Great Lakes Const. Co. v. Republic Creosoting Co.

• Decision Date: 10 December 1943
• Docket Number: No. 12607.,12607.
• Parties: GREAT LAKES CONST. CO. et al. v. REPUBLIC CREOSOTING CO.
• Court: U.S. Court of Appeals — Eighth Circuit

139 F.2d 456 (1943)

GREAT LAKES CONST. CO. et al. v. REPUBLIC CREOSOTING CO.

No. 12607.

Circuit Court of Appeals, Eighth Circuit.

December 10, 1943.

William R. Bascom, of St. Louis, Mo. (William G. Pettus, Jr., and Arthur B. Shepley, Jr., both of St. Louis, Mo., McKnight, McLaughlin, Dunn & Sims, of Chicago, Ill., and Nagel, Kirby, Orrick & Shepley, of St. Louis, Mo., on the brief), for appellants.

Forrest M. Hemker, of St. Louis, Mo., and George A. Reilly, of Chicago, Ill. (Greensfelder & Hemker, of St. Louis, Mo., and Scott, MacLeish & Falk, of Chicago, on the brief), for appellee.

Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.

WOODROUGH, Circuit Judge.

This appeal is to reverse a judgment for $12,279.29, found to be the value of work and materials furnished by Republic Creosoting Company, a sub-contractor, to Great Lakes Construction Company, the prime contractor, in the construction of the Post Office Building at Eighteenth and Market Streets in St. Louis, Missouri. Republic intervened in the action brought by another materialman under the Heard Act, 40 U.S. C.A. § 270, against the bond supplied by Great Lakes as principal and several companies appellants as sureties pursuant to the terms of that statute. Republic originally had a sub-contract with Great Lakes to furnish the work and material to complete the wood flooring in the building for $32,500, but on the trial to the court without jury it was held that Republic had been prevented from the performance of its contract without its fault and that Great Lakes had breached it and the judgment for recovery on the bond was on the quantum meruit. A counterclaim for damages asserted by Great Lakes for alleged breach of the contract by Republic was dismissed.

On this appeal Great Lakes does not question that Republic furnished work and materials in the construction of the flooring in the building, nor that the fair value was as adjudicated, but it contends (1) that Republic's action against the bond was barred by the applicable time limitation of the Heard Act; and if it was not, (2) that the court erred in ascribing the breach of the sub-contract to Great Lakes instead of to Republic.

(1) The original Heard Act provisions as to the time for bringing action on public building contractors' bonds, 40 U.S.C.A. § 270, were repealed and amended by the Act of August 24, 1935, but the terms of the amendment continued them in force in respect to the contract here involved, 40 U.S.C.A. (1942) § 270, and the parties rightly agree that Republic's intervention here had to be filed within one year from "completion and final settlement" of the contract of the Great Lakes company. The question decided by the trial court and presented to this court by the appeal, is whether the "final settlement" was on August 24, 1940, or whether it was on November 13, 1940. The Republic's intervention was filed September 8, 1941, and was too late if the final settlement date was August 24, 1940, but it was within the year from November 13, 1940.

The contract of the Great Lakes Company for the construction of the building for $3,636,163 was entered into with the Procurement Division of the United States Treasury Department, but the functions of that division in respect to it were subsequently transferred to the Federal Works Agency. The administrative action of August 24, 1940, relied on by the Great Lakes company to establish "final settlement" on that date, was by the Federal Works Agency. Republic denies the finality of that action and contends that the "final settlement" is evidenced by certificate of the Comptroller General on November 13, 1940, as decided by the triel court.

It appears that: The contract between Great Lakes and the United States provided: "The compensation hereinbefore stipulated to be paid shall be reduced by the amount that the contracting officer, subject to the approval of the Comptroller General, shall find the cost of performing this contract is reduced solely by reason of the contractor not complying with the provisions of any code or codes of fair competition, or any related requirements (as provided in Executive Order Numbered 6646 of March 14, 1934); and such compensation shall be increased by the amount that the contracting officer, subject to the approval of the Comptroller General, shall find the cost of performing this contract has been increased solely by reason of compliance with any acts of Congress enacted after August 29, 1935, requiring the observance of minimum wages, maximum hours, or limitations as to age of employees in the performance of contracts with agencies of the United States."

