Fruin-Colnon International, SA v. CONCRETO, SA

• Decision Date: 26 May 1964
• Docket Number: Civ. No. 5163.
• Citation: 231 F. Supp. 14
• Parties: FRUIN-COLNON INTERNATIONAL, S.A. and Le Boeuf & Dougherty, Inc., corporation, a Joint Venture, Plaintiffs, v. CONCRETO, S.A., a corporation, Defendant. and United States Fidelity & Guaranty Company, a corporation, Surety-Defendant.
• Court: U.S. District Court — Panama Canal Zone

231 F. Supp. 14

FRUIN-COLNON INTERNATIONAL, S.A. and Le Boeuf & Dougherty, Inc., corporation, a Joint Venture, Plaintiffs, v. CONCRETO, S.A., a corporation, Defendant. and United States Fidelity & Guaranty Company, a corporation, Surety-Defendant.

Civ. No. 5163.

United States District Court D. Canal Zone, Balboa Division.

May 26, 1964.

Roy Phillipps P., Balboa, Canal Zone, Gilbert A. Cuneo, Sellers, Conner & Cuneo, Washington, D. C., for plaintiffs Fruin-Colnon, et al.

De Castro & Robles, Balboa, Canal Zone, Robert Sheriffs Moss, Washington, D. C., for defendant Concreto, S.A.

L. S. Carrington, Balboa, Canal Zone, Guillermo Jurado, Panama, Republic of Panama, for surety-defendant-U. S. Fidelity & Guaranty Co.

CROWE, District Judge.

The plaintiffs, Fruin-Colnon International, S.A. and Le Boeuf & Dougherty, Inc., doing business as a joint venture, entered into a contract with the Panama Canal Company to construct the substructure of a bridge spanning the Panama Canal and designated in the contract as "Balboa Bridge." This bridge has been named by the Congress of the United States as the Thatcher Ferry Bridge and Panama through her National Assembly has named it the Bridge of the Americas.

On August 5, 1959, plaintiffs entered into a subcontract with defendant, Concreto, S.A., wherein the defendant agreed to furnish and deliver 30,000 cubic yards, more or less, of ready-mixed concrete as necessary for the "construction of Balboa Bridge Substructure" to the complete intent and in conformance with the covering requirements of the concrete section of the "Specifications for Construction of Balboa Bridge Substructure, Canal Zone, Serial No. PC-59-66, dated April 15, 1959 and as amended by Addenda Nos. 1 and 2", prepared by the Engineering and Construction Bureau of the Panama Canal Company.

The complaint alleges that the defendant failed to comply with the terms of the contract and United States Fidelity & Guaranty Company was joined as a party defendant as it is the surety on the Performance Bond executed by defendant in favor of plaintiffs.

The plaintiffs set out in their pleadings six causes of action claiming a total sum by reason of Concreto's breaches of the subcontract agreement of $349,747.00. The surety-defendant is alleged to be responsible with defendant and it in turn has cross-complained against Concreto under the indemnity clause of the Performance Bond.

The defendant, Concreto, instituted a counterclaim against the joint venture setting out five causes of action. The first and third are shown to have been settled by the parties in the "Pre-Trial Order" of September 24, 1962 as was the sixth cause of action in plaintiffs' complaint, so these matters are moot and will no longer be considered.

The second and fifth causes of action in the counterclaim, although not shown to have been dismissed in the Pre-Trial Order, were dismissed by agreement as set out in defendant's brief (P. 16) and are therefore moot.

The counterclaim therefore maintains claims for damages arising out of the fourth cause of action for loss of potential profits in the sum of $63,720.00 as a consequence of plaintiffs' "unjustified" termination of their contract with Concreto.

The United States, for the use of Concreto, cross-complained under the authority of the Miller Act against the joint venture and United States Fidelity & Guaranty Company for damages in the sum of $54,664.75 plus interest, as the price of ready mixed concrete furnished the plaintiffs by Concreto pursuant to the subcontract, which plaintiffs admitted receiving and not paying for as they are claiming it as a set-off against their claim against Concreto.

Concreto has joined the United States Fidelity & Guaranty Company as a co-cross-defendant under its responsibilities arising out of a Payment Bond guaranteeing payment by plaintiffs and the United States Fidelity & Guaranty Company has cross-complained against the plaintiffs on the indemnity clauses of its Payment Bond and against Concreto on the indemnity clause of its Performance Bond. Neither plaintiffs nor defendant have resisted the cross-complaint of United States Fidelity & Guaranty Company.

