Jasper Construction, Inc. v. Foothill Junior College Dist.

• Decision Date: 27 March 1979
• Citation: 153 Cal.Rptr. 767,91 Cal.App.3d 1
• Court: California Court of Appeals Court of Appeals
• Parties: JASPER CONSTRUCTION, INC., Plaintiff and Respondent, v. FOOTHILL JUNIOR COLLEGE DISTRICT OF SANTA CLARA COUNTY et al., Defendant and Appellant. Civ. 41646.

Page 767

153 Cal.Rptr. 767

91 Cal.App.3d 1

JASPER CONSTRUCTION, INC., Plaintiff and Respondent, v. FOOTHILL JUNIOR COLLEGE DISTRICT OF SANTA CLARA COUNTY et al., Defendant and Appellant.

Civ. 41646.

Court of Appeal, First District, Division 4, California.

March 27, 1979.

As Modified on Denial of Rehearing April 18, 1979.

Hearing Denied May 24, 1979.

Gerald R. Knecht, San Francisco, for plaintiff and respondent.

Cottrell, Hofvendahl & Roessler by Russell L. Hofvendahl, San Jose, Robert A. Seligson, Inc. by Robert A. Seligson, San Francisco, for defendant and appellant.

DRUMMOND, ^* Associate Justice (assigned).

Defendant-appellant Foothill Junior College District of Santa Clara County (hereafter "Foothill") appeals from a judgment in Santa Clara County Superior Court following a jury verdict awarding plaintiff-respondent Jasper Construction Company (hereafter "Jasper") $742,133.96 upon its complaint for damages for breach of contract stemming from alleged defects in plans and specifications for the construction of a junior college auditorium.

Jasper cross-appeals from that portion of the judgment denying its prejudgment interest.

The focus of controversy in this case is the construction of the Calvin C. Flint Center for the Performing Arts, located on the De Anza Community College campus in Santa Clara. Jasper ¹ was the general contractor for this project and Foothill the owner for whom the project was constructed. In addition to suing Foothill, Jasper sued Kump, Masten & Hurd, a joint venture consisting of two separate architectural firms (hereafter referred to as "the architects") who designed and supervised the project. The essence of Jasper's claim was that as the result of inadequate and defective plans and specifications for the construction of the project and negligence in administering it, Jasper suffered delays and extra expenses for which he sought recovery in damages.

Under the terms of the contract signed on May 17, 1968, Jasper was to be paid $3,307,403 and was required to complete the project within 600 calendar days or by January 7, 1970. Jasper agreed to pay as liquidated damages, the sum of $400 for each calendar day that the project was delayed.

Jasper received extensions of 155 days from Foothill, which would have made the completion date June 11, 1970. Requests totalling 223 days of extension were denied. Notice of completion was not in fact filed until June 10, 1971, or 363 days beyond the original completion date. Foothill thus withheld $145,200 in liquidated damages on account of the delay.

Jasper's major claim for damages at trial was that the plans and specifications prepared by the architects were defective since they did not reveal that he was required to pour concrete by using a different method than the customary one he had anticipated when preparing his bid.

The contract between the parties specified:

"11. CONSTRUCTION JOINTS

(A) Location and details of construction joints shall be as indicated on the structural drawings, or as approved by the Architect. Relate required vertical joints in walls to joints in finish. In general, approved joints shall be located to least impair the strength of the structure."

Jasper stated that the location of the construction joints was not shown on the architect's drawings, but that certain structural drawings indicated to him that the steel was from floor-to-floor and that therefore the concrete would be poured from floor-to-floor. He stated that he began pouring the basement from floor-to-floor but that the architects then informed him to keep the pour joints in a straight horizontal line from wall-to-wall. Jasper objected to this "horizontal" method of pouring as he alleged that it left him with a lot of wooden concrete forms he could not use. At trial, Jasper claimed that having to use this different method of pouring cost him $500,000 in "extra material and extra labor," as distinguished from delay.

Foothill, in addition to denying liability under Jasper's claim, instituted a cross-complaint praying for $145,200 against Jasper as the result of his alleged breach of contract in delaying completion of the project. The figure was based on the $400 per day liquidated damage figure multiplied by the 363 additional days it took to complete the project.

The case went to the jury on theories of breach of implied warranty and breach of contract against Foothill and professional malpractice against the architects. The jury was instructed that if Foothill was responsible for some delay in completing the project, it could not recover under the liquidated damages provision, but could recover any actual damages for delays caused by Jasper.

The jury returned a general verdict in favor of Jasper and against Foothill in the sum of $742,133.96. It rendered a verdict in favor of Foothill on its cross-complaint against Jasper in the sum of $12,054.30. The jury found against the architects in the sum of $25,200 ($36,000 reduced by 30%, the proportion of contributory negligence of Jasper). The architects do not appeal. We discuss some of the major assignments of error.

