U.S. v. Lembke Const. Co., Inc., 85-2137
| Decision Date | 11 April 1986 |
| Docket Number | No. 85-2137,85-2137 |
| Parties | 33 Cont.Cas.Fed. (CCH) 74,340 UNITED STATES of America, Plaintiff/Appellant, v. LEMBKE CONSTRUCTION CO., INC. Defendant/Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Kenneth Oestricher, Dept. of Justice, Washington, D.C., for plaintiff/appellant.
Doug Shook, James R. Broening, Crampton, Woods, Broening & Oberg, Phoenix, Ariz., for defendant/appellee.
Appeal from the United States District Court for the District of Arizona.
Before SCHROEDER, CANBY and BOOCHEVER, Circuit Judges.
The United States appeals the district court's judgment in favor of Lembke Construction Co., Inc. claiming that certain defects in the roof were latent. The United States sued Lembke, its contractor for the construction of a school. The district court concluded that (1) the defects were not latent, (2) the U.S. had accepted Lembke's performance on the contract knowing of roof problems, and (3) Lembke did not breach the contract. At issue is whether the district court erred in rejecting an expert's opinion as a basis for concluding that a defect is latent, when the opinion is based on evidence known prior to acceptance of the building.
On October 30, 1974, the United States, through the Bureau of Indian Affairs (BIA), and Lembke entered into the contract for constructing an addition to the Santa Rosa School. Lembke started construction in December 1974, and subsequently completed the building in December 1975. Final inspection of the addition was performed on January 6-9, 1976, and the school was turned over to the BIA for beneficial occupancy on February 25, 1976.
The design of the addition, prepared by architects Chopas, Starkovich and Associates, called for the construction of a two-way-post-tension flat roof over the classroom area. This low roof consisted of several thirty-foot concrete spans supported by columns.
Soon after the addition was completed, Lembke received complaints of leaks, cracks, and deflections (sagging) in the roof. In April 1977, Lembke hired the firm of MacCornack & Burns to investigate the leaking and deflection problems. MacCornack & Burns concluded that the leaking and deflection problems were caused by excessive concrete creep or improper post-tensioning. The BIA was informed of MacCornack & Burns' conclusions.
On August 10, 1977, the government hired Portland Cement Association (PCA) to study the integrity and safety of the roof. On August 29, 1977, PCA issued a preliminary report indicating that the roof was structurally sound. PCA engineers visited the school several times between 1977 and 1979. Cracks and deflections in the roof were measured and compared in November 1977 and January 1978. In March 1979, PCA issued its final report concluding that the roof was structurally sound.
In the meantime, on December 28, 1978, the government wrote to Lembke advising that it had finally accepted the building and that final acceptance was to be effective as of July 13, 1977.
In June 1980, the government hired the engineering firm of Stearns-Roger Limited (Stearns-Roger) to perform an analysis of the roof structure of the school. Stearns-Roger issued a report in July 1980, concluding that the addition to the school lacked an adequate margin of safety. The BIA subsequently closed the school.
Stearns-Roger then suggested four options for repairing the roof: (1) restressing the tendons; (2) placing a steel superstructure on the present roof; (3) replacing the existing roof; or (4) rebuilding the entire school. The BIA chose the second option. The steel superstructure was placed on the roof in early 1982 at a cost of $681,000. Neither Lembke nor PCA was advised of the repairs or of Stearns-Roger's conclusion that the roof was unsafe.
The construction contract between the BIA and Lembke provides that: "Acceptance shall be final and conclusive except as regards latent defects, fraud, or such gross mistakes as may amount to fraud, or as regards the Government's rights under any warranty or guarantee." The government's sole contention is that defects in the roof were latent. The alleged defect is the inadequate margin of safety in the roof discovered by Stearns-Roger after final acceptance. The government argues that the defect was caused by construction error. Because we conclude that the district court did not err in not finding a latent defect, we need not reach the issue of whether the defect was caused by design or construction error.
The district court applied the proper test that a latent defect is "one which cannot be discovered by observation or inspection made with ordinary care." Kaminer Construction Corp. v. United States, 488 F.2d 980, 984, 203 Ct.Cl. 182 (1973). The district court determined that the defects described by Stearns-Roger were not latent, and further, that the defects were caused by design deficiencies rather than construction error.
To determine whether a defect is latent first requires determining the proper legal definition of the term. As indicated above, there is no dispute in this case as to that definition. The historical facts must then be applied to that...
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