City of Seattle v. Dyad Const., Inc.

• Decision Date: 09 May 1977
• Docket Number: No. 3206-I,3206-I
• Parties: CITY OF SEATTLE, a Municipal Corporation, Respondent/Cross-Appellant, v. DYAD CONSTRUCTION, INC., Appellant.
• Court: Washington Court of Appeals

Page 501

17 Wn.App. 501

565 P.2d 423

CITY OF SEATTLE, a Municipal Corporation, Respondent/Cross-Appellant, v. DYAD CONSTRUCTION, INC., Appellant.

No. 3206-I Court of Appeals of Washington, Division 1.

May 9, 1977.

As Changed May 18, 1977.

Casey, Pruzan, Kovarik & Shulkin, Richard A. Acarregui, Seattle, for appellant.

John P. Harris, Corp. Counsel, Gordon F. Crandall, Asst. Corp. Counsel, Seattle, for respondent.

Carney, Stephenson, Siqueland, Badley, Smith & Mueller, Inc., P.S.C., Edward L. Mueller/Herman S. Siqueland, Seattle, amicus curiae.

CALLOW, Judge.

This case concerns the interpretation of a public works contract. It involves a claim for damages by the contractor for delays claimed to have been caused by the municipal corporation. Dyad Construction, Inc. (hereinafter called the contractor), appeals from a judgment entered denying its counterclaim for recovery of delay damages in an action initiated by the municipality, the City of Seattle (hereinafter called the City), for recovery of moneys asserted to have been erroneously paid to the contractor. The City cross-appeals from that portion of the judgment in the same action that awarded the contractor $12,725 for extra work done at the City's request.

In July 1971, the City called for bids to construct a project known as the 44th Avenue Southwest Sanitary Sewer Improvement. The project was to commence at the south city limits, and proceed northwesterly along Seola Beach on Puget Sound to a residential area known as "The Arroyos."

The location of the proposed sewer line, designed in its entirety by the City, was shown on the plans, staked by the City's survey crew, and examined by the contractor before bids were submitted. The contractor was the low bidder and was awarded the contract. The sewer trench was to be cut through the sands and gravel of tide flats skirting the base of a bluff and breakwaters on the easterly side, with the tide flats on the westerly side. Work on the beach could only take place during periods of favorable low tides.

The project was begun the first week of August 1971. While proceeding along Seola Beach, the contractor encountered ground water carrying silt and sand coming from beneath the adjacent bulkheads. The City was concerned about the protection of bordering private property and ordered the work to stop on August 5, 1971. Correspondence between the two parties resulted in the contractor beginning work again and implementing, under protest, corrective procedures required by the City that involved the installation of sheet piling and the replacement of native beach material with imported backfill. As the contractor neared the location of Manhole No. 1 on September 3, 1971, ground water and vibrations from the excavation work caused a slide behind the backhoe. The contractor stopped work and asked the City to redesign the line and move it farther out on the beach, asserting that while construction there was not impossible, it was impractical, dangerous and expensive.

The state safety inspector responsible for the job considered the location unsafe, and that building the line farther out on the beach would be safer. The initial revision of the line's design by the City did not satisfy the state safety inspector. In April 1972, the City submitted a second revised plan which was deemed far enough out on the beach to assure safe construction. The line was completed approximately 4 months later than planned. The City then commenced this action to recover money claimed to have been erroneously paid to the contractor, and the contractor counterclaimed.

The trial court found that the work was fully completed by the contractor and made the following additional findings of fact pertinent to this appeal:

III.

Dyad gave to the City timely and proper notice of its claims against the City for extra compensation because of alleged breach of contract, extra work, owner interference, and other grounds which at time of trial Dyad alleged to be $61,676.

IV.

The parties have stipulated in open court that the City made an unintentional and mistaken payment to Dyad of $30,431.94, and that Dyad should without consideration of its other claims in this lawsuit be entitled to a credit against this mistaken payment of $1,486.62 for certain extra work items which are undisputed. This $28,945.32 ($30,431.94 less $1,486.62) is a valid claim against Dyad, subject to the offsets hereinafter set forth in Finding IX. The net sum of $16,220.32 ($28,945.32 less $12,725) bears interest at the rate of 6% per annum from March 8, 1973, to date of entry of the judgment.

