballooned into a disagreement between the parties over what formula

they had agreed to use for calculating adjustments based on fluctuations in the asphalt

index.

The Subcontract work was completed on or about May 15, 2017. For several

months thereafter, the parties engaged in discussions to resolve these change order

disputes, but to no avail. Consequently, on January 17, 2020, F.O. Day filed a two-count

complaint in the Circuit Court for Montgomery County against Hess alleging breach of

contract and violation of the Maryland Prompt Payment Statute.

Following a four-day bench trial in May 2021, the court took the matter under

advisement. On July 5, 2023, the court issued an opinion in which it denied F.O. Day’s

Maryland Prompt Payment Statute claims but awarded F.O. Day a total of $469,523.80 in

damages on its breach of contract claims. The court determined that the provision of the

Subcontract governing adjustments based on the asphalt price index was unenforceable

2
because there was no meeting of the minds. The damages award, therefore, was based, in

part, on the court’s finding that Hess improperly reduced the Subcontract Price by

$348,655.39 based on the asphalt index. The court also found that Hess improperly

rejected several of F.O. Day’s proposed change orders totaling $121,866.71.

Hess timely noted this appeal on August 3, 2023. Hess challenges the circuit court’s

damages award under the “clear and unambiguous” language of the Subcontract, and also

claims a portion of the award is barred by the statute of limitations. To give context to the

particularized questions presented on appeal, we first set out the background facts.

BACKGROUND

A. Formation of the Subcontract

The parties memorialized their agreement in two separate documents. On March

12, 2015, the parties entered into the Master Subcontract, which sets out “general terms

and conditions” that apply to any project 1 for which F.O. Day serves as a subcontractor for

Hess, including the Project. On July 15, 2015, the parties entered into the SAR, which

supplements the MSA with additional terms specific to the Project.

The SAR requires F.O. Day to provide “all labor, equipment, materials, scaffolding,

hoisting and incidentals to complete all Asphalt Paving work” for the Project, subject to

the plans and specifications of Hess under the Subcontract. It outlines the “scope of work”

that F.O. Day is responsible for performing under the Subcontract and specifies that F.O.

1
The MSA provides that “[a]ll terms and conditions specific to each particular
project will be addressed in a project specific [SAR.]” There is nothing in the record to
indicate that the parties have applied the terms of the MSA to any other project.
3
Day is entitled to a “Subcontract Price” of $2,636,000.00 as base pay for its work on the

Project. This Subcontract Price is subject to adjustment according to the following

“Asphalt Index Provision” – one of several provisions itemized in the SAR scope of work:

21. Pricing is based on the asphalt index of 562.50 and any increase
or decrease will be handled as a change order at time of placement. 2

Provisions within the Master Subcontract governing payment, including any

withholding of payment by Hess, state as follows:

5.5 Withholding Payments. Progress payments may be withheld by
[Hess], in whole or in part, on account of: (a) claims or liens by any
subcontractor or supplier of [F.O. Day], or any notice thereof arising out of
the Subcontract; (b) any breach by [F.O. Day] of any provision or obligation
in the Subcontract Documents; (c) unsatisfactory prosecution of the Work or
failure to carry out the Work in accordance with the Subcontract Documents;
(d) a reasonable doubt that the Work can be completed for the balance of the
Subcontract Price then unpaid or within the required time. [Hess] shall not
be in Default by reason of reasonably withholding payment based on any of
the above grounds . . . . [I]n the event of a payment dispute . . . [F.O. Day]
shall proceed diligently with the performance of the Work, including the
disputed Work, and shall be entitled to reserve its right to make a claim.

***

6.1 Changes in the Work. [Hess] may, by written notice and without
notice to [F.O. Day’s] surety(ies), direct [F.O. Day] to make changes,
additions and/or deletions in the Work. [F.O. Day] shall promptly proceed
in compliance with such written instructions as set forth herein . . . . Any
increase or decrease in the Subcontract Price and/or extension of time shall
be agreed upon in writing by the Parties in the form set forth in SAR Exhibit
C, Change Order. If the Parties cannot agree to the increase or decrease in
the Subcontract Price and/or an extension of time, [F.O. Day] shall proceed
with the change, addition or deletion in the Work, notwithstanding any
dispute, upon [Hess’s] direction. [F.O. Day] may propose changes, additions
and/or deletions to the Subcontract Documents within five (5) days of the
event giving rise to the change, addition and/or deletion, but in any event

2
Additional provisions in the SAR scope of work are discussed, where relevant,
throughout this opinion.
4
before such changed, additional or deleted Work is performed, which is a
condition precedent to payment for such change. [Hess] does not have any
obligations to accept [F.O. Day’s] request for a change. Disputes regarding
changes shall proceed in accordance with Article 12.

***
12.2 [F.O. Day] specifically agrees that any dispute with Owner or [Hess]
shall not interfere with [F.O. Day’s] progress of its work in any manner, and
that [F.O. Day] shall proceed with its work as ordered, subject to claim. [F.O.
Day’s] failure to do so shall be considered a material breach and Default of
contract, justifying termination under Article 11.

F.O. Day agreed to begin work under the Subcontract “in a prompt and diligent

manner” after receiving “Notice to Proceed” from Hess, “at such time and in such sequence

as [Hess]” directed. Hess was entitled under the Subcontract to “modify and change the

schedule” for F.O. Day’s work as it deemed appropriate. F.O. Day was entitled to receive

payment “within seven (7) days of [Montgomery County’s] payment to [Hess] for [F.O.

Day’s] Work.”

Hess gave F.O. Day Notice to Proceed on November 24, 2015. F.O. Day completed

performance on the Project on or about May 15, 2017.

B. Hess’s Proposed Change Orders

After F.O. Day began work under the Subcontract, Hess issued several change

orders decreasing the Subcontract Price “as a result of the decreases in the asphalt index.”

Hess’s “Change Order No. 00002,” issued on June 21, 2016, provided for a decrease of

$185,956.53 for “FO Day Credit for Asphalt Escalation per item #21 in the SAR Scope of

Work,” which applied to all asphalt already placed “up until 6/15/16.” Hess attached a

spreadsheet to the change order, entitled “PSTA Liquid Asphalt Credit Index,” that

5
recorded the asphalt index price on each date that F.O. Day had received delivery of asphalt

mix to be used in its work on the Project.

As shown on Appendix A to this opinion, the spreadsheet included columns for the

“Tonnage Placed” on each date, the percentage of “Liquid Asphalt per Mix Design,” and

two cost calculations – the “Per Contract Cost of Tonnage Placed” and the “Actual Cost of

Tonnage Placed.” In the final column, Hess recorded the “CREDIT BACK TO HESS”

corresponding to each placement date. The bottom of this column showed a $185,956.53

total decrease to the Subcontract Price. Hess also attached a memorandum from the

Maryland State Highway Administration (“SHA”) that included the price of asphalt in June

2016, a graph showing the change in the SHA “Office of Construction Liquid Asphalt

Cement Price” for each month from February 2015 to June 2016, the delivery tickets from

each delivery of asphalt to the Project site, and a series of “Mix Design Reports” reflecting

the percentage of liquid asphalt in the asphalt mix delivered to the Project site. 3

Change Order No. 00002 was signed and approved by Francis O. “Michael” Day

IV, Vice President of F.O. Day, on June 28, 2016, and Hess’s Project Executive, Dave

Gauthier, signed noting final approval about a month later. On September 13, 2016, Hess

3
At trial, F.O. Day’s Vice President, Francis O. “Michael” Day IV, acknowledged
that he received these materials with Change Order No. 00002. After Hess’s counsel
walked him through the materials, Day stated that it “appear[ed]” Hess had taken “the price
per the contract of [$562.50], multipl[ied] it times the tonnage placed on that particular
date,” then multiplied “that same tonnage times the actual price at the date of placement”
and taken the difference between the two as part of its calculations. However, Day
maintained that these calculations did not reflect the parties’ agreement, and that the
language “any increase or decrease” in the Asphalt Index Provision “refers to a change in
the asphalt index . . . [not] the calculations” on Appendix A.
6
issued “Change Order No. 00005,” again showing a reduction in the Subcontract Price for

“Asphalt Escalation per item #21 in the SAR Scope of Work.” Change Order No. 00005

provided for a decrease of $111,685.71, and again included the same PSTA Liquid Asphalt

Credit Index spreadsheet, this time reflecting the reduction for all asphalt placed after June

15, 2016. F.O. Day did not sign Change Order No. 00005. On November 21, 2016, Hess

issued “Change Order No. 00009,” showing another Subcontract Price reduction of

$242,433.65 based on asphalt price index decreases, which F.O. Day also did not sign. At

trial, Michael Day testified that Hess did not “provide[] the calculation” used to arrive at

the amount of the reductions, so F.O. Day was not “sure which formula was used” to

calculate the adjustment. 4 In an email dated December 1, 2016, F.O. Day informed Hess

that F.O. Day was rejecting Change Order No. 00009 because it suspected Hess had used

a calculation method that “ignore[d] the project specifications resulting in an incorrect

calculation of the adjustment.” F.O. Day referenced a November 11, 2016 meeting that

the parties held “to resolve the change order log and outstanding change orders[,]” and

acknowledged that the parties had “not resolved the best way to move forward and

reconcile the outstanding [change orders] and project accounting noted on them.”

Hess sent a “formal response” on December 2, 2016, in which it acknowledged that

F.O. Day disputed the method of calculation used but pointed out that “Change Order [No.

