City of Wahpeton v. Drake-Henne, Inc.
| Decision Date | 10 August 1973 |
| Docket Number | No. 8870,DRAKE-HENN,INC,8870 |
| Citation | 215 N.W.2d 897 |
| Parties | CITY OF WAHPETON, North Dakota, Plaintiff, Respondent and Cross-Appellant, v., a corporation, et al., Defendants, Appellants and Cross-Respondents. Civ. |
| Court | North Dakota Supreme Court |
Syllabus by the Court
1. Although backfill compaction was deficient at the time the certificate of completion was signed by the project engineer, the City did not waive compliance with the contract specifications by the engineer's certification of completion and, accordingly, is not barred from recovering for defects resulting from the contractor's failure to perform according to the specifications, when defects were discovered during the one-year period as provided for in I(H)3. (b) of the contract.
2. When an appeal is taken pursuant to Section 28--27--32, N.D.C.C., and the appellant demands a trial de novo, the findings of the trial court must be given appreciable weight by the Supreme Court, especially when based upon testimony of witnesses who appeared in person before the trial court.
3. Considering Section 40--22--31, N.D.C.C., and the terms of the contractor's bond in the instant case in light of Sections 9--08--03 and 9--08--04, N.D.C.C., we conclude that the default referred to in Subsection 3 of Section 40--22--31, N.D.C.C., must amount to a complete failure of performance before the entire amount of the bond may be taken as a fixed and liquidated damage.
4. Where contractor laid underground sewer and water mains for City but failed to compact the backfill placed in the trenches in which the mains had been laid in accordance with the contract specifications, which reesulted in the settlement of the insufficiently compacted backfill, followed by a settlement and disturbance of the curb and gutter, pavement and other improvements which had been placed over and were resting upon the insufficiently compacted backfill, the failure of compaction is a latent causal defect which proximately caused the disturbance and settlement of the overhead curb and gutter, pavement and other improvements.
5. Where the warranty clause of a contract for laying sewer and water mains provides that if any workmanship which does not comply with the requirements of the contract shall be discovered within one year after completion of the project, the contractor shall remedy the defective workmanship within thirty days after written notice of the existence thereof shall have been given by the owner, or pay the owner the cost and expense thereof, and where the deficiency in workmanship consists of a failure to have compacted the backfill in the trenches in which the sewer and water mains were laid, in accordance with contract specifications, and where the contract also allows the immediate installation of curb and gutter, pavement and other improvements following the installation of the sewer and water mains, whch was done, and which deficiency in workmanship manifested itself by the settlement and disturbance of the overlying improvements over a period of time, the failure of compaction was a latent defect. The discovery by the owner of the defect and the giving of notice thereof in writing within the one-year period activated the warranty clause of the contract and placed upon the contractor the duty to discover how much of its work was defective because of the deficiency in compaction and to correct it, or to respond to the owner in damages.
6. For reasons stated in the opinion of the majority, following rehearing, the City is entitled to recover $517,791.60 in damages, plus interest at four per cent per annum after entry of judgment on mandate.
John D. Kelly, of Wattam, Vogel, Vogel & Peterson, Fargo, for defendants, appellants and cross-respondents.
James L. Lamb, Grant Forks, for American Cas. Co.
Bruce E. Bohlman, Grand Forks, for Johnson, Milloy & Eckert, Wahpeton, for plaintiff, respondent and cross-appellant.
OPINION OF AUGUST 10, 1973.
TEIGEN, Justice (on rehearing).
Following the issuance of an opinion with one dissent, we granted a rehearing in this case. After the reargument a majority of this court have agreed that the opinion previously issued should be modified in two important respects.
We do not agree that the City is limited to recover damages by the number of feet of deficiencies in curb and gutter and eight other listed items discovered within one year of the completion of the project. In other respects, we agree with the opinion as originally issued. Judge Erickstad, who authored the first opinion, has decided to file his opinion as his dissent. We therefore adopt his dissent as to the facts and affirm the issues decided therein, with the following exceptions:
1. We do not agree that the trial court erred in awarding the cost of repairing 'deficiencies' discovered after the expiration of the one-year warranty period. We believe and conclude that all injuries sustained by the City in this case are attributable to one defect in workmanship: the failure to compact backfilled trenches to 95% Of Proctor. The City gave timely notice of this defect to Drake-Henne. Thus the City passed to the contractor (Drake-Henne) the duty to discover how much of its work was affected by this single defect and to correct that defect or, upon its failure to do so, to respond in damages to the City.
