Hensler v. City of Los Angeles

• Decision Date: 23 March 1954
• Citation: 124 Cal.App.2d 71,268 P.2d 12
• Court: California Court of Appeals Court of Appeals
• Parties: HENSLER v. CITY OF LOS ANGELES. Civ. 19810.

Page 12

268 P.2d 12

124 Cal.App.2d 71

HENSLER v. CITY OF LOS ANGELES.

Civ. 19810.

District Court of Appeal, Second District, Division 2, California.

March 23, 1954.

Roger Arnebergh, City Atty., Bourke Jones, Asst. City Atty., Alfred E. Rogers, Deputy City Atty., Los Angeles, for appellant.

Irvin Grant, Los Angeles, for respondent.

FOX, Justice.

Defendant appeals from a judgment awarding damages for breach of contract and reimbursing plaintiff for expenditures incident to a suspension of work ordered by defendant.

Plaintiff, a licensed general contractor, entered into a contract with the City of Los Angeles on April 12, 1951, whereby he undertook 'to furnish all equipment, material and labor necessary for the construction of, and to construct Stage 1 Runways and Taxiways and appurtenant work at the Los Angeles International Airport.' The total agreement between the parties embraced the following documents, which had been furnished to plaintiff in making his bid and which were incorporated by reference in the contract of April 12, 1951:

(a) Published Notice Inviting Bids; (b) Standard Specifications for Construction of Airports; (c) Special Provisions designated as Specification No. 5021; (d) the contractor's proposal; (e) bonds; and (f) Plans for the Work.

The work to be performed by plaintiff was broken down into a detailed set of items embodied in a bid schedule which was contained in the contractor's proposal, and incorporated into the contract. Each item related to an estimated quantity of work, payment for which was based upon unit prices for the various items of work.

At the time the agreement was executed, automobile traffic which ordinarily proceeded on that part of Sepulveda Boulevard whih then bordered one side of the airport had been rerouted to a temporary by-pass road running along the westerly end of the then existing runways. This by-pass road traversed an area which was ultimately to be a part of the airport. The contract included the installation of runways and taxiways over the area occupied by the temporary road, removed of the by-pass, and certain appurtenant work. Both parties knew that the completion of the work would require a discontinuance of traffic over the by-pass and knew that a new by-pass road was being constructed by a different contractor further to the west, which was scheduled for completion by June 30, 1951. The Special Provisions set up two priorities for plaintiff's construction work. The first priority, to be completed by June 30, 1951, consisted substantially of the performance of all the work exclusive of the removal of the existing by-pass road and other construction work in the area occupied by that road. The entire job was to be finished by September 1, 1951.

Plaintiff commenced work and progressed with his operations until August 20, 1951, at which time defendant issued Change Order No. 8, deleting certain portions of the work to be performed under the contract. The work so deleted consisted of items relating to the removal of the Sepulveda by-pass road and the installation of appurtenant work, as well as construction work on the runways and taxiways to be installed in the area adjacent to the by-pass road. Defendant ordered these deletions when it discovered that because of the refusal of the Division of Highways of the State of California to grant its consent for the connection of the new by-pass road with existent highways, it would be unable to remove traffic from the Sepulveda by-pass road and so make available to plaintiff the job site contemplated by the contract. As a result of these deletions, the work called for by the agreement remained in an unfinished condition. The new by-pass road was placed in operation several months later, following which defendant let a contract to another contractor for the performance of substantially all of the work which had been deleted from plaintiff's contract.

The record also shows that while plaintiff was engaged in performance of the work, he was orally notified on May 31, 1951, to cease the mixing operations then taking place. A confirmatory written order was issued the following day. The stop order was released on June 5, 1951, but due to the time required for realignment of the personnel, material and equipment, work was not resumed until June 7, 1951. Plaintiff had received no prior warning that work would be halted, nor was he informed as to the reason for the stop order during the cessation of work.

