Honeywell, Inc. v. Babcock
| Decision Date | 24 March 1966 |
| Docket Number | No. 38213,38213 |
| Citation | 412 P.2d 511,68 Wn.2d 239 |
| Court | Washington Supreme Court |
| Parties | HONEYWELL, INC., a corporation, Appellant, v. J. F. BABCOCK, doing business as Babcock Plumbing, Heating & Air Conditioning Co., and Spokane Merchants' Association, doing business as National Association of Credit Management, Spokane Division, Defendants, Inland Automobile Association, S. G. Morin and William S. Morin, copartners doing business as S. G. Morin & Son, a copartnership, and United Pacific Insurance Company, a Washington corporation, Respondents. |
Woods & Kumbera, Leslie L. Woods, Spokane, for appellant.
George W. Young, Spokane, for respondents.
This appeal involves the construction of a building contract, and a labor and material payment bond furnished by the general contractor. The facts, although somewhat involved, are not in dispute.
February 12, 1963, S. G. Morin & Son (hereinafter referred to as the general contractor) entered into a contract to furnish all labor and materials necessary to construct an office building for the Inland Automobile Association of Spokane (hereinafter referred to as the owner), in accordance with the owner's plans and specifications, for a consideration of $202.083.
The general contractor, in compliance with the terms of the contruction contract, furnished two surety bonds, (1) a performance bond, and (2) a labor and material payment bond. The surety was United Pacific Insurance Company (hereinafter referred to as the bonding company). It is the interpretation of the latter bond which is involved in this action.
The construction contract provided that the general contractor's work must be 'substantially completed August 15, 1963 and fully completed September 5, 1963,' subject to designated penalties for late construction, and that the owner could occupy the building prior to the completion date without waiver of full performance of the conditions of the contract.
The general contractor subcontracted the mechanical portion of the contract to J. E. Babcock, doing business as Babcock Plumbing, Heating & Air Conditioning Co. (hereinafter referred to as Babcock), for $57,888. Babcock subcontracted a certain portion of his subcontract to Honeywell, Inc., for the sum of $10,558. As the work progressed, the general contractor made progress payments to Babcock. Babcock in turn paid $2,500 to Honeywell, Inc., to apply upon that subcontract.
July 29, 1963, the building being substantially completed, the owner moved in and occupied the premises.
August 17, 1963, Babcock went into receivership, and the general contractor then employed the firm of Warren, Little and Lund to complete the Babcock work.
During the month of August, 1963, the owner's architect died. At the time of his death, he had not issued to the general contractor a certificate of completion of the work on behalf of the owner, as required by the contract. Thereafter, the owner's mechanical engineer, Mr. H. Jack Reeves, inspected the premises for construction items necessary to complete the contract.
September 26, 1963, Mr. Reeves, on behalf of the owner, prepared and delivered to the general contractor a written instrument (designated as a 'punch list') detailing necessary construction items to be performed as follows:
Mechanical
9/26/63
Work to be done Mechanical
1. Valves inverted in fan-coil units.
2. Balance air system.
3. Summer-Winter legend plate on dampers.
4. Tag valves.
5. Description names (a) controls (b) piping (c) ducts (d) pumps and switches.
6. Replace broken thermostat MZ-CW return.
7. Caulk sewer pipe in outside wall.
8. Install grille on fan-coil unit east side supply room and make door access to controls and valve.
9. Repair damaged or misplaced end sheets on several fan-coil units.
10. Provide access to controls on 2 unit heaters, basement-entry and receiving room.
11. Spare filters.
1. Cooling water control valve surging.
2. Cooling water solenoid valve does not close on machine shutdown.
1. Thermometers in airways.
2. Connect air manometer properly in MZ unit.
3. Mark all damper positions.
Part of the items detailed on the 'punch list' was performed by Honeywell, Inc., and the remainder by Warren, Little and Lund.
October 15, 1963, Honeywell, Inc., installed three dial-type thermometers inside the airways and fully performed all of its items detailed on the 'punch list.' When Honeywell, Inc., presented its statement in the sum of $8,058 to the owner, the general contractor, Babcock, and the bonding company for the balance due it on labor and material furnished in the contruction of the building, payment was refused.
August 18, 1964, Honeywell, Inc., commenced this action against the owner, the general contractor, Babcock, and the bonding company on the labor and material payment bond. The defendants admitted the labor and material were furnished, but contended that the action was barred by the express provision of the bond which required that the action be commenced within one year after the general contractor ceased work; that the general contractor's work had ceased July 29, 1963, and that the action was not commenced until August 18, 1964.
The trial court held that the general contractor's work had ceased July 29, 1963, and that the action was barred by the express limitation in the bond.
From the judgment dismissing its cause of action, Honeywell, Inc., has appealed.
The sole issues presented by this appeal is an interpretation of the limitation in the labor and material payment bond which provided:
3. No suit or action shall be commenced hereunder by any claimant.
(b) After the expiration of one (1) year following the date on which Principal (general contractor) ceased work on said Contract.
The general contractor furnished the labor and material for the major portion of the contract, but subcontracted the mechanical and electrical portion of the contract to subcontractors skilled in those fields.
July 25, 1964, in the following letter, the owner acknowledged that the general contractor had substantially completed the building by July 29, 1963:
This letter is written in lieu of what, in the ordinary course of events, you would have received from our architect as a letter of acceptance on completion of construction of our new office building. The death of Henry C. Bertelsen prevented his delivering such letter.
Accordingly, this will confirm the fact that our new office building was Substantially completed in accordance with the plans and specifications and that our organization moved into the new building On or about July 29, 1963 and have been occupying it for regular operations since that time.
This letter is, of course, subject to any and all guarantees and agreements extending guarantees, and is written to indicate substantial completion and acceptance on the date referred to. (Italics ours.)
The evidence is conclusive that the building contract was substntially completed on July 29, 1963. Our query is whether the 'one (1) year following the date on which Principal (general contractor) ceased work on said Contract' started to run on July 29, 1963, when the building contract was Substantially completed. If so, the action was not timely commenced. If cessation of the work contemplated Complete performance, then the action was timely commenced.
In construing contracts, words used therein must be given their usual and ordinary meaning. Miller v. Allstate Ins. Co., 66 W.D.2d 857, 405 P.2d 712 (1965). Webster's Third New International...
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