Irby Steel v. W. R. Fairchild Const. Co., Ltd.

• Decision Date: 13 November 1972
• Docket Number: No. 9036,9036
• Citation: 270 So.2d 233
• Parties: IRBY STEEL v. W. R. FAIRCHILD CONSTRUCTION COMPANY, LTD., et al.
• Court: Court of Appeal of Louisiana — District of US

Page 233

270 So.2d 233

IRBY STEEL v. W. R. FAIRCHILD CONSTRUCTION COMPANY, LTD., et al.

No. 9036.

Court of Appeal of Louisiana, First Circuit.

Nov. 13, 1972.

Rehearing Denied Dec. 26, 1972.

Murphy Moss and Wm. R. Forrester, Jr., Lemle, Kelleher, Kohlmeyer, Matthews & Schumacher, New Orleans, for appellant.

John W. Haygood and John C. Reynolds, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, and Bruce C. Aultman, Hattiesburg, Miss., for appellees.

Before SARTAIN, BLANCHE and EVERETT, JJ.

BLANCHE, Judge.

Plaintiff, Teledyne, Inc., successor to Irby Steel Company, filed suit against defendants, W. R. Fairchild Construction Company, Limited, and J. W. Snowden Construction Company, a joint venture (hereinafter referred to as 'Joint Venture') and Western Casualty and Surety Company, for sums allegedly owed Irby Steel Company on a subcontract in connection with the construction of the East Pearl River Bridge and approaches. In due course defendants answered and the Joint Venture reconvened against plaintiff, claiming entitlement to damages in excess of the amount which Joint Venture owed but had not paid plaintiff. Both sides perfected devolutive appeals from the trial court's judgment.

The factual situation involved in this litigation is ably summarized by the trial judge as follows:

'Plaintiff on the main demand has asked judgment against defendants in the principal sum of $115,272.41 with interest, attorney fees and costs.

'The joint venture in reconvention has admitted its liability to Irby Steel in the sum of $110,861.87 but has demanded judgment on a reconventional demand against Irby Steel in the sum of $585,656.97 for damages over and above the balance of the sub-contract sum which it admits owing Irby Steel together with the joint venture's claim for interest and costs.

'This controversy grows out of a subcontract between the parties represented by letter of June 6, June 20 and July 1, 1966 under which Irby Steel agreed to fabricate and deliver to the joint venture for the total price of $816,750.00 various steel items required by the joint venture as prime contractor under a public works construction contract dated July 13, 1966, between the joint venture and the Louisiana Department of Highways for the construction of the East Pearl River Bridge and approaches under Louisiana State Project No. 450--19--01 for a contract price of $6,478,659.50. Irby Steel admits payment to it of all sums due under the sub-contract, except for a balance of $115,272.41 which as stipuated at the trial was properly subject to a credit of $3,800.00 as the cost of barge transportation which should have been paid by Irby Steel, together with the sum of $610.54 as the cost to the joint venture of straightening certain hand rails, which was also the obligation of Irby Steel, thus reducing the principal balance of Irby Steel's claim to the sum of $110,861.87.

'The sub-contract reflects that the delivery date of all steel to be furnished by Irby Steel was October 1, 1967. Irby Steel was unable to make deliveries by this delivery date and it was further shown that it was unable to make deliveries of three of the four principal steel components by the very latest delivery date which the joint venture had advised that it would receive them in order to timely complete the bridge under its contract with the Highway Department. There is no question that Irby Steel could not make the delivery date and the main defense advanced by Irby Steel was to challenge the extent of the damages which the joint venture alleges that it suffered.

'The four principal steel components to be delivered by Irby Steel and which formed the principal basis for this controversy, are the east and west steel approach spans, and the east and west bascule leaves, which were required to be installed after installation of the approach spans and which form a lifting draw bridge. Each of these four components are in excess of 100 feet in length, are composed of large steel girders and various cross members and accessories that weight many tons. The specifications furnished by the Louisiana Department of Highways required that they be fabricated, assembled and properly fitted in the fabrication shop, then dismantled and transported to the job site where they would be reassembled and installed by the contractor.

