City of Littleton v. Employers Fire Ins. Co.

• Decision Date: 05 May 1969
• Docket Number: No. 21798,21798
• Parties: The CITY OF LITTLETON, a Municipal Corporation, Plaintiff in Error, v. The EMPLOYERS FIRE INSURANCE COMPANY and Latimer and Gaunt Contractors, Inc., a Colorado corporation, Defendants in Error.
• Court: Colorado Supreme Court

Page 810

453 P.2d 810

169 Colo. 104

The CITY OF LITTLETON, a Municipal Corporation, Plaintiff in Error, v. The EMPLOYERS FIRE INSURANCE COMPANY and Latimer and Gaunt Contractors, Inc., a Colorado corporation Defendants in Error.

No. 21798.

Supreme Court of Colorado, In Department.

May 5, 1969.

Alan L. Sternberg, Raymond C. Johnson, Littleton, for plaintiff in error.

McComb, Zarlengo & Mott, John C. Mott, Denver, for The Employers Fire Ins. Co.

H. D. Reed, Denver, for Latimer and Gaunt Contractors, Inc.

PRINGLE, Justice.

The City of Littleton (hereinafter referred to as Littleton) brought an action against Latimer and Gaunt Contractors, Inc. (hereinafter referred to as the contractor) to recover damages resulting from the alleged breach of a contract to build two five-million gallon water tanks. From an adverse judgment, Littleton brings this writ of error. The contractor's bonding company, The Employers Fire Insurance Company, also appears as a defendant in error. Where necessary, the partners in the contracting firm, Latimer and Gaunt, will be referred to individually.

In brief, on May 8, 1961, Littleton and the contractor entered into a contract which required the contractor to build two precast and pre-stressed concrete water tanks pursuant to plans and specifications supplied by Littleton. The plans for each tank called for a poured concrete base, with a diameter of 175 feet. Around the edge, 92 pre-cast concrete wall panels, each six feet wide and 29 feet high, were to be set in a slot in the base and jointed together. Once in place, the wall panels were to be pre-stressed by wrapping wire cable under tension around the circumference of the tank. During the course of construction, both tanks collapsed.

Thereafter, Littleton and the contractor entered into a Supplemental Agreement which, among other things, required reconstruction of the tanks pursuant to specifications and plans already in existence, and in accordance with instructions to be supplied by Littleton's consulting engineer. No work was done pursuant to the Supplemental Agreement. In an exchange of letters after its execution, the contractor requested but was refused additional written details regarding reconstruction. On April 15, 1962, the contractor terminated the agreement by telegram, and the next day sent a letter to the councilment of Littleton explaining that the agreement was terminated because the design was faulty.

Littleton brought the present suit, alleging that the contractor had breached its obligations under the Supplemental Agreement. After a trial to the court, the court found that performance under the terms of the Supplemental Agreement was impossible as a practical matter. Citing the Restatement of the Law of Contracts § 454 (hereinafter cited as Restatement), the trial court ruled as a matter of law that the impossibility constituted a complete defense to the claims of the plaintiff. Littleton contends here that the contractor either knew or should have known of the facts which now support its defense of impossibility when it signed the Supplemental Agreement, and that the parties by that agreement allegedly manifested an intention that impossibility should not be a defense, and that, therefore, the defense of impossibility of performance is inapplicable.

I.

The law recognizes impossibility of performance as a defense to an action for breach of contract. In his brief, the contractor suggests that we adopt the Restatement § 454 definition of impossibility. According to the Restatement, impossibility means not only strict impossibility but impracticability because of extreme and unreasonable difficulty, expense, injury or loss involved. As elaborated in the comment, 'impossible' must be given a practical rather than a scientifically exact meaning. Impracticability rather than absolute impossibility is enough. Restatement § 454, and comment a thereunder.

Commenting on the Restatement § 454, Williston has stated that:

'(t)he true distinction is not between difficulty and impossibility. A man may contract to do what is impossible * * *. The important question is whether an unanticipated circumstance has made performance of the promise vitally different from what should reasonably have been within the contemplation of both parties when they entered into the contract. If so, the risk should not fairly be thrown upon the promisor.' 6 Williston, Contracts § 1931 (Rev. ed.) See 6 Corbin, Contracts § 1325.

Other jurisdictions have begun to adopt the Restatement definition. See 84 A.L.R.2d 12, and cases therein cited. After reviewing the authorities which have subscribed to the Restatement definition of impossibility, we hereby adopt the definition of impossibility contained in the Restatement § 454 as interpreted by Williston. See commentary on this section contained in Storke, Colorado Annotations to Restatement of the Law of Contracts.

II.

The principal question remaining in this case is whether we must conclude as a matter of law that the evidence is insufficient to support the finding of the trial court that, within the framework of the Restatement definition of impossibility, the tanks contemplated by the Supplemental Agreement were impossible to build. If there is substantial evidence to support the findings of the trial court, then the judgment must be affirmed.

The trial judge in this case heard fifteen days of testimony in a trial which commenced on December 14, 1964, and terminated on January 14, 1965. Over 4,000 folios of testimony and three boxes of documentary exhibits appear in the record. The record reflects that the trial judge observed at least one demonstration in the courtroom. Throughout most of the trial, he listed to the expert testimony of consulting engineers. Thirty days after the trial ended, the court entered carefully considered and detailed findings of fact, conclusions of law and judgment. Under these circumstances, it is particularly appropriate to reiterate the general rule that the judgment of the trial court is presumed to be correct, and that the findings of the trial court are conclusive if supported by the evidence. E.g., Julius Hyman & Co. v. Velsicol Corp., 123 Colo. 563, 233 P.2d 977.

Nine engineers and contractors testified on the issue of impossibility of performance. One engineer said that construction of the tanks either as originally specified by the contract or as modified by the Supplemental Agreement was not possible either as a structure or later for use as a water-containing bank. Another testified that he 'certainly wouldn't attempt' to rebuild the tanks on the basis of the information supplied on the documents. Another contractor told Latimer that he didn't think it was possible to construct the walls of the tanks in the manner specified. Even Jorgensen the consulting engineer for Littleton, admitted that he was 'scared of these tanks,' according to the testimony of Latimer. On cross-examination, Jorgensen admitted that the specifications on one tank would have had to be changed to facilitate reconstruction. Although one engineer was apparently convinced that construction was physically possible, he appeared to be equally convinced that the tanks would collapse soon after construction.

Without detailing the other testimony, suffice it to say that the consensus was that the tanks could not be reconstructed as contemplated under the Supplemental Agreement consistent with sound engineering practice. We conclude that there was substantial evidence in the record to support the trial court's finding that the tanks contemplated by the Supplemental Agreement were impossible to build, either physically, as structures, or functionally, as water containing tanks, within the Restatement definition of impossibility of performance. See Restatement § 456, Illust. 4. Cf. Smith Engineering Co. v. Rice, 9...