Hensel Phelps Const. Co. v. King County

• Decision Date: 05 March 1990
• Docket Number: No. 21131-5-I,21131-5-I
• Citation: 57 Wn.App. 170,787 P.2d 58
• Parties: HENSEL PHELPS CONSTRUCTION CO., a Colorado corporation, Respondent. v. KING COUNTY, a municipal corporation, Defendant, Sarah White and Joe Steenmeyer, partners d/b/a Phoenix Painting, Appellants,
• Court: Washington Court of Appeals

Page 170

57 Wn.App. 170

787 P.2d 58

HENSEL PHELPS CONSTRUCTION CO., a Colorado corporation, Respondent. v. KING COUNTY, a municipal corporation, Defendant, Sarah White and Joe Steenmeyer, partners d/b/a Phoenix

Painting, Appellants,

No. 21131-5-I.

Court of Appeals of Washington,

Division 1.

March 5, 1990.

William A. Helsell, Deborah L. Martin, Charles H. Van Gorder, Richard S. White, Bradley H. Bagshaw, Helsell, Fetterman, Martin, Todd & Hokanson, Seattle, for appellants.

Richard Stanislaw, David C. Burkett, Stanislaw, Asbaugh Chism, Jacobson & Riper, Seattle, for respondent.

WINSOR, Judge.

Sarah White and Joseph Steenmeyer, d/b/a Phoenix Painting (Phoenix), appeal from a jury verdict denying them recovery on a claim for compensation based on unanticipated "massive disruption" of the performance of a contract. We affirm.

Phoenix and Hensel Phelps Construction Company (Hensel) entered into a written contract obligating Phoenix to paint the interior and exterior of the 18-story King County Jail for a contract price of $488,415. Hensel was the general contractor for the construction of the jail. The subcontract agreement between Hensel and Phoenix incorporated the terms of the contract agreement between Hensel and King County, the owner of the facility.

Various problems plagued the construction project and Phoenix's participation in it. Because of delays early in the 20-month construction schedule, Hensel was forced to accelerate the work schedules of subcontractors such as Phoenix whose work was to be performed late in the construction schedule. The original critical path schedule composed by Hensel required Phoenix to complete its work on each floor in 45 days. Because of the accelerated time table, however, Hensel actually required Phoenix to complete its work on each floor in 19 days.

Another consequence of the accelerated time table was Hensel's "stacking of trades" ¹ in an attempt to timely complete the project. Stacking impacted Phoenix's performance by substantially increasing the amount of touch-up work it performed, due to a large number of tradespeople working in the same area. In addition, the working environment was chaotic, causing work to proceed inefficiently; at points Phoenix had to pull out and wait for a section to be built before its painters could do their work. Finally, Phoenix bid the job intending to spray paint it, but because of the stacking of trades it ended up going through the building a second time brushing and rolling many of the surfaces.

Because of the acceleration, Phoenix had huge cost overruns. Phoenix had originally estimated 9,725 labor hours to complete the project; it actually expended 25,500 labor hours. It also used as many as 26 painters at a time, although it had originally anticipated using a maximum of 9 painters.

The design of the building itself also hampered the painters' efficiency. The jail was designed to prevent escape by omitting any continuous vertical access throughout the building. Staircases from one floor to the next are positioned at opposite ends of the building; consequently, a worker would have to walk across the entire building floor to go from one staircase to another. The project manager for Hensel estimated at trial that if a subcontractor was required to do work on several floors in one day, "[a]t least 50 percent of the workman's efficiency was lost".

Despite the difficulties it encountered, Phoenix never asked for an extension of time or gave written notice of change of conditions, although such remedies were included in the subcontract. See infra footnote 5. However, Phoenix presented written claims for extras almost daily, as permitted under the subcontract, and was paid for nearly everything asked--about $120,000.

Hensel began this action to recover damages from King County for various acts and omissions related to construction of the jail. Phoenix was given leave to file a complaint in intervention. Phoenix's complaint sought quantum meruit recovery against Hensel for the full cost it incurred in performing the contract. Specifically, the complaint alleged that extra work and work done out of sequence and schedule so changed the original subcontract that it was abrogated as a matter of law. All claims, except for those of Phoenix, settled in late 1986.

Shortly before trial, Hensel moved to strike Phoenix's quantum meruit claim. The trial judge provisionally granted Hensel's motion, but reserved final ruling to allow Phoenix to produce evidence at trial that supported its quantum meruit theory. On the sixth day of trial the judge granted Hensel's motion, finding that the contractual provisions contemplated remedies for Phoenix's complaints.