Implied Warranty Instructions

At the request of Jasper, the trial court instructed the jury as follows:

"When a public entity, such as Defendant Foothill District in this case, issues plans and specifications to a contractor, such as Plaintiff Jasper in this case, the District impliedly warrants that the plans and specifications are free from defect, are complete and will, if followed by the contractor, result in construction of the project intended."

Foothill contends that this instruction constituted prejudicial error because it (1) permitted the jury to find Foothill liable in the absence of any evidence of misrepresentation or intentional concealment, contrary to law and (2) held Foothill strictly liable for the errors and omissions of the architects, even though the architects were independent contractors and were themselves held only to a standard of ordinary negligence. The first of these contentions has merit.

The correct rule applicable to the instant case was stated by the Supreme Court in Souza & McCue Constr. Co. v. Superior Court (1962) 57 Cal.2d 508, 510, 20 Cal.Rptr. 634, 635, 370 P.2d 338, 339:

"A contractor of public works who, acting reasonably, is misled by incorrect plans and specifications issued by the public authorities as the basis for bids and who, as a result, submits a bid which is lower than he would have otherwise made may recover in a contract action for extra work or expenses necessitated by the conditions being other than as represented. (E. g., United States v. Spearin, 248 U.S. 132, 136-137, 39 S.Ct. 59, 63 L.Ed. 166; Christie v. United States, 237 U.S. 234, 239-242, 35 S.Ct. 565, 59 L.Ed. 933; McCree & Co. v. State, 253 Minn. 295, 91 N.W.2d 713, 721-722; See Gogo v. Los Angeles etc. Flood Control Dist., 45 Cal.App.2d 334, 341, 114 P.2d 65; 43 Am.Jur. 852; Annotation 76 A.L.R. 268.)"

The Supreme Court went on to explain that "(t)his rule is mainly based on the theory that the furnishing of misleading plans and specifications by the public body constitutes a breach of an implied warranty of their correctness." (Id., at pp. 510-511, 20 Cal.Rptr. at p. 636, 370 P.2d at p. 340.)

The "implied warranty" theory may be traced back to the early United States Supreme Court case of United States v. Spearin (1918) 248 U.S. 132, 39 S.Ct. 59, 63 L.Ed. 166. Spearin, a contractor, agreed to build a dry dock for the federal government according to plans and specifications provided by the government. (Id., at p. 133, 39 S.Ct. 59, 63 L.Ed. 166.) Included within the plans was the relocation of a 6-foot sewer. Spearin built the entire project as prescribed by the plans. About a year later the relocated sewer broke as the result of internal pressure brought about by heavy rain and the dry dock flooded. Upon investigation, it was discovered that there was a dam in a connecting sewer which had been diverting water to the 6-foot sewer and causing the internal pressure. Although the government did not know of the dam, it did know that the sewers had overflowed from time to time and did not communicate this fact to Spearin. (Id., at p. 134, 39 S.Ct. 59, 63 L.Ed. 166.) It was held that Spearin should be allowed to recover damages for breach of contract. Said the court:

"The risk of the existing system proving adequate might have rested upon Spearin, if the contract for the dry dock had not contained the provision for relocation of the 6-foot sewer. But the insertion of the articles prescribing the character, dimensions and location of the sewer imported a warranty that if the specifications were complied with, the sewer would be adequate."

The first California case which squarely met with the issue was Gogo v. L.A., etc., Flood Control Dist. (1941) 45 Cal.App.2d 334, 114 P.2d 65, where a contractor was permitted to recover damages for extra excavation work done as the result of misrepresentations in plans furnished by the district. The applicable principles were clearly explained by the court:

"It may be stated generally that where the plans and specifications induce a public contractor reasonably to believe that certain indicated conditions actually exist and may be relied upon in submitting a bid, he is entitled to recover the value of such extra work as was necessitated by the conditions being Other than as represented. Faber v. City of New York, 222 N.Y. 255, 118 N.E. 609; Pitt Construction Co. v. City of Alliance, 6 Cir., 12 Fed.2d 28; (Ohio); Hollerbach v. United States, 233 U.S. 165, 34 Sup.Ct. 553, 58 L.Ed. 898; Salt Lake City v. Smith, 8 Cir., 104 Fed. 457; (43 C.C.A. 637 (Utah)); Palmberg v. City of Astoria, (101 Or. 224, 199 P. 630) 16 A.L.R. 1125 (Supra.) The facts of the instant case bring it within the foregoing rule."

"The authorities are divided concerning the theory upon which recovery is allowed in this type of case. Some cases, such as Faber v....