00002] was fully executed without any notice from F.O. Day that there was an issue.” Hess

From the transcript, it appears Day was asserting that F.O. Day did not receive the
4

same spreadsheet sent with Change Order Nos. 00002 and 00005 when Hess sent No.
00009.
7
argued that F.O. Day “mistakenly believe[d]” that the Asphalt Index Provision included “a

5% fluctuation calculation resulting in the first 5% of any increase or decrease not being

included in the price adjustment,” as contained in the SHA formula. Hess insisted that the

SHA formula did not apply to the Subcontract, and that instead, changes to the Subcontract

Price “should be calculated strictly based on the $562.50 price included in the [SAR] less

the price of asphalt at the time of placement[.]”

F.O. Day responded to this letter by email on December 5, 2016, indicating that it

disagreed with Hess’s understanding of the Subcontract and asking for the “calculation

sheet used to develop the adjustment.” F.O. Day also stated that it appeared the tonnage

of asphalt delivered to the Project site during the time period covered by Change Order No.

00009 was “significantly over stated (by a multiple of almost 10).” Although Hess stood

firm on its interpretation of the Asphalt Index Provision, it did recognize that it made a

tonnage calculation error in Change Order 9. Therefore, Hess issued Change Order #11 on

December 13, 2016, adding back $217,970.50 to the Subcontract Price.

In sum, by December 2016, three change orders concerning “Asphalt Escalation

Credits” remained in dispute: (1) Change Order No. 00002 in the amount of $185,956.53;

(2) Change Order No. 00005 in the amount of $111,685.71; and (3) Change Order No.

00009 (as corrected by Change Order No. 00011) in the amount of $24,463.15.

Thereafter, Hess issued “Change Order No. 00016” on October 26, 2017, reflecting

a decrease to the Subcontract Price in the amount of $26,550.00, with the description

“Liquid Asphalt Credit/Tack Coats.” Again, F.O. Day did not sign this change order. On

March 9, 2017, Hess followed up on Change Order No. 00016, and F.O. Day responded

8
that “there is no credit due for ‘tack coat’ on the [Project][,]” as F.O. Day “does not use

liquid asphalt for tack coat operations” and had “never had a price adjustment on any job

for tack coat[.]” F.O. Day further stated that Change Order No. 00016 was based on a

misunderstanding of the Asphalt Index Provision, and that it did not see “the connection

between an asphalt index and tack coat.” Hess responded that “[t]ack is made of liquid

asphalt,” and requested an accounting of the amount of tack used by F.O. Day on the

Project. F.O. Day provided an estimate but maintained that “the price of tack did not

fluctuate with the asphalt index” and was “not dependent on fluctuations in the price of

[liquid asphalt].”

C. F.O. Day’s Proposed Change Orders

Following receipt of Hess’s official Notice to Proceed in November 2015, F.O.

Day’s Operations Manager, David Wolff, told Hess’s Senior Project Manager, David

McMaster, that F.O. Day felt it had “been misled on the status of completion of predicate

work” necessary for it to begin its paving operations. Wolff identified problems with the

grading and elevation of the Project site, the ability of trucks to enter and exit the site, and

saturation of the site preventing the application of paving stone. Wolff informed McMaster

that F.O. Day could not begin paving until these issues were addressed, and that Hess’s

expectation that F.O. Day complete its paving work by December 15, 2015 was “wholly

unrealistic” because the Project site was “inaccessible” and “predicate work [was]

incomplete.” Wolff asked McMaster to notify F.O. Day when the Project site was “actually

available for work,” so that it could “mobilize to the site.”

According to Thomas Gerhold, F.O. Day’s Chief Surveyor and Director of GPS

9
Operations, Hess informed F.O. Day on December 7 that it had addressed the problems

with the Project site and that the site was now ready for paving. However, when F.O. Day

returned to the site, it determined that there were still numerous issues. Specifically, a

grade check conducted by F.O. Day on December 8 revealed that the grades and elevations

were still incorrect, meaning that F.O. Day could not pave the Project site in line with the

terms of the Subcontract. Bobby C. “Kip” Gwinn, Senior Project Manager for F.O. Day,

informed Hess that “excessive pumping” had rendered the ground inadequate for paving.

In a December 21 letter to Hess, F.O. Day emphasized that it “should not absorb the costs”

of conducting repeated grade checks at the Project site and demanded “that these costs be

borne by [Hess].” F.O. Day requested that going forward, Hess perform proof rolls of any

part of the site it wished F.O. Day to pave before notifying F.O. Day that the site was ready.

Hess responded the next day, claiming that F.O. Day had impermissibly delayed

beginning work and failed to request that Hess conduct additional surveys of the site. F.O.

Day replied that it had requested additional surveys as early as December 2, and that it was

not required to request that Hess “comply with the terms of its own contract” by providing

surveys. F.O. Day reemphasized that the site was still not suitable for it to perform its

work. F.O. Day further informed Hess that its asphalt plant would be closing for the winter

on January 8, 2016, but that it was prepared to perform “any work available” prior to that

date, provided Hess brought the Project site into “compliance with the contractual

obligations” of the Subcontract. F.O. Day continued pressing the issue of inadequate site

conditions throughout the course of the Project, emphasizing that its repeated grade checks

of the site were “at the sole cost of [Hess].”

10
Other problems with the work that was to be completed by other subcontractors

surfaced a few months later. On April 27, 2016, Hess sent F.O. Day a letter stating that

F.O. Day’s paving was “high” around Inlet #934 (“I-934”), a depression in the road

designed to facilitate drainage. The letter instructed F.O. Day to “have the base paving and

intermediate paving removed, [and] stone base lowered to accommodate the proper

elevations required to meet the water drainage to I-934.”

On May 2, 2016, F.O. Day responded that it was “in no way responsible for the

conditions highlighted” because Hess had directed F.O. Day to pave the area, and any issue

with the paving was “the direct result of improper layout, design conflicts, and/or improper

sub-grade preparation,” which F.O. Day did not conduct. Hess was advised that F.O. Day

would expect additional payment from Hess to make the repairs because “survey and layout

[of] the Work is by others and specifically excluded from [the SAR].” Hess responded the

next day, warning that “[s]hould the work not take place during this cure period (uncover

and repair), [Hess] w[ould] be forced to supplement the work,” and that payment to F.O.

Day for the paving work would be withheld. Then on May 25, Hess informed F.O. Day

that if it did not “confirm . . . by 2pm today that [F.O. Day] will be onsite tomorrow am

making the repairs,” Hess would assign the repair to another subcontractor at cost to F.O.

Day. F.O. Day responded that it would complete the requested repairs but advised that the

work would be performed under protest.

On September 12, 2016, F.O. Day sent Hess Proposed Change Order #011 (“PCO

11”) requesting that Hess add $22,110.17 to the Subcontract Price for “costs associated

with . . . Asphalt Repairs [at] Cityscape at I-934.” F.O. Day attached a “Price Breakdown”

11
to PCO 11, dated July 22, 2016, which itemized its labor, equipment, and materials costs

in performing the asphalt repairs on I-934, along with receipts. F.O. Day also sent Hess

Proposed Change Order #034 (“PCO 34”) on March 6, 2017, demanding $101,258 for

“multiple grade checks, performing as-built of works by others, and numerous changes to

the GPS Model to match existing conditions as they were in conflict with the

[Subcontract].” Again, F.O. Day attached a Price Breakdown itemizing its costs, but also

included a handwritten document listing each grade check performed over the course of

F.O. Day’s work on the Project and the corresponding date. Hess ultimately refused to pay

F.O. Day the amounts it demanded under PCO 11 and PCO 34.

D. Circuit Court Proceedings

On January 17, 2020, F.O. Day sued Hess in the Circuit Court for Montgomery

County, alleging that Hess had breached the Subcontract and violated the Maryland Prompt

Payment Statute, Maryland Code (1974, 2015 Repl. Vol, 2019 Supp.), Real Property

Article (“RP”), §§ 9-301-9-304. The first count of F.O. Day’s complaint alleged that it had

“performed all of its obligations under the contracts,” but that Hess still owed F.O. Day an

additional $553,051.25 under the Subcontract for “additional work, change orders and

delays,” including the work described in PCO 11 and PCO 34. 5 F.O. Day also alleged that

the Asphalt Index Provision was unenforceable because Hess had failed to include “any

language detailing how a price adjustment for asphalt would be calculated” in the SAR. In

the second count of its complaint, F.O. Day argued that Hess’s failure to pay the amount

5
By the time the circuit court issued its memorandum opinion, this number was
reduced to $528,603.52.
12
alleged in count one “[f]or well over thirty (30) days” constituted a violation of the Prompt

Payment Statute.

Hess filed an answer in which it generally denied all of F.O. Day’s allegations and

asserted various affirmative defenses. Specifically, Hess took the position that F.O. Day

had failed “to comply with the requirements, terms and conditions of [the Subcontract],

including but not limited to the provision of notice and submission of claims in a timely

manner.” Furthermore, Hess alleged that F.O. Day had “failed to properly perform its work

on the Project and/or breached [the Subcontract].”

The Trial

The action was tried to the court on May 24-26 and May 28, 2021. The circuit court

heard testimony from both F.O. Day’s and Hess’s employees. David Wolff testified about

the site conditions and problems he and his team encountered with the predicate work on

site. According to Wolff, it was the job of “Hess’s site contractor, Total Contracting” to

ensure that the subgrade was in adequate condition for F.O. Day to conduct its paving work.

