Guy F. Atkinson Co. v. Merritt, Chapman, & Scott Corp.

• Decision Date: 05 November 1954
• Docket Number: No. 33585.,33585.
• Citation: 126 F. Supp. 406
• Court: U.S. District Court — Northern District of California
• Parties: GUY F. ATKINSON COMPANY, a corporation, Plaintiff, v. MERRITT, CHAPMAN, & SCOTT CORPORATION, a corporation, The Savin Construction Corporation, a corporation, individually, and as joint venturers; United States of America, et al., Defendants.

126 F. Supp. 406

GUY F. ATKINSON COMPANY, a corporation, Plaintiff, v. MERRITT, CHAPMAN, & SCOTT CORPORATION, a corporation, The Savin Construction Corporation, a corporation, individually, and as joint venturers; United States of America, et al., Defendants.

No. 33585.

United States District Court N. D. California, S. D.

November 5, 1954.

Johnson & Stanton, Gardiner Johnson, John A. Sproul, San Francisco, Cal., for plaintiff.

Bronson, Bronson & McKinnon, Kirke La Shelle, San Francisco, Cal., for defendants Merritt, Chapman & Scott Corp. and The Savin Construction Corp.

Lloyd H. Burke, U. S. Atty., George A. Blackstone, Asst. U. S. Atty., San Francisco, Cal., for defendant United States of America.

OLIVER J. CARTER, District Judge.

This is an action under the Federal Tort Claims Act, 28 U.S.C.A. § 2671 et seq., arising out of the following facts:

Plaintiff is constructing Folsom Power Plant on the American River under a contract with the Bureau of Reclamation of the United States Department of the Interior. Adjacent to plaintiff's construction site, defendant, United States of America, through the Corps of Army Engineers, is constructing Folsom Dam under contract with defendants, Merritt, Chapman & Scott Corporation and The Savin Construction Corporation. Defendants built a cofferdam upstream from plaintiff's construction site to retain and divert the waters of the American River from the areas in which Folsom Dam and Folsom Power Plant were being constructed. Defendants' upstream cofferdam collapsed on January 9, 1953, causing a sudden flow of water which inundated plaintiff's construction site, resulting in substantial damage to plaintiff. Subsequently defendants rebuilt the upstream cofferdam which collapsed again on May 20, 1953, causing a sudden flow of water, resulting in further damage to plaintiff.

United States District Judge O. D. Hamlin, 123 F.Supp. 720, granted defendants' motion to strike the first four causes of action of the complaint, which were based upon the theory of strict liability, and therefore they are no longer in the case and this order will be confined to a consideration of the fifth, sixth, seventh and eighth causes of action in relation to defendant's motion for summary judgment.

The fifth and sixth causes of action allege specific acts of negligence leading up to the first and second failures of the upstream cofferdam, and the seventh and eighth causes of action allege negligence in general terms with regard to each collapse of the cofferdam.

Defendant's motion for summary judgment is based upon three contentions; the first is that because of certain language found in Section 42 of Specifications No. DC-3662, and in Order for Changes No. 2 to the contract between plaintiff and the Bureau of Reclamation, plaintiff indemnified the United States against liability arising out of the damage complained of.

It is a sufficient answer to this contention that the meaning of the language in question is disputed by the parties, because plaintiff and defendant have different versions of the circumstances surrounding the framing of the disputed language, and each ascribes a different meaning to the words; therefore there are disputed questions of fact. But further than this, plaintiff has alleged acts of affirmative negligence. The exculpatory language relied upon by defendant does not refer to negligence at all. The California rule of interpretation of exculpatory clauses is that the clause is not construed to indemnify against negligence unless that is explicitly referred to:

"`"The defendant itself wrote the provision into the contract for its own benefit. It could have plainly stated, if such was the understanding of the parties, that the plaintiff agreed to relieve it in the matter from all liability for its own negligence. As it did not do so, we resolve all doubt, as we should, in favor of the plaintiff, and hold that it was not the intent of the parties to give to the contract as written the effect claimed by the company."'" Basin Oil Co. of California v. Baash-Ross Tool Co., 125 Cal.App.2d 578, 271 P.2d 122, 132.

This rule is not limited to cases involving the landlord and tenant relationship, since the Basin Oil Co. case arose from a sale of chattels and Pacific Indemnity Co. v. California Electric Works, Ltd., 29 Cal.App.2d 260, 84 P.2d 313, involved a contract for the construction of a building. The California rule is also the majority rule according to a recent annotation in 175 A.L.R. 8, 29:

"In the overwhelming majority of the cases the result reached by their interpretational efforts can be condensed into the single rule that where the parties fail to refer expressly to negligence on their contract such failure evidences the parties' intention not to provide for indemnity for the indemnitee's negligent acts."

Therefore defendant's first contention is without merit.

Defendant's second contention is that the United States is specifically exempt from liability for flood damage under Section 3 of the Mississippi River Flood Control Act of 1928, 33 U.S.C.A. § 702c:

"No liability of any kind shall attach to or rest upon the United States for any damage from or by floods or flood waters at any place * * *."

Upon careful consideration of the background of the quoted section, this Court is of the opinion that its purpose was to prevent the Government from being held liable for the staggering amount of damage caused by natural floods, merely because the Government had embarked upon a vast program of flood control in an effort to alleviate the effect of the floods. Because floods could not be eliminated in a single year, flood damage was bound to recur, and Congress did not want to burden its efforts to lessen the total effect of the floods with the cost of the damage that was certain to result in spite of its efforts. In rejecting a proposal to reverse this Congressional policy by indemnifying victims of flood damage, the House Committee on Appropriations said:

"The Committee believes that the approval of the proposed indemnification program would commit the Federal Government to a new concept of Federal responsibility which would result in an almost unlimited number of claims from victims of every `Act of God' disaster throughout the country regardless of the type or size of the disaster. The financial implications inherent in such an action would be enormous." H.Rept. 1092 on H.J.Res. 341, 82d Con., 1st Sess., p. 5.

Thus the purpose of the enactment in question was to avoid financial liability being placed on the Federal Government for `Act of God' disasters, because of the enormous damage which results — often running into the hundreds of millions of...