Hartford Acc. & Indem. Co. v. Dist. of Columbia

• Decision Date: 02 February 1982
• Docket Number: No. 80-581.,No. 80-748.,80-581.,80-748.
• Citation: 441 A.2d 969
• Parties: HARTFORD ACCIDENT AND INDEM-NITY COMPANY, Appellant, v. DISTRICT OF COLUMBIA, et al., Appellees. DISTRICT OF COLUMBIA, et al., Cross-Appellants, v. HARTFORD ACCIDENT AND INDEM-NITY COMPANY, Cross-Appellee.
• Court: D.C. Court of Appeals

441 A.2d 969

HARTFORD ACCIDENT AND INDEM-NITY COMPANY, Appellant, v. DISTRICT OF COLUMBIA, et al., Appellees.

DISTRICT OF COLUMBIA, et al., Cross-Appellants, v. HARTFORD ACCIDENT AND INDEM-NITY COMPANY, Cross-Appellee.

No. 80-581.

No. 80-748.

District of Columbia Court of Appeals.

Argued May 6, 1981.

Decided February 2, 1982.

COPYRIGHT MATERIAL OMITTED

George B. Reynolds, Washington, D. C., with whom Francis J. Pelland, Washington, D. C., was on the brief, for Hartford Acc. and Indem. Co.

Christopher M. Kerns, Washington, D. C., for the District of Columbia, et al.

Before NEWMAN, Chief Judge, and MACK and FERREN, Associate Judges.

MACK, Associate Judge:

This action was brought under D.C.Code 1973, § 1-804b¹ in the name of the District of Columbia for and on behalf of Heller Electric Co., Inc. (Heller) against Weiss Construction Inc. (Weiss) and Weiss' surety, Hartford Accident and Indemnity Company (Hartford).

In 1975 the District of Columbia entered into a public contract with Weiss for the construction of the Wheatley Playground Addition. Heller, as a subcontractor of Weiss, performed electrical work on the project. In accordance with D.C.Code 1973, § 1-804a, as amended, Pub.L.No.93-89, § 501, 87 Stat. 305, Weiss, as the prime contractor, furnished a payment bond secured from Hartford to protect persons supplying labor and material under the prime contract.²

In June 1978 Heller filed a complaint against Weiss and Hartford claiming that Heller's property was vandalized as a result of Weiss' failure to provide adequate security at the job site. In addition, Heller sought recovery of costs incurred as a result of performance delays. An amended complaint, filed August 24, 1979, added a claim for the unpaid balance of the contract. The trial court awarded $31,179 against Weiss and Hartford for the contract balance (including $5,700 vandalism damages, $1,949 telephone conduit change, $15,258 "BCD change # 4" and $8,272, original contract balance); $2,500 for the preparation of a damage estimate; and $1,200 for off-site storage costs. Delay damages totalling $24,169 were awarded against Weiss while only $8,502 in delay damages were awarded against Hartford. Both Hartford and Heller appeal from the judgment. We affirm in part and reverse in part.

While Hartford raises several issues on appeal, it is primarily alleged that the trial court erred (1) in permitting the amended complaint to relate back to the date of the filing of the original complaint; (2) in holding the surety liable for delay damages; and (3) in denying permission to Hartford and Weiss to amend their answer to add a compulsory counterclaim.

Heller on cross-appeal claims that the trial court erred in denying prejudgment interest on certain claims and in failing to award delay damages for supervisory time and unabsorbed overhead.

I

We address initially Hartford's allegation that the trial court erred in allowing Heller's August 24, 1979 amended complaint for the unpaid balance on the subcontract to relate back to the date of the filing of the initial complaint — June 29, 1978.³

Super.Ct.Civ.R. 15(c) provides for the relating back of an amendment to the date of the original pleading "[w]henever the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleadings"⁴ (emphasis added). Further, the amended complaint relates back where "the initial complaint put the defendant on notice that a certain range of matters was in controversy and the amended complaint falls within that range." Jackson v. Airways Parking Co., 297 F.Supp. 1366, 1382 (N.D. Ga.1969).⁵

The June 1978 complaint alleged jurisdiction of the Superior Court pursuant to D.C.Code 1973, §§ 1-804b and 11-921 and put Weiss and Hartford on notice that Heller was seeking damages for breach of the prime contract and subcontract.

In July 1979 Heller received notification that its subcontract with Weiss was terminated. Heller promptly filed an amended complaint adding a claim for the balance due under the subcontract. Thus, the new claim arose from the "same transaction" as the initial complaint — namely, the subcontract between Weiss and Heller. In view of the fact that the amendment was made several months before the May 1980 trial, Hartford had ample notice and time to prepare its defense against the new claim. Rural Fire Protection Co. v. Hepp, 366 F.2d 355, 362 (9th Cir. 1966). Accordingly, we find the relating back of the amendment to the date of the original complaint to have been proper.