He explained that after receiving Notice to Proceed from Hess on November 24, 2015, F.O.

Day scheduled a “proof roll” for November 30, during which it would drive a “loaded

vehicle” over the site to determine whether the “subgrade” ground at the site was “firm

enough” to pave. However, this proof roll was canceled after Hess informed F.O. Day that

it could not be performed on “wet or frozen ground.” Regardless, F.O. Day’s surveyor

reported that the “site was not ready” for paving to begin on November 30.

Wolff explained that performing a “stakeout” to “give [] elevation points, . . . to

ensure that the project is being built in accordance with the plans” is typically the duty of

13
a surveyor, and not a paving subcontractor like F.O. Day. He stated that performing

stakeouts was not part of F.O. Day’s obligations under the Subcontract. He said it was

obvious that the Project site was “not to the proper elevations” when F.O. Day first went

out to begin work after receiving Notice to Proceed. Nevertheless, Hess continually

insisted that F.O. Day “continue to work” and complete asphalt paving on certain areas of

the Project site by December 15, 2015. Wolff recounted that F.O. Day conducted

additional tests and determined that: “the grades were out of tolerance,” meaning they did

not match Project specifications; part of the site’s “dimensions were incorrect for the

paving foundation”; and overall, the site “wasn’t fully ready” for asphalt paving. Hess

nevertheless “claimed that the areas were ready,” and required F.O. Day to continue

returning to the site and perform “a number of proof rolls,” all of which demonstrated that

the site was not prepared properly.

Kip Gwinn testified that F.O. Day had no obligation under the Subcontract “to pull

final grades . . . and elevations,” and that it had developed a GPS survey model for the

Project strictly for its own use and “nothing to do with the stakeout.” Gwinn explained

that “no engineering, surveying, and/or layout” was to be completed by F.O. Day under the

Subcontract. Though Gwinn acknowledged that F.O. Day was required to check the

quality of the preliminary work performed by prior subcontractors, he nevertheless stated

that F.O. Day was not obligated to check things “to this extent.” He explained that the

“tolerances” – the amount of deviation from Project specifications permitted under the

Subcontract – were “very tight” as compared to other projects F.O. Day had worked on,

and that as a result, he had a “surveyor and his helper” at the site every day who “checked

14
everything, which is not normal.” Gwinn testified that the Project “had a lot of problems,”

and that checking for inconsistencies required F.O. Day to perform multiple surveys and

grade checks of the Project site, which required two people “[a]t the minimum.” According

to Gwinn, the additional compensation demanded in PCO 34 was for the equipment and

labor for these two individuals to perform survey and grade check work. Gwinn

acknowledged that F.O. Day “never did any stake-out work at the request of Hess,” but did

complete grade checks at Hess’s direction.

Thomas Gerhold testified about the GPS model F.O. Day used on the Project. He

explained that the development of GPS models made surveying “a lot faster,” and that F.O.

Day used GPS to ensure its paving conformed to the “elevations and locations” specified

by Hess for the Project. Gerhold developed the GPS model for the Project to be used “in

conjunction with the stakeout” provided by Hess at the beginning of the Project. However,

when Gerhold attempted to survey the site on December 8, 2015, so that F.O. Day could

begin paving, he found that there were only “a few” stakes at the site, and that Hess had

not “staked out and made ready the surrounding area” where F.O. Day had been instructed

to pave. In fact, Gerhold added, none of the areas Hess had said were ready for paving

could have been paved “to the requirements on the contract drawing.” Gerhold stated that

after the I-934 “fiasco” occurred, Hess told F.O. Day that they would have to “do a lot of

additional checking” of preliminary work, which meant that Gerhold had to check Hess’s

“stakes to make sure that they didn’t have more mistakes again.” Gerhold testified that he

ultimately had to build nineteen different GPS models for the Project, because on eighteen

different occasions F.O. Day identified an area of the site that did not match the initial

15
model and was instructed by Hess to match the model to the conditions at the site.

According to Gerhold, this was not “typical for the work that’s done” after a general

contractor provides F.O. Day with “finished grades . . . for placement of pavement.”

Michael Day confirmed that the stakeout provided by Hess was “not adequate” for

F.O. Day to conduct its work, and that F.O. Day had informed Hess of this fact. He

explained that stakeout work, as part of “layout and engineering,” was expressly excluded

from F.O. Day’s scope of work under the Subcontract. He described the work that goes

into asphalt paving, emphasizing that at multiple steps in the process, paving

subcontractors have to “pull string line” placed as part of the stakeout to ensure that the

grading of the site is within tolerance and to verify that the asphalt is being paved at the

“proper thickness.” He said that F.O. Day “would have no way of building the project

without stake out,” so F.O. Day ultimately did its own stakeouts when Hess “did not, in

fact, satisfy the requirements that were contained” in the Subcontract.

Regarding the Asphalt Index Provision of the Subcontract, Michael Day testified

that Hess and F.O. Day never agreed “to a formula for any increase or decrease that was to

be handled as a change order.” He stated that he initially understood the formula provided

in the Standard Specifications for Construction and Materials (“SHA Specs”) to be the

method for calculating adjustments to the Subcontract Price based on changes to the asphalt

index, and that F.O. Day had “never used another formula on public works jobs.” He

initially assumed that Hess had used the SHA formula at the time he signed Change Order

No. 00002. He testified that he only realized Hess was using a different formula when he

received Change Order No. 00005.

16
On Hess’s side, Dave Gauthier testified that he understood the MSA to require F.O.

Day, with respect to predicate work, to “do some quality control to make sure [its] material

fits the way it’s supposed to” in the areas designated. Gauthier recounted that for “survey,

stakeout, [and] layout,” Hess had hired “a licensed surveyor to perform all of the [] survey

for the job.” He added that Hess “never directed or required F.O. Day to do any

engineering,” and that a “grade check and engineering” are not the same thing. F.O. Day

was merely asked to check “elevations and grades based on [Hess’s] stakeout to make sure

it’s correct.” Gauthier also clarified that Hess initially misunderstood F.O. Day’s use of

GPS to mean Hess did not “need to do stakeout for F.O. Day because [F.O. Day was] going

to use their GPS,” though Hess eventually realized its mistake before F.O. Day began

performance.

Memorandum Opinion and Order

In a memorandum opinion and order dated July 5, 2023, the Circuit Court for

Montgomery County held that Hess was liable for breach of contract and awarded damages

in the amount of $469,523.80 to F.O. Day. The court found that “the SAR’s scope of work

does not include layout and engineering” because “[b]oth were originally included in the

printed agreement but crossed out” in the executed version of the Subcontract.

Accordingly, the court resolved that Hess was responsible for the additional “survey,

engineering, and layout work” detailed in PCO 34 because Hess directed F.O. Day to begin

paving even after F.O. Day, as directed under section 2.10 of the Master Subcontract,

alerted Hess to “discrepancies” at the Project site.

Additionally, the court rejected Hess’s argument that the statute of limitations

17
barred F.O. Day’s claim concerning PCO 34. Hess had argued that the statute of limitations

began to run “on or before October 19, 2016,” when the work that was the subject of PCO

34 was completed, but the court concluded that F.O. Day’s claim could not have accrued

before May 2017, when Hess “rejected” PCO 34. The court awarded F.O. Day

$101,258.24 in damages for its claims under PCO 34.

The court also found that Hess was liable for the repairs at Inlet 934 because “Hess

and its other subcontractors were responsible for this work[,]” and F.O. Day performed

“the work under protest because there had been a directive” from Hess. Although the court

did not explicitly state that the statute of limitations did not bar F.O. Day’s claim for this

work, it is clear from the context that the court applied the same reasoning. Thus, the court

awarded F.O. Day $19,610.17 in damages, subtracting $2,500 from its claim under PCO

11 for “move-in of the equipment required to perform the work[.]”

Turning to the dispute between the parties regarding the Asphalt Index Provision,

the court noted that Hess claimed credits for a decrease in the cost of asphalt under Hess’s

Change Order Nos. 00002, 00005, 00009, and 00011, totaling $322,105.39. The court

observed:

The SAR provides: “Pricing is based on the asphalt index of $562.50 and any
increase or decrease will be handled as a change order at time of placement.”
While the SAR determines the method to adjust a change in asphalt price,
there is no clear or defined way for the asphalt credit to be calculated. The
SAR does not specify (1) whether any asphalt credit would be based on
percentage, (2) whether there are limitations on price changes, or (3) for what
percentage of the initial estimate the asphalt credit would be apply [sic].

The court concluded that, “[w]ithout agreement on these terms, there was no mutual

assent regarding the calculation of the asphalt price adjustment.” The court rejected Hess’s

18
argument that F.O. Day’s execution of Change Order No. 00002 evidenced the parties’

mutual assent to a method of calculating the asphalt price adjustment. The court pointed

out that “Change Order #2 contains no method of calculating the adjustment,” and noted

that Michael Day testified that he understood the adjustment would be calculated based on

the SHA formula that “is standard for all public works jobs, and Mr. Day [was] unaware

of any other formula.” Ultimately the court determined that the Asphalt Index Provision

was unenforceable because the parties did not “express their intention in a manner that is

capable of understanding.” The court applied the same reasoning in determining that Hess

could not obtain any credit for “Liquid Asphalt Credit/Tack Coats” pursuant to Change

Order No. 00016. The court thus awarded F.O. Day damages in the amount of $322,105.39

for the asphalt price adjustments made in Change Order Nos. 00002, 00005, and 00009 and

$26,550 for the adjustment made in Change Order No. 00016 for the Tack Coats credit.

