Goodwin, Inc. v. City of Lafayette

• Decision Date: 19 November 1969
• Docket Number: No. 27199.,27199.
• Parties: GOODWIN, INC., Plaintiff-Appellant, v. CITY OF LAFAYETTE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

418 F.2d 698 (1969)

GOODWIN, INC., Plaintiff-Appellant, v. CITY OF LAFAYETTE, Defendant-Appellee.

No. 27199.

United States Court of Appeals Fifth Circuit.

November 19, 1969.

Frank M. Gleason, Rossville, Ga., for plaintiff-appellant.

Norman S. Fletcher, LaFayette, Ga., Oscar M. Smith, Rome, Ga., for defendant-appellee; Shaw, Stolz & Fletcher, LaFayette, Ga., Matthews, Maddox, Walton & Smith, Rome, Ga., of counsel.

Before RIVES, COLEMAN and MORGAN, Circuit Judges.

LEWIS R. MORGAN, Circuit Judge:

Goodwin, Inc., as plaintiff brought an action against the City of LaFayette, Georgia, defendant, for labor and materials allegedly due under a written contract between the parties for the construction of certain sewerage facilities and improvements to the existing sewerage system. Goodwin's complaint, as amended, alleged eleven distinct claims against the City in the total amount of $269,825.00. All of the claims sought compensation for extra work allegedly done over and above that called for by the contract with the exception of the claims made in Paragraph 6 of the complaint which alleges claims that the City of LaFayette did not permit Goodwin to do certain work, thereby causing it to lose certain monies. The defendant municipality denied all the material allegations and asserted certain special defenses. The City moved for summary judgment as to all claims. The District Court granted the motion except with respect to the claims alleged in Paragraph 6 of the complaint. The claim relative to Paragraph 6 of the complaint is not at issue on this appeal.

At some time prior to October 21, 1963, the date of the execution of the contract, the City of LaFayette, acting through its authorities, decided to have certain sewerage system improvements made. In order to finance the improvements and additions, the City sold revenue certificates and made arrangements with the Housing and Home Finance Agency, an agency of the Federal Government, for a grant to supply additional funds for the contract cost. On October 21, 1963, Goodwin's bid was accepted and a written contract was executed between the municipality and Goodwin for the work to be performed.

The material terms of the contract concerned in this dispute are as follows:

"17: Changes in Work

No changes in the work covered by the approved contract document shall be made without having prior written approval of the owner. Charges or credits for the work covered by the approved change shall be determined by one or more, or a combination of the following methods * * *

"18: Extras

Without invalidating the contract, the owner may order extra work or make changes by altering, adding to or deducting from the work, the contract sum being adjusted accordingly, and * * * All of the work of the kind bid upon shall be paid for at the price stipulated in the proposal, and no claims for any extra work or material shall be allowed unless the work is ordered in writing by the owner or its architect-engineer, acting officially for the owner, and the price as stated in such order.

"22: Claims for extra cost

No claim for extra work or cost shall be allowed unless the same was done in pursuance of a written order of the architect/engineer approved by the owner, as aforesaid and the claim presented with the first estimate after the changed or extra work is done. Emphasis supplied.

"24: Construction Schedule and Periodic Estimates

* * * the contractor shall also furnish on forms to be supplied by the owner (a) a detailed estimate giving a complete breakdown of the contract price and (b) periodic itemized estimates of work done for the purpose of making partial payments thereon."

The work began on or about November 1, 1963, and as the work progressed, Goodwin submitted eleven periodic estimates of the work performed in order to obtain partial payments from the municipality. These estimates were approved by J. B. McCrary Company, Inc., the engineering firm for LaFayette; they were also approved by the city officials, and paid to Goodwin. Each of the eleven estimates contained a certification by Goodwin "* * * that the foregoing is a true and correct statement of the contract account up to and including the last day of the period covered by this periodic estimate * * *".

Approximately one year after the work began, on November 6, 1964, Goodwin submitted a final (twelfth) estimate signed by its president showing that the total adjusted contract amount to that date was $413,325.00; that the work under the contract had been 100 percent completed, and that the City of LaFayette had paid Goodwin, the contractor, all sums due with the exception of $50,534.64.

Also, on the date of November 9, 1964, a contract change order on a form supplied by the Housing and Home Finance Agency, showing a reduction in the original contract price by a sum of $59,752.00 and stating that the "total adjusted contract price to date is $413,325.00", was accepted in writing by Goodwin and submitted to the Housing and Home Finance Agency. This amount in the sum of $413,325.00 is the same amount as that shown on the final estimate, No. 12, which Goodwin submitted to the defendant municipality.

Thereafter, the City paid Goodwin the $50,534.64 (a total of $413,325.00 on the contract) with the exception of $2,500.00 which the City retained pursuant to an agreement between the City and Goodwin. Subsequently, Goodwin agreed in writing for the City to repair certain manholes with the understanding that the City could deduct $1300.00 from the $2500.00, leaving an unpaid balance of $1200.00. This amount ($1200.00) has been retained by the City since...