V.

. . . On August 5, and thereafter, the City interfered with and shut down Dyad's operations. The City ordered Dyad to install tight interlocking sheeting in the area of the bulkheads, and also directed that the excavated native beach material be replaced by a select type of imported backfill.

VI.

The City did not have the right under the contract to require sheet piling and to direct a particular method of operation with regard to the contractor's (Dyad's) compliance with the contract. . . . It was up to the contractor to determine what construction methods were proper. It has not been established that there was any clear danger to any of the bulkheads or adjoining property by reason of the Contractor's method of construction. Dyad was operating in a workmanlike fashion and was utilizing normal contemplated construction procedures. If there was any incidental damage Dyad was required to repair it under the terms of the contract.

VII.

The City did not have the right to, in effect, become the contractor insofar as supervising and requiring particular methods of construction with regard to the sheet piling operation. The City arbitrarily and without justification directed the manner and method of Dyad's performance. The effect of this improper interference of the City was to materially increase the scope of the work required of the Contractor, to delay his operations, and to cause extra costs in labor and equipment. By reason of the City's interference in its operations the Contractor was delayed in his operations from August 5, 1971, to August 31, 1971, when Dyad was permitted to resume normal operations. Dyad is entitled to recover for the expenses incident to the sheet piling operation, plus the costs incident to the days on the beach that were lost by reason of that operation.

VIII.

Dyad is not entitled to its expenses with regard to the select backfill. The City did specifically retain on that item the right to control the type of backfill that would be used. The City did not have the similar right with regard to the sheet piling that they tried to impose.

IX.

The damages which Dyad is entitled to recover for the sheet piling portion of its claim . . . (total) $12,725.

X.

The City provided Dyad with plans and specifications which located the beach sewer line at the vicinity of Manhole # 1 in the toe of a highly unstable sandy cliff rising vertically some three hundred feet in height, and covered with slide debris. There was no justifiable reason for locating the line in its designed location. The specifications which placed this line so close to the toe of the bluff were improper specifications, in that they, in effect, provided for a line that could not feasibly be completed because of the state's safety requirements and because of the practical inability to safely engineer and complete such a project in that area. Any construction activity at the toe of this bluff would very probably have triggered a slide which could have resulted in death to the workmen beneath. There was no feasible way to provide shoring or other protective measures in this area, using normally accepted construction procedures, to permit the line to be installed while at the same time providing a safe place to work for the men and equipment.

XI.

Dyad discovered the improper specifications on September 3, 1971, and immediately notified the City that the line should be moved. The City did not give Dyad adequate plans to complete the beach line until late April, 1972. Dyad did not and was not obligated to have discovered or anticipated the plans were defective in this area. The result of the City's providing improper plans was to delay Dyad's completion of the contract for four months. Because the line had to be installed on the beach, the contractor could only work during a period of favorable low tides. Time was of the essence, and the City's improper plans caused the contractor to be unable to complete the beach work in the fall of 1971.

XII.

The delay in the project from the fall tides until the spring tides was caused by the error in specification and plan. But for the City's erroneous plans and specifications, Dyad could have completed the entire contract work in the fall of 1971.

XIII.

Dyad suffered substantial damages as a result of the design failure and for the delay factor. The damages . . . proven as being reasonably related to that breach (are in the sum of) $47,099.

XIV.

The City-caused delays from interference and faulty design demolished Dyad's intended cost structure as well as its time structure. This resulted in Dyad's being unable to proceed in a normal contemplated manner to construct the project.

Based upon these findings, the trial court concluded that:

(1) the contractor was entitled to the $12,725 expended in the sheet piling operation;

(2) there was an implied duty not to hinder or delay the contractor's performance, and an implied warranty that if its plans and specifications were complied with, the contractor would be able to complete the project on time, and both obligations were breached by the City;

(3) the contractor would be entitled to the $47,099 delay damage it had proved under the contract but for the ruling of Gross v. Northern Pac. Hosp. Ass'n, 50 Wash. 236, 96 P. 1078 (1908), on time extension clauses as exclusive remedies. On the basis of the Goss decision, ...