Allied Properties v. John A. Blume & Associates

• Decision Date: 22 May 1972
• Court: California Court of Appeals Court of Appeals
• Parties: ALLIED PROPERTIES, Plaintiff and Appellant, v. JOHN A. BLUME & ASSOCIATES, ENGINEERS, Defendant and Respondent. Civ. 28886.

Page 259

102 Cal.Rptr. 259

25 Cal.App.3d 848

ALLIED PROPERTIES, Plaintiff and Appellant, v. JOHN A. BLUME & ASSOCIATES, ENGINEERS, Defendant and Respondent.

Civ. 28886.

Court of Appeal, First District, Division 2, California.

May 22, 1972.

Steinhart, Goldberg, Feigenbaum & Ladar, Marvin D. Morgenstein, William A. Resneck, San Francisco, for appellant.

Farella, Braun & Martel, John S. Martel, Jon F. Hartung, San Francisco, for respondent.

TAYLOR, Presiding Justice.

On this appeal by plaintiff, Allied Properties (hereafter Allied) from a judgment entered on a jury verdict in favor of respondent, John A. Blume & Associates, Engineers (hereafter Blume), the only contentions are that the trial court erred in rejecting an instruction on implied warranty and giving an instruction that Blume's standard of care was to be determined from the testimony of experts.

Viewing of record most strongly in favor of the judgment and verdict, as we must, the following facts appear. Allied is a corporation that has owned the Santa Barbara Biltmore Hotel in Montecito since 1934 and also owns the Coral Casino Beach and Cabana Club across the street. The Santa Barbara Biltmore Hotel (hereafter hotel) is a high-class vacation hotel for affluent people that caters to people in their 60's, with its formal atmosphere and general requirement of coats and ties for meals. In 1962, Robert Odell, Allied's president, after taking to a number of friends and customers, including Coral Casino Club members who had trouble getting slips in Santa Barbara Harbor, decided that a pier ¹ for small boats would be a useful addition to the hotel's facilities. Allied first contacted a contractor who recommended Blume as marine engineers. Initially, Odell asked Blume to design pier facilities that could be constructed for about $50,000. By a letter dated May 17, 1962, Blume outlined for $1,000 an engineering feasibility study to determine whether a structurally adequate facility could be built for $50,000.

Blume's senior vice president, Nicoletti, understood that his responsibilities were limited to 'engineering feasibility,' an engineering term that includes a determination of whether the facility could be built and the size of the principal member and cost. An 'economic feasibility study' that would also include the usage, operation, financing and other economic factors would have cost at least $10,000. Blume assumed that Odell already knew he had potential customers for the proposed hotel pier as Odell had initially approached a contractor to build the pier without a design. Nicoletti understood that Odell wanted a facility to use in the season from May to September for small boats ² and to transfer people by water taxis from large boats to shore and occasional refueling of large boats in calm weather. Blume assumed that Allied was familiar with the site in front of the hotel, ³ the shallow water there, ⁴ and the local weather conditions and would, therefore, know that the pier would not be usable at all times.

Blume began the feasibility study in the spring of 1962 and completed it in the fall. Blume delayed from June to the end of August at the request of Allied while Allied negotiated a lease with the state.

Blume's engineers' feasibility study indicated that an expenditure of around $150,000 would be required to build a structurally adequate pier. This information was conveyed to Allied and an expenditure in this amount approved by Odell, again without an economic analysis of the project. Blume then prepared a design for the facility that was to be built by a contractor paid by Allied. At the design phase, Blume's responsibility was to design a structurally sound pier that would withstand the exposure of the site.

As part of the structural calculation to determine the strength necessary to withstand wave action, Blume employed an expert oceanographer, Dr. Kent, and his firm, National Marine Consultants, to provide the wave information for the design of the pier. ⁵ After the receipt of Dr. Kent's letter of January 2, 1963 (quoted in the footnote below), ⁶ Nicoletti changed the pier design from one 40 foot float in front of the pier to two 60 foot floats on both sides of the pier that could also be used as fixed platforms raised and lowered by electric hoists, if needed. The initial plan had been to open the pier in the 1963 season but the contractor's delay in driving the piles, for which he was penalized, postponed the opening date to the 1964 season. Construction was completed in December 1963, but a storm damaged both of the floats in December 1963. Blume on December 23, 1963, wrote Odell that the floats were not designed for heavy wave action and had to be raised out of the water whenever the sea was too rough for the average yacht. ⁷ Blume again recommended electric hoists but Odell, in the interest of economy, first insisted on manual ones.

