Edwin J. Dobson, Jr., Inc. v. Rutgers, State University

• Decision Date: 12 January 1978
• Citation: 384 A.2d 1121,157 N.J.Super. 357
• Parties: EDWIN J. DOBSON, JR., INC., Plaintiff, v. RUTGERS, the STATE UNIVERSITY et al., Defendants and Third-Party Plaintiffs, v. BROADWAY MAINTENANCE CORP., Third-Party Defendants. BROADWAY MAINTENANCE CORP., Plaintiff, v. RUTGERS, the STATE UNIVERSITY et al., Defendants and Third-Party Plaintiffs, v. EDWIN J. DOBSON, JR., INC., Third-Party Defendants.
• Court: New Jersey Superior Court

Page 357

157 N.J.Super. 357

384 A.2d 1121

EDWIN J. DOBSON, JR., INC., Plaintiff, v. RUTGERS, the STATE UNIVERSITY et al., Defendants and Third-Party Plaintiffs, v. BROADWAY MAINTENANCE CORP., Third-Party Defendants.

BROADWAY MAINTENANCE CORP., Plaintiff, v. RUTGERS, the STATE UNIVERSITY et al., Defendants and Third-Party Plaintiffs, v. EDWIN J. DOBSON, JR., INC., Third-Party Defendants.

Superior Court of New Jersey, Law Division.

Jan. 12, 1978.

Harold G. Smith, Perth Amboy, for plaintiff Dobson (Wilentz, Goldman & Spitzer, Perth Amboy, attorneys); and Richard Bonamo and Jerome Reiss, New York City, of the New York Bar.

C. Stephen Barrett, III, and Joseph R. McMahon, Newark, for plaintiff Broadway Maintenance (Lum, Biunno & Tompkins, Newark, attorneys).

Edward Schwartz, Deputy Atty. Gen., for defendants and third-party plaintiffs, Rutgers, The State University and College of Medicine and Dentistry of N. J. (William F. Hyland, Atty. Gen., attorney).

DWYER, J. S. C.

The parties in this action are identified in Briscoe v. Rutgers, 130 N.J.Super. 493, 327 A.2d 687 (Law Div.1974). The court uses the same designations for the parties in this decision as it used therein. ¹ The caption in this action is changed because on the eve of the trial, State and Briscoe settled the one action which concerned Briscoe, of the three consolidated actions involving Briscoe, Dobson and Broadway, except for two claims for indemnification which State reserved against Briscoe.

In addition to certain specialized claims asserted by each, Dobson and Broadway are suing on alleged breaches of express and implied promises under their respective contracts to perform certain work for the construction of a medical school and to recover added costs incurred by each because the period of contract performance extended beyond the 700-day period specified in the contract by 25 months in respect to Dobson and 29 months in respect to Broadway.

Analysis of the claims shows that they are not all attributable to lapse of time such as may be the case where a wage increase occurs under a union contract, when a date for a wage increase passes, or interest is lost on retainage which is held by an owner. Some of the claims are based on the alleged lack of stairs and elevators at scheduled dates so that workers had to climb ladders and lift material by hand, with the result that workers used more time to perform work than had been anticipated. Each also alleges that it incurred substantial damages due to Rutgers' failure to deliver on time: (i) "roughing in" drawings for equipment which Rutgers was to furnish or cause other contractors to furnish; and (ii) equipment, with the consequence that the hookup work had to be done piecemeal and over a protracted period of time.

Before setting forth the defenses asserted by State and the issues, the court will set forth certain provisions of the contracts and some pretrial history of this matter so that the issues may be put in perspective.

The contract documents are massive. In 1964 and 1965, when officers of Rutgers, its attorneys and the architect were preparing the contract documents, they believed that Rutgers was subject to the public bidding statute, R.S. 52:32-1 et seq. As the statute was then written, ² an entity subject to it could not let a contract to construct a building on the basis of one general contract. The statute specified that contracts for such work as electrical, mechanical, iron and general construction had to be bid and let separately. Accordingly, Rutgers drew the specifications, bids and contracts so that there would be multiple prime contracts and contractors on the one job.

The sources of funding for the medical school were federal grants as well as certain Rutgers funds. Up until the commencement of this project, it was the largest building in size and cost Rutgers had undertaken. Aggregate estimated cost was $19,300,000 of which $14,188,636 was for the six prime contracts for construction. Rutgers sought, in the "General Conditions," to minimize potential delay in execution of the work on the project and to limit its liability for monetary damage resulting from delay.

