Brower Co. v. Garrison

• Decision Date: 20 April 1970
• Docket Number: No. 272--40713--I,272--40713--I
• Citation: 2 Wn.App. 424,468 P.2d 469
• Parties: The BROWER COMPANY, a Washington corporation, d/b/a The Brower Asbestos Company, Plaintiff, v. Jack M. GARRISON, Kenworth Northwest Sales and Service, Inc., United Plumbing and Heating, Inc., et al., Respondents. KENWORTH NORTHWEST SALES AND SERVICE, INC., Respondent, v. Henry W. BATTS and Jane Doe Batts, d/b/a Batts Construction Company, and General Insurance Company of America, Appellants.
• Court: Washington Court of Appeals

Page 424

2 Wn.App. 424

468 P.2d 469

The BROWER COMPANY, a Washington corporation, d/b/a The

Brower Asbestos Company, Plaintiff, v. Jack M. GARRISON, Kenworth Northwest Sales and Service,

Inc., United Plumbing and Heating, Inc., et al.,

Respondents.

KENWORTH NORTHWEST SALES AND SERVICE, INC., Respondent, v. Henry W. BATTS and Jane Doe Batts, d/b/a Batts Construction

Company, and General Insurance Company of America,

Appellants.

No. 272--40713--I.

Court of Appeals of Washington, Division 1, Panel One.

April 20, 1970.

As Amended April 29, 1970.

As Modified May 7, 1970.

Ferguson & Burdell, W. Wesselhoeft and William E. Kuhn, Seattle, for appellants.

Bogle, Gates, Dobrin, Wakefield & Long, Don Paul Badgley, Seattle, for respondent, Kenworth Northwest Sales & Service, Inc.

Reaugh, Hart, Allison, Prescott & Davis, Keith R. Baldwin, Seattle, for respondent United Plumbing.

SWANSON, Judge.

Henry W. Batts and wife, doing business as Batts Construction Co. (Batts), as general contractor, agreed to construct a truck sales and service building for Kenworth Northwest Sales & Service, Inc. (Kenworth). After construction of the facility was completed, The Brower Co., a subcontractor, brought a lien foreclosure action against Kenworth, the owner of the property, Batts, the general contractor, and other subcontractors, including United Plumbing & Heating, Inc. (United). United cross-claimed to foreclose its lien claim for an alleged balance due on its subcontract. Kenworth then brought a separate action against Batts and its surety. It sought damages in excess of $425,000 claiming poor construction, real estate depreciation, and delayed performance damages. Batts counterclaimed seeking foreclosure of its lien claim of $81,209.01. These actions were consolidated for trial. The subcontractors' lien claims were settled during the course of the trial, and none are appealed from. United is the only subcontractor involved in an issue on this appeal. Batts received a judgment against Kenworth for $81,209.01, less a setoff to Kenworth for damages for deficiencies in the construction of the building and for loss of profits caused by Batts' failure to substantially complete the building within a reasonable time. The setoff totalled $79,811.50, thus netting Batts only $1,397.51. Batts has not appealed from that part of the judgment relating to deficiencies in construction but appeals from certain of the amounts allowed Kenworth as a setoff and the insufficiency of a setoff awarded Batts against United.

Four separate areas of dispute are raised by the appeal and cross-appeal, as follows:

(1) The award of a setoff to Kenworth of approximately $14,000 against Batts for loss of profit caused by Batts' delay in completing the building within a reasonable time.

(2) The award of a setoff to Batts of $2,900 against United, the amount being based upon the portion of the responsibility the trial court felt United had in causing the delay in the completion of the building. Batts claims the amount set off should have been $9,600.

(3) The award to Batts of a $1,500 attorneys' fee. Respondent Kenworth cross-appeals and claims that Batts did not in fact receive a net judgment and, even if it did, the court abused its discretion in awarding an attorneys' fee larger than the amount of the net judgment.

(4) The rejection of Batts' claim for a 15 per cent markup on all change orders, including work performed by the subcontractors wherein a 15 per cent markup was included within their change order figure. This involves a claim of approximately $5,577.

To place these questions in their proper perspective necessitates a somewhat detailed account of the transaction.

Kenworth was incorporated when Kenworth Motor Truck Corporation announced it was going to separate the sales and service of trucks in the Seattle area from its manufacturing operation. Kenworth was awarded the distributorship and, in preparation for taking over this business operation, had certain plans and specifications prepared for the construction of a sales and service building. Kenworth issued a call for bids which were to be tendered on forms supplied by its architect. The instructions to bidders said that 'consideration will be given to both the dollar amount and the completion time.' The bid form contained a clause reading, 'The Undersigned, agrees if awarded the contract for the work, to substantially complete the work within _ _ consecutive calendar days after notice to proceed is received.' The specifications issued to prospective contractors provided that the general conditions of the contract were to be controlled by The American Institute of Architects' document A--201. ¹ The architect also added supplementary conditions which were to control when in conflict with the general conditions. The appellant Batts submitted the winning bid and in it agreed to substantially complete the construction within 160 consecutive calendar days after receiving notice to proceed.

The owner-contractor agreement contained a specific article dealing with the time of completion, but no completion time was inserted. The article was left blank. The court found the contract did not provide for a fixed completion date. Finding 7. The trial court further determined, pursuant to the authority of Robinson v. Davis, 158 Wash. 556, 559, 291 P. 711 (1930), that where no time of performance is specifically agreed upon, a reasonable time for performance under the circumstances will be by the law presumed as intended by the parties to the contract. The court then stated in finding 9:

Under the circumstances which prevailed at the time of the execution of the Contract and taking into consideration all the evidence regarding the conditions and events which occurred during the performance of the contract, a reasonable time by which Batts should have substantially completed the facility was February 15, 1967.

Thus, the initial question we must review is whether the construction contract contained an established completion date. Batts bases its argument that the contract did contain a fixed completion date on the terms of the accepted bid. It contends that the accepted bid which is described as a contract document in the contract itself must be a part of the contract. The contract's supplementary condition article 1(a) modifying the general conditions states:

'Contract Documents' consist of: (A) Accepted Bid, (B) General Conditions, (C) Supplementary General Conditions, (D) Agreement, (E) Specifications, and (F) Drawings. Items (B) to (F) inclusive shall form the contract.

Batts argues that if the accepted bid is a contract document it must be part of the contract, and since the bid sets forth the specified number of days for completion, the court erred in disregarding that portion of the contract. In making this argument, Batts ignores the sequence of events. The accepted bid did, indeed, specify 160 days as the time within which the work was to be completed; however, the agreement contained a specific article dealing with time of completion:

Article 2. Time of Completion

The work to be performed under this Contract shall be commenced and completed as follows:

However, nothing was either typed or written below this heading. But the contract itself provides the answer to the intention of the parties, for the contract's supplementary condition 1(a), Supra, indicates that the accepted bid, though a contract document, is not part of the contract. This is a clear indication that the parties intended that the accepted bid should merge into the contract and lose its separate existence apart from the agreement itself. The Supreme Court discussed the question of merger in Dix Steel Co. v. Miles Constr., Inc., 74 Wash.2d 114, 119, 443 P.2d 532, 536 (1968):

As a general rule, preliminary negotiations between a subcontractor bidder and a general contractor merge as a matter of law in the formal written contract between them. * * * It all depends upon the parties' intentions, and these intentions, more often than not, are facts to be ascertained by the trial court or jury.

The trial court found that the contract did not provide a fixed completion date. This finding is correct and is supported by substantial evidence. The legal conclusion to be drawn from this finding is that Batts and Kenworth did not agree on a certain date for completion; rather, they agreed that performance should be completed by a date coextensive with a reasonable time. This conclusion is a presumption or fiction indulged in by the law to keep a contract from failing for lack of definiteness.

(When) no time of performance (is) specifically agreed upon, a reasonable time for performance, under the circumstances, will be by the law presumed as intended by the parties to the contract.

Robinson v. Davis, Supra at 559, 291 P. at 713. See also RCW 62A.2--309.

The court found that under the circumstances, February 15, 1967, was a reasonable time for completion. The finding is based on substantial evidence and will not be overruled. Thorndike v. Hesperian Orchards, Inc., 54 Wash.2d 570, 343 P.2d 183 (1959). Having found a reasonable time, it is then presumed this is what the parties intended. And since this is what the parties intended, it then becomes a term of the contract just as surely as if it were written in by the parties. 'Necessary implications are as much a part of an agreement as though the implied terms were plainly expressed.' Suess v. Heale, 68 Wash.2d 962, 966, 416 P.2d 458, 461 (1966).

Having determined the date the parties intended, the court then found that there was no meeting of the minds on the terms of the liquidated damages clause. ² Finding 19. ³ The court also stated in finding 22:

It was intended by the parties that Art. 45 not be in effect unless a specified completion date was set forth in Art. 2 of Standard Form of Agreement (or elsewhere), which was not done.

In other words, the court said that a completion...