537 F.2d 105 (5th Cir. 1976), 75-1147, E. C. Ernst, Inc. v. General Motors Corp.

Docket Nº:75-1147.
Citation:537 F.2d 105
Party Name:E. C. ERNST, INC., Plaintiff-Appellant, v. GENERAL MOTORS CORP., and the Whiting-Turner Contracting Company, Defendants-Appellees.
Case Date:August 16, 1976
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 105

537 F.2d 105 (5th Cir. 1976)

E. C. ERNST, INC., Plaintiff-Appellant,


GENERAL MOTORS CORP., and the Whiting-Turner Contracting

Company, Defendants-Appellees.

No. 75-1147.

United States Court of Appeals, Fifth Circuit

August 16, 1976

Page 106

Aubrey L. Coleman, Jr., Glower W. Jones, Atlanta, Ga., for plaintiff-appellant.

Joseph B. Haynes, R. Byron Attridge, Atlanta, Ga., Ross L. Malone, Detroit, Mich., for General Motors.

Sutherland, Asbill & Brennan, James P. Groton, Charles T. Lester, Jr., Atlanta, Ga., for Whiting-Turner Cont. Co.

Appeal from the United States District Court for the Northern District of Georgia.

Before THORNBERRY [*] and AINSWORTH, Circuit Judges, and HOFFMAN [**], District Judge.

AINSWORTH, Circuit Judge:

This is the second appeal in a Georgia diversity action brought on a construction contract by appellant, E. C. Ernst, Inc., against General Motors and its general contractor for the project, Whiting-Turner. As the electrical subcontractor, Ernst sought $134,451 in damages allegedly resulting from construction delays which disrupted the performance of its contractual obligations.

In our first decision, we vacated the summary judgment entered in favor of General Motors and Whiting-Turner and remanded the case to the District Court. E. C. Ernst, Inc. v. General Motors Corp., 5 Cir., 1973, 482 F.2d 1047. Upon remand, Ernst contended that our treatment of the contractual defenses raised by General Motors and Whiting-Turner in their motion for summary judgment foreclosed any further consideration of these issues. The trial judge, however, ruled that our decision required a full trial of all the issues raised by the pleadings. After a two-week trial, the District Judge directed a verdict in favor of Whiting-Turner and sent the issue of General Motors' liability to the jury. The jury subsequently returned a general verdict in favor of General Motors exonerating it from liability.

In this appeal, Ernst challenges the trial judge's interpretation of our first decision and, in the alternative, argues that he erred

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in not directing a verdict in Ernst's favor on several issues. Ernst contends further that the District Court erred in directing a verdict for Whiting-Turner. We conclude, though, that our previous decision did not preclude litigation of these issues and that the proceedings below were free of reversible error. We therefore affirm.


Involved in this case is a facility designed to complete automobiles produced in an adjacent building at General Motors' Chevrolet assembly plant in Atlanta, Georgia. Whiting-Turner became general contractor for the project pursuant to an agreement entered into with General Motors on April 6, 1967. Subsequently, on April 18, General Motors also executed a contract with Ernst which provided that Ernst would perform the electrical work for the project. On June 5, General Motors assigned the Ernst contract to Whiting-Turner so that the electrical work could be supervised by Whiting-Turner in its capacity as general contractor.

Under the controlling contracts, work was to begin immediately. The facility was scheduled to be ready for beneficial occupancy on December 1, 1967, with final completion slated for April 11, 1968. The start of construction, however, was delayed six to seven weeks by difficulties encountered by Black Grading, a contractor engaged by General Motors to prepare the building site.

Immediately after being informed of the impending delay, Ernst wrote to Whiting-Turner on May 1, 1967 disclaiming liability for the late start dates and indicating that a proposal for compensation would be forthcoming. The project was not substantially completed until the first week of June 1968, at which time the plant went into full operation. By September of that year, all adjustments and repairs were completed and all performance under the contract ended.

Shortly thereafter, Ernst requested a meeting with General Motors and Whiting-Turner "to thoroughly discuss and settle all outstanding directives, claims, etc." which had arisen during the course of construction. The meeting was held on October 28 and 29 with the result that General Motors subsequently paid $28,000 in settlement of the numerous claims raised by Ernst. On December 20, 1968, however, Ernst submitted a 180-page "claim booklet" demanding an additional $134,000 for losses allegedly resulting from construction delays. These claims became the subject of the suit below.


