JA Jones Const. Co. v. Greenbriar Shopping Center

• Decision Date: 16 June 1971
• Docket Number: Civ. A. No. 10625.
• Citation: 332 F. Supp. 1336
• Parties: J. A. JONES CONSTRUCTION COMPANY, Plaintiff, v. GREENBRIAR SHOPPING CENTER, etc., et al., Defendants, SAM FINLEY, INC., and Daniel & Daniel, Inc., Third-Party Defendants.
• Court: U.S. District Court — Northern District of Georgia

332 F. Supp. 1336

J. A. JONES CONSTRUCTION COMPANY, Plaintiff, v. GREENBRIAR SHOPPING CENTER, etc., et al., Defendants, SAM FINLEY, INC., and Daniel & Daniel, Inc., Third-Party Defendants.

Civ. A. No. 10625.

United States District Court, N. D. Georgia, Atlanta Division.

February 11, 1971.

Supplemental Opinion June 16, 1971.

Smith, Currie & Hancock, Atlanta, Ga., Fleming, Robinson & Bradshaw, Charlotte, N. C., for plaintiff.

William G. Grant, Smith, Cohen, Ringel, Kohler, Martin & Lowe, Atlanta, Ga., for defendant Greenbriar Shopping Center.

Richardson, Chenggis & Constantinides, Chamblee, Ga., for Daniel & Daniel, Inc.

Webb, Parker, Young & Ferguson, Bertram S. Boley, Atlanta, Ga., for Sam Finley, Inc.

SIDNEY O. SMITH, District Judge.

This is a suit by a prime-contractor (Jones) for balances alleged to be due on a multimillion contract for the construction of the Greenbriar Shopping Center in suburban Atlanta. By way of counter-claim, the owner (Greenbriar) seeks general and special damages for alleged failures and breaches in the construction contract. Involved in this dispute are numerous "extras" claimed by Jones and numerous specific items of damage claimed by Greenbriar. Principal among the latter is a claim for defective paving of a parking area of some fifty acres. This occasioned a third-party complaint against the base and paving subcontractor (Finley) and a further third-party claim against the subbase contractor (Daniel) who was employed under a side agreement with the owner prior to the beginning of construction.

One of the prime defenses by the paving subcontractor as against the general contractor and by it against the owner's counter-claim is a claim denominated as "accord and satisfaction" or "release" as embodied in Work Order 154 between Greenbriar and Jones and Work Order 4 between Jones and Finley. At the trial of the case, evidence on this issue alone consumed all of the allotted time and, by consent of the parties, because of its effect on the future conduct of the trial, the Court agreed to make findings in this regard. On the evidence presented, the Court makes the following

FINDINGS OF FACT

By an agreement dated August 15, 1964, Jones contracted to construct for Greenbriar a shopping center consisting at that time of an estimated number of building units together with the parking area in question. It was the mutual intention of the parties to detail the work to be done as requirements were made known and, traveling on the good faith of the parties to do so, construction was commenced. Under this scheme, plans and specifications were furnished from time to time by the Architect (Portman), figured by Jones as to cost, and mini-contracts entered into by the execution of specific work orders for each such project.

Greenbriar was represented by an on-the-site engineer, Schroeder, who supervised and coordinated construction. However, responsibility for inspection and acceptance rested upon the Architect, who from time to time issued "certificates of payment" for the work done plus a 4% override less a 10% retainage, all in accordance with the contract. Some 5½ million dollars was paid under this arrangement with nothing more than typical minor disputes between the parties.

An original opening date was targeted for August 15, 1965, but was subsequently delayed until September 23. In the rush of all parties to meet these deadlines, considerable confusion developed. Work was ordered, countermanded, and changed to try to complete varying aspects of the job around each other in order to satisfy rental commitments. Quite naturally, interference with the performance of one task by another ensued. Eventually, minor disputes developed into major ones, major disputes developed into serious charges and countercharges, communications failed and this law suit followed.

As to the paving dispute, it followed the route described above. As stated, the sub-base and rough grading was performed by Daniel on separate directives of the owner. The original specifications called for 95% soil compaction, but in the interests of speed and economy, the owner reduced these specifications to 88% compaction. The specifications for the parking area were as follows:

"Asphalt pavement shall be provided for parking and traffic lanes. Asphalt pavement shall consist of fine grading the area and installing 5½ inch crusher run base, plus prime coat and plus 1½ inch plant mix surface course. All areas shall be sloped to drain water and no low places shall be acceptable."