F.O. Day’s claims for asphalt resurfacing in the amount of $2,500, loss of

production in the amount of $1,826, and delay-related losses in the amount of $29,753 were

denied by the court as either within the scope of the Subcontract or waived.

Finally, the court found that F.O. Day could not recover under Maryland’s Prompt

Payment Statute because its claims were not undisputed, and because F.O. Day failed to

prove that Hess did not make payment to F.O. Day within seven days after its receipt of

payment under the Prime Contract for F.O. Day’s work. The court summarized its decision

as follows:

Hess breached the Agreement with F.O. Day by failing to pay F.O. Day the
amounts due for survey, engineering, and layout costs and repairs at Inlet
934. Hess also breached the Agreement with F.O. Day by taking credits

19
against amounts due F.O. Day for asphalt and tack coats. F.O. Day is entitled
to $469,523.80 in damages[.]

Hess timely noted this appeal on August 3, 2023, and presents three issues for our

review, which we rephrase and reorder as follows: 6

I. Did the circuit court err in concluding that the Subcontract’s Asphalt Index
Provision was unenforceable and awarding F.O. Day $348,655.39 in
damages for asphalt price adjustments?

II. Did the circuit court err in determining that F.O. Day’s claim for damages in
the amount of $101,258.24 for additional work was not barred by the statute
of limitations?

III. Did the circuit court err in concluding that F.O. Day was entitled to
$101,258.24 in damages for additional survey, engineering, and layout work
under the Subcontract?

We supplement these facts in our discussion of the issues.

6
In its brief, Hess presented the following questions:
I. Did the Trial Court err in refusing to enforce and give effect to the
clear and unambiguous asphalt index price adjustment provision
of the Contract and thus err in awarding F.O. Day $348,655.39 in
damages for asphalt price adjustments?
II. Did the Trial Court err in refusing to enforce and give effect to the
clear and unambiguous language of Sections 2.2 and 2.10 of the
Contract and thus err in awarding F.O. Day $101,258.24 in
damages for “additional” survey, engineering and layout work?
III. Did the Trial Court err in failing to apply the statute of limitations
(as provided by Md. Code Ann., Cts. & Jud. Proc. § 5-101) to bar
as untimely F.O. Day’s claims for survey, engineering and layout
work as well as Inlet-934 repair work and thus err in awarding F.O.
Day $121,866.71 in damages for those claims?
20
DISCUSSION

I.

Enforceability of the Asphalt Index Provision

Parties’ Contentions

Hess argues that the circuit court should have enforced the Subcontract’s Asphalt

Index Provision because it “was negotiated at arms-length, between two sophisticated and

experienced commercial construction companies, and [i]s clear and unambiguous.” Hess

asserts the parties had a “meeting of the minds” because F.O. Day “insisted” that the

provision be included in the SAR and F.O. Day’s signature on the SAR demonstrates it

“assented to both the inclusion of the Asphalt Index Provision in the Subcontract and the

language of the Provision itself.” Hess posits that the Asphalt Index Provision includes all

essential terms and “clearly provides that the [adjustment for changes in the asphalt index]

is based simply on a decrease or increase in the asphalt index rate of [$]562.50 and not

based on any ‘percentage adjustment.’” Hess disagrees with the trial court’s finding that

the provision failed to specify whether there are “limitations on price changes” and what

“percentage of the initial estimate” for the Subcontract Price is impacted by a change in the

asphalt index. Hess contends the provision already addresses both these concerns by

stating that “any” increase or decrease in the asphalt index applies “to the pricing of the

asphalt material as a whole.”

Hess maintains that F.O. Day “accepted both the initial price adjustments made by

[Hess] and the method for calculating those adjustments” when it signed Change Order No.

00002 because it contained “a worksheet illustrating that the adjustment was calculated

21
based on the asphalt index price at the time of placement and capturing the delta between

that price and the Subcontract’s [$]562.50 benchmark.” Therefore, Hess contends, by

signing Change Order No. 00002 “without any question, objection or dispute,” F.O. Day

demonstrated sufficient assent and understanding for a meeting of the minds to take place.

F.O. Day counters that it never agreed to Hess’s “arbitrary calculation of asphalt

price adjustments that was not set forth in the [Subc]ontract” and that the calculation

method that Hess used was “inconsistent with the typical manner of calculating such credits

in the paving industry.” According to F.O. Day, the circuit court “correctly found that the

ad hoc method of calculation that Hess came up with is not conveyed, much less clearly

and unambiguously, within” the Asphalt Index Provision. F.O. Day asserts that Hess’s

“application of the calculation to tack coat – a manufactured product which . . . does not

fluctuate in price like virgin liquid asphalt” is likewise not supported by the language of

the Subcontract. F.O. Day points to the “differing interpretations each party applied to the

[A]sphalt [I]ndex [P]rovision” as evidence that “there was no meeting of the minds as to

the essential term necessary to give effect” to the provision. Even if there was a meeting

of the minds, F.O. Day argues, the Asphalt Index Provision is ambiguous, and the circuit

court’s conclusion that the provision was unenforceable would have to be remanded so that

court could “take evidence, including extrinsic parol evidence, to determine the parties’

intent” and resolve the ambiguity.

Legal Framework

In Maryland, “[t]he interpretation of a contract, including the determination of

whether a contract is ambiguous, is a question of law, subject to de novo review.” Sy-Lene

22
of Wash., Inc. v. Starwood Urb. Retail II, LLC, 376 Md. 157, 163 (2003). “Maryland courts

subscribe to the objective theory of contract interpretation[,]” by which they “interpret the

contract based on what a reasonable person in the position of the parties would have

understood the language to mean[.]” W.F. Gebhardt & Co., Inc. v. Am. Eur. Ins. Co., 250

Md. App. 652, 666 (2021) (internal quotations omitted). When a court engages in contract

interpretation, it should endeavor to give effect to each clause in order to prevent “an

interpretation which casts out or disregards a meaningful part of the language of the writing

unless no other course can be sensibly and reasonably followed.” Cochran v. Norkunas,

398 Md. 1, 17 (2007) (quoting Sagner v. Glenangus Farms, 234 Md. 156, 167 (1964)).

Courts focus primarily on the “customary, ordinary, and accepted meaning of the language

used[,]” Walton v. Mariner Health of Maryland, Inc., 391 Md. 643, 660 (2006) (internal

quotation omitted), and “attempt to construe the contract as a whole, interpreting ‘separate

provisions harmoniously[.]’” Lithko Contracting, LLC v. XL Ins. Am., Inc., 487 Md. 385,

403 (2024) (quoting Credible Behav. Health, Inc. v. Johnson, 466 Md. 380, 396 (2019)).

In other words, courts “do not interpret contractual language in a vacuum” but rather in the

context of “the text of the entire contract.” Id. at 401 (quoting Johnson, 466 Md. at 394).

When a court determines that contractual language is ambiguous it will consider

extrinsic evidence, including parol evidence, in order to ascertain the parties’ intentions.

See W.F. Gebhardt & Co., Inc., 250 Md. App. at 666. We have cautioned, however, that

“a contract is not ambiguous merely because the parties do not agree as to its meaning.”

Maslow v. Vanguri, 168 Md. App. 298, 319 (2006). Rather, language is ambiguous “if, to

a reasonable person, the language used is susceptible of more than one meaning or is of

23
doubtful meaning.” Cochran, 398 Md. at 17. As noted, once a court determines that a

provision in a contract is ambiguous, it “must consider any extrinsic evidence which sheds

light on the intentions of the parties at the time of the execution of the contract.” Sy-Lene

of Wash., Inc., 376 Md. at 167-68 (quoting Cnty. Comm’rs of Charles Cnty. v. St. Charles

Assocs. Ltd. P’ship, 366 Md. 426, 445 (2001)). “To be admissible, extrinsic evidence of

intent as to the meaning of a contract term must demonstrate ‘an intent made manifest, not

a secret intent’ at the time of contract formation.” Impac Mortg. Holdings, Inc. v. Timm,

474 Md. 495, 508 (2021) (quoting Gov’t Emps. Ins. Co. v. Coppage, 240 Md. 17, 25-26

(1965)). This follows from the universally accepted principle that “a manifestation of

mutual assent is an essential prerequisite to the creation or formation of a contract.”

Cochran, 398 Md. at 14. In determining whether the parties have mutually assented, “the

inquiry will focus not on the question of whether the subjective minds of the parties have

met, but on whether their outward expression of assent is sufficient to form a contract.”

Williston on Contracts, § 4:1 (4th ed. 2024).

Extrinsic evidence may include “negotiations of the parties, the circumstances

surrounding execution of the contract, the parties’ own construction of the contract and the

conduct of the parties.” Canaras v. Lift Truck Servs., Inc., 272 Md. 337, 352 (1974). “The

court may also consider the special meaning which trade custom or usage attaches to

certain words or terms.” Della Ratta, Inc. v. Am. Better Cmty. Devs., Inc., 38 Md. App.

119, 130 (1977). “[C]ommunications between the parties about a contract subsequent to

the execution of that contract may be admissible ‘as evidence of an interpretation by both

parties.’” Timm, 474 Md. at 508 (quoting Hurt v. Penn. Threshermen Farmers’ Mut. Cas.