Plaintiff's complaint states two causes of action. In brief, the first alleges that the defendant's deletion from the contract of the described items of work upon finding that it could not reroute traffic from the Sepulveda by-pass constituted a breach of contract by which he sustained damages. The second cause of action is based on a claim that he was entitled to be reimbursed for the actual money expended on the job during the period he ceased work pursuant to defendant's stop order.

The court gave judgment in the sum of $38,421.30 on plaintiff's first cause of action. The court found that the agreement between the parties contemplated the contruction of a completed work of improvement and that the omissions contained in change order No. 8 left the work uncompleted. While the court recognized that defendant was accorded the right under the contract to make certain changes, within specified limitations, in the quantity of the work as might be considered necessary or desirable to complete fully and satisfactorily the proposed construction, it found that the deletions ordered were neither necessary nor desirable to complete the work in a satisfactory manner. The court also found that while the contract allowed defendant to omit items not of a major character deemed unnecessary to the project, the work eliminated by change order No. 8 was necessary to the project and that the effect of the ordered deletions was 'to eliminate such an important part of the entire construction as to make the portion that had been constructed of little value for the use intended under the contract.' Other findings relating to the first cause of action will be alluded to where pertinent in our subsequent discussion of the issues raised by defendant.

Judgment on the second cause of action was in the sum of $1,735.88. The court found that when defendant issued its stop order, plaintiff was engaged in mixing operations involving the use of an equipment train which sometimes consisted of a tractor and mixer, to which, at times, a water trailer was coupled; occasionally the equipment train comprised a tractor, mixer, water trailer and oil trailer. The tractor was tearing and loosening parts of the sub-base when the water trailer was a part of the equipment train. The court found that the only change which came about after the stop order in plaintiff's conduct of its mixing operations was the removal of the water trailer from the equipment train, which virtually eliminated the tearing of the sub-base by the tractor. The court found that defendant was aware that this remedial action was necessary at the time the stop order was issued; that under the contract, defendant's right to issue stop orders was dependent on the reasonable necessity therefor; and that since there was no reasonable necessity for the issuance of the stop order of May 31, 1951, plaintiff was entitled to compensation for his expenses incurred thereby.

Defendant attacks the determination made by the court that the contract between the parties contemplated a complete work of improvement and that defendant was liable to plaintiff for loss of profit by virtue of the deletions made in change order No. 8. Defendant argues that the omissions it made are within the limits perscribed in, and authorized by, the agreement.

The pertinent sections of the contract as they relate to plaintiff's first cause of action are as follows:

The Notice Inviting bids announces that 'the work will consist generally of excavation and embankment, grading and bituminous paving to construct approximately 4100 linear feet of runways and approximately 10,200 linear feet of taxiways, drainage facilities and appurtenant work.' Section 10-10 of the Standard Specifications for Construction of Airports provides that the contract is to include not only the documents already alluded to, but all supplemental agreements which may be executed 'to complete the work in accordance with the intent of the plans and specifications, in an acceptable manner.'

Section 40 of the Standard Specifications covering the scope of the work, provides in part:

'40-01 Intent of Plans and Specifications. The intent of the plans and specifications is to prescribe a complete work or improvement which the contractor undertakes to do in full compliance with the plans, the specifications, the special provisions, proposal and contract. The contractor shall do all work including such additional, extra, and incidental work as may be considered necessary to complete the project in a satisfactory and acceptable manner, as provided in the plans, proposal and contract * * *' (Italics added.)

'40-03 Changes and Increased or Decreased Quantities of Work. The engineer reserves and shall have the right to make such changes, from time to time, in the plans, the character, or quantity of the work as may be considered necessary or desirable to complete fully and acceptably the proposed construction in a satisfactory manner provided such alterations do not change the total cost of the project, based on the originally estimated quantities and the unit prices bid, by more than twenty-five (25) percent, and provided further that such alterations do not change the total cost of any major items, based on the originally estimated quantities and the unit price bid, by more than twenty-five (25) percent. (A major item shall be construed to be any item, the total cost of which is equal to or greater than ten (10) percent of the total...