At the conclusion of the trial the case was submitted to the jury on a breach of contract theory. The jury returned its verdict in favor of Hensel. From this verdict, Phoenix appeals.

I.

Phoenix first argues that the trial court erred in dismissing the quantum meruit claim because: 1) the jury should decide as a factual issue whether, at the time of contract formation, the parties contemplated the changed conditions encountered by Phoenix; and 2) Phoenix presented substantial evidence at trial of changed conditions that would warrant giving the question of recovery in quantum meruit to the jury.

When the trial court dismisses a claim as a matter of law, the appellate court views the plaintiff's evidence in its most favorable light and determines whether the trial court correctly applied the law in dismissing the action. Jones Assoc., Inc. v. Eastside Properties, Inc., 41 Wash.App. 462, 465, 704 P.2d 681 (1985).

Quantum meruit is an appropriate basis for recovery when substantial changes occur which are not covered by the contract and are not within the contemplation of the parties, and the effect of such changes is to require extra work or to cause substantial loss to the contractor. Bignold v. King Cy., 65 Wash.2d 817, 826, 399 P.2d 611 (1965). This doctrine is based on the concept of mutual assent and its limits: although a contractor is presumed to be bound by the terms to which he or she has agreed, he or she cannot be presumed to have bargained away his or her right to claim damages resulting from changes the parties did not contemplate at the time of contract formation. Corinno Civetta Constr. Corp. v. New York, 67 N.Y.2d 297, 493 N.E.2d 905, 910, 502 N.Y.S.2d 681, 686 (1986).

"The critical factor in application of the [quantum meruit] doctrine is whether the contractor should have discovered or anticipated the changed condition." V.C. Edwards Contracting Co. v. Port of Tacoma, 83 Wash.2d 7, 13, 514 P.2d 1381 (1973). Determination of this factor has sometimes been identified by Washington courts as a question of fact. Edwards, 83 Wash.2d at 13-14, 514 P.2d 1381 (whether contractor should have discovered or anticipated Port's delays because of failure to furnish material, failure to make decisions, and interference by other contractors in the right of way are questions of fact); Bignold, 65 Wash.2d at 822, 399 P.2d 611 (whether contractor should have discovered or anticipated presence of wet subsurface and large boulders a question of fact); Tribble v. Yakima Valley Transp. Co., 100 Wash. 589, 595, 171 P. 544 (1918) (jury question whether a change in the line of a railway necessitating use of excess material was beyond the intent of the contract). Sometimes, however, it is regarded as a question of law. Goss v. Northern Pac. Hosp. Ass'n, 50 Wash. 236, 238-39, 96 P. 1078 (1908) (trial court properly withdrew from the jury question of recovery of damages for delay, where contract provided remedy for foreseen condition); Nelse Mortensen & Co. v. Group Health Coop., 17 Wash.App. 703, 566 P.2d 560 (1977), aff'd, 90 Wash.2d 843, 586 P.2d 469 (1978) (appellate court reversed trial court's finding that hospital project was "unreasonably delayed" such that contractor entitled to receive quantum meruit recovery, where delay was of a nature contemplated by the parties and contract remedy applied). Tribble, Edwards and Bignold all termed foreseeability a question of fact, but in each of those cases no clause in the contract provided a remedy for the delay-caused damages.

After examining the long line of construction cases dealing with quantum meruit recovery, ² we conclude that the question is one of mixed fact and law. The first step in the analysis is for the trial court to decide whether the contract contains any ambiguity from which a trier of fact could reasonably find that the damages or changed conditions were not contingencies contemplated by the parties. If, by looking at the four corners of the document, the court can determine that the contract unambiguously contemplates the changes or disruptions experienced by the complaining party, no issue of fact exists and the quantum meruit claim must be dismissed. If, on the other hand, the provisions are ambiguous, issues of fact would exist, and resolution of the question would be for the trier of fact. See Spokane Helicopter Serv., Inc. v. Malone, 28 Wash.App. 377, 382-83, 623 P.2d 727 (1981).

Here, we find no ambiguity in the terms of the contract sufficient to make the question one for the jury. A review of Phoenix's complaints reveals that for each, the contract specified a procedure for remedial relief. The specific complaints were: 1) the design of the building itself hampered the efficiency with which the painters could complete their tasks; 2) Phoenix was forced to accelerate its performance, resulting in uncompensated labor and other cost overruns; 3) Hensel's stacking of trades impacted Phoenix's performance by substantially increasing the amount of work it performed; and 4) Hensel ordered Phoenix to paint areas in which the surfaces were not ready to be painted because other subcontractors had not finished their work.

The first complaint is clearly covered by article 3 of the subcontract. ³ By signing the...