Jones v. Chaney & James Construction Company

• Decision Date: 12 August 1968
• Docket Number: No. 24940.,24940.
• Citation: 399 F.2d 84
• Parties: W. Stanley JONES and Thomas E. Walker, partners d/b/a Stanley Jones Company, Appellants, v. CHANEY & JAMES CONSTRUCTION COMPANY, Inc., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

399 F.2d 84 (1968)

W. Stanley JONES and Thomas E. Walker, partners d/b/a Stanley Jones Company, Appellants, v. CHANEY & JAMES CONSTRUCTION COMPANY, Inc., Appellee.

No. 24940.

United States Court of Appeals Fifth Circuit.

August 12, 1968.

Morris K. Sirote, Birmingham, Ala., for appellants.

Allen Poppleton, James L. North, Birmingham, Ala., for appellee.

Before THORNBERRY, AINSWORTH and DYER, Circuit Judges.

THORNBERRY, Circuit Judge:

Appellee entered into a contract ("the prime contract") with the United States of America, acting through the Corps of Engineers, for the construction of a rocket test facility at the Marshall Space Flight Center, Huntsville, Alabama. Shortly thereafter, appellee entered into a subcontract with appellants on a unit price basis ($1.00 per cubic yard for excavation; $1.25 per cubic yard for "borrow") for a portion of appellee's work under the prime contract, specifically, the excavation and backfill required. After performing the subcontract, appellant instituted this diversity suit¹ claiming certain sums of money allegedly due from appellee, which are computed as follows:

(a) Contract Retainage. A claim for approximately $2500.00 allegedly due as final retainage on the contract. This claim was not contested, appellee having admitted indebtedness for this amount at the pre-trial hearing.

(b) Rehandling of Stockpiled Materials. A claim for approximately $9200.00 for rehandling material which had been previously excavated and stockpiled by appellants.

(c) Special Tamping. A claim for approximately $3300.00 allegedly due for spreading and tamping by hand, rather than mechanically as appellants had anticipated, certain earth or "backfill" which was used to refill a previously excavated area.

The trial court found as a matter of law that the terms of the contract were clear and unambiguous and that both of appellants' contested claims were foreclosed by specific contract provisions. Accordingly, at the close of appellants' case, the court granted appellee's motion for a directed verdict and directed the jury to find for the appellee on the contested claims and for appellants on the uncontested claim for contract retainage. On this appeal, appellants contend that the trial court erred in granting appellee's motion for a directed verdict on the contested claims.

I. JURISDICTION

At the outset, we consider appellee's contention that this Court is without jurisdiction because appellants failed to file a proper notice of appeal from the judgment of the trial court. The jury's verdict was returned on March 7, 1967. Judgment on the verdict was entered on March 8, 1967. Appellants gave notice of appeal on March 20, 1967 from the "six separate and several rulings entered in this action on March 7", all of which were rendered prior to the entry of the final judgment on March 8 and were unappealable. Appellee maintains that appellants have therefore failed to file a notice of appeal from the only judgment entered in this cause and that inasmuch as appeals may be taken only from final decisions, 28 U.S.C. § 1291, this Court is without jurisdiction.

The notice of appeal, however, should not be used as a "trap for the unwary draftsman", Wright, Federal Courts § 104 at 406 (1963); and decision on the merits should not be avoided on the basis of "mere technicalities", Foman v. Davis, 1962, 371 U.S. 178, 181, 83 S.Ct. 227, 230, 9 L.Ed.2d 222, 225. This Court has consistently said that an appeal will be entertained where an "overriding intent to appeal" may be reasonably inferred from the text of the notice and the defect has not materially misled the appellee. Markham v. Holt, 5th Cir. 1966, 369 F.2d 940, 943. Appellee contends, however, that these principles cannot be invoked in appellants' favor because they intentionally avoided appealing from the March 8 judgment in order to avoid jeopardizing the judgment below in their favor. Hence, appellants' "overriding intent", it is argued, was clearly to avoid appealing from the judgment of the trial court.

