Background
Exxon hired AECOM to overhaul an oil refinery in Billings, Montana. Disputes arose over project delays, performance quality, and additional costs. A jury found both parties breached the contract, awarding AECOM sixty-four million dollars and Exxon twenty million dollars. AECOM appealed three post-trial rulings regarding the interpretation of the jury verdict, a judgment as a matter of law on its Prompt Payment Act claim, and the denial of prejudgment interest.
The court’s reasoning
The court reviewed the grant of judgment as a matter of law de novo, concluding there was no evidence Exxon violated the Montana Prompt Payment Act. The parties had contractually agreed to a complex billing scheme allowing Exxon to set off losses against payments due. Exxon exercised these setoff rights within the thirty-day period for four invoices, and for the other two, AECOM failed to prove the submission date. Regarding prejudgment interest, the court applied Montana law, noting that such interest is inappropriate when the amount of recovery is uncertain or disputed. Given the competing expert data and the jury’s discretion in determining damages, the amount was not capable of being made certain until the verdict.
What it means going forward
The decision reinforces that parties can contractually modify statutory payment timelines and that disputed damages in complex construction cases generally preclude prejudgment interest awards.