I

The plaintiffs' first cause of action is based upon the allegations that defendant, Concreto, failed to comply with Paragraphs 12-09(b) (3)b, 12-09(c) and 12-09(c) (2) of the concrete specifications of the contract and as a result thereof, the Contracting Officer issued a stop order on concrete operations on the 12th day of January, 1960 which was in effect for a two-week period from January 13, 1960 to January 29, 1960 to plaintiffs' damage in the sum of $15,000.00.

The testimony does not support plaintiffs' position. Colonel Robert D. Brown, Jr., Contracting Officer for the Panama Canal Company who issued the stop order in a letter of January 12, 1960 written to the plaintiffs, wrote that the shutdown was the result of plaintiffs' "poor management". His testimony given by deposition during the trial was emphatically to the effect that he and the engineering and inspection officers were not satisfied with the supervision that the "contractor", plaintiffs, "was providing or his planning or his management at that time."

This position assumed by the Contracting Officer supplemented by other proof and in the absence of any showing to the effect that he was acting arbitrarily or capriciously, thoroughly establishes that plaintiffs were at fault and preclude recovery.

It appears that Concreto's equipment failed to meet some of the specifications and these failures were enumerated in the letter of January 12, 1960. This does not relieve plaintiffs, however, for this was only a part of the reason for delay if there was an actual delay as much of the equipment and personnel were used at other places on the job during the stoppage of concrete operations. Proof later introduced and considered as to the claim for general delay sustains the position of defendant that no actual over-all delay was occasioned.

As there was a stoppage and assuming, arguendo, that there was a delay, plaintiffs' contribution to it would preclude recovery as the courts have refused to apportion damages between a plaintiff and a defendant when both are responsible for the delay. See Jefferson Hotel Co. v. Brumbaugh, 4 Cir., 168 F. 867; Caldwell & Drake v. Schmulbach, 4 Cir., 175 F. 429; Greenfield Tap & Die Corp. v. United States, 68 Ct.Cl. 61, Supreme Court denial certiorari, 281 U.S. 737, 50 S.Ct. 333, 74 L.Ed. 1152.

II

In their second cause of action plaintiffs complain that on or about the second half of December 1960 defendant, Concreto, S. A., failed to adequately and satisfactorily supply the ready mixed concrete as required by the applicable specifications and as a consequence thereof, the Contracting Officer demanded compliance and did not approve the methods defendant had been employing. The plaintiffs therefore, because of the Contracting Officer's disapproval of Concreto's concrete plant as a source of supply, were compelled to suspend work on the water piers until they imported and set up a concrete plant which would meet specifications.

The suspension extended from January 3, 1961 up to and including April 3, 1961 and because of the suspension plaintiffs claim damages of $180,000.00. Plaintiffs estimate that had the specified concrete been available for incorporation into the water piers, the joint venture would have been able to complete the substructure by the end of August, 1961 and that it was delayed until October 31, 1961.

Plaintiffs' witnesses as to the delay claimed are not convincing as against the proof offered by the defense.

Elmer Stevens, Resident Engineer, and William Brooks, Contract Administrator, employees of the Panama Canal Company after a detailed study of the progress of the construction and the preparation of careful charts as to the progress came to the conclusion that there was no delay.

Stevens testified at the first hearings in the case to the effect that "in my opinion there was certainly some delay" but after a careful study of their diaries containing their project notes together with charts prepared by Brooks, he reversed his testimony at a subsequent hearing and stated "When I was here in September, I had been totally unable to make the detailed study that has since been made and which has taken quite a long time." He then told how certain parts of the project were dependent upon completion of other parts and declared, "I therefore must testify that I see no delay to the completion of the project due to the shutdown of the concrete plant."

This testimony together with the charts themselves, demonstrating the progress achieved, establish that there was no delay so no recovery is permitted under plaintiffs' second cause of action.

III

In the third and fourth causes of action the plaintiffs claim that by reason of the Contracting Officer's disapproval of Concreto's concrete plant as a source of concrete mix for the "important main and anchor piers" as set out in his letter of January 4, 1961, the plaintiffs were compelled to purchase in the United States a complete "job site" automatic concrete plant with the necessary additions and special features in order to comply with the specifications of the Prime Contract. The excess cost to plaintiffs for the purchase, transportation and assembly of the plant and accessories and the batching, mixing and delivery of concrete mix is alleged to be $90,747.00.

Plaintiffs allege that as it manufactured its own concrete in its central mixing plant, it was compelled to procure Type II cement required in the contract at $1.74 per sack rather than at the price of $1.44 per sack as specified as the cost of cement to plaintiffs as a result of supply by defendant under its terms.

The defendant in defense of its position relies upon a letter dated July 22, 1959 written to Fruin-Colnon Contracting Company, 48 Park Road, Burlingame, California and...