Freeman v. Department of Highways, 6973

• Decision Date: 13 March 1967
• Docket Number: No. 6973,6973
• Parties: E. M. FREEMAN d/b/a Freeman & Associates v. DEPARTMENT OF HIGHWAYS, State of Louisiana.
• Court: Court of Appeal of Louisiana — District of US

Page 188

197 So.2d 188

E. M. FREEMAN d/b/a Freeman & Associates v. DEPARTMENT OF HIGHWAYS, State of Louisiana.

No. 6973.

Court of Appeal of Louisiana, First Circuit.

March 13, 1967.

Rehearing Denied April 17, 1967.

Writ Granted June 20, 1967.

Elven E. Ponder, Philip K. Jones, D. Ross Banister, Glenn S. Darsey and Norman L. Sisson, Baton Rouge, for appellant.

Victor A. Sachse, of Breazeale, Sachse & Wilson, Baton Rouge, Morgan, Baker, Skeels & Coleman, Shreveport, for appellee.

Before LANDRY, ELLIS and BAILES, JJ.

LANDRY, Judge.

The Department of Highways, State of Louisiana (Department) has taken this appeal from the judgment of the trial court awarding plaintiff, E. M. Freeman, d/b/a Freeman & Associates (Freeman), money judgment in the aggregate of $151,634.45, together with legal interest thereon, for engineering services performed by Freeman pursuant to two certain contracts and damages found to be due because of the Department's alleged violation of the terms of the agreement resulting in losses to Freeman. In addition the lower court assessed all costs of trial against defendant. We find that in so decreeing our brother below fell into error and that his decision must be amended.

On this appeal the Department complains as follows: (1) the judgment in favor of Freeman is erroneous in that plaintiff has been paid all sums due him under the contracts; (2) plaintiff is not entitled to damages because there was no breach of either agreement by defendant and, alternatively, if there were a breach it was passive and plaintiff may not recover damages therefor because of his failure to place defendant in default; (3) the trial court erred in awarding interest on the amount of the judgment rendered inasmuch as interest is not recoverable against the state in the absence of a statute or stipulation so providing, and (4) the lower court improperly assessed all costs of trial against defendant whereas, being an agency of the state, the Department is by law exempt from payment of all court costs save and except stenographer's fees for taking testimony.

On June 25, 1957, plaintiff and defendant entered into the first contract (known as Contract 13), pursuant to which plaintiff undertook to perform professional engineering services required for State Project No. 700--03--13 (Federal Aid Interstate Project No. I--540(1), Greenwood-Shreveport Interstate Highway, State Route No. Louisiana 3029, Caddo Parish, Louisiana). Based on then available information, the Department estimated the cost of Project 13 at the sum of $5,700,000.00. The second agreement was confected May 19, 1958, and provided that plaintiff would furnish similar services for State Project 700--03--37 (Federal Aid Project No. I--20--I(7) O, Texas State Line-Greenwood Highway, Interstate Route No. I--20, Caddo Parish, Loupisiana, (known as Contract 37). The cost of Contract 37 was initially estimated by the Department at the sum of $3,700,000.00.

It appears that plaintiff's organization is a long established and respected firm of consulting engineers and had previously served the Department in a similar capacity on another project. To perform the work required by Contracts 13 and 37, plaintiff E. M. Freeman employed his regular staff, augmenting same by the addition of four or five employees. In essence the contracts called for plaintiff to furnish all engineering services for the design, planning, detailing, surveying, drawing, engineering and right of way acquisition requisite for the construction of the two projects. It appears that these projects, in the vicinity of Shreveport, Louisiana, constituted a link in Interstate Highway 20 and included surface paving of dual laned highways, bridges, overpasses and interchanges with accompanying cloverleafs and turn-outs.

Both contracts provided in substance that the work undertaken by plaintiff was to be divided into two phases, the first of which involved preliminary planning including sub-surface investigation and delivery to the Department of preliminary plans and estimates of costs. Phase two encompassed preparation of and submission of final plans to the Department. In each instance it was stipulated that Phase I would be completed within six months following the Department's notice to proceed therewith. Each agreement likewise stipulated that Phase II was to be completed and right of way maps, contract plans, specifications and estimates delivered to defendant within four months following notification to plaintiff to proceed with Phase II.

It is conceded that with regard to Contract 13, the Department issued orders to proceed under Phase I on July 9, 1957, and under Phase II on November 27, 1957; with respect to the second agreement, orders were issued to undertake Phase I on May 20, 1958, and commence Phase II on January 7, 1959.

