423 F.2d 111 (5th Cir. 1970), 27782, Craddock v. Greenhut Const. Co.

Docket Nº:27782.
Citation:423 F.2d 111
Party Name:G. H. CRADDOCK, d/b/a Southern Heat Pump Company, Plaintiff-Appellant, v. GREENHUT CONSTRUCTION COMPANY, Inc., Defendant-Appellee.
Case Date:March 09, 1970
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 111

423 F.2d 111 (5th Cir. 1970)

G. H. CRADDOCK, d/b/a Southern Heat Pump Company, Plaintiff-Appellant,

v.

GREENHUT CONSTRUCTION COMPANY, Inc., Defendant-Appellee.

No. 27782.

United States Court of Appeals, Fifth Circuit.

March 9, 1970

Alan H. Rosenbloum, Pensacola, Fla., Thomas F. Johnston, Memphis, Tenn., for appellant.

Gordon W. Wells, Gerald L. Brown, E. N. Stephens, Jr., Pensacola, Fla., for appellee.

Before WISDOM, GEWIN and AINSWORTH, Circuit Judges.

GEWIN, Circuit Judge:

Appellant, G. H. Craddock, d/b/a Southern Heat Pump Company, brought an action in the United States District Court for the Northern District of Florida against appellee, Greenhut Construction Company, Inc., for breach of contract to employ Craddock as a subcontractor

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on a construction project. 1 This appeal is taken from an order of the district court granting Greenhut's motion for summary judgment. We reverse.

The controversy arises from Craddock's thwarted efforts to obtain the subcontract for the heating and air-conditioning of 300 housing units to be constructed at Eglin Air Force Base, Pensacola, Florida. Craddock is a mechanical contractor. For the five years immediately prior to the critical events, he was primarily engaged in construction work in the Panama Canal Zone. While between jobs in Panama, Craddock came to the States in search of work. He met Dudley Greenhut, appellee's president, in Charleston, South Carolina, where both had come to bid on another government project. There they discussed Greenhut's plan to submit a bid for the general contract for the forthcoming Eglin project, and it was agreed that Craddock would furnish Greenhut with a bid for the heating and air-conditioning portion of the work.

On 21 June 1967, Craddock sent Greenhut a bid of $322,500.00 not including the cost of a payment and performance bond. A second bid letter dated 17 July 1967 quoted the lump sum of $328,000.00 including the cost of acquiring the bond. Greenhut used Craddock's June 21 bid plus the normal cost of a bond in preparing its bid on the general contract. On 20 July 1967, Craddock sought and obtained a letter from Greenhut which provided in part:

We wish to advise, at this time, that in the event that we are awarded the above subject contract, that we will award you a contract covering Section 28, HEATING AND AIR CONDITIONING, as outlined in your letter of June 21, 1967, providing that we are furnished with a Performance Bond two (2) weeks thereafter. This bond must be furnished with good and sufficient surety or securities acceptable to the General Contractor and the Government.

On 8 August 1967, Greenhut was awarded the general contract for the Eglin project. It informed Craddock, by means of a letter from its president dated 12 August 1967, that unless it received the performance bond by 17 August 1967 it would 'of necessity consider the matter closed.' Craddock received this letter on 15 August 1967, and replied by a letter bearing that date. Craddock referred to the Greenhut letter of 20 July 1967, and reaffirmed his intention to comply with its terms. In reference to the letter of 12 August, he stated that he would do his best to expedite the bonding procedure. On 15 August 1967, Greenhut sent Craddock a telegram noting that it had been requested by the government to furnish the name of the mechanical subcontractor and stating:

Due to your inability to furnish a performance and payment bond, which we have requested from you several times, we deem it necessary to consider another source for the project.

The bonding company that Craddock had previously used was not licensed to issue bonds in the United States. Consequently, Craddock had been negotiating with Fidelity & Deposit Company of Maryland for the payment and performance bond. On 16 August 1967, an agent of this company called Dudley Greenhut and informed him that Fidelity & Deposit was prepared to issue a bond for Craddock. Greenhut stated that it would be unnecessary to furnish the bond, since Greenhut was obtaining another subcontractor for the project.

Craddock, through his counsel, sought a clarification of the situation by a letter of...

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