We disagree. Appellee bases its position on the contention that an appeal on the contested claims would supersede the entire judgment, making the claim in appellants' favor uncollectible. But an appeal would only supersede the challenged portion of the judgment in this case where there are several independent claims for which relief is sought. Appellants' notice of appeal expressly sought review of only those rulings adverse to their position on the contested claims, and thus that portion of the judgment favoring them on the uncontested claim would not be jeopardized by appeal. There is no reason to believe that the defect in the notice was anything other than a mistake by counsel or that appellants deliberately sought to circumvent the judgment of March 8 and predicate their appeal on the clearly interlocutory, unappealable trial rulings of March 7. Quite the contrary, appellants' intention to seek review of the only judgment in the cause seems clear. There is no indication that the defect has materially misled appellee. Accordingly, we proceed to the merits of this controversy.

II. APPELLANTS' CLAIM BASED ON THE REHANDLING OF STOCK PILED MATERIALS

Under the subcontract appellants were to excavate a 600-foot tunnel leading to the test stand facility. It was originally contemplated that, prior to the excavation of the tunnel, work on the test stand facility would be brought to the point that the appellant subcontractors could place material excavated from the tunnel in the main structural cavity at the test stand. However, before work on the test stand had progressed sufficiently to absorb the excavated material, appellee instructed appellants to proceed with the excavation of the tunnel area and to stockpile the excavated material adjacent to the tunnel, where it remained for about 120 days. Thereafter, appellants, pursuant to instructions from appellee, moved the stockpiled material and deposited it at various locations on the site. A small portion of this material was later moved back and used to backfill the tunnel. Appellants billed appellee for the rehandling of the stockpiled material as "borrow" under the subcontract; and appellee, in turn, presented a claim as "borrow" to the Corps of Engineers under the prime contract. When the Government's Contracting Officer disallowed appellee's claim under the prime contract, appellee refused to pay the claim for additional work under the subcontract and the appellant subcontractors filed this suit.

Appellants base their claim on the contention that rehandling the material previously excavated and stockpiled by them constitutes "borrow" under the subcontract. At the trial they introduced evidence of the construction of the subcontract by the parties as well as evidence of a well-established trade custom or usage indicating that "excavation", as understood by those engaged in the excavation industry in Alabama, is a continuous process which is completed once the material is excavated and stockpiled and that the rehandling of the stockpiled material constitutes another unit of work for which the contractor is entitled to additional payment. Appellee, on the other hand, maintains that the contract provisions contemplated both that "excavation", for which appellants were admittedly paid, included rehandling and that material excavated as a part of contract performance could not be considered or paid for as "borrow". Appellee objected to the introduction of extrinsic evidence by appellants on the ground that the contract itself carefully set out complete and unambiguous definitions of the disputed terms. The court reserved ruling after noting that appellee's objection would stand as to the entire line of such testimony.

At the close of appellants' case, the court, agreeing with appellee, ruled that the terms of the contract were clear and unambiguous and that the "rehandling of the previously excavated and stockpiled material and bringing it back to backfill the tunnel area could not under any circumstances be considered borrow * * * and it would be immaterial under these circumstances as to the general custom and usage where the definitions are plainly spelled out as they are in this contract." (R.116). The record reveals that the court's directed verdict was based entirely on its interpretation of the contract between the parties, and that, despite the fact that appellants have given great emphasis to these points in their brief, the disputes clause of the prime contract, the Contracting Officer's adverse decision, and the proceedings in connection therewith played no part in the court's decision. Accordingly, this Court must determine whether the trial court's interpretation was correct.

Once the court determined that the contract was not ambiguous, the conclusion that extrinsic evidence could not be permitted to vary or contradict its terms followed as a matter of the applicable Alabama substantive law. With respect to usage, in Homeland Insurance Co. v. Crescent Realty Co., 1964, 277 Ala. 213, 168 So.2d 243, 246, the rule was stated as follows:

Usage may be admissible to explain what is doubtful but is never admissible to contradict what is plain, or to change an express contract.

As to custom, in Ison Finance Co. v. Glasgow, 1957, 266 Ala. 391, 96 So.2d 737, 740, the court said:

* * * a custom cannot be operative if it is opposed to the express language of the contract. It may serve to clarify an ambiguity in a contract but cannot vary it.

It is clear that the court acted properly in determining whether or not the contract was unambiguous, for that is a function of the court, not the jury. In Hoover Inc. v. McCullough Industries, Inc., 5th Cir. 1967, 380 F.2d...