24
Ins. Co., 175 Md. 403, 407 (1938)). Furthermore, “language in a contract prepared and

concluded by one party is to be construed against that party if there is any ambiguity or

uncertainty[.]” Canaras, 272 Md. at 356; see also Johnson, 466 Md. at 399 (“[A] contract

will be ‘most strongly construed against’ its drafter when a court finds the contractual terms

at issue to be ambiguous.” (quoting Prima Paint Corp. v. Ammerman, 264 Md. 392, 395

(1972))).

Courts must be mindful that “[t]he law does not favor, but leans against the

destruction of contracts because of uncertainty[.]” Quillen v. Kelley, 216 Md. 396, 407

(1958). The fact that the parties offer differing interpretations of a contract provision does

not, in and of itself, render that provision unenforceable. The court’s task is to take the

“outward expressions of the parties and ask what meaning the words should have conveyed

to a reasonable person cognizant of the relationship between the parties and all of the

antecedent and surrounding facts and circumstances.” Williston, supra, at § 4:1. “[I]f the

intention of the parties can be clearly discovered, the court will give effect to it and construe

the words accordingly,” regardless of “the inaccuracy of expression or the inaptness of the

words used.” Id. at § 30:2.

Analysis

The Master Subcontract, Section 14.5, provides that “[i]f any term, provision,

covenant, or condition of this Agreement is held invalid or unenforceable for any reason,

the remainder of the provisions shall continue in full force and effect”; thus, we assess the

enforceability of the Asphalt Index Provision without considering the enforceability of the

Subcontract as a whole. Still, in order to understand the meaning of the Asphalt Index

25
Provision, we must read it in the context of the entire Subcontract. See Lithko Contracting,

LLC, 487 Md. at 401.

The purpose of the Asphalt Index Provision is evident from its plain language:

21. Pricing is based on the asphalt index of 562.50 and any increase
or decrease will be handled as a change order at time of placement.

(Emphasis removed). It is clear that the parties agreed that the Subcontract Price is based

on the “asphalt index of 562.50.” 7 The parties also agreed to handle any “increase or

decrease” through a “change order at the time of placement.” The record further establishes

that: (1) F.O. Day negotiated for the inclusion of a provision in the SAR by which the

Subcontract Price could be adjusted based on the asphalt index; (2) Hess drafted the

language of the Asphalt Index Provision and added it to the SAR; 8 and (3) each party

assented to the Asphalt Index Provision by written signature. See Cochran, 398 Md. at 14

(“[C]ommon to all manifestations of acceptance is a demonstration that the parties had an

actual meeting of the minds regarding contract formation.”); Walther v. Sovereign Bank,

386 Md. 412, 430 (2005) (“[A] party that voluntarily signs a contract agrees to be bound

by the terms of that contract.”). We can “sensibly and reasonably” conclude from the

foregoing acts, and the language of the Asphalt Index Provision itself, that the parties

7
Though the Asphalt Index Provision does not explicitly state which “asphalt
index” it refers to, the parties do not dispute that the provision refers to the index
maintained by the SHA.
8
Hess acknowledged at oral argument that it had drafted the Asphalt Index
Provision.
26
manifested an intention to adjust the Subcontract Price based on fluctuations in the asphalt

index maintained by the SHA. Cochran, 398 Md. at 17.

However, the Asphalt Index Provision does not specify whether the SHA formula

(which includes, for example, a 5% fluctuation calculation), Hess’s formula, or some other

formula should be used to calculate such adjustments. Thus, the issue before the circuit

court was not whether the parties agreed to adjust the Subcontract Price based on

fluctuations in the asphalt index, but rather, how the parties were to calculate any such

adjustments.

The problem, as the circuit court identified, is that the Asphalt Index Provision does

not explain the method of calculating “Pricing [] based on the asphalt index of 562.50.”

Hess insists that it is “straightforward and clearly understood from the plain language of

the provision” that the adjustment calculation “is a simple multiplication calculation based

on the new price index at the time of placement for the volume placed.” It points to the

spreadsheet attached to Change Order No. 00002, reproduced infra as Appendix A, as

evidence of this calculation in action. But the Asphalt Index Provision does not specify a

“multiplication calculation,” much less one based on “the volume placed.”

By contrast, F.O. Day claims that the Asphalt Index Provision assumes application

of the formula published by the SHA, 9 which Michael Day, F.O. Day’s Vice President,

9
We take judicial notice of the fact that the SHA asphalt index is available on the
website of the Maryland Asphalt Association. See Asphalt Index, Maryland Asphalt
Association (Jan. 23, 2025, 7:22 PM), https://mdasphalt.org/asphalt-index/. Immediately
below the index are links to “SHA-approved spreadsheets” employing the SHA formula
for calculating liquid asphalt, “density, mix, and fuel adjustments” which are updated
monthly. Id.
27
testified is “standard . . . for all public works jobs” in the construction industry. If the SHA

formula is indeed standard in the construction industry, then it is also a sensible method of

calculating adjustments. But again, the plain language of the Asphalt Index Provision does

not make any explicit reference to that formula.

Before we look to extrinsic evidence for answers, we examine the Subcontract “as

a whole, interpreting ‘separate provisions harmoniously[.]’” Lithko Contracting, LLC, 487

Md. at 403 (quoting Johnson, 466 Md. at 396). The SAR scope of work states that all of

F.O. Day’s work was to be performed according to section 321216 of the Project “Bid Set”

of technical specifications. Section 321216 states in the “REFERENCES” section that the

SHA Specs’ standard “Measurement and Payment Clauses do not apply.” Hess argued in

a letter to F.O. Day that this meant Section 540.04.01 of the SHA Specs, which contains

the SHA Asphalt Index formula, “does not apply” because the heading for that section is

“Measurement and Payment.” However, at trial, Michael Day testified that he understood

that language to mean the “Measurement and Payment Clauses” of the SHA Specs “do not

apply as they relate to payment on [the Prime Contract].” 10 Indeed, in the same letter in

which it rejected the use of the SHA formula, Hess acknowledged that section 321216

comes from the Prime Contract. Accordingly, we may assume that the provision

referencing section 321216 via the Prime Contract was already in the Subcontract before

10
The full Prime Contract is not contained in the record, but Hess’s Dave Gauthier
testified at trial that it did not contain an asphalt adjustment provision. Thus, it is possible
that the “Measurement and Payment Clauses” of the SHA Specs were carved out because
Section 504.04 provides that “Hot Mix Asphalt Pavement will be measured and paid for at
the Contract unit price per ton” – which would be inconsistent with a contract that
purportedly does not require Montgomery County to pay Hess for the cost of asphalt.
28
the Asphalt Index Provision was added. Again, either party’s reading would be consistent

with the plain language of the Subcontract and section 321216.

Our examination has not uncovered, nor have the parties directed us to, any other

provision in the Subcontract that might illuminate the formula to be used for calculating

Subcontract Price adjustments under the Asphalt Index Provision. We hold, therefore, that

the Asphalt Index Provision is ambiguous because the phrase “[p]ricing is based on the

asphalt index of 562.50 and any increase or decrease will be handled as a change order” is

“susceptible of more than one meaning or is of doubtful meaning,” given that it does not

explicitly provide a method for calculating pricing changes, and no other provision in the

Subcontract clarifies what method the parties intended to use. Cochran, 398 Md. at 17.

This ambiguity does not compel a declaration that the provision is unenforceable

for lack of definiteness. Maryland courts have long refrained from declaring a contract

provision unenforceable “merely because the parties do not supply every conceivable detail

or anticipate every contingency that may arise.” Rocklin v. Eanet, 200 Md. 351, 357

(1952); see also Cnty. Comm’rs for Carroll Cnty. v. Forty West Builders, Inc., 178 Md.

App. 328, 381 (2008). The law “leans against” declaring entire provisions of contracts

unenforceable, Quillen, 216 Md. at 407, and courts should not do so “unless no other course

can be sensibly and reasonably followed.” Cochran, 398 Md. at 17 (quoting Sagner v.

Glenangus Farms, 234 Md. 156, 167 (1964)). This principle is particularly important in

the construction context, where contracts are often comprised of a series of complex,

interlocking documents, layered on top of each other like the concrete blocks in a building’s

foundation. Subcontracts routinely incorporate by reference a series of subcontract

29
documents along with the prime contract and government specifications. Declaring one

provision of a subcontract unenforceable can easily create a ripple effect across other

contract documents.

While courts “may not cure indefinite or vague contract language by supplying

missing contract terms or definitions,” 8621 Ltd. P’Ship v. LDG, Inc., 169 Md. App. 214,

227 (2006), they can examine extrinsic evidence of the “negotiations of the parties, the

circumstances surrounding execution of the contract, the parties’ own construction of the

contract and the conduct of the parties” before declaring the provision unenforceable.

Canaras v. Lift Truck Services, Inc., 272 Md. 337, 352 (1974). Here, the circuit court

prematurely declared the Asphalt Index Provision unenforceable without fully considering

extrinsic evidence.

An unreported opinion from the United States District Court for the District of South

Dakota cited by Hess—Metz Farms v. Fisher Sand & Gravel Co., No. CIV 05-4058, 2006

WL 1047067 (D.S.D 2006)—illustrates, under similar facts, the distinction between

ambiguous and fatally indefinite contract language. Hess cites Metz Farms in support of

its argument that the Asphalt Index Provision is clear and unambiguous. We conclude,

however, that the district court’s decision in Metz Farms clarifies when extrinsic evidence,

such as “the custom or usage in the trade” of a contract term, can be used to understand the

meaning of an otherwise ambiguous provision. Id. at *6.