2. Upon Drake-Henne's failure to correct the defective compaction, we hold that it must answer in damages for the cost of repairing all resulting defects which were fairly, reasonably and directly attributable to the failure to compact, proved at the trial.
The workmanship was defective in that Drake-Henne had failed to compact the soil in the trenches in accordance with the requirements of the contract. This resulted in a settling of the soil and the resulting damage to the curb and gutter, pavement and other improvements. The failure to compact was discovered within the one-year period following completion of the project and Drake-Henne was advised thereof in writing. Further, Drake-Henne acknowledged its obligation under the warranty clause when, in July 1964, it attempted to correct the defective workmanship by employing a short-cut method, known as 'mudjacking', to raise the displaced curb and gutter in place, but the attempt failed and, on the following day, it discontinued this work and no further attempts were made to remedy the defective workmanship. It is our opinion that the city of Wahpeton satisfied its requirements of the warranty clause when it discovered and notified Drkae-Henne, in writing, of the defective workmanship within one year after completion of the project. It then became the duty of Drake-Henne, under the warranty clause, to carry out its terms.
We find that the failure to compact to 95% Of Proctor, as required by the specifications, is the Causal defect and the proximate cause of the Resulting defects, also referred to as 'deficiencies', to wit, the settling of the curb and gutter, pavement and other improvements placed over and resting upon the insufficiently compacted soil within the trenches. The settling of the curb and gutter, pavement and other improvements located over the insufficiently compacted trenches are consequential damages, or resulting defects, which are referred to as 'deficiencies' in a portion of the dissent. These deficiencies may be fairly and reasonably attributed to the single 'causal defect', to wit, the failure to compact the trenches to 95% Of Proctor. We believe that Drake-Henne is resonsible for all consequential damages proved at the trial which may be fairly and reasonably attributed to the single causal defect, where, as here, notice of that causal defect was given within the one-year warranty period. The deficiency of compaction (the causal defect) is a latent defect which continued to manifest itself as time passed, even after the one-year period specified in the warranty clause, by the continuing settlement of curb and gutter, pavement, alley returns, storm sewers, catch basins, driveways and berm overlying the improperly compacted trenches and, it appears, was still manifesting itself at the time of trial. Drake-Henne was notified of the defect within one year after completion of the project, thus activating the warranty clause for all consequential damages (resulting defects) proved at the trial. There is no claim that these overlying improvements were defectively constructed and it is evident that had the trenches been compacted to within 95% Of Proctor, as required by the specifications, the overlying improvements would not have settled or become disturbed. Thus, admittedly, there is but a single 'causal defect', i.e., failure to compact to 95% Of Proctor. Drake-Henne must be held responsible for the improper workmanship and the resulting defects or deficiencies directly resulting from its failure to perform.
The warranty clause of the contract provides that the contractor shall remedy defective workmanship within thirty days after notice in writing of the existence thereof shall have been given by the owner and 'in the event of failure by the Contractor to do so, the Owner may remedy such defective workmanship * * * and in such event the Contractor shall pay the Owner the cost and expense thereof.' This is in harmony with the measure of damages for breach of contract as provided by Section 32--03--09, N.D.C.C.:
Thus we affirm the trial court's judgment which, in respect to this issue,...
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IN INTEREST OF TF
...de novo, none of these cases discuss N.D.R.Civ.P. 86 or its application. It was not until the decision in City of Wahpeton v. Drake-Henne, Inc., 215 N.W.2d 897, 902 (N.D. 1973), that this Court recognized that Rule 86(a) permitted the application of amended Rule 52(a) "retroactively." In Ci......
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City of Wahpeton v. Drake-Henne, Inc.
...on the issue of damages. The judgment in question was entered pursuant to the majority opinion in a previous appeal reported at 215 N.W.2d 897 (N.D.1974). THE FACTS AND CONTENTIONS OF THE The action arose from a dispute over whether the defendant Drake-Henne, Inc., properly performed a cont......
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All Seasons Water Users Ass'n, Inc. v. Northern Imp. Co., CERTAIN-TEED
...bond can be liquidated, the breach must amount to a total failure of performance. Section 40-22-31(3), N.D.C.C.; City of Wahpeton v. Drake-Henne, Inc., 215 N.W.2d 897 (N.D.1974), cert. denied, 419 U.S. 986, 95 S.Ct. 245, 42 L.Ed.2d 194 (1974). No total failure of performance exists here and......