Both as to compaction and topping, these specifications are woefully substandard for the eventual intended use, particularly considering the original plasticity of the soil. In essence they constitute what is known as "light" paving. Nevertheless, proceeding under the subcontract, Finley undertook to execute the job. Paving actually commenced on May 12, 1965. At that time, the target opening date was still on August 15, 1965, only three months away. Consequently, Finley was under great pressure to complete the job from both Jones and Greenbriar, so much so that at times, paving was laid on direct orders from Schroeder under written protest from Finley. Of even more significance, Jones and its other subcontractors and Greenbriar and other independent contractors with it, such as landscapers, continually interfered with Finley's performance. As a result, the new paving was consistently abused by heavy trucks, cement mixers, water tank trucks, and other impedimenta for which it was obviously not designed.

Shortly after the September opening, it became apparent that the paving then complete was unsatisfactory. It was cracking and crumbling in certain places, there were some poor drainage areas, and core testings taken by the owner indicated that the base and topping were less than specified in some of the test locations. During the fall and winter of 1965-1966, Finley endeavored to complete the contract and undertook to make repairs as demanded. Heavy winter rains emphasized the deficiencies and all the parties began to document their contentions as to responsibility therefor. The paving job was flatly rejected by Greenbriar in March. Relations between Jones and Greenbriar over all aspects of the prime contract were meanwhile deteriorating, but the paving problem was the most obvious and critical focal point. A series of fruitless conferences and a salvo of written memoranda and demands consumed most of the spring of 1966.

Finally, the architect moved to attempt a resolution of the overall paving problem. Through his graces, meaningful negotiations finally commenced in June. Significant amongst them was an admission by Greenbriar, by Jones, and by Finley of separate responsibility for the failure. The entire area was carefully plotted and individual sections marked and measured as needful of overhaul. Initially Jones and Greenbriar agreed upon a division of cost responsibility by specific sections for the needed repair and subsequently Jones and Finley subdivided their respective responsibility, again by section. In late July, it was agreed that each such section should be corrected by the addition of one inch of asphalt to compensate for any base or original topping deficiency with 2½ inches of asphalt to be applied in heavy duty traffic lanes, where the original specifications were obviously inadequate. The total cost of all work was estimated to be some $77,000 to be shared $27,000 by Greenbriar, $7,000 by Jones, and $43,000 by Finley. Based on the oral representations of the parties, Finley undertook in the fall to execute the agreed remedial paving on its and Jones' sections of responsibility, pending preparation of a written document incorporating the agreement obtained by the architect.

Because of its continuing overall dispute with Jones, Greenbriar very carefully refrained from any formal dealings with the subcontractor. Instead, the remedial work was authorized, as had been the custom, through a change-order, later to obtain considerable notoriety as "Change Order 154 of October 6, 1966." It was prepared by the architect and authorized Jones to do the agreed work at a price of $16,989.82 plus authorized quantity prices later fixed by Change Order 155 (together constituting the owner's share of the overall cost of $77,000). In addition it provided the following:

"8. Patch and repair all failures and breakage of the asphalt top which may develop and occur before February 15, 1968, at any place on the entire asphalt top or base material or both as good construction practices require and crusher-run stone installed as required by good engineering practices and asphalt top placed thereon equal in thickness to that required by the original contract and this modification for the particular area which may be involved, except the obligation of this paragraph and shall not commence for the areas colored green on attached Edwards and Portman Drawing P-3 dated July 27, 1966, until the corrective work described above has first been completed. A bond shall be provided in the penal sum of $150,000.00 issued by a surety company qualified to do business in Georgia and reasonably satisfactory to Greenbriar, guaranteeing and conditioned upon the faithful and full performance of all obligations of the General Contractor described in this item 8.

"Notwithstanding the language or the form of this Agreement, J. A. Jones Construction Company agrees to perform the corrective work as described above subject to the following: The acceptance and execution of this Agreement by J. A. Jones Construction Company is expressly agreed by all parties hereto not to waive, modify or alter in any way J. A. Jones Construction Company's assertion that the above described work is work outside of the scope of its contract with Greenbriar Shopping Center and that the acceptance or the performance of this agreement concerning the above described work for Greenbriar Shopping

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