In Metz Farms, a South Dakota partnership that owned property containing a quarry

(“Metz”) and a North Dakota mining corporation (“Fisher”) entered into a contract. Id. at

*1. Under the contract, Fisher paid Metz an annual royalty in exchange for the right to

30
“mine and excavate rock, sand and gravel” from a quarry owned by Metz. Id. As in this

case, the contract also contained a provision that called for price adjustments based on an

index. See id. Fisher was obligated to pay Metz 30 cents per ton of mined product, subject

to an “escalation clause” that provided that “[t]he price per ton for material will be adjusted

per the consumer’s price index at the end of each 5 years” that the contract is in effect. Id.

The contract was contained in “a single page on a form furnished by Fisher.” Id.

Fisher mined the quarry from 1987 “at least until November 2003,” when Fisher

notified Metz that it intended to terminate its mining operations. Id. The parties then

“discovered the escalation clause had been overlooked,” and Metz sued Fisher for money

it alleged was owed under the clause. Id. Fisher answered by asserting several defenses,

including an argument that the escalation clause was “indefinite” and therefore

unenforceable. Id. The parties filed cross-motions for summary judgment on the issue of

Fisher’s liability under the clause. Id.

The district court determined that the plain language of the clause “clearly

manifested the intention of the parties to adjust the price per ton according to a calculation

tied to the consumer price index.” Id. at *3. However, the court also found that the clause

did not clearly state which “consumer price index” the parties were referring to, meaning

it was not clear what “calculation” the parties had agreed to use for price adjustments. Id.

But rather than declare the provision unenforceable, the court reasoned that there was

merely an ambiguity as to the meaning of the phrase “consumer price index.” Id. at *4.

The court concluded that “the ambiguity [wa]s not so indefinite as to render it impossible

to fulfill the parties’ clear intention about adjusting the per ton price by using the consumer

31
price index” by consulting “parol or extrinsic evidence.” Id. at *3, *4. It granted partial

summary judgment in favor of Metz on the issue of the clause’s enforceability, and

provided that on the issue of damages, both parties would be permitted to introduce “parol

or extrinsic evidence to establish the parties’ intention, or to establish the custom or usage

in the trade when the term ‘consumer price index’ [is] used.” Id. at *6.

Here, as in Metz Farms, the language of the Asphalt Index Provision is not so

indefinite that parol evidence could not clarify the method of adjustment calculation called

for. At trial, each party offered a method of calculating price adjustments that the court

could have “sensibly and reasonably” read into the language of the Asphalt Index

Provision. Cochran, 398 Md. at 17 (quoting Sagner v. Glenangus Farms, 234 Md. 156,

167 (1964)). Instead of simply declaring the Asphalt Index Provision unenforceable, the

circuit court should have examined parol evidence to determine which of the two methods

expressed “the intentions of the parties at the time of the execution of the contract.” 11 Sy-

11
We note that the circuit court did not mention the principle, well-recognized in
contract law, that “language in a contract prepared and concluded by one party is to be
construed against that party if there is any ambiguity or uncertainty” in it. Canaras, 272
Md. at 352; see also John L. Mattingly Constr. Co., Inc. v. Hartford Underwriters Ins. Co.,
415 Md. 313, 327 (2010) (“It is a basic principle of contract law that, in construing the
language of a contract, ambiguities are to be resolved against the draftsman of the
instrument.” (quoting Burroughs Corp. v. Chesapeake Petroleum & Supply Co., Inc., 282
Md. 406, 411 (1978))). Nor does it appear the court considered all of the testimony about
the “circumstances surrounding execution of the contract” and “negotiations of the parties”
presented at trial. Canaras, 272 Md. at 352. Although the circuit court mentioned Michael
Day’s testimony that the SHA formula is “standard for all public works jobs,” it is unclear
whether the court considered whether this, or any other evidence, could demonstrate a trade
custom in the asphalt paving industry to default to the SHA formula in calculating price
adjustments based on the SHA asphalt index. See Della Ratta, Inc. v. Am. Better Cmty
Devs., Inc., 38 Md. App. 119, 130 (1977) (“The court may also consider the special

32
Lene of Wash., Inc. v. Starwood Urb. Retail II, LLC, 376 Md. 157, 167-68 (2003) (quoting

Cnty. Comm’rs of Charles Cnty. v. St. Charles Assocs. Ltd. P’ship, 366 Md. 426, 445

(2001)). We therefore vacate the circuit court’s ruling with respect to the enforceability of

the Asphalt Index Provision, and remand with instructions to “consider extrinsic or parol

evidence to ascertain the parties’ intentions” as to calculating adjustments under the

provision. W.F. Gebhardt & Co., Inc. v. Am. Eur. Ins. Co., 250 Md. App. 652, 666

(2021). 12

II.

Statute of Limitations on PCO Claims

Parties’ Contentions

Hess argues that F.O. Day’s claims concerning PCO 11 and PCO 34 were barred by

Maryland Code (1973, 2020 Repl. Vol.), Courts & Judicial Proceedings Article (“CJP”),

§ 5-101, which states in relevant part that a “civil action at law shall be filed within three

years from the date it accrues[.]” According to Hess, F.O. Day submitted PCO 11 on

September 12, 2016, and any cause of action on PCO 11 accrued “no later than September

12, 2016” because by that point, “F.O. Day knew it had a claim for payment for additional

meaning which trade custom or usage attaches to certain words or terms.”). If language
like “[p]ricing is based on the asphalt index” is generally understood in the construction
industry to call for use of the SHA formula, that would favor F.O. Day’s interpretation of
the Asphalt Index Provision because courts have long imputed “knowledge of a trade
usage” to “persons in the same trade.” Wathen v. Pearce, 175 Md. 651, 663-64 (1939).
12
We briefly note that the court should also consider whether the Asphalt Index
Provision applies to “tack coat,” as asserted by Hess in Change Order No. 00016. Because
the circuit court simply declared the Asphalt Index Provision unenforceable, it did not
reach this issue in its July 5, 2023 opinion.
33
compensation.” Because F.O. Day filed the complaint on January 17, 2020, Hess contends,

the suit was filed “more than three years” after F.O. Day’s claims relating to PCO 11

accrued.

Hess posits that the accrual date for F.O. Day’s claim concerning PCO 11 is the date

of PCO 11’s submission. Conversely, Hess asserts that F.O. Day’s claims concerning PCO

34 accrued not when PCO 34 was submitted, but “when F.O. Day completed the claimed

extra work on October 16, 2016.” In Hess’s view, F.O. Day “had reason to know of its

claim for payment” by October 16, 2016 because the “work was completed and the full

cost known” at that point. Hess argues that F.O. Day was “sitting on or otherwise delaying

action with its claim” by waiting to submit PCO 34 until March 6, 2017, and that it “would

turn the statute of limitations rule on its head” if we accepted a date later than October 16,

2016 as the accrual date for F.O. Day’s claims concerning PCO 34. Hess urges us to

reverse as, in its view, affirming the circuit court’s determination that F.O. Day’s claims

concerning PCO 34 were not barred by the statute of limitations would “set the dangerous

precedent of allowing any plaintiff with a claim to delay submission of it as a tactic to

extend the statute of limitations.”

In response, F.O. Day highlights Section 5.5 of the Master Subcontract, which

provides that Hess “is entitled to withhold progress payments to F.O. Day for various

reasons, none of which entitles F.O. Day to cease performance under the [Subc]ontract.”

F.O. Day then points to Section 6.1 of the Master Subcontract, requiring F.O. Day to

“proceed with the change, addition, or deletion in the Work, notwithstanding any dispute

[over a change order], upon [Hess’s] direction,” and asserts that the “mandatory

34
performance requirement in the event of a payment dispute applies equally to change

orders[.]” According to F.O. Day, it could not sue for breach of contract if Hess withheld

payment on a change order because “withholding of payment to F.O. Day is not a

breach . . . until its performance under the [Subc]ontract [is] complete and Hess refuse[s]

to tender payment for the work and services rendered.” Therefore, F.O. Day argues, its

breach of contract claims relating to PCO 11 and PCO 34 did not accrue until its “final

performance on the Project . . . on or about May 15, 2017,” when F.O. Day was entitled to

receive final payment from Hess, which was less than three years before F.O. Day filed its

complaint on January 17, 2020.

F.O. Day rebukes Hess’s treatment of the Subcontract as an installment contract

whereby the statute of limitations begins to run on each installment as it becomes due. The

Subcontract, F.O. Day insists, is “a pay-when-paid [c]ontract that specifically permits Hess

to withhold payments without excusing F.O. Day’s continued performance.” According

to F.O. Day, because the Subcontract provides that Hess’s withholding of payment is not a

breach, mere nonpayment is “insufficient to start the statute of limitations running.” If the

Subcontract were an installment contract, F.O. Day posits, it would have been “required to

repeatedly file separate suits in the middle of the contract performance” which it argues

would “run[] afoul of long-standing Maryland precedent in breach of contract actions ‘that

not more than one suit may be instituted on the same instrument . . . and that rights cannot

be enforced piecemeal.’” (Quoting Iula v. Grampa, 257 Md. 370, 373 (1970)). Instead,

F.O. Day contends, it was only entitled to file suit for breach of contract after Montgomery

35
County paid Hess for its work on the Project, and then Hess refused to pay F.O. Day.

(Citing Patriot Constr., LLC v. VK Elec. Servs., LLC, 257 Md. App. 245, 266 (2023)).

