FD Rich Co. v. Wilmington Housing Authority, 16794.
| Decision Date | 10 April 1968 |
| Docket Number | No. 16794.,16794. |
| Citation | 392 F.2d 841 |
| Parties | F. D. RICH CO., Incorporated, Appellant, v. WILMINGTON HOUSING AUTHORITY. |
| Court | U.S. Court of Appeals — Third Circuit |
Lawrence Gochberg, Stamford, Conn. (Bayard, Brill & Handelman, Wilmington, Del., on the brief), for appellant.
Morris Cohen, Wilmington, Del. (Thomas Herlihy, Jr., Wilmington, Del., on the brief), for appellee.
Before HASTIE, Chief Judge, and FREEDMAN and VAN DUSEN, Circuit Judges.
Plaintiff, F. D. Rich Co., Incorporated, as the successful bidder was awarded the contract by defendant, Wilmington Housing Authority, to construct a public housing project in Wilmington, Delaware. The present diversity action seeks recovery on two claims arising from the contract. One is for the additional cost of $33,677.75 which resulted from the Authority's requirement that plaintiff supply off-site or "borrow" fill material for areas in which plaintiff had contemplated using on-site fill material. The other claim is for additional expenses in heating the buildings and in storing electric refrigerators which resulted from the extension of the time for completion of the project, amounting to $12,567.10. The district court entered summary judgment for defendant on the claim for additional expenses and after a nonjury trial rejected the claim for the additional cost of fill.1 From the final judgment for defendant, plaintiff has taken this appeal.
Plaintiff's first claim depends upon an interpretation of the contract specifications. As originally drawn the specifications permitted the use of on-site material as backfill against the foundations, making no reference to other areas of the site. Subsequently, however, the Authority issued Addendum 1 which required the use of "Test Controlled Compacted Fill" in some areas of the project and defined this term so as to make it clear that the fill was to come from off-site locations, or "borrow pits". Addendum 4, which is the source of the dispute, provides:
(Specifications, Part III, Division 2, ¶ 8h(2).)
Plaintiff contends that ¶ 8h(2) authorized it to use on-site fill below the level of the building footings so long as it was three feet outside the building lines. This conclusion can only be reached, however, by making the first sentence absolute and by reducing the second sentence to mere surplusage, since by virtue of the first sentence on-site fill cannot be used within three feet of the building line at any depth. But the meaning of the second sentence is not so limited. It does not prohibit the use of on-site fill directly below building footings. Instead it forbids the use of such material at a depth below the level of the building footings. This clearly means that on-site material may not be used at a depth which is below a line projected from the building footings. Thus, the manifest meaning of the provision coincides with a construction which would not do violence to either sentence. It authorizes the use of on-site fill in areas three feet outside the building lines but prohibits its use below the level of the building footings.
Since the language of the contract is clear and without ambiguity and leads to a meaning which is both reasonable and sensible, there is no need to look beyond it in search of some other intention.2
Plaintiff's second claim is based on the extension of the completion date of the contract granted by the Authority's Contracting Officer. As a result of this extension the Authority required plaintiff to assume the cost of providing heat for an additional heating season and to store electric refrigerators which were on hand but which could not be installed at the time.
Both of these items of expense would normally have been borne by the plaintiff under the contract.3 The contract moreover contains a general "no damage" clause, common in public contracts:
"No payment or compensation of any kind shall be made to the Contractor for damages because of hindrance or delay from any cause in the progress of the work, whether such hindrances or delays be avoidable or unavoidable."4
Such a clause is now universally accepted as valid,5 although it is, of course, to be strictly construed against the owner.6 Plaintiff does not question the validity of the provision but argues that the present case falls within what it claims are three well recognized exceptions to its operation:
(1) where the delay is the result of bad faith on the part of the public authority;
(2) where the delay is of such a nature that it was not foreseeable by the parties;
(3) where the delay is so extensive that it constitutes an abandonment of the contract.7
Assuming the recognition of these exceptions in Delaware law8 plaintiff has not brought itself within the range of any of them.
There was no proof of the claim that the Authority was guilty of bad faith. None of the evidence produced tends to sustain the contention either that the Authority withheld information about or misrepresented adverse soil conditions on the site. Indeed, the problem of soil conditions was one which was known to both parties before they entered into the contract. The specifications were altered as a result of special studies following suggestions by the United States Public Housing Administration and the time for submission of bids was therefore extended. Addenda 1 and 4 already referred to were issued by the Authority as the result of these concerns. Addendum 1 included data prepared by the Authority after an extensive subsoil investigation and Addendum 4 made it clear that the Authority assumed no responsibility for the soil conditions, by providing:
"* * * No responsibility is assumed by the Local Authority for subsoil quality or conditions other than at the locations, and at the time, the exploration was made. * * *" (Specifications, Part III, Division 2, ¶ 2).
There is no claim that the Authority inaccurately set forth the results of its subsoil tests. Plaintiff in bidding for the job in these circumstances assumed the risk of what the subsurface soil conditions would be.9 The fact that the Authority's Contracting Officer in extending the time for performance of the contract noted that there were many undetermined factors affecting the areas in which the soil problems arose is an admission only that adverse conditions were in fact encountered. Indeed, the specifications which so clearly called attention to the problem of soil conditions refute any claim that the Authority failed to indicate the possibility of unknown soil problems.
It follows from what has...
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