The amount to be added or subtracted was a question for determination between Great Lakes and the United States. In addition, in August of 1939 there had been a flood in the post office which caused damage to certain electrical installations. A dispute arose between the United States and Great Lakes as to whether the building had been accepted at the time of the flood so that the loss was that of the United States or whether it had not been accepted so that the loss was that of Great Lakes. The amount involved was $11,911.38. There was also the question of the Government's right to damages for the delay in performance from February 28, 1938, to August, 1940.

On August 24, 1940, Neal A. Melick, Acting Commissioner of Public Buildings, addressed the following communication to the Federal Works Administrator:

"The following report and recommendation are submitted relative to Contract No. TIPW 2537, with the Great Lakes Construction Company, Chicago, Illinois, for construction of the Post Office Building, St. Louis, Missouri:

                  Date of contract ................  Sept. 6,    1935
                  Time for completion fixed in
                    contract (900 days from
                    9-12-35) ......................  Feb. 28, 1938
                  Time for completion as extended
                    under Articles 3 &amp
                    9 (207 days) ..................  Sept. 23, 1938
                  Liquidated damages for delay .... $200.00 per day
                  Amount of contract as originally
                   awarded ........................  $3,636,163.00
                  Additions from time to time .....     185,583.74
                                                     _____________
                                                      3,821,746.74
                  Deductions from time to time           20,178.66
                                                     _____________
                                                      3,801,568.08
                  Less payments on account ........   3,711,729.40
                  Balance .........................  $   89,838.68
                

"A review of the records indicates that the work under this contract was substantially completed, (more than 99%), and the building occupied, by June 23, 1939. In addition to the defects and omissions found at final inspection there remained to be completed the cafeteria and equipment for same. It is shown that at the time the building was occupied the loading platform and adjacent C.O.D. space was not ready for use, making it necessary for the postal activities to occupy the cafeteria space temporarily, so that it was not available for cafeteria work until May, 1939, and the work was completed by September 13, 1939. The defects and omissions were not of a character to interfere with the transaction of business and were all corrected or supplied by March 4, 1940. The delays in the correction of the defects and omissions and the completion of the work in the cafeteria was the cause of no loss or inconvenience to the Government.

"Regarding the delay in substantial completion the contractors report that same was due to various strikes, labor disputes, abnormal weather conditions, and clearing old brick sewer. Careful examination of the records confirms the contractors' statements and shows that such delay was mainly caused by strikes and labor disputes over which the contractors had no control. Since the delays experienced from the causes given account for all of the time from September 23, 1938, to June 23, 1939, it is recommended that liquidated damages be waived in accordance with the Act of June 6, 1902, as amended by Reorganization Plan No. 1, under the Reorganization Act of 1939.

"In accordance with Public Resolution No. 65 a representative of the contracting officer made an examination of the contractors' records on March 18 to March 20, 1940, and reported that reductions due to noncompliance with approved codes of fair competition amounted to $1,246.72, and the records indicated no instance whereby the contract amount should be increased, as provided in said Resolution.

"As a result of a flood during the month of August, 1939, the St. Louis, Missouri, Post Office suffered damage to the extent that the building ceased functioning. On August 5, 1939, the contractors were advised of the flood, and that, inasmuch as all construction items had not been completed, the costs involved appeared to be their responsibility. Exigency repairs sufficient to allow the building to function were made and the contractors called upon to complete the remainder. Under date of March 5, 1940, the contractors denied all responsibility for damages caused by floods on the ground that their work had been completed. Accordingly a contract was awarded, after competition, for completion of the repairs, and the work was accomplished by April 4, 1940. On June 26, 1940, an itemization of the amounts paid for repairs, indicating a total of $11,911.38, was forwarded to the contractors, with the request that they submit a proposal for a deduction in this amount, they being advised that if such deduction proposal was not received by July 10, 1940, recommendation would be made that the amount would be deducted from the balance due under the contract. The proposal has not been received.

"In view of the fact that this contract is subject to Public Resolution No. 65, which provides that the Comptroller General approve the findings of the contracting office, and since the contractors have failed to assume responsibility for the cost of the...