Legal Framework

“As a general rule, the party raising a statute of limitations defense has the burden

of proving that the cause of action accrued prior to the statutory time for filing the suit.”

Newell v. Richards, 323 Md. 717, 725 (1991). Under CJP § 5-101, “[a] civil action at law

shall be filed within three years from the date it accrues unless another provision of the

Code provides a different period of time within which an action shall be commenced.”

Generally, “the question of accrual in § 5-101 is left to judicial determination.” Frederick

Road Ltd. P’ship v. Brown & Sturm, 360 Md. 76, 95 (2000). “This determination may be

based solely on law, solely on fact, or on a combination of law and fact, and is reached

after careful consideration of the purpose of the statute and the facts to which it is applied.”

Id. (citing Poffenberger v. Risser, 290 Md. 631, 634 (1981)).

A cause of action “accrues when the claimant in fact knew or reasonably should

have known of the wrong.” Est. of Adams v. Cont’l Ins. Co., 233 Md. App. 1, 25 (2017)

(quoting Poffenberger, 290 Md. at 636). Nevertheless, a cause of action “cannot accrue

until all the elements are present, including damages.” Baker, Watts & Co. v. Miles &

Stockbridge, 95 Md. App. 145, 187 (1993) (citing Goldstein v. Potomac Elec. Power Co.,

285 Md. 673, 685 (1979)), superseded on other grounds by Rule 2-504.

It is commonly accepted that in breach of contract cases, “a cause of action typically

accrues at the time of the breach.” Kumar v. Dhanda, 426 Md. 185, 195 (2012). “[U]nless

the contract provides otherwise, a cause of action for extra labor and services accrues when

36
the work is done or services provided.” Mayor and Council of Federalsburg v. Allied

Contractors, Inc., 275 Md. 151, 157 (1975). Nevertheless, “the nature of the promises

made in the contract and the times for performing those promises” ultimately determine

when a breach occurs under a particular contract. Jones v. Hyatt Ins. Agency, Inc., 356

Md. 639, 649 (1999). For example, when a contract “requires some action, such as an

accounting, a billing or a hearing” to occur before payments under the contract are to be

made, “then the performance of that activity is ‘a condition precedent to recovery of such

payments,’” and the statute will not begin to run until that condition precedent is met.

Federalsburg, 275 Md. at 157 (quoting Laurel Race Course v. Regal Constr., 274 Md. 142,

150 (1975)). We applied this principle in the construction context recently, in Patriot

Construction, LLC, v. VK Electrical Services, LLC, 257 Md. App. 245 (2023). That case

involved a subcontract between Patriot—the general contractor under a contract with the

Maryland Procurement Office of the National Security Agency (the “MPO”)—and VK

Electrical Services, LLC (“VKES”), the company that provided electrical work for the

project as a subcontractor, which contained a “pay-when-paid” clause suspending Patriot’s

obligation to pay VKES for work until the MPO paid Patriot for the same work. Id. at 253.

We reasoned that “[h]ad VKES ignored the pay-when-paid provision” and sued Patriot for

payment before the MPO paid them, “Patriot could have – and likely would have – moved

to dismiss by virtue of the non-occurrence of the subcontract’s condition precedent.” Id.

at 266.

Where a contract provides for payment in installments, and the nonpayment of an

installment constitutes a default, a claim for payment accrues separately on each

37
installment at the time it is due. In Avery v. Weitz, 44 Md. App. 152 (1979), we considered

when the statute of limitations in CJP § 5-101 began to run on claims for payment arising

out of a $12,240 promissory note that was payable in monthly installments of $340. Id. at

153. Weitz filed a declaration for confessed judgment in the circuit court on September

27, 1978, seeking to recover monthly payments dating back to September 1, 1974. Id. We

held that recovery of all monthly installments due before September 27, 1975 was barred

by CJP § 5-101, reasoning that the statute of limitations began to run on each individual

installment at the time it was due. Id. at 155. We further reasoned that the date of accrual

of Weitz’s claims could not be the final date of maturity of the promissory note as a whole,

because such a holding would mean that “a holder of an installment note without an

acceleration provision would be required to wait, despite a default, until the entire note

matured before any recovery could be had.” Id. As the guarantor of the promissory note

was obligated to pay each monthly installment in the month it became due, the holder of

the note had a separate claim for payment on each installment of the note. See id.

Analysis

A straightforward reading of the Subcontract drives our decision that the breaches

F.O. Day alleges did not occur at either of the times proposed by Hess—the date the change

order was submitted, for PCO 11, and the date on which the work was performed, for PCO

34. As “the party raising a statute of limitations defense,” Hess had the burden of

demonstrating that F.O. Day’s claims accrued more than three years before January 17,

2020, when F.O. Day brought this action. Newell, 323 Md. at 725. We hold that Hess

failed to demonstrate that F.O. Day “reasonably should have known” it had breach of

38
contract claims arising out of PCOs 11 and 34 on any date prior to final performance on or

about May 15, 2017. See Est. of Adams, 233 Md. App. at 25. We explain.

The Subcontract provided for “progress payments” on a monthly basis, and for

payment of the remainder of the Subcontract Price as a final payment after F.O. Day

completed work on the Project. Each month, F.O. Day was required to invoice Hess in

writing for its “completed work-in-place,” along with any “approved change orders.” Hess

would then make “monthly progress payments,” after comparing the invoiced amount to

its own accounting, “within seven (7) days of [Montgomery County’s] payment to [Hess]

for [F.O. Day’s] Work.” However, under Section 5.5 of the Master Subcontract, Hess had

discretion to withhold these “progress payments” for several enumerated reasons,

including breach of the Subcontract by F.O. Day or unsatisfactory work product.

Furthermore, “in the event of a payment dispute,” F.O. Day was required to “proceed

diligently with the performance of the Work,” but was “entitled to reserve its right to make

a claim.”

The work and costs for which F.O. Day sought compensation in PCO 11 and PCO

34 did not stem from “completed work-in-place,” but rather from undertaking additional

survey, layout, and repair work at the site. Hess never approved (or rejected prior to date

of completion) PCO 11 or PCO 34. Given that “only approved change orders issued by

Hess” could be included in F.O. Day’s monthly invoices, F.O. Day was never entitled to

include the amounts requested in PCO 11 and PCO 34 in an invoice. Nevertheless, PCO

11 and PCO 34 clearly gave rise to “payment dispute[s]” between the parties, so F.O. Day

was entitled to “reserve its right to make a claim” for the compensation it believed it was

39
owed. But that does not mean F.O. Day could actually bring a claim on the dates Hess

argues the claims accrued.

We fail to see how Avery supports a determination, as Hess suggests, that the statute

of limitations on F.O. Day’s claims relating to PCO 11 accrued no later than September

12, 2016 – the date F.O. Day submitted PCO 11 to Hess. The Subcontract does not contain

installment provisions similar to those at issue in the Avery case. Under the promissory

note in Avery, the guarantor was obligated to pay the note holder $340 each month. Id.

Any failure by the guarantor to make a monthly installment payment when due constituted

a default. Id. By contrast, Section 5.5 of the Master Subcontract specifies that Hess would

“not be in Default” if it had “reasonably” withheld monthly progress payments from F.O.

Day for various reasons. Moreover, under the Subcontract, Hess had no obligation to even

consider including a PCO in a progress payment until that PCO had been “accepted.”

Monthly progress payments were not fixed installments of the Subcontract Price, as in

Avery, but rather estimates, based on comparison of F.O. Day’s invoices with Hess’s own

accounting, of the value of F.O. Day’s “completed work-in-place” within a given month.

PCO 11 was not accepted or rejected by Hess on September 12, 2016, when F.O.

Day submitted it. Hess failed to demonstrate that F.O. Day “reasonably should have

known,” before May 15, 2017, that Hess had determined to never make payment on all or

a portion of PCO 11, or that Hess otherwise breached the Subcontract in regard to PCO 11

on or before that date. Est. of Adams, 233 Md. App. at 25 (quoting Poffenberger, 290 Md.

at 636). Accordingly, Hess failed to show that F.O. Day’s claims relating to PCO 11

“accrued prior to the statutory time for filing the suit.” Newell, 323 Md. at 725.

40
There is even less support for Hess’s contention that F.O. Day’s claims relating to

PCO 34 accrued “when F.O. Day completed the claimed extra work on October 16,

2016”—before PCO 34 was submitted to Hess. In addition to the payment provisions of

the Subcontract discussed above, the Subcontract required “some action, such as an

accounting, a billing or a hearing” before payment could be made. Federalsburg, 275 Md.

at 157. Specifically, the Master Subcontract, Section 6.1, requires F.O. Day submit a

request for additional payment in the form of a proposed change order. Id. This did not

occur until March 6, 2017, which would already put F.O. Day’s claims relating to PCO 34

within CJP § 5-101’s three-year statute of limitations.