Rutgers utilized two novel concepts in preparing the General Conditions designed to minimize delay in executing the work. First, it provided in the General Conditions G4-N that the contractor for general construction (which contractor in certain of the General Conditions is called the "General Contractor," but in fact there was no general contractor) should have the following responsibilities:

G4-N.1 UNIQUE ROLE OF RESPONSIBILITY: STAFFING: The General Contractor has the responsibility for being the supervisor, manager, overseer, coordinator and expediter of all of the Contractors and of the total construction process and all of its parts, in accordance with the Contract. In executing the duties incurred by these responsibilities, the General Contractor shall provide sufficient executive and supervisory staff in the field to enable efficient and expeditious handling of these matters. There shall be at least one full-time Project Manager assigned by the General Contractor to his home office, as well as the field staff referred to above; the Project Manager shall attend each Progress Meeting at the site.

G4-N.2 OWNERS RELIANCE UPON GENERAL CONTRACTOR: The Owner relies upon the organization, management, skill, cooperation, and efficiency of the General Contractor to supervise, direct, control and manage the General Construction work and the efforts of the other Contractors, so as to deliver the intended building conforming to the Contract and within the scheduled time.

G4-N.3 OTHER CONTRACTORS' RELIANCE UPON GENERAL CONTRACTOR: All other Contractors shall rely upon the organization, management, skill, cooperation and efficiency of the General Contractor to supervise, direct, control and manage the General Construction work and the efforts of the other Contractors so as to deliver the intended building conforming to the Contract and within the scheduled time.

Second, Rutgers employed a consultant on the critical path method ³ to develop an arrow network diagram to illustrate one feasible method of executing the project and a computer printout schedule showing early start-early finish dates and late start-late finish dates for all major activities. This work was reviewed by an independent general contractor for feasibility of completion within the estimated time of 700 days. Rutgers then incorporated the network diagram and schedule, as an illustration of one feasible way of executing the project, in the bid documents.

When called by Dobson, the architect testified at trial that he helped the attorneys for Rutgers prepare all provisions of the contract except for those pertaining to the critical path method (CPM). The General Conditions pertaining to the role of CPM on the project in relevant part are set forth below. ⁴ The structure which was to house the medical school consisted of three components. These included a two-story teaching wing with a basement and an eight-story faculty wing with a basement, these two structures being joined by a two-story structure with a basement called the link. The eight-story faculty wing was designed to house offices and research laboratories on the third floor and each floor above. The vertical piping for these laboratories came from the horizontal piping in the galleries described below.

Three design features are particularly relevant in understanding the issues in this case. The structures did not have a steel frame. Poured concrete columns rising from below the basement floor slab to the first floor and then from the floor slab of each floor level to the eighth-floor level formed the weight-bearing structure and the frame from which precast concrete panels to enclose the interior were to be hung. In the faculty wing a gallery located in the center of each half of each floor slab in that component of the faculty wing rose from the third-floor level through the eighth-floor level so that there were two openings measuring 104 feet by 7 feet to permit a myriad of pipes for electrical wiring, water, specialized gases and acid drain, as well as regular waste, pipes to rise vertically to each floor and then branch laterally to service the laboratories which were grouped around each gallery. On each side of the faculty wing a set of towers was to be constructed. One housed stairs. One housed the elevators. One housed lavatories. One housed the closets for maintenance storage and janitorial sinks.

Rutgers provided in the General Conditions: "Each Contractor agrees to cooperate and coordinate his own operations in order to meet effectively all scheduled task deadlines." G4-F.4. In the form of agreement signed by each contractor and Rutgers after the award of contracts, but which form was in the bid documents, Rutgers provided the following:

EIGHTH: The Bond, General Conditions, Drawings, Specifications, Advertisement, Instructions to Bidders, Bid Form, Addenda, if any, and this agreement form the Contract, hereinafter called the 'Contract', between the Contractor and the Owner and all thereof are as fully a part of the Contract, as if attached hereto or set forth herein at length.

SEVENTH: If the Contractor is delayed in completion of the work by any act or neglect of the Owner, Architect, or of any other Contractor employed by the Owner, or by changes ordered in the work, or by strikes, lockouts, fire, unusual delay by common carriers, unavoidable casualties, or any cause beyond the Contractor's control or by any cause which the Architect shall decide to justify the delay, then for all such delays and suspensions the Contractor shall be allowed one day additional to the time limitations herein stated for each and every day of such delay so caused in the completion of the work, the same to be ascertained solely by the Architect, and a similar allowance of extra time...