S.O.G.-San Ore-Gardner v. Missouri Pac. R. Co.

Decision Date31 August 1981
Docket NumberORE-GARDNE,80-1934,Nos. 80-1891,A,s. 80-1891
Citation658 F.2d 562
PartiesS.O.G.-SANppellant, v. MISSOURI PACIFIC RAILROAD COMPANY, Appellee, v. TRAVELERS INDEMNITY COMPANY. S.O.G.-SANppellee, v. MISSOURI PACIFIC RAILROAD COMPANY, Appellant, v. TRAVELERS INDEMNITY COMPANY.
CourtU.S. Court of Appeals — Eighth Circuit

Herschel H. Friday and B. S. Clark, argued, Little Rock, Ark., for appellee/cross-appellant.

Thomas M. Phillips, argued, Thomas R. Phillips, Houston, Tex., Ronald A. May, Little Rock, Ark., for appellant; Baker & Botts, Houston, Tex., Wright, Lindsay & Jennings, Little Rock, Ark., of counsel.

Before LAY, Chief Judge, McMILLIAN, Circuit Judge, and LARSON, * Senior District Judge.

LAY, Chief Judge.

S.O.G.-San Ore-Gardner (S.O.G.) entered into a contract on November 5, 1968, with the Missouri Pacific Railroad Company (Railroad) for the alteration of the Benzal Bridge over the White River, which is located near Benzal, Arkansas and is owned by the Railroad. The change was necessitated by the Arkansas River Project of the United States Army Corps of Engineers and the United States Coast Guard and included replacing the central pier and swing span with two new piers and a lift span. The contract provided for performance in three stages: Stage I (Substructure) Construction; Stage II (Change-out or Changeover) Construction; and Stage III (Superstructure) Construction. The contract contained, inter alia, a provision for liquidated damages of $600 per day if performance of the contract was not completed within the time period specified. The Railroad had also entered into a separate contract with the government on June 19, 1967, which obligated the United States to reimburse "all reasonable and legitimate costs" incurred by the Railroad in arranging and altering the bridge. This suit arises out of alleged damages incurred by both parties from the delay in completion of the project.

Difficulties and delays arose throughout the performance of the contract. The term for completion of the contract was originally set at 660 days, but it was later amended to 1122 days, which set the completion date at March 5, 1972. S.O.G. actually completed work on July 18, 1974, and the Railroad claimed approximately one-half million dollars in liquidated damages. S.O.G. filed a complaint against the Railroad, and later filed an amended and substituted complaint seeking damages for increased costs resulting from a funding delay; 1 S.O.G. also sought damages for an alleged material breach of the contract by the Railroad in failing to disclose the imposition by the Coast Guard of a seasonal restriction on the changeover phase. In addition, S.O.G. claimed additional damages resulting from a delay allegedly caused by the Railroad's failure to timely apprise the government of S.O.G.'s float-in and erection plans. Finally, S.O.G. made claim for certain monies retained by the Railroad as liquidated damages. The district court held that, although the Railroad and the government were partially at fault in causing many of the delays, S.O.G. was not entitled to any increased costs. The court also held the liquidated damages clause unenforceable as there was no "realistic consideration given to the elements of damage ... at the time the contract was executed." San Ore-Gardner v. Missouri Pac. R.R., 496 F.Supp. 1337, 1349 (E.D.Ark.1980). S.O.G. appeals that portion of the judgment denying it damages from the delay caused by the difficulties in obtaining the changeover permit and the delay surrounding the float-in.

I. Changeover Permit.

Prior to implementation of Stage I cofferdam construction, S.O.G. applied to the Coast Guard for a permit. It is this permit application and the following difficulties prior to execution of the Phase II changeover which initiated the most controversial delay in the project.

On August 22, 1968, prior to execution of the S.O.G.-MOPAC contract, the United States Coast Guard wrote to the Railroad's engineering consultants, stating:

The operation of the navigation span of this bridge is governed by Section 117.560(f)(26) of Title 33, Code of Federal Regulations. It will be necessary to publish a change to this special regulation to provide for the changeover period during which the swing span will be removed and the lift span will be inoperable. As soon as the approximate inclusive dates for this alteration period are known, the owner of the bridge should make application to this office for a change in this regulation.

Shortly after the S.O.G.-MOPAC contract was signed, MOPAC's engineering consultant gave S.O.G. a design memorandum prepared for the Corps of Engineers in 1967 which advised Phase II changeover during the fall months.

The first part of paragraph 6 of the S.O.G.-MOPAC contract special conditions states:

(a) General Requirements. Construction of a bridge over the navigable waters of the White River near Benzal, Arkansas has been authorized by an instrument of approval of location and plans therefor, signed by the Commandant, U. S. Coast Guard. Copies of this permit will be furnished to prospective bidders upon request. The Contractor shall assume all the obligations and shall comply with all of the requirements and provisions of this permit, which are applicable to the work of this contract.

(Emphasis added.)

S.O.G. urges that it interpreted this to mean that all necessary permits had been obtained. However, paragraph 6 further states:

All work in navigable waters shall be so conducted that free navigation of the waterway will not be unreasonably interfered with and that existing navigable depths will not be impaired.

The Contractor shall communicate with the appropriate agency or agencies and procure, at his own expense, all required permits. The Contractor shall comply fully and faithfully with the requirements established by the District Engineer, Corps of Engineers, the U. S. Coast Guard, and such other agencies, if any, as may have jurisdiction. Copies of all permits and authorizations shall be filed with the Engineer for information and record....