The floats were again discussed at a meeting on March 9, 1964. On March 18, 1964, Blume wrote to Odell as follows: 'Length of floats: The landing floats are designed for unlimited use in waves two feet or less in height. The floats can be used safely for short periods in waves three to four feet in height, but extended exposure to these waves will be expected to produce structural damage. The modifications described in a following paragraph will permit the floats to be used as a fixed platform above the waves for emergency landings in heavy weather. Although this will permit use of the floats with waves in excess of four feet, it should be emphasized that this should only be attempted by experienced boatmen with well-built maneuverable boats.' ⁸ The March 18 letter also repeated the recommendation for electric hoists and a steel spreader bar.

In March of 1964, Blume still planned to leave the floats in the water, but subsequent damage indicated that only the fixed platform was operational at the site. Accordingly, on May 12, 1964, Blume wrote to Odell concerning the damage and again recommended the motorized winches and steel spreader bars to permit operation of the float as a platform.

To arrive at a conservative wave height for the purpose of structural design, Blume's chief engineer, Koch, used a generalized Navy Harbor Analog study. From the tables in this statistical study based on weather and navigation reports without onsite observations, applicable to all areas of the world, when adjusted for the hotel pier location, Koch indicated a wave height ⁹ in excess of 2 feet for approximately 36 percent of the time. Although this figure was used in the structural calculations, Blume did not consider it to be an accurate estimate of actual wave conditions but merely a conservative figure to be used in the structural design of the floats. For this reason and because the figure did not agree with the on-site observations of Blume's employees, ¹⁰ the 36 percent figure was not reported to Odell. Blume accepted the figure as an indication that in the summer, the pier would not be usable about one-third of the time.

Dr. Kent testified that if he had made the same calculations as Koch on the basis of the Navy Analog study, he would have classified the hotel pier as 'unprotected' (e.g., the degree of the arc of exposure of more than 120 degrees for 15 nautical miles) and used a maximum 'fetch' ¹¹ of 500--2,000 nautical miles, and used different tables than those used by Koch.

Dr. Kent stated that while it was desirable to verify data like that of the Navy study, it was not always practical to do so. Each year is different and only average figures can be obtained. In addition, the figures had to be adjusted by: the refraction factor ¹² of the waves as they approach the shore (that decreases wave height); the shoaling effect ¹³ (that in turn increases it); the different locations of the stations that studies are based on, and the hotel pier site, as well as the sea and swell ¹⁴ data.

Koch's figure of 36 percent was actually higher than the total of the sea and swell for the three summer months at Montecito according to Kent's calculations. However, the total of the sea and swell conditions is not accurate, as additional data are required as to when sea and swell occur.

Dr. Kent, however, considered it below the standard of care for Blume's engineers not to have also used in their calculations a more specific report based on on-site observations, in addition to the generalized data in the Navy Analog report. Kent's firm had prepared a specific study in 1960, on the Santa Barbara channel. The report was made for the Army Engineers and not generally available, but the Blume office usually obtained such reports for its files shortly after their issuance. Koch was not aware of the 1960 study.

Dr. Kent stated that there was no firm standard for wave height for unloading passengers from small boats. The 'surge' or lateral motion of the water also has to be taken into account, but this is difficult to do as a practical matter. Aside from big ship analysis, surge studies are not done.

In Dr. Kent's opinion, the hotel pier as a platform was usable a fair amount of the time by average people using small craft. If only a few people and boats used the hotel pier since 1965, there must be some other reason than the water conditions, as the water at that location was flat a great number of times.

Allied's expert, Dr. Collins, testified that on the basis of the same study as that used of Koch, his own figure showed that at the hotel pier in June, 63.4 percent of the time the waves were higher than 2 feet; in July, 52.1 percent; and August 40.3 percent. From these, he obtained an average of 49 percent for the three summer months, during which the waives would be over 2 feet in height. Collins considered the hotel pier site unprotected and used a different set of figures than Koch. In Collins' opinion, the area in front of the hotel was usable by small boats ¹⁵ 40 to 50 percent of the time in the summer...