Kelley v. Bank Building and Equipment Corp. of Amer.

• Citation: 453 F.2d 774
• Decision Date: 07 January 1972
• Docket Number: No. 316-70.,316-70.
• Parties: Jack W. KELLEY et al., Appellants, v. BANK BUILDING AND EQUIPMENT CORPORATION OF AMERICA, a corporation, and Advance Glass Company, a corporation, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

453 F.2d 774 (1972)

Jack W. KELLEY et al., Appellants, v. BANK BUILDING AND EQUIPMENT CORPORATION OF AMERICA, a corporation, and Advance Glass Company, a corporation, Appellees.

No. 316-70.

United States Court of Appeals, Tenth Circuit.

January 7, 1972.

Thomas R. Brett, of Jones, Givens, Brett, Gotcher & Doyle, Tulsa, Okl., for appellants.

Robert S. Rizley, Tulsa, Okl. (Walter M. Clark, Justin C. Cordonnier, and Armstrong, Teasdale, Kramer & Vaughan, St. Louis, Mo., of counsel, with him on the brief), for appellee Bank Building and Equipment Corp. of America.

Harry M. Crowe, Jr., of Crowe & Thieman, Tulsa, Okl., for appellee Advance Glass Co.

Before SETH, HOLLOWAY and DOYLE, Circuit Judges.

SETH, Circuit Judge (reassigned to SETH, Circuit Judge, for opinion).

This diversity suit was brought by the owners of the Fourth National Bank Building in Tulsa, Oklahoma, against Bank Building and Equipment Corporation of America, a general contractor that constructed the building for the owners. Commercial Union Insurance Company wrote the performance bond for Bank Building and was included as an additional party defendant. Advance Glass Company, a subcontractor impleaded by Bank Building, counterclaimed against the plaintiffs and defendant Bank Building. Plaintiffs assert several defects in the completed building were caused by the contractor's negligence.

As between the owner-plaintiffs and the defendant Bank Building, judgment was rendered in favor of the defendant. In the third party action, judgment was initially rendered in favor of the third party defendant Advance Glass against both the owner-plaintiffs and the defendant Bank Building, but was subsequently amended so that Bank Building was entitled to reimbursement from plaintiffs for money paid to Advance Glass in satisfaction of the third party claim. Trial was to the court, and plaintiffs appeal both judgments.

On August 13, 1965, plaintiffs, reserving the right to negotiate various subcontracts, entered into a contract for the construction of the Fourth National Bank Building with defendant Bank Building (hereinafter the contractor). On December 28, 1967, the parties executed a termination agreement, concluding their obligations under the original contract, reserving certain rights, and stipulating that the building was formally accepted by the plaintiffs on September 1, 1967.

The action was instituted within the period referred to in the original contract, and also under a termination agreement. Plaintiffs alleged four major defects in workmanship and seek to recover expenses for remedial work necessitated by the contractor's alleged faulty construction.

Two of the building owners were also the architects who designed the building and supervised its construction. These owner-architects originally designed a thirty-one-story building. The outside of the building was to be covered with glass and marble. Concrete structural columns of the exterior were to be faced with marble sheets three-quarters of an inch thick and secured to the columns by metal fasteners. According to the original plans the vertical surfaces of the concrete columns were allowed a three-quarter-inch tolerance or variation from plumb, which could have been trued by the devices used to attach the marble. The plans, however, were changed during construction and it was decided to use a seven-sixteenths-inch thick marble to be attached directly to the columns by an adhesive. Because some of the columns were out of plumb as permitted under the original plans, and because the change in design required them to be true, the cement columns had to be built up and straightened by the addition of material to their surfaces where the thinner marble was to be bonded.

It was agreed between the plaintiffs and defendant contractor that the columns would be built out and straightened by applying metal lath and cement plaster. The contractor engaged Mr. Harry True to perform the necessary corrective work, and his work was done as specified. Mr. Richard Klein was engaged to do the marble setting, though it is disputed whether he was in fact in the employ of the contractor or the owner-architects. Two other marble-setters were also on the payroll of the contractor but working under Mr. Klein.

While Mr. True was to have trued all the columns, and so prepared them for Mr. Klein, Mr. Klein proceeded independently as well, and in an effort to expedite the marble setting, he plastered and filled out some columns with a soft plaster admittedly incapable of providing a suitable surface upon which to bond the marble to the column. Shortly after the completion of the building, the marble that had been bonded to the columns over the soft plaster began to loosen, crack, and come off. It is undisputed that the marble placed over Mr. True's cement plastering has remained secure and troublefree. The damages sought in this regard are for remedial work necessitated by the work of Mr. Klein and the marble-setters.

The plaintiffs owner-architects alleged that it was the responsibility of the contractor to oversee the corrective work on the columns and the marble setting; that the marble-setters were on the payroll of the contractor; that the contractor scheduled their work, and that the contractor is accordingly liable under the terms of the termination agreement. The defendant contractor maintains that the owner-architects did their own marble work, thus independently altering the original contract and assuming the responsibilities attendant to the marble setting. In its findings of fact and conclusions of law, the trial court found that the owner-architects assumed the responsibility for supervising the marble work; that the work performed by persons under the supervision of the owner-architects was not the responsibility of the defendant contractor.

It is apparent from the testimony that Klein had been an employee of the owner-architects and was concurrently on other of their jobs. The marble setting was not subcontracted through the defendant contractor, but rather was negotiated by Mr. Kelley, one of the owner-architects. He had also negotiated a bonus agreement with Mr. Klein, payable if the work was completed expeditiously. The record shows that Mr. Klein traveled to Indiana during the course of the marble setting in order to do some work for the owner-architect on another job. Mr. Klein was also paid out of the building account for work he had done on another owner-architect building. Mr. Bill Smith, a superintendent for the contractor, testified that he had not supervised the marble installation, that as far as he knew the supervision was being conducted by the owner-architects, and contrary to trade custom, he was never approached by the owner-architects who instead made frequent on-the-job visits to Mr. Klein. While it is true that the marble-setters were on the contractor's payroll, this was apparently directed by Mr. Kelley in...