Detweiler Bros., Inc. v. John Graham & Co.

• Decision Date: 01 April 1976
• Docket Number: No. C-75-79.,C-75-79.
• Citation: 412 F. Supp. 416
• Parties: DETWEILER BROS., INC., an Idaho Corporation, Plaintiff, v. JOHN GRAHAM AND COMPANY, a Washington Corporation, Defendant.
• Court: U.S. District Court — District of Washington

412 F. Supp. 416

DETWEILER BROS., INC., an Idaho Corporation, Plaintiff, v. JOHN GRAHAM AND COMPANY, a Washington Corporation, Defendant.

No. C-75-79.

United States District Court, E. D. Washington.

April 1, 1976.

COPYRIGHT MATERIAL OMITTED

Lynden O. Rasmussen and Patrick A. Sullivan of Winston, Cashatt, Repsold, McNichols, Connelly & Driscoll, Spokane, Wash., for plaintiff.

Camden M. Hall of Foster, Pepper & Riviera, Seattle, Wash., for defendant.

MEMORANDUM AND ORDER

NEILL, Chief Judge.

Plaintiff is a mechanical subcontractor who contracted via the general contractor to install a system of steam pipes in a multi-purpose coliseum for Washington State University at Pullman, Washington. Defendant is an architectural firm that contracted with the University to design, inspect and to a limited extent, supervise the installation of the Coliseum's steam pipe system. Defendant's supervisory duties included the responsibility to approve "the reliability of subcontractors' submittals" and the authority to stop work of subcontractors "whenever such stoppage may be necessary in his reasonable opinion to insure the proper execution of the Contract". The parties agree there is no privity of contract between them, defendant having contracted directly with the University, which is not a party to this action, and plaintiff having contracted with the University's general contractor. Jurisdiction is properly founded upon diversity of citizenship, pursuant to 28 U.S.C. § 1332, and Washington law applies.

Plaintiff's complaint alleges that defendant approved its submittal to substitute "grooved" piping in place of the welded or threaded pipe originally contemplated in plaintiff's contract, but that defendant later ordered plaintiff to stop work and replace the grooved pipe with welded pipe, causing plaintiff to incur damages in excess of $30,000.00.

Plaintiff earlier instituted an action against the pipe manufacturer but the United States District Court for the District of Idaho granted summary judgment in favor of the manufacturer. Plaintiff then instituted this action against defendant architectural firm for alleged misrepresentations concerning the pipe originally installed. Following this, plaintiff executed a "Release and Settlement Agreement" with the University and the prime contractor, which provided that only the signatories would be released. Defendant was not a signatory to the release.

Defendant now seeks summary judgment on the grounds that:

(1) Plaintiff has failed to state a claim on which relief can be granted because there was no privity of contract between plaintiff and defendant (2) The release signed by plaintiff bars plaintiff's claim against defendant because defendant is an agent of the State and therefore released by the release of the State, and because the release constituted an election of remedies;

(3) Plaintiff has failed to join the University and the prime contractor as defendants and, since they are indispensable parties, the action must be dismissed pursuant to Rule 19(b) of the Federal Rules of Civil Procedure.

Plaintiff has filed a motion for protective order to prevent defendant from deposing Mr. E. C. Connell, an employee of plaintiff, on the ground that Mr. Connell has no personal knowledge of the facts surrounding this litigation and that he is currently on vacation out of the State of Idaho where defendant proposes to conduct the deposition. Further, plaintiff seeks a protective order requiring defendant to be more specific about the scope of its examination of Mr. Connell and the documents defendant has requested plaintiff to produce. Plaintiff also seeks reimbursement for the costs of transporting its employee, Dean Harris, from Las Vegas, Nevada for defendant's deposition.

I. Defendant's Motion for Summary Judgment Privity of Contract

Since the parties agree there is no privity of contract between them, plaintiff's claim is not supportable on a breach of contract theory. Nor can plaintiff maintain this action as a third-party beneficiary of defendant's contract with the University for the University was the only intended beneficiary of that contract and Washington law requires that third-party beneficiary contracts evidence "an intent that the promisor shall assume a direct obligation to" the third-party beneficiary. McDonald Construction Co. v. Murray, 5 Wash.App. 68, 71, 485 P.2d 626 (1971). No such intent can be inferred from the defendant's contract with the University. Further, although the Washington State Supreme Court has indicated a willingness to entertain a suit against a consulting engineer based on a breach of implied warranty theory, Prier v. Refrigeration Eng'r. Co., 74 Wash.2d 25, 442 P.2d 621 (1968), no case has held that such a suit can be maintained in the absence of privity of contract. See, e. g. Loyland v. Stone & Webster Eng'r. Corp., 9 Wash.App. 682, 514 P.2d 184 (1973). Cf. Stewart Warner Corp. v. Burns International Security Services, Inc., 343 F.Supp. 953 (N.D.Ill.1972). Therefore, plaintiff's suit is not maintainable under any breach of contract or related theory.