(b) Specific Requirements. The use of falsework, cofferdams or other temporary construction encroaching upon navigation channels will be permitted subject to the following requirement: Except during the "change-out" (Stage II construction) period, there shall be maintained at all times within the navigation channel a navigable horizontal clearance of sufficient width to safely accommodate the passage of a tow consisting of two 35-foot barges abreast.

All falsework or cofferdams so erected or other temporary construction facilities shall be removed completely and promptly upon discontinuation of their useful purpose.

If in case the Contractor's method proposes the use of falsework or other constrictions in the navigation channel, the Contractor shall furnish the details requesting a permit from the Coast Guard District and shall indicate therewith the clearance and method by which it will be maintained. In the event the Contractor's procedure requires a constriction in the navigation channel of less than the horizontal clearance specified for any period(s) of time prior to and/or following the Stage II construction period, it shall be his own responsibility to make the necessary arrangements with the Coast Guard District or other agency involved and to furnish such details and information as may be required by that agency....

(Emphasis added.)

In addition, paragraph 18 of the General Provisions of the S.O.G.-MOPAC contract provides, "The Contractor shall, at his own expense, obtain all permits required for the performance of work, and he must strictly comply with all laws and ordinances which may apply to the work."

On June 29, 1970, S.O.G. wrote to the Coast Guard requesting a permit to commence the cofferdam construction necessary for the erection of Stage I piers. The Coast Guard replied on July 8, 1970, acknowledging receipt of S.O.G.'s "plan of the cofferdam layout" and stating that its conditions regarding "construction of falsework, pilings or other obstructions" were imposed upon the bridge owner and that authorization to make application for approval on the owner's behalf was required. The letter also requested general information as to the sequence of construction and the estimated time that each stage would commence.

On July 20, 1970, and August 17, 1970, S.O.G. wrote again to the Coast Guard with the necessary authorization from the Railroad and provided sequence information which included, inter alia, reference to Phase II changeover occurring in December 1971 and January 1972. The Coast Guard's reply contained a request for additional information regarding construction of the cofferdam, referring to the potential navigational problems should S.O.G. intend concurrent construction of the cofferdams. Coast Guard approval was subsequently granted subject to certain conditions related solely to cofferdam construction and navigation lights. The approval letter dealt with cofferdam construction only; no reference to approval of Stage II was apparent. S.O.G. characterized this permit request of August 1970 as an application for Stage I cofferdam approval only. The Railroad viewed this permit as one for both Stage I and Stage II operations.

These initial permit characterizations did not become pertinent until S.O.G. was ready to commence the Stage II changeover. It is uncontroverted that S.O.G. did not complete the piers until November 1972, rather than November 1971 as originally forecast. S.O.G. apprised the Railroad of its progress throughout the contract and submitted a revised schedule on March 6, 1972, which reset changeover for November 1972. The Railroad replied on March 16, 1972, that it had made formal application to the Coast Guard to immobilize the drawspan of the bridge from November 1, 1972, to March 31, 1973. It is important to note that the Railroad,...

To continue reading

Request your trial
13 cases
  • Trevino v. HSBC Mortg. Servs., Inc. (In re Trevino)
    • United States
    • U.S. Bankruptcy Court — Southern District of Texas
    • 31 de julho de 2015
    ...It is well settled that the principal's undisclosed knowledge is not imputed to the agent. See, e.g., S.O.G.-San Ore–Gardner v. Mo. Pac. R. Co., 658 F.2d 562, 567 (8th Cir.1981) ; Cirillo v. Valley Baptist Health Sys. (In re Cirillo), 2014 WL 1347362, at *7 n. 8 (Bankr.S.D.Tex. Apr. 3, 2014......
  • Trevino v. HSBC Mortg. Servs., Inc. (In re Trevino)
    • United States
    • U.S. Bankruptcy Court — Southern District of Texas
    • 19 de junho de 2015
    ...It is well settled that the principal's undisclosed knowledge is not imputed to the agent. See, e.g., S.O.G.–San Ore–Gardner v. Mo. Pac. R. Co., 658 F.2d 562, 567 (8th Cir.1981) ; Cirillo v. Valley Baptist Health Sys. (In re Cirillo), 2014 WL 1347362 at *7 n. 8 (Bankr.S.D.Tex. Apr. 3, 2014)......
  • In re Siharath
    • United States
    • U.S. Bankruptcy Court — District of Minnesota
    • 6 de novembro de 2002
    ...of his principal and that the principal's undisclosed knowledge is not imputed to him." S.O.G.-San Ore-Gardner v. Missouri Pacific R.R Co., 658 F.2d 562, 567 (8th Cir.1981); see also Restatement (Second) of Agency §§ 320, 348 (1958). The Peterson Firm did not willfully violate the automatic......
  • Baldwin v. National Safe Depository Corp.
    • United States
    • Washington Court of Appeals
    • 12 de março de 1985
    ...F.2d 1026, 1038 (5th Cir.1977), cert. denied, 434 U.S. 1067, 98 S.Ct. 1246, 55 L.Ed.2d 769 (1978). See also S.O.G.-San Ore-Gardner v. Missouri P.R.R., 658 F.2d 562 (8th Cir.1981) (too difficult to delineate fault); Brecher v. Laikin, 430 F.Supp. 103 (S.D.N.Y.1977) (no legal authority cited ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT