City of Houston v. R. F. Ball Const. Co., Inc.

• Decision Date: 12 July 1978
• Docket Number: No. 1750,1750
• Citation: 570 S.W.2d 75
• Parties: CITY OF HOUSTON, Appellant, v. R. F. BALL CONSTRUCTION COMPANY, INC., et al., Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 75

570 S.W.2d 75

CITY OF HOUSTON, Appellant, v. R. F. BALL CONSTRUCTION COMPANY, INC., et al., Appellees.

No. 1750.

Court of Civil Appeals of Texas, Houston (14th Dist.).

July 12, 1978.

Rehearing Denied Aug. 30, 1978.

Robert M. Collie, Jr., City Atty., Joseph G. Rollins, Senior Asst. City Atty., Dale M. Tingleaf, Asst. City Atty., Houston, for appellant.

Owen W. Cecil, Brian S. Greig, Fulbright & Jaworski, Houston, for appellees.

COULSON, Justice.

The City of Houston appeals from an adverse judgment entered in a suit brought by R. F. Ball Construction Company, Inc. and Southwest Ball Construction Company for damages occasioned by delay and hindrance in the construction of passenger terminal facilities at Houston Intercontinental Airport. We hold that the construction contract precludes recovery of such damages. We reverse and render judgment that the plaintiffs take nothing.

On June 15, 1965, the City of Houston ("City") awarded R. F. Ball Construction Company, Inc. and Southwest Ball Construction Company (jointly referred to as "Ball") a contract for the construction of the following parts of Houston Intercontinental Airport: two five-level terminal buildings, seven flight stations, seven connecting concourses to join the flight stations to the terminals, a battery train tunnel and pedestrian tunnel, a utility tunnel, two U-ramps (one at each terminal), four spiral ramps (two at each terminal), and four baggage cart tunnels. Ball began work on the project on June 16, 1965 and was scheduled to complete it on April 30, 1967. Work was not in fact completed until the opening date of the airport, June 9, 1969. During the performance of the work the City issued, as it was contractually authorized to do, several hundred "Change Items" and between eight hundred and nine hundred "Clarifications" varying the original plans and specifications. Although the City paid Ball.$2,404,194.02 for such changes, this payment was for the "direct" costs of the changes and did not cover the "indirect" or "impact" costs occasioned by the delay, disruption, and general hindrance of efficient work which inevitably resulted from the changes. Following an unsuccessful demand on the City for payment of such costs, Ball filed suit, on behalf of itself and its subcontractors, for the damages sustained as a result of the delay and hindrance of work caused by the City's changes. At the conclusion of a two month trial, thirteen special issues were submitted to the jury. In response to the first eight of these issues the jury found that:

(1) The number of Change Items and Clarifications was greater than was foreseen or contemplated by Ball and the City at the time they entered into the contract;

(2) The number of Change Items and Clarifications caused Ball to be delayed in the completion of its work under the contract;

(3) Such delay was not foreseen or contemplated by Ball and the City at the time they entered into the contract;

(4) Such delay caused Ball to perform additional work;

(5) The number of Change Items and Clarifications caused Ball to be hindered in the completion of its work under the contract;

(6) Such hindrance was not foreseen or contemplated by Ball and the City at the time they entered into the contract;

(7) Such hindrance caused Ball to perform additional work;

(8) $3,759,209.90 would reasonably compensate Ball for the additional work performed by it and its subcontractors for which Ball had not been paid.

The remaining issues, dealing with recovery in quantum meruit, were submitted conditionally and were not answered by the jury. The trial court added pre-judgment interest to the amount of damages found by the jury and rendered judgment for Ball totaling $5,108,765.50, from which the City brings this appeal.

In the absence of provision to the contrary, a contractor, such as Ball, is entitled to recover damages from a contractee, such as the City, for losses due to delay and hindrance of work if it proves (1) that its work was delayed or hindered, (2) that it suffered damages because of the delay or hindrance, and (3) that the contractee was responsible for the act or omission which caused the delay or hindrance. Anderson Dev. Corp. v. Coastal States, Etc., 543 S.W.2d 402 (Tex.Civ.App. Houston (14th Dist.) 1976, writ ref'd n. r. e.); Bd. of Regents, U. of Tex. v. S. & G. Const. Co., 529 S.W.2d 90 (Tex.Civ.App. Austin 1975, writ ref'd n. r. e.); H. Cohen, Public Construction Contracts and the Law § 8.3, at 229 (1961). However, the parties may foresee the possibility of delay and contractually provide for the remedy to be applied if that possibility occurs. Ball's contract with the City contains such a provision:

13. Delays. The Contractor shall receive no compensation for delays or hindrances to the work, except when direct and unavoidable extra cost to the Contractor is caused by the failure of the City to provide information or material, if any, which is to be furnished by the City. When such extra compensation is claimed a written statement thereof shall be presented by the Contractor to the Engineer and if by him found correct shall be approved and referred by him to the Council for final approval or disapproval; and the action thereon by the Council shall be final and binding. If delay is caused by specific orders given by the Engineers to stop work, or by the performance of extra work, or by the failure of the City to provide material or necessary instructions for carrying on the work, the such delay will entitle the Contractor to an equivalent extension of time, his application for which shall, however, be subject to the approval of the City Council; and no such extension of time shall release the Contractor or the surety on his performance bond from all his obligations hereunder which shall remain in full force until the discharge of the contract.

Similar provisions in other construction contracts have been given effect by the courts. Coleman Bros. Corporation v. Commonwealth, 307 Mass. 205, 29 N.E.2d 832, 838 (1940); Ace Stone, Inc. v. Wayne Tp., 47 N.J. 431, 221 A.2d 515, 517 (1966); Psaty & Fuhrman v. Housing Authority, 76 R.I. 87, 68 A.2d 32, 36 (1949); Housing Authority of City of Dallas v. Hubbell, 325 S.W.2d 880 (Tex.Civ.App. Dallas 1959, writ ref'd n. r. e.).

One of the exceptions to the application of a "no damages" provision is that a delay which was not intended or contemplated by the parties to be within the purview of the provision is not governed by it. Ace Stone, Inc. v....