Hagginwood Sanitary Dist. v. Downer Corp.
| Decision Date | 14 April 1960 |
| Court | California Court of Appeals Court of Appeals |
| Parties | HAGGINWOOD SANITARY DISTRICT, a public corporation, Plaintiff and Appellant, v. DOWNER CORPORATION, a corporation, and Pacific Indemnity Company, a corporation, Defendants and Respondents. Civ. 9757. |
James H. Phillips, Sacramento, for appellant.
Everett S. Layman, San Francisco, & Forrest E. Macomber and Gordon J. Aulik, Stockton, for respondents.
Plaintiff has appealed from an adverse judgment in an action in which plaintiff sought to recover damages from defendant Downer Corporation and its surety, Pacific Indemnity Company, for alleged breach of contract. Plaintiff alleged in substance that the Downer Corporation had failed to conform to the plans and specifications set forth in its contract with plaintiff to build a sewer line; that Downer Corporation deliberately failed to make proper joints and falsely represented that all joints were properly made; that the district engineer relied on the representations and was unable to discover their falsity; and that the falsity of the representations was not discovered until within three years before the filing of the complaint. Defendants' answer denied the material allegations of the complaint and pleaded the statute of limitations and laches.
In 1948 the Hagginwood Sanitary District sought bids for the construction of sewer lines in the district. Downer Corporation submitted the accepted bid and thereafter entered into a contract with Clyde C. Kennedy as engineer of the Hagginwood Sanitary District to perform the work. The contract provided the Downer Corporation would do all the work in a good and workmanlike manner under the direction and to the satisfaction of the district engineer and in accordance with the plans and specifications. The plans and specifications provided in part:
'1-12. Materials and workmanship.--* * * All work shall be done and completed in a thoroughly workmanlike manner, * * *.
'All defective work or materials shall be removed from the premises by the Contractor, * * *, and shall be replaced or renewed in such manner as the Engineer may direct.
All material and workmanship of whatever description shall be subjected to the inspection of, and rejection by, the Engineer if not in conformance with the specifications.
'Any defective material or workmanship, or any unsatisfactory or imperfect work which may be discovered before the final acceptance of the work or within one (1) year thereafter, shall be corrected immediately on the requirement of the Engineer, * * *, notwithstanding that it may have been overlooked in previous inspections * * *. Failure to inspect work shall not relieve the Contractor from any obligation to perform sound and reliable work as herein described.
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'1-15. Specifications and drawings.--* * * It shall be the duty of the Contractor to see that the provisions of these specifications are complied with in detail irrespective of the inspection given the work during its progress by the authorized official or his representatives. Any failure on the part of the Contractor to observe the specifications will be sufficient cause for the rejection of the work at any time before its acceptance.
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'1-27. Definitions. * * *
'Engineer: * * * On all questions concerning the acceptability of * * * the work, the decision of the Engineer, and his duly authorized assistants and inspectors working under his direction, shall be final.'
The work was performed by Downer Corporation. On March 29, 1950, after a complete inspection by the district engineer of the work performed by Downer Corporation the district accepted the work.
Following a trial before the court sitting without a jury, the court found in substance that neither defendant Downer Corporation nor its employees were guilty of any fraudulent or unfair conduct to plaintiff or plaintiff's engineer or made any false representations; that the contract provision that any defective material or workmanship or any unsatisfactory work which was discovered before the final acceptance of the work, or within one year thereafter, related only to defects pointed out within one year after final acceptance; that no defects were pointed out to Downer Corporation; that the contract contained a provision that all work was to be done under the direction and to the satisfaction of the district engineer and a provision that on all questions concerning the acceptability of the work the decision of the district engineer was final; that the intent of the written contract agreement was that final acceptance of the job would relieve Downer Corporation from any further liability; and that plaintiff district had accepted the work of Downer Corporation. The court also found the plaintiff's causes of action were barred by sections 338, subdivision 4, and 337, subdivision 1, of the Code of Civil Procedure. Judgment was entered in accordance with the findings.
While appellant has made numerous contentions, the substance of its appeal is that the evidence does not support the findings and judgment. There was considerable conflict in the evidence produced at the trial. Walter Hatch who became the superintendent of the district after Downer...
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...be overthrown only for fraud, bad faith or mistake. (Brown v. Aguilar, 202 Cal. 143, 151, 259 P. 735; Hagginwood Sanitary Dist. v. Downer Corp., 179 Cal.App.2d 756, 760, 3 Cal.Rptr. 873; 17 A C.J.S., Contracts, § 498(8), pp. 739-745.) The rule extends to financial determinations. (See Calif......
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