Hartford, relying on Lite-Air Products, Inc. v. Fidelity & Deposit Co. of Maryland, 437 F.Supp. 801, 804 (E.D.Pa.1977) and United States v. P. J. Carlin Construction Co., 254 F.Supp. 1001, 1002 (E.D.N.Y.1965), next claims that the trial court erred in holding the payment bond surety liable for damages to the subcontractor resulting from a delay in performance.

While some courts have interpreted the Miller Act⁶ (the federal counterpart to § 1-804a et seq.) as denying recovery from the surety for delay damages, we adopt the interpretation of the Act found in United States f/u/b Mariana v. Piracci Construction Co., Inc., 405 F.Supp. 904 (D.D.C.1975). We find the rationale of that decision to be persuasive. The payment bond was designed to protect subcontractors supplying labor and material to a government project. Thus, the expenses incurred by the subcontractor as a result of the delay are within the clear purpose of the statute. Further, the public interest in completion of public projects is promoted "by reducing the possibility that delay will frustrate the governmental objective due to disputes between the prime and its subs." Id. at 907. Accordingly, we hold that a § 1-804b "surety is liable to a subcontractor for increased costs actually incurred due to delay for labor or material, to the extent such delay is not attributable to the subcontractor." Id. at 906.

Hartford also alleges that the trial judge abused her discretion when she denied it and Weiss permission to amend their answer to include a compulsory counterclaim that Heller installed inferior quality fixtures in a violation of the subcontract and specifications.

In support of the motion to amend their answer, appellant and Weiss contended that they first became aware of the inferior quality of the fixtures in April 1980 when the contractor hired to complete the electrical work on the project informed them that certain installed fixtures were inferior to those set out in the contract specifications.

"Leave to file an omitted counterclaim beyond the proper time limitations should be granted where the court, in its discretion, determines that the omission is the result of `oversight, inadvertence, or excusable neglect,' or where justice so demands." Bronson v. Borst, D.C.App., 404 A.2d 960, 963 (1979) quoting from Super.Ct.Civ.R. 13(f). See also Randolph v. Franklin Investment Co., D.C.App., 398 A.2d 340 (1979).

In reviewing the trial court's exercise of discretion, we consider several factors including "the number of such requests, the length of the pendency of the trial, the number of the previous continuances, the existence of bad faith or dilatory motive, the merit of the counterclaim, and the existence of prejudice to the other party." Bronson, supra at 963.

Review of the record discloses: (1) the suit had commenced two years earlier; (2) the defendants had previously been granted permission to amend their answer; (3) two prior continuances had been granted at the defendants' request; (4) the request was made approximately two weeks prior to the scheduled trial date; and (5) with the exercise of reasonable diligence, inferior quality fixtures could have been detected earlier.

On this record, we find that the trial judge did not abuse her discretion in denying the motion to amend answer to include a counterclaim.

Hartford further contends that the trial court erred in considering claims for preparation of a water damage estimate and for storage of materials. Specifically, Hartford alleges that (1) the claims are not cognizable under § 1-804b and, in any event, (2) the claims were not included in the pleadings.

We find these costs to be cognizable under § 1-804b. The estimate was prepared at the direction of Weiss and, in effect, became part of the contract. The storage of material off-site became necessary when the roof at the project site began leaking. We also note that recovery of storage costs is permissible under the Miller Act. United States f/u/b Mariana v. Piracci Construction Co., Inc., supra.

While the amended complaint does not specify the costs of preparing the estimate or of storing material, the deposition of Heller's president, taken four months prior to trial, notified appellant of appellee's intention to seek damages for these items. See Jess Fisher & Co., Inc. v. Darby, D.C. Mun.App., 96 A.2d 270 (1953); cf. Randolph v. Franklin Investment Co., D.C.App., 398 A.2d 340, 350-51 (1979) (en banc); Moore v. Moore, D.C.App., 391 A.2d 762, 767-69 (1978). In view of this notice, appellant's ability to defend against the claims was not prejudiced and the trial court did not err in considering them.

Finally, Hartford contends that the evidence does not support the award of $8,502 for delay damages, $3,700 for off-site storage costs and preparation of a water damage estimate; $5,700 for vandalism damages; $1,949 for telephone entrance change and $15,258 for change order "BCD No. 4."

Having reviewed the record, we hold that, with the exception of "BCD No. 4," the trial court's judgment was based upon sufficient evidence.⁷ United States f/u/b Mariana v. Piracci Construction Co., Inc., supra at 907 n. 7.

With respect to "BCD No. 4," we note that the District of Columbia agreed to $15,258 for completion of the work and appellee concedes that work worth $400 was not performed. Thus, the trial court's award of...