In substance plaintiff's claim is predicated on the contention that by virtue of the contracts and certain verbal commitments given by plaintiff to the then Director of the Department, R. B. Richardson, plaintiff's organization became a part of the Department's own activities. Plaintiff further shows that he commenced work in accordance with the terms of the contracts without delay, but due to procrastination on the part of the Department and its various agents and employees, beyond plaintiff's control and in violation of the contracts, plaintiff was unable to complete Contract 13 until August 19, 1960 (26 months beyond the contemplated termination date) and was prevented from consummating Contract 37 until August, 1960, (one year and three months subsequent to its stated date of expiration).

Allowing twelve months for completion of Contract 13, plaintiff calculates his damages at the amount of his payroll directly attributable to said project subsequent to July 1, 1958, in the sum of $56,028.38, together with an additional $21,238.67 for overhead payroll or the sum of $77,267.05. Similarly, granting twelve months for completion of Contract 37, he determined payrolls directly attributable to said job subsequent to May 20, 1959, in the amount of $33,198.51, together with overhead in the sum of $16,249.18, making a total of $49,447.69. In addition plaintiff prayed for further compensation due under Contracts 13 and 37 in the sums of $15,208.46 and $9,711.30, respectively. Defendant admits owing plaintiff an additional $15,208.46, under Contract 13, but maintains said obligation is partially offset by overpayment of $10,961.38 made on Contract 37. Alternatively, plaintiff prayed for judgment on quantum meruit in the sum of $226,532.73. The trial court's judgment was for the amount of damages and earned unpaid compensation alleged by plaintiff to be due under the contracts, together with interest from date of judicial demand, until paid, and as aforesaid, cast the Department for all trial costs.

The Department's defense is predicated upon the following provisions appearing in each contract:

In Contract 13:

'Services to Be Performed By The Department

The Department will furnish the Engineers without charge the following services and data:

5. Prints of standard plans of bridges, culverts and incidental drainage structures prepared by the Department and approved for use on the Interstate Highway System. Tracing of such plans will be inserted in the final plans after delivery to the Department by the Engineers. Detailed information showing standard plans available will be furnished the Engineers prior to execution of this Contract.' (P--1, pp. 5--6)

'COMPENSATION:

The Department shall pay and the Engineers agree to accept fees in full compensation for the engineering services required of them under each of the foregoing Phases, as follows:

PHASE I--PREPARATION OF PRELIMINARY PLANS

In addition to the fee for subsurface investigations as specified in Item 5 of Phase I under the caption 'Scope of Engineering Services,' and based on the estimated construction cost of the total Project, all as developed for the preliminary plans and as approved by the Chief Engineer of the DEPARTMENT the fee of

(1) One per cent (1%) of such estimated construction cost, if the DEPARTMENT furnished the topographic survey, or

(2) One and twenty-five hundredths per cent (1.25%) of such estimated construction costs if the ENGINEERS make the complete topographic survey.

PHASE II--CONTRACT PLANS AND SPECIFICATIONS

For the preparation of plans, special specifications and estimates for the section or sections required and checking Contractor's working drawings and shop details of the Project, the fee of two and Twenty-five one-hundredths per cent (2.25%) of contract costs for each and every such section as is placed under contract within four (4) calendar months after completion of the plans and the specifications for each individual section. Should award of any construction contract or contracts be delayed or deferred for any reason by the DEPARTMENT, final payment for such section or sections shall be based upon the ENGINEERS' estimate of construction cost as approved by the Chief Engineer of the DEPARTMENT of such section or sections.' (P. 2--p. 6).

'REVISIONS OF PLANS:

Should major changes be required by the DEPARTMENT during the progress or after completion of the work, for which the ENGINEERS are not responsible and which will require revision of work otherwise satisfactorily accomplished, the ENGINEERS shall be paid additional compensation in the form of a lump sum which is mutually agreeable to the DEPARTMENT and to the ENGINEERS. If the parties hereto are unable to agree upon a lump sum for each additional work, the ENGINEERS shall be paid on the basis of their certified and itemized direct payroll costs plus one hundred per cent (100%) to cover overhead costs and profit.' P. 2, p. 8).

'DELAYS AND EXTENSIONS:

The ENGINEERS will be given credit and extension of time for delays beyond their control or for these caused by tardy approvals of work in progress by various official agencies,...