It is Ernst's position that our previous decision vacating the summary judgment entered against it was determinative of the notice and settlement defenses raised by General Motors and Whiting-Turner upon remand. Ernst contends, therefore, that the District Court erred in permitting these issues to be considered at trial.

Much of our previous decision was, indeed, phrased in broad language which, considered out of context, could be construed as being conclusive on the issues of notice and settlement. Prior to any discussion of the facts before us in that appeal, however, we were careful to limit the effect of our decision upon subsequent proceedings. After noting that "(t)he question is whether summary judgment should have been granted," we stated:

When a movant makes out a convincing showing that genuine issues of fact are lacking, it becomes incumbent on the adversary to adequately establish by receivable facts that a real, not formal, controversy exists. Stopping short of expressing any opinion as to how the trier (of the fact) should resolve the fact issue ultimately, we think Appellant (Ernst) has made the required showing and should have been allowed to go to trial.

482 F.2d at 1049 (emphasis supplied). Also, we concluded our opinion by reiterating that:

Appellant here has demonstrated to our satisfaction that genuine triable issues of fact are in existence. Where such a showing is made, summary judgment may not be substituted for trial.

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482 F.2d at 1057 (emphasis supplied). Nowhere did we state that we were entering summary judgment in favor of Ernst on the notice and settlement questions.

During the course of our discussion of the notice and settlement questions, we made several seemingly conclusive statements. For example, in response to contentions that Ernst's May 1, 1967 letter was not sufficiently specific to satisfy the contractual notice requirement we noted that general contract law does not require the giving of unreasonably specific notice:

Our decision here should in no way be construed as relieving the parties to a contract of strict compliance with notice provisions and the like. To the contrary, it results from our conclusion that, under the particular facts of this case, Appellant complied with the notice provision contained in paragraph 52 of its contract to the extent reasonable. . . . The question we have answered here is need Appellant, at the time of its May 1 letter, have made their (sic) notice any more specific than it did? Our answer to that is one well supported in general contract law if it could have, it should have. We think the record supports the conclusion that here it did all it could have done.

Id. at 1056.

On the issue of settlement a question not reached by the District Judge in his order granting summary judgment we stated:

Though we would agree that Appellant's letter (requesting the settlement meeting) evidences a poor choice of language, we do not think that their intention there was to settle the claims at bar here. To so hold would not only be to read that particular phrase out of context with the rest of the letter, but, in view of the nature of the other claims settled at the October 29 meeting, such a holding would be illogical. The record supports the conclusion that Appellant requested this meeting to settle various directives from GM to perform extra work incurred during the course of the project, but for which no price had been agreed upon between the parties. The only thing which remained on these claims of record was for the parties to meet and negotiate the prices.

Id. at 1057 (citations omitted).

We noted at the outset of our opinion, however, that we were merely reviewing the record under "the usual standard" governing appeals from summary judgments. Id. at 1049. That standard, of course, requires us to view the record in the light most favorable to the party who opposed the summary judgment motion; accepting his allegations as true and giving him the benefit of the doubt whenever his assertions conflict with those of the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Gauck v. Meleski, 5 Cir., 1965, 346 F.2d 433, 436; 10 C. Wright & A. Miller, Federal Practice and Procedure § 2716 at 430-32 (1973). Under this standard, our analysis of the limited record before us necessarily was of a binding character only with respect to the existence of a genuine triable controversy. As in any reversal of summary judgment, and assessment of the facts was not a mandatory blueprint for all subsequent proceedings upon remand. Gross v. Southern Ry., 5 Cir., 1971, 446 F.2d 1057, 1060. Indeed, we have held that our reversal of a summary judgment does not preclude the trial court from subsequently directing a verdict against the appellant:

(T)he reversal of summary judgment does not foreclose the right and the imperative duty of the District Judge to test the case against the actual evidence adduced at every stage of the trial. Nor is it a forecast that on remand the case must go to the jury. That depends upon the actual proof made and such proof may fall way short.

Braniff v. Jackson Ave.-Gretna Ferry, Inc., 5 Cir., 1960, 280 F.2d 523, 529; accord, Gross v....

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