Heifetz Metal Crafts, Inc. v. PETER KIEWIT SONS'CO., 15939.
| Decision Date | 06 April 1959 |
| Docket Number | No. 15939.,15939. |
| Citation | 264 F.2d 435 |
| Court | U.S. Court of Appeals — Eighth Circuit |
| Parties | HEIFETZ METAL CRAFTS, INC., a corporation, and Federal Insurance Co., a corporation, Appellants, v. PETER KIEWIT SONS' CO., a corporation, Appellee. |
Fremont Meyers, Omaha, Neb. (Harry J. Farnham, Omaha, Neb., on the brief), for appellants.
Hird Stryker, Omaha, Neb. (Robert R. Veach, Omaha, Neb., on the brief), for appellee.
Before SANBORN, JOHNSEN and VAN OOSTERHOUT, Circuit Judges.
Heifetz Metal Crafts, Inc., sued to have rescinded and cancelled, for alleged mistake, a subcontract on a Veterans Hospital construction-project at Topeka, Kansas, entered into by it with Peter Kiewit Sons' Co., the general contractor. Kiewit counterclaimed (joining as a party the surety on Heifetz's performance bond) for damages in breach from Heifetz's refusal to carry out the subcontract. The court, on a non-jury trial, denied relief to Heifetz and gave judgment in favor of Kiewit on its counterclaim. Heifetz and the surety have appealed.
Kiewit had been awarded the general contract to construct the Topeka hospital plant, in accordance with published plans and specifications, for a price of $17,942,200 — which was $9,000 lower than any other bid. The original bid filed by Kiewit had been $52,000 higher than its awarded price. Telegraphic reduction of the $52,000 amount was made by it on the date that the bids were to be opened. The reduction was prompted by the receipt of a long-distance telephone call that day from Heifetz, with which Kiewit had never had any previous dealings or contact, offering to do the kitchen-equipment part of the job for $99,500 — a figure $52,000 less than any estimate or offer which Kiewit had had from other contractors in that field.
Kiewit inquired of Heifetz if the quotation was being made in accordance with the plans and specifications and was told that it was and that the figure would remain firm. In the course of the conversation, Heifetz further stated that it was communicating with all the other general contractors bidding on the project and was making the same quotation to each of them. In view of these facts, Kiewit decided that it ought to reduce its bid accordingly. Had the telegraphic reduction not been made, Kiewit would not have been the low bidder on the project.
After the project bidding was closed, Kiewit requested from Heifetz and was given written confirmation of the kitchen-equipment quotation. It did not, however, take any steps to tie Heifetz up on an agreement. Heifetz on the other hand kept endeavoring to find out from Kiewit whether it was going to be given the kitchen work. The parties finally, some weeks later, entered into a formal contract for the amount of Heifetz's quotation. Shortly thereafter, Kiewit asked Heifetz to provide it with rough-in drawings for the kitchen work. Heifetz replied that this would require several weeks time and that a complete copy of all the plans and specifications would be needed by it. These were sent by Kiewit, and it then telephoned Heifetz urging that the drawings for Building 20 of the project be gotten out immediately and suggesting that those for the other buildings could be forwarded later.
Heifetz thereupon woke up to the fact, for the first time, that apparently more than one building was involved in the subcontract job. In arriving at its estimate, Heifetz had used the plans for only one building, which constituted the location of the principal kitchen-equipment installation, and which it had assumed represented the only place where such work was to be done. The plans and specifications, however, called for kitchen-equipment installations of lesser degrees in several other buildings in the project.
Kiewit had had no part in or responsibility for this error of Heifetz. The mistaken assumption in which Heifetz had engaged came about from the fact that it had obtained and used the plans on Building 20 only, in preparing its price-figure. These plans it had borrowed from another general contracting firm, which was bidding on the project and which had asked Heifetz to give it a quotation on the kitchen-equipment work.
Heifetz's president had gone to the office of this general contractor to pick up the applicable plans and specifications. Section 502 of the specifications was given to him, which had application to the kitchen-equipment work generally, and which showed that such work covered installations in a number of buildings of the project. Neither Heifetz's president who approved the quotation (which, as indicated, was not only given to this general contractor, but also volunteered to Kiewit and the other bidders on the project), nor any of the other persons in Heifetz's organization who prepared and had responsibility for the estimate, engaged in any checking of section 502 of the specifications on this aspect.
As to the plans from which the estimate was made, Heifetz's president testified on the trial that he asked one of the general contractor's office-employees for the plans on the kitchen-equipment work, and that the employee dug out for him the two sheets of blue prints relating to Building 20 and said "This looks like it". In a previous deposition, however, he had stated that the plans for the project consisted of a voluminous pile of several hundred blueprint sheets, and that he and the contractor's employee determined that the two sheets and section 502 of the specifications represented what he needed — "that this was about what it was".
On this equivocalness, and with an opportunity for appraisal from hearing the witness testify, the trial court concluded and made finding to the effect that the president had had a voice and judgment as to the mode and degree of the search, selection and determination engaged in, and that the judgment reached, without examination of the index or any of the other plan-sheets of the voluminous pile, that the two sheets covered the kitchen-work involved was entitled to be regarded as being responsibly his own.
The court also concluded, apart from this responsibility for the error as to plans, that if Heifetz's employees in preparing the estimate, or the president in checking it, had not neglected to go over section 502 of the specifications, which was in their hands, the mistaken assumption engaged in as to the scope of the work would immediately have been detected; and that such an ignoring of the specifications in making a contractor's estimate, which it intended to hold out as being in accordance with both the specifications and the plans, made Heifetz's conduct amount, in the possible consequences to itself, to a failure on its part to have exercised due diligence in the situation.
The court also concluded, from the facts and circumstances of the situation and the testimony of Kiewit's employees who had handled the...
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