520 F.2d 886 (9th Cir. 1975), 73-1431, United States for Use and Benefit of Greenhalgh v. F. D. Rich Co., Inc.

Docket Nº:73-1431, 73-1432.
Citation:520 F.2d 886
Party Name:UNITED STATES of America for the Use and Benefit of Val GREENHALGH and George Piper, d/b/a Acme Granite and Tile, Plaintiff-Appellant and Cross-Appellee, v. F.D. RICH COMPANY, INCORPORATED, a corporation doing business in the State of Washington, and American Surety Company, Defendants-Appellants and Cross-Appellants, and B & G Constructors, Incorp
Case Date:July 08, 1975
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 886

520 F.2d 886 (9th Cir. 1975)

UNITED STATES of America for the Use and Benefit of Val

GREENHALGH and George Piper, d/b/a Acme Granite

and Tile, Plaintiff-Appellant and Cross-Appellee,

v.

F.D. RICH COMPANY, INCORPORATED, a corporation doing

business in the State of Washington, and American

Surety Company, Defendants-Appellants

and Cross-Appellants,

and

B & G Constructors, Incorporated, et al., Defendants-Appellees.

Nos. 73-1431, 73-1432.

United States Court of Appeals, Ninth Circuit

July 8, 1975

Page 887

Ralph B. Potts (argued), Seattle, Wash., for appellants.

John E. Ederer (argued), Seattle, Wash., Lyle L. Iversen (argued), Seattle, Wash., for appellee.

OPINION

Before DUNIWAY and CHOY, Circuit Judges, and Skopil, [*] District Judge.

DUNIWAY, Circuit Judge:

This is the second appeal in this case, see 437 F.2d 549. It was begun in 1963 by the Acme Granite and Tile Company (Acme) 1 to recover damages for alleged wrongful termination of its lathing, plastering and ceramic tile work subcontract by the F.D. Rich Company (Rich), the prime contractor for construction at Fort Lewis, Washington, of a 500 unit military housing project funded under the Capehart Act, 42 U.S.C. Secs. 1594-1594k, Acme's complaint also included a lien claim against Rich for an unpaid progress payment and a claim for damages against B & G Constructors, Inc. (B & G), the subcontractor responsible for framing the surfaces on which tile was to be placed. Acme claimed that some of the defects in its own performance resulted from defective framing installing by B & G. Rich, B & G and their bonding companies counterclaimed against Acme

Page 888

and its bonding company for delay damages and the costs of correcting defective work done by Acme.

By agreement, the issues of liability and damages were separated for trial. Only the liability issues were tried to a jury; the damages issues were referred to a special master by stipulation.

There were two principal liability issues. The first was whether Acme had committed a substantial breach justifying termination of the subcontract by Rich (the termination issue). This sub-sumed three sub-issues: whether Acme had committed a substantial breach by (1) failing to discover and report framing defects before placing its work over the frame; 2 (2) failing to resume work at Rich's written order; 3 and (3) repudiating the contract. The second issue was whether Acme's placing its work over the defective framing, and other defects in Acme's work unrelated to the framing, constituted insubstantial or partial breaches rendering Acme liable to Rich in damages for the costs of corrective work performed by a substitute subcontractor after Acme's termination (the partial breach issue).

The trial judge fully instructed the jurors on the law applicable to both issues and submitted the case on a form of special verdict which had been extensively discussed and approved by all counsel. The verdict was as follows:

We, the jury in the...

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