Don L. Cooney, Inc. v. Star Iron & Steel Co., 2225--I

• Citation: 528 P.2d 487,12 Wn.App. 120
• Decision Date: 25 November 1974
• Docket Number: No. 2225--I,2225--I
• Parties: DON L. COONEY, INC., Respondent. v. STAR IRON AND STEEL CO., Appellant.
• Court: Court of Appeals of Washington

Page 120

12 Wn.App. 120

528 P.2d 487

DON L. COONEY, INC., Respondent. v. STAR IRON AND STEEL CO., Appellant.

No. 2225--I.

Court of Appeals of Washington, Division 1.

Nov. 25, 1974.

Kane, Vandeberg & Hartinger, Elvin J. Vandeberg, Leslie O. Stomsvik, Tacoma, for appellant/cross-respondent.

DeGarmo, Leedy, Oles & Morrison, Bruce T. Rinker, Seattle, for respondent/cross-appellant.

FARRIS, Judge.

In early 1970, Don L. Cooney, Inc. contacted Star Iron and Steel Co. concerning modification of a hoist to be used in constructing the Dent Bridge at the Dworshak Reservoir in Idaho. Several letters passed between the parties, one of which contained a disclaimer of warranty liability. In June of 1970, the exchange of correspondence ceased when Cooney notified Star to stop work on the proposed modification.

In November of 1970, Cooney again contacted Star concerning modification of the hoist, this time for construction of the Grandad Bridge. The specifications were altogether different from those required for the Dent Bridge construction. On January 14, 1971, the parties expressly recorded the 'total contract', which included a disclaimer of warranty liability.

Star modified the hoist and Cooney advanced $16,411.19 in partial satisfaction of the contract price. The modified hoist, however, failed to comply with the agreed upon specifications for the project. Although it could and did perform some work on the bridge, the inability of Cooney to use the hoist because it did not perform up to specification allegedly caused delay and expense.

Cooney brought suit against Star, alleging breach of express and implied warranties and negligence. Star denied liability for consequential damages in reliance on a disclaimer of warranty liability found in a letter from Star to Cooney which was part of the correspondence on the Dent Bridge project. Star also counterclaimed for the contract price less the $16,411.19 which had already been paid by Cooney. The trial court entered judgment for Cooney in the sum of $97,500 as lost profits because of failure of consideration and dismissed Star's counterclaim with prejudice. Cooney was also awarded costs. The court permitted Star to retain the $16,411.19 already paid by Cooney, who has cross-appealed for the return of that sum.

On appeal, Star does not dispute that there is substantial evidence to support the trial court's finding of a breach of warranty and negligence. Rather, Star assigns error to the trial court's failure to 'construe together' the disclaimer of warranty liability found in the Dent Bridge negotiations and the letter of January 14 which the trial court found to be the entire contract for the Grandard Bridge project.

Whether different instruments will be construed together in interpreting contract terms turns upon the intention of the parties to those instruments. Dix Steel Co. v. Miles Constr., Inc., 74 Wash.2d 114, 443 P.2d 532 (1968); Barker v. Sartori, 66 Wash. 260, 119 P. 611 (1911). See also Lynch v. Higley, 8 Wash.App. 903, 510 P.2d 663 (1973).

Construing together simply means that, if there be any provisions in one instrument limiting, explaining, or otherwise affecting the provisions of another, they will be given effect as between the parties themselves and all persons charged with notice, so that the intent of the parties may be carried out, and the whole agreement actually made may be effectuated. This does not mean that the provisions of one instrument are imported bodily into another, contrary to the intent of the parties. They may be intended to be separate instruments, and to provide for entirely different things, as in the very case before us. (Thorp v. Mindeman, 123 Wis. 149, 101 N.W. 417 (1904).)

Barker v. Sartori, Supra, 66 Wash. at 264, 119 p. at 612.

Where, as here, the instruments dealt with the same subject matter but allegedly concerned different transactions, whether the January 14th writing set forth the complete agreement of the parties or whether they intended the instruments to be read together to define their contractual duties is a question of fact. Dix Steel Co. v. Miles Constr., Inc., Supra; Aztec Sound Corp. v. Western States Leasing Co., Colo.App., 510 P.2d 897 (1973); 3 A. Corbin, Contracts § 595 (1960). The trial court, upon substantial evidence, resolved the issue against Star. We will not disturb that ruling on appeal. Thorndike v. Hesperian Orchards, Inc., 54 Wash.2d 570, 343 P.2d 183 (1959).

Star and Cooney both challenge the trial court's method of awarding damages. Star assigns as error the court's ruling which excused Cooney from paying the remaining contract price because of failure of consideration; Cooney cross-appeals from the trial court's award of $16,411.19 to Star, alleging that there was a total failure of consideration and that the record contains no evidence to support the trial court's award.

Star argues that the trial court should have held Cooney responsible for the total contract price less such damages as it may have proved. The trial court found instead a failure of consideration in that the modification of the hoist was of little practical value to Cooney for the purposes contemplated when the contract was made and denied Star recovery 'on the contract.' 3A A. Corbin, Contracts § 710 at 342 (1960). See Jacks v. Blazer,39 Wash.2d 277, 235 P.2d 187 (1951); 6 A. Corbin, Contracts § 1253 (1962). The court found as a fact that

Cooney continued to try to make the hoist operable from about July 21, 1971 until September 8, 1971. However, neither of the drums, i.e., the haul drum or the lifting drum, would perform as required and it became necessary to replace the hoist with other equipment. Accordingly, the alteration of the hoist by Star was of limited value to plaintiff except as it would perform at the Grandad Bridge site, the modification being specifically designed for use on the Grandad Bridge job.

Finding of fact No. 7. Star's failure therefore went to the heart of the contract. White v. Mitchell, 123 Wash. 630, 213 P. 10 (1923). The finding supports the conclusion that the breach discharged Cooney from his dependent obligation to pay the contract price. Jacks v. Blazer, Supra; Cartozian & Sons, Inc. v. Ostruske-Murphy, Inc., 64 Wash.2d 1, 390 P.2d 548 (1964); Restatement of Contracts §§ 397, 399 ...