Hess’s argument that F.O. Day should have submitted PCO 34 on October 16, when

it had “reason to know of its claim[,]” is not logical under the terms of the Subcontract and

the facts presented. F.O. Day did not have “reason to know” it had a claim on October 16,

because it had not yet sent PCO 34 to Hess for consideration. If F.O. Day had sued Hess

for breach of contract in October 2016, before submitting PCO 34, Hess surely could have

defended on the grounds that “an accounting, a billing or a hearing” necessary for payment

had not yet occurred. Federalsburg, 275 Md. at 157. Furthermore, given Hess’s discretion

under the Master Subcontract to withhold progress payments, reject or accept proposed

changes, and retroactively revoke its acceptance of F.O. Day’s work, it was not

unreasonable for F.O. Day to assume that it would not get paid the amounts requested in

PCO 34 until after F.O. Day completed all of its work under the Subcontract. Cf. Patriot

Constr., LLC, 257 Md. App. at 266. Therefore, we conclude that Hess also failed to meet

41
its burden of proving that F.O. Day’s claims relating to PCO 34 were not made within CJP

§5-101’s three-year statute of limitations.

The correct accrual date for claims relating to each PCO is the first date on which

F.O. Day “reasonably should have known” that Hess had determined not to pay F.O. Day

for all or part of the work requested in that PCO. Est. of Adams, 233 Md. App. at 25

(quoting Poffenberger, 290 Md. at 636); see also Patriot Constr., LLC, 257 Md. App. at

265-66. In the instant case, Hess failed to demonstrate that F.O. Day’s claims accrued prior

to May 2017. Accordingly, we hold that F.O. Day’s breach of contract claims relating to

PCO 11 and PCO 34 are not barred by the applicable statute of limitations, CJP § 5-101.

III.

Merits of PCO 34 Claim

Parties’ Contentions

Hess also challenges the merits of F.O. Day’s claims under PCO 34. First, Hess

avers that they are partially foreclosed by Section 2.2 of the Master Subcontract, which,

according to Hess, “plainly states that means and methods of F.O. Day are part and parcel

of its base scope of work obligations under the [Subc]ontract.” Hess points specifically to

the portion of PCO 34 requesting payment for “numerous changes to the GPS Model” that

F.O. Day used in surveying the Project site. In Hess’s view, the GPS model was part of

F.O. Day’s “means and methods of performing its asphalt paving work” and therefore,

“F.O Day has [] been paid for this GPS model work within the [Subc]ontract price.” Hess

insists that F.O. Day “unequivocally admitted” at trial that the GPS model was part of its

42
means and methods and acknowledged that Hess “did not direct F.O. Day to use” the GPS

model in its work on the Project.

Next, Hess asserts that the remainder of F.O. Day’s claims under PCO 34 are

foreclosed by Section 2.10 of the Master Subcontract, which defines F.O. Day’s scope of

work under the Subcontract as including “checking grades, elevations and the work

performed by others.” Therefore, F.O. Day’s remaining claims under PCO 34 for “multiple

grade checks” and “performing as-built of works by others,” are not for “extra work

activities . . . but rather part of what [F.O. Day] bargained for and agreed to perform under

the [Subc]ontract.”

F.O. Day counters by asserting that the Subcontract required Hess to provide

“survey, stakeout, and layout” work before F.O. Day commenced paving, and that Hess’s

failure to provide this work “made it impossible for F.O. Day to complete its work” under

the Subcontract “on several occasions.” Additionally, F.O. Day contends that it is “not

seeking compensation for using GPS on the Project,” but rather for the cost of using GPS

to complete “additional work” not contemplated by the Subcontract. According to F.O.

Day, under Section 2.2 of the Master Subcontract, it was entitled to compensation for

“work outside the scope of the [Subc]ontract . . . regardless of the means and methods

used.”

Similarly, F.O. Day argues, although Section 2.10 of the Master Subcontract

requires it to “confirm the conditions necessary to receive performance of the work before

beginning performance,” it does not require it to “repeatedly ensure that all predicate work

is performed in accordance with the [Subc]ontract specifications.” Though F.O. Day

43
acknowledges that a certain amount of grade checking and checking of predicate work was

contemplated by the Subcontract, it contends that the amount contemplated was

“substantially less than what F.O. Day was required to perform on the Project as a result

of Hess’s multiple failures to ensure the site was available for paving before directing F.O.

Day to proceed.” F.O. Day argues that even after it gave Hess “notice of discrepancies”

between the specifications of the Subcontract and the quality of predicate work, Hess

“repeatedly directed F.O. Day to proceed” rather than first ensuring that the site was in

“appropriate” condition for F.O. Day to perform its work.

Analysis

We reiterate that “Maryland courts subscribe to the objective theory of contract

interpretation.” W.F. Gebhardt & Co., Inc. v. Am. Eur. Ins. Co., 250 Md. App. 652, 666

(2021). Where the terms of a contract are “clear and unambiguous,” it is “improper for the

court to rewrite [the] contract . . . simply to avoid hardships.” Canaras v. Lift Truck Servs.,

Inc., 272 Md. 337, 350 (1974).

The Master Subcontract includes the following provisions with respect to the scope

of the work F.O. Day was obligated to complete as a subcontractor for Hess:

2.2 Supervision; Means and Methods. [F.O. Day] shall be solely
responsible for and have control over construction means, methods,
techniques, sequences and procedures and for coordinating all portions of the
Work under the Subcontract Documents,13 so long as [F.O. Day] does not
interfere, delay or otherwise impact the progress of the work on the Project.

13
The MSA defines “Subcontract Documents” as the Subcontract together with “the
drawings, specifications, exhibits, and other documents” attached to the MSA or referenced
therein.
44
***

2.10 Work by Others; Discrepancies. [F.O. Day] shall check all work
performed by others necessary to receive and/or for the performance of [F.O.
Day’s] Work. Failure to give notice of any known discrepancy shall relieve
[Hess] of any responsibility therefore. [F.O. Day] shall be responsible for all
field measurements and shall check elevations and grades to ensure proper
fitting of its Work.

Applying the plain language of Section 2.2 and Section 2.10 of the Master

Subcontract, we conclude that the court correctly found that the work for which F.O. Day

sought additional payment in PCO 34 fell outside of its scope of work under the

Subcontract. It is clear that both parties recognized that F.O. Day had an obligation to

“check all work performed by others” to ensure that the Project site was ready for paving

before it began work. Furthermore, there is no dispute that F.O. Day unilaterally decided

to use a GPS model to make its own work more efficient as part of its “means, methods,

techniques, sequences and procedures.” The evidence presented at trial demonstrated,

however, that Hess repeatedly failed to provide a Project site that was ready to be paved,

resulting in costs to F.O. Day not anticipated as part of these contractual obligations.

Under the Master Subcontract, F.O. Day was required to “perform the Work in

accordance with the schedule, sequence and direction from [Hess].” When Hess told F.O.

Day that the Project site was ready, F.O. Day was required to head to the site and begin

performing. On multiple occasions, Hess directed F.O. Day to proceed to the site despite

glaring problems with precedent work that was not F.O. Day’s responsibility. Each time

this happened, F.O. Day expended money and time traveling to the site, checking

elevations and grades, performing proof rolls, and examining and recalibrating its GPS

45
model. F.O. Day’s Kip Gwinn and Thomas Gerhold testified extensively about the costs

incurred as a result. A “reasonable person in the position of the parties,” W.F. Gebhardt

& Co., Inc., 250 Md. App. at 666, would not have understood the Master Subcontract’s

language to require F.O. Day to bear these costs itself. Nor would a reasonable person

expect F.O. Day to bear the costs of reworking Hess’s inadequate stakeouts so that it could

complete the paving work according to “the schedule, sequence and direction” given by

Hess, particularly where that work was outside the SAR scope of work. The circuit court

correctly determined that F.O. Day is entitled to compensation for all of this work, much

of which F.O. Day completed at Hess’s repeated insistence. We affirm the court’s

determination that Hess breached the Subcontract by rejecting PCO 34.

Conclusion

In sum, the record establishes that the parties agreed to adjust the Subcontract Price

in accordance with the SHA asphalt index. The underlying dispute centers on what method

the parties reasonably intended to use to calculate any such adjustments. In this case, the

circuit court erred in failing to consider whether the Asphalt Index Provision is merely

ambiguous before declaring it unenforceable. We hold that the Asphalt Index Provision is

ambiguous because it is susceptible to either of the reasonable interpretations advanced by

the parties. Therefore, we vacate the damages award to F.O. Day in the amount of

$348,655.39 and remand for further proceedings so that the circuit court may consider

whether parol evidence reveals the reasonable intention of the parties at the time they

executed the Subcontract. We leave the court with remedial flexibility to determine

whether an additional hearing is necessary to take additional evidence on this narrow issue.

46
We affirm the judgment of the circuit court in all other respects. We hold that CJP

§ 5-101’s three-year statute of limitations does not bar F.O. Day’s claims relating to PCO

11 and PCO 34 because Hess has not shown that those claims accrued more than three

years before this suit was filed. We also discern no error in the court’s determination that

the work for which F.O. Day requested additional compensation in PCO 34 was not within

its scope of work under the Subcontract, and that Hess was therefore obligated to reimburse

F.O. Day for its costs in completing the work.

JUDGMENT OF THE CIRCUIT COURT
FOR MONTGOMERY COUNTY
AFFIRMED IN PART AND VACATED IN
PART; CASE REMANDED FOR FURTHER
PROCEEDINGS CONSISTENT WITH
THIS OPINION; EACH PARTY TO PAY
THEIR OWN COSTS.

47
APPENDIX A

48