Housing Authority of City of Dallas v. Hubbell

• Citation: 325 S.W.2d 880
• Decision Date: 13 March 1959
• Docket Number: No. 15295,15295
• Parties: HOUSING AUTHORITY OF CITY OF DALLAS, Texas, Appellant, v. J. T. HUBBELL et al., Appellees.
• Court: Texas Court of Appeals

Page 880

325 S.W.2d 880

HOUSING AUTHORITY OF CITY OF DALLAS, Texas, Appellant, v. J. T. HUBBELL et al., Appellees.

No. 15295.

Court of Civil Appeals of Texas, Dallas.

March 13, 1959.

Rehearing Denied June 26, 1959.

Scurry, Scurry, Pace & Wood, Dallas, for appellant.

Strasburger, Price, Kelton, Miller & Martin, W. M. Taylor, Jr., Royal H. Brin, Jr., and Aubrey J. Roberts, Dallas, for appellees.

DIXON, Chief Justice.

This is an appeal from judgments totalling $906,901.22 in favor of several plaintiffs, all contractors, against the Housing Authority of the City of Dallas, Texas.

Three of the plaintiffs allege that they were associated together in a joint venture under the name of Hubbell-Hubbard Associated Contractors. These three plaintiffs are J. T. Hubbell, an individual doing business as The J. T. Hubbell Construction Company; T. B. Hubbard Construction Co., Inc., a Texas corporation; and Russell W. Nix, an individual. This group will hereafter be referred to as Contractors. A fourth plaintiff C. Russell Lewis, the paint contractor, joined the other contractors in a separate cause of action based on 'economic coercion.'

The Housing Authority of the City of Dallas is a public body corporate and politic, created under and by virtue of the Texas Housing Authorities Law. Art. 1269k, Vernon's Ann.Civ.St., which is part of Title 28, 'Cities, Towns and Villages', of our Statutes. It will hereafter be referred to as Owner.

In 1951 Owner began awarding contracts for the development of a housing project known as Tex. 9-11 to consist of 3,500 dwelling units and to cost approximately $15,000,000. The first three contracts covered the entire project and provided respectively for demolition of existing buildings, grading and construction of foundations. The next seven contracts, awarded in 1952, each covered the construction of approximately 500 dwelling units, these seven construction jobs being designated as Projects Tex. 9-11, A, B, C, D, E, F and G respectively. Thereafter other contracts were awarded, each embracing the entire Tex. 9-11 project, for sewer facilities, underground utilities, electrical distribution, paving, sidewalks, etc.

Contractors were the successful bidders on project Tex. 9-11-C at a contract price of $3,056,948, and on project Tex. 9-11-D at a contract price of $1,854,472. These written agreements will hereafter be referred to as Contract C and Contract D.

The suit sought recovery (1) for $122,416 alleged to have been wrongfully withheld by Owner as liquidated damages because of delay by Contractors in completing performance; (2) for damages for breaches of contract by Owners, said breaches consisting of arbitrary and capricious conduct of Owner (a) in causing delay, and (b) in interfering with Contractors' performance; (3) for extra work not called for in the contract; (4) for damages due to 'economic coercion'; and (5) for attorney's fees.

Owner assigns no error to the recovery for extra concrete totalling $12,717.31, or for extra grading costing $1,240.22, and concedes that Contractors are entitled to judgment for these items.

Owner assigns error as to all other items of recovery, praying that the judgment be reversed and rendered as to some items and reversed and remanded as to others.

The trial of this case lasted eleven weeks in the District Court. The Statement of Facts consists of nineteen volumes of testimony and seventeen folios of exhibits. The Transcript is 584 pages in length. Special Issues to the number of 168 were submitted to the jury. Appellant has seriously briefed 73 points on appeal and one 'additional point.' Though we have labored to avoid prolixity, our opinion cannot be short. In re: Contractors' Judgment for $143,063.36 as Liquidated Damages Wrongfully Withheld by Owner.

Owner withheld from final payment the sum of $122,416 as liquidated damages for alleged delay of the Contractors in completing performance.

