Kansas Turnpike Authority v. Abramson

• Citation: 275 F.2d 711
• Decision Date: 29 February 1960
• Docket Number: No. 6200.,6200.
• Parties: KANSAS TURNPIKE AUTHORITY, Appellant, v. Edwin John ABRAMSON and Emmett Johns, Executors of the Estate of John P. Abramson, deceased, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

275 F.2d 711 (1960)

KANSAS TURNPIKE AUTHORITY, Appellant, v. Edwin John ABRAMSON and Emmett Johns, Executors of the Estate of John P. Abramson, deceased, Appellees.

No. 6200.

United States Court of Appeals Tenth Circuit.

February 29, 1960.

Edward F. Arn, Wichita, Kan. (Dale Spiegel, Emporia, Kan., and Gale Moss, El Dorado, Kan., were with him on the brief), for appellant.

Samuel Mellinger, Emporia, Kan., for appellees.

Before MURRAH, Chief Judge, LEWIS, Circuit Judge, and WALLACE, District Judge.

MURRAH, Chief Judge.

The appellee contractor for the grading and drainage of a segment of the Kansas Turnpike brought this diversity action against the Turnpike Authority to recover compensation for redoing work which it had already acceptably done, but which was required to be redone due to the fault of no one. The construction contract obligated the contractor to construct, according to specifications, a road bed suitable for the paved surface of the turnpike. This work entailed the laying down of successive layers or "lifts" of earth of specified thickness and moisture density until the embankments were brought to specified grade and drainage. Each lift was to be laid, rolled and inspected before another layer was placed on top of it.

The contractor performed his contract in a satisfactory and acceptable manner on certain parts of the contract area, but before final acceptance as provided in the contract, unusual rains over a period of two weeks softened the "upper lifts" of the embankment to such an extent that it was necessary to rework and recompact them in order to bring them up to specifications. When the contractor refused to do the work without additional compensation therefor, it was agreed that he would proceed to do it and that both parties would keep an account of it and they would then decide whether compensation was due. After the work was done, the Authority finally denied a claim therefor, and this suit was commenced. There is no question concerning the value of the work performed. Our salient question is whether the contract should be construed to provide compensation therefor. The trial court so construed it and entered judgment for the contractor in an agreed amount.

The first question is one of jurisdiction, i. e., whether the suit is against the State of Kansas, or rather whether the State is a real party in interest. If so, the suit must be dismissed for lack of diversity. The Kansas Legislature created the Turnpike Authority as a body corporate and politic, and as a public instrumentality, with powers to construct, operate and maintain turnpike projects, and to issue revenue bonds of the Authority, payable solely from revenue to finance such projects. It is exempt from all taxes or assessments upon any property acquired or used by it, and it is clothed with sovereign immunity except to the extent to which it has expressly been made liable. See Anderson Cattle Co. v. Kansas Turnpike Authority, 180 Kan. 749, 308 P.2d 172; State ex rel. Fatzer v. Kansas Turnpike Authority, 176 Kan. 683, 273 P.2d 198. But it is vested with power to sue and be sued in its own name, and the State of Kansas is in no wise interested in judgments for or against it. It is unlike the Commission in State Highway Commission of Wyoming v. Utah Const. Company, 278 U.S. 194, 49 S.Ct. 104, 73 L.Ed. 262, which was "but the arm or alter ego of the state, with no funds or ability to respond in damages." See 278 U.S. at page 199, 49 S.Ct. at page 106. The Authority is not under the supervision of the State or any agency thereof. In sum, it is a public corporation — a creature of the legislature empowered to perform designated proprietary functions without any obligation on the part of the State. The State was therefore not a real party in interest, and the requisite diversity of citizenship is present. Cf. Harrison Construction Co. v. Ohio Turnpike Commission, 6 Cir., 1959, 272 F.2d 337.

This brings us to a construction of the contract, and it is well to have in mind some governing canons. The generally accepted rule is that "where one agrees to do for a fixed sum a thing possible to be performed, he will not be excused or become entitled to additional compensation, because unforeseen difficulties are encountered." United States v. Spearin, 248 U.S. 132, 136, 39 S.Ct. 59, 61, 63 L.Ed. 166; see also Day v. United States, 245 U.S. 159, 38 S.Ct. 57, 62 L.Ed. 219; Barnard-Curtis Co. v. United States, 10 Cir., 244 F.2d 565; Smith v. Phillips, D.C., 128 F.Supp. 61; Newcomb v. Schaeffler, 131 Colo. 56, 279 P.2d 409; Restatement Contracts, § 3467; Williston Rev. Ed., § 1963-64. In the words of the Kansas court, "When the principal object of the contract is to obtain a result * * * the risk of accomplishing such purpose or result is on the builder." Glass v. Wiesner, 172 Kan. 133, 238 P.2d 712, 716. Where, however, the contract provides for the performance of a given undertaking in accordance with prescribed plan and specification, this rule does not apply, because the contractor is not permitted to vary from the prescribed plans and specifications "even if he deems them improper and insufficient; and therefore cannot be held to guarantee that work performed as required by them will be free from defects, or withstand the action of the elements, or accomplish the purpose intended. Where the contract specifies what he is to do and the manner and method of doing it, and he does the work specified in the manner specified, his engagement is fulfilled and he remains liable only for defects resulting from improper workmanship or other fault on his part, unless there be a provision in the contract imposing some other or further obligation." Friederick v. Redwood County, 153 Minn. 450, 190 N.W. 801; also quoted in McCree & Co. v. State, 253 Minn. 295, 91 N.W.2d 713. See also Schliess v. City of Grand Rapids, 131 Mich. 52, 90 N.W. 700. Whether ours is an "end result" contract or a "specified manner and method" one depends of course upon the intention of the parties, to be gathered from its text and context. Construction by classification or categorization is rendered difficult, if not impossible, by the fact that contracts like ours call for an end result according to specifications. And so, in the last analysis, we must look to the contract by the whole of its parts to determine whether the parties actually intended to provide compensation for extra work required to be done through the fault of no one. Or, more specifically, the question is who assumed the unforeseen risk of the elements.

The construction contract incorporated the standard specifications for state road and bridge construction by the Kansas State Highway Commission. And, it also incorporated special Kansas Turnpike provisions and supplemental specifications, all of which were made integral parts of the construction contract, with the proviso that in the event of a discrepancy between the standard or general specifications and the supplemental specifications or special provisions, the latter would govern.

Section 5.1 of the general provisions of the...