However, the absence of contractual privity between plaintiff and defendant does not affect plaintiff's tort claim, provided plaintiff can establish the existence of a duty between the parties, and defendant's breach of such duty, with the proximate result that plaintiff suffered the damages of which it complains. For reasons discussed below, the Court concludes that plaintiff has stated such a claim and that issues of material fact exist requiring a trial.

Courts are divided on the issue of whether privity of contract is a prerequisite to the maintenance of a tort suit by a contractor against an architect, and although the courts of Washington have not confronted the issue an emerging majority of jurisdictions have taken the position that a contractor can maintain a negligence action against an architect without direct privity of contract between the parties. United States v. Rogers & Rogers, 161 F.Supp. 132 (S.D.Cal.1958); C. H. Leavell & Co. v. Glantz Contracting Corp., 322 F.Supp. 779 (E.D.La.1971); A. R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla.1973); See also, Miller v. DeWitt, 59 Ill.App.2d 38, 208 N.E.2d 249, aff'd in part and rev'd in part on other grounds, 37 Ill.2d 273, 226 N.E.2d 630 (cases summarized in Anno., 65 A.L.R.3d 249).

Defendant asserts that these cases are not the law of Washington and that even if they were defendant would still be entitled to summary judgment because plaintiff was remiss in its duty to seek the pipe manufacturer's approval before installing the grooved piping. In support of its contention defendant cites Vonasek v. Hirsch & Stevens, Inc., 65 Wis.2d 1, 221 N.W.2d 815 (1974), in which the Wisconsin Supreme Court held that, on the facts of the case, the defendant architect had no duty to warn plaintiff of certain construction hazards and that the damage to plaintiff was due to plaintiff's own negligence.

However, Vonasek gainsays defendant's argument for summary judgment because the court in that case held, after considering the negligence issue, that on the facts of the case the architect owed its duties only to the owner and not to the contractor, and that plaintiff's damages were caused by its own conduct. Since the Vonasek Court reached the merits of plaintiff's claim to hold that tort liability had not been proven, the negative implication of Vonasek is that privity of contract is not a condition precedent to the maintenance of a tort suit by a contractor against an architect. In any event, since Vonasek involved a full trial of the negligence issues, it is not authority for granting summary judgment in this case.

Effect of the Release

Defendant argues that plaintiff's execution of a release with the University also released defendant from liability as an agent of the University, relying on Transpac Construction Co. v. Clark & Groff Eng., Inc., 466 F.2d 823 (9th Cir. 1972) and Lundgren v. Freeman, 307 F.2d 104 (9th Cir. 1962). However, these cases are distinguishable from the case at bench.

In Transpac, plaintiff construction company settled its claim against the owner for whom plaintiff had constructed a water supply system. Plaintiff then sought to assert precisely the same claims against the architectural firm that designed the system. Supra at 828. The Court concluded that since the defendant architect acted as an agent of the owner, plaintiff's release of the owner absolved the owner's agent for all settled claims, absent a contrary intention in the settlement agreement. Supra at 829. The Transpac holding would not require the Court to construe plaintiff's release of the University as a release of the defendant John Graham and Company because plaintiff's claim against defendant is totally unrelated to the claims plaintiff settled with the University and because the written release expressly applied only to its signatories, which did not include defendant.

Lundgren is similarly inapplicable to the facts of this case. A provision of the contract at issue in Lundgren stated that decisions of the defendant architect were subject to arbitration between the owner and plaintiff contractor, and such arbitration had occurred. Supra at 117. The Lundgren Court held that such arbitration constituted an election of remedies concerning the arbitration claims, which barred the plaintiff contractor from asserting those claims against the architect (which was the owner's agent). Supra at 116-117, 119. Lundgren would not preclude the claims plaintiff asserts against the defendant architect since, as noted above, plaintiff has not attempted to settle these claims with the owner, i. e., the claims settled with the University in the written release are unrelated to those asserted against the defendant architect. Finally, the immunity of the defendant architects in Lundgren, supra at 117-118, arose from their contractual role as...