Owner bases its claims for liquidated damages on a provision in Section 13, par. (a) 'General Conditions of the Contract' one of several contract documents, which provision is as follows: '(a) * * * The Contractor shall pay to the Local Authority as fixed and liquidated damages (it being impossible to determine the actual damages occasioned by the delay) for each calendar day of delay, until the work is completed, or accepted, or until such time as the Contractor's right to proceed shall be terminated, the amount as set forth in the special conditions, and the Contractor and his sureties shall be liable for the amount thereof. * * *'

Contractors deny the right of Owner to withhold any sum whatever as liquidated damages, basing their contention on another part of Section 13, Par. (a) of the written 'General Conditions', which part is as follows: '(a) * * * 'Provided, that the right of the Contractor to proceed shall not be terminated or the Contractor charged with liquidated damages because of any delays in the completion of the work due to unforeseeable causes beyond the control and without the fault of negligence of the Contractor, * * * if the Contractor shall within ten days from the beginning of any such delay * * * notify the contracting officer in writing of the causes of delay, who shall ascertain the facts and work when in its judgment the findings of shall, subject to prior approval of the P. H. A., extend the time for completing the work when in its judjgment the findings of fact of the contracting officer justify such an extension, and his findings of fact thereon shall be final and conclusive upon the parties hereto.' (Emphasis supplied.)

With reference to Contract 'C' the jury answered the first twelve special issues as follows: (1) delays, as that word had been defined, prevented Contractors from completing 24 buildings by Oct. 4, 1952; (1-A) 283 1/2 days of such delay occurred in addition to the 129 days extension of time already allowed by Owner: (1-B) delays prevented Contractors from completing 16 buildings by Dec. 8, 1952; (1-C) 283 1/2 days of such additional delay resulted: (1-D) delays prevented Contractors from completing 15 buildings by Feb. 19, 1953; (1-E) 283 1/2 days of such additional delay resulted; (1-F) delays prevented Contractors from completing 10 buildings by March 21, 1953; (1-G) 283 1/2 days of such additional delay resulted; (1-H) delays prevented Contractors from completing 17 buildings by April 17, 19--under Contract C; (1-1) 283 1/2 days of such additional delay resulted; (3) the withholding by Owner of $76,740 as liquidated damages for the above additional delays was arbitrary and capricious; (4) adverse findings of fact made by the Public Housing Authority's Contracting Officer, Stephenson, in denying Contractors' request for further extension of time were arbitrary and capricious.

In answering Special Issues numbered 5 through 8 the jury made similar findings with reference to the withholding by Owner of $45,676 as liquidated damages under Contract D.

Based on the above jury findings the trial court on October 25, 1956, awarded Contractors a judgment for $122,416 for liquidated damages wrongfully withheld by Owner plus $20,647.36 interest from January 1, 1954, making a total of $143,063.36, such sum to bear interest from date of judgment at the rate of six per cent per annum.

In its charge to the jury the trial court gave this definition: 'By the term 'arbitrary and capricious' as the same is used in this charge, is meant willful and unreasoning action without due consideration and in disregard of the facts, circumstances, and the rights of other parties involved.' $The court also gave this definition: 'By the term 'delays', as the same is used in this charge means delays in the completion of the work, due to unforeseeable causes beyond the control and without the fault or negligence of the Contractors, including, but not restricted to, the acts of God, or of the public enemy, acts of the Government, acts of the Local Authority, acts of another prime contractor in the performance of a contract with the Local Authority, fires, floods, epidemics, quarantine, restrictions, strikes, freight embargoes, and unusually severe weather or delays of sub-Contractors, due to such causes.'

Owner does not contend the judgment awarding Contractors $143,063.36 for wrongfully withholding of alleged liquidated damages should be reversed and rendered. It admits that there is sufficient evidence to authorize time extensions where actual delay resulted from certain causes. But it says that the judgment as to the liquidated damages should be reversed and remanded for retrial under proper submission of issues inquiring as to specific causes and the number of days' delay resulting from each cause.

In its 59th point on appeal Owner asserts that the trial court erred in its definition, as above quoted, of the term 'arbitrary and capricious' in connection with certain special issues, including issues Nos. 3, 4, 7 and 8.

Owner objected to the definition because the term 'arbitrary and capricious' was not also defined as including and meaning 'fractious, whimsical, changeable, not rational, depending on the will alone, tyrannical, despotic, done in bad faith, or a failure to exercise honest judgment'; and for the further reason that the definition as given did not advise the jury that an act is not arbitrary or capricious when exercised honestly and upon due consideration where there is room for two opinions, however much it may be believed that an erroneous conclusion was reached.

We do not agree with Owner insofar as the definition affects issues Nos. 3, 4, 7 and 8. The definition as given includes the terms 'willful', 'unreasoning action', 'without due consideration', 'disregard of facts, circumstances, and rights of other parties involved'. Surely it cannot fairly be said that Owner may in such manner refuse Contractors' applications for proper extensions of time made pursuant to and in compliance with Sec. 13(a) of...