'The joint venture made a number of visits and verbal requests as well as written requests to Irby Steel urging faster progress in fabrication of these items and the joint venture in a letter of August 13, 1968 furnished Irby Steel at its request the dates of latest possible delivery of the east and west bascule leaves and the west approach span. These dates were set forth as September 15, 1968 for the east bascule and October 15, 1968 for the west bascule with the delivery of the west approach span to precede the erection of the west bascule.

'The west approach span was not delivered until October 21, 1968, the east bascule was delivered on February 5, 1969 and the west bascule was delivered on March 10, 1969.

'Mr. James Snowden, the project superintendent for the joint venture testified that on October 11, 1968 the joint venture was making excellent progress on the job, had about 150 to 160 men working on the project with sufficient foremen and superintendents to keep the men working efficiently together with all the equipment necessary to perform all necessary items of work concurrently, but that when the east bascule leaf was not delivered, the joint venture was required to lay off some of these men, that the rhythm of the job was lost, and that progress along the path towards completion of the project was completely stopped as the contractor was unable to perform operations concurrently. The joint venture completed the East Pearl River Job on July 11, 1969 and it was accepted on that date by the Louisiana Department of Highways. ¹ (Written Reasons for Judgment, Record, pp. 198--200).

The trial judge then passed upon the various categories of damages claimed by the Joint Venture as a result of the breach by the subcontractor of its contract. The first category of such damages concerns the Joint Venture's equipment which was forced to remain idle at the jobsite for a certain period of time as a result of the delayed performance by the subcontractor. The trial judge resolved this issue in the following manner:

During the delay period from October 11, 1968, when the joint venture was ready to receive the remaining three major steel components until the date when it received the first of the bascule leaves on February 5, 1969, the joint venture made a number of complaints and many visits to Irby Steel Company in Gulfport in an effort to speed delivery. The joint venture is claiming damages for the delay period from October 11, 1968 through February 5, 1969. However, the joint venture in a letter dated January 13, 1969 advised Irby Steel that its equipment was being used until December 20, 1968. In this letter, the joint venture said:

'This means that we are presently holding on standby at the job site and have been holding since December 20, 1968, several large and expensive pieces of construction equipment that we must have on hand to erect the bascule spans and to complete the construction work following behind the erection of the bascule span. This equipment has been steadily employed here at the job site for approximately the past 2 years but now has no other work to do at the job until the bascule spans are delivered for erection. In fact, this equipment has been ready and available for erection of the bascule spans since October 11, 1968, the date on which we notified you that progress towards completion was being delayed by your failure to deliver the east bascule leaf. From October 11, 1968 to December 20, 1968, we used this equipment to do work that could have been done simultaneously with the erection and completion of the bascule spans.'

'There is no question that Irby Steel was unable to make the delivery dates required by the joint venture. The only question remaining is the extent of damages suffered by the joint venture.

'The joint venture claims that damages for the delay period of October 11, 1968 through February 5, 1969 its losses resulting from idle equipment costs for equipment maintained on the site during the period, which equipment was needed to complete the job. This equipment was described on plaintiff's in reconvention exhibit no. 47 together with a total of monthly rental rates for the equipment needed on the job for the 3 months and 26 days, which totals amount to the sum of $205,860.92.

'Mr. Snowden testified that the average rental rate for this idle equipment on a monthly basis as set forth on exhibit pr. 47 was determined or arrived at by reference to the rental value of such equipment as set forth in the 1969 20th edition Computation of National Average Rental Rates of the Associated Equipment Distributors. This manual was introduced into evidence by plaintiff in reconvention as pr. exhibit no. 46 subject to the objection of Irby Steel. As to those items on exhibit pr. 47 for which rental values are not set forth in the Associated Distributors Rental Rate Book, Mr. Snowden placed a value based on his knowledge as a contractor with 22 years experience in the use and rental of similar equipment, of the going rental value at the time and in the area. Although there is jurisprudence to the effect that manuals such as the Associated Equipment Distributors rental rate book are inadmissible evidence because of the hearsay rule, Mr. Snowden's testimony along with that of his superintendent was sufficient in the court's mind to establish these values in computing the amount of damages suffered by the joint venture.

'Irby Steel produced no witness to dispute these average rental values. However it did call a certified public accountant who testified that he examined the books of the joint venture and found...