Kurland v. United Pac. Ins. Co.

• Decision Date: 17 May 1967
• Citation: 59 Cal.Rptr. 258,251 Cal.App.2d 112
• Court: California Court of Appeals Court of Appeals
• Parties: Frank KURLAND, Plaintiff and Appellant, v. UNITED PACIFIC INSURANCE COMPANY, Defendant and Respondent. Civ. 29641.

Page 258

59 Cal.Rptr. 258

251 Cal.App.2d 112

Frank KURLAND, Plaintiff and Appellant, v. UNITED PACIFIC INSURANCE COMPANY, Defendant and Respondent.

Civ. 29641.

Court of Appeal, Second District, Division 3, California.

May 17, 1967.

Rehearing Denied June 13, 1967.

Hearing Denied July 12, 1967.

S. L. Kurland and A. Arnold Klein, Los Angeles, for appellant.

Betts & Loomis and Ingall W. Bull, Jr., Los Angeles, for respondent.

FORD, Presiding Justice.

The plaintiff, the assignee of the owners and of the general contractor, has appealed from a judgment in favor of the defendant in an action upon a performance bond executed with respect to a subcontract for the installation of an air conditioning system in an apartment building in Las Vegas, Nevada.

The findings of fact of the trial court were in part as follows: 1. On August 1, 1957 Defendant United Pacific Insurance Company executed a subcontract bond in which M.F.S., Inc., the subcontractor, was named as principal and Labby Construction and Development Company (hereinafter called Labby), the general contractor, was named as obligee. (The terms of the bond were made a part of the findings of fact. ¹ ) 2. The subcontract of May 21, 1957, related to the air conditioning work to be performed in a cooperative apartment building known as the Rexford, Inc., which was being constructed by Labby, as general contractor, for the owners, S. L. Kurland and Paul Manuel. (The terms of the subcontract were made a part of the findings of fact. ² ) 3. The plans and specifications were prepared for the owners by an architect licensed in the State of Nevada; the air conditioning system embodied in the plans and specifications was designed for the architect by an air conditioning engineer licensed in that state. 4. The proposal submitted to Labby by M.F.S., Inc., was prepared upon the basis of the air conditioning plans and specifications. 5. The equipment specified in the plans and specifications, or the substantial equivalent thereof, and all of the duct work, piping, wiring and other equipment necessary to furnish and complete the air conditioning system described in the plans and specifications were installed in a workmanlike manner in the places indicated therein. 6. The air conditioning system 'was incorrectly and inadequately designed for the purpose for which it was intended, that is, the adequate cooling of said 22 unit apartment house.' 7. M.F.S., Inc. 'reasonably and in good faith believed and relied upon the plans and specifications * * * as representing a system which would be adequate to cool said apartment building by thirty degrees in extreme summer conditions;' M.S.F., Inc. was never asked to redesign the system. 8. The damages incurred by plaintiff's assignors in endeavoring to remedy the problems which arose in connection with the air conditioning system were not the proximate result of any act or failure to act on the part of M.F.S., Inc. 9. 'That by reason of the facts hereinabove set forth, it was physically impossible to furnish or produce an air conditioning system sufficient to cool said apartment building by thirty degrees in extreme summer conditioning by following or complying with said plans and specifications.'

The function of this court with respect to the interpretation of a written contract is set forth in Parsons v. Bristol Development Co., 62 Cal.2d 861, at page 865, 44 Cal.Rptr. 767, at page 770, 402 P.2d 839, at page 842: 'The interpretation of a written instrument, even though it involves what might properly be called questions of fact (see Thayer, Preliminary Treatise on Evidence, pp. 202--204), is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. (See Civ.Code, §§ 1635--1661; Code Civ.Proc., §§ 1856--1866.) Extrinsic evidence is 'admissible to interpret the instrument, but not to give it a meaning to which it is not reasonably susceptible' (citations), and it is the instrument itself that must be given effect. (Civ.Code, §§ 1638, 1639; Code Civ.Proc., § 1856.) It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence. Accordingly, 'An appellate court is not bound by a construction of the contract based solely upon the terms of the written instrument without the aid of evidence (citations), where there is no conflict in the evidence (citations), or a determination has been made upon incompetent evidence (citation).' (Estate of Platt, 21 Cal.2d 343, 352, 131 P.2d 825, 830 * * *.'

Evidence extrinsic to the subcontract and the bond was properly admitted at the trial to determine the circumstances under which the parties contracted and their purpose. (Parsons v. Bristol Development Co., supra, 62 Cal.2d 861, 864--865, 44 Cal.Rptr. 767, 402 P.2d 839.) In the present case the uncontradicted evidence was that the plans and specifications, including those relating to the air conditioning work, were prepared for the owners by an architect licensed by the State of Nevada. The subcontractor relied thereon in submitting his proposal or bid. The first bond submitted by the subcontractor for the air conditioning work was rejected by the general contractor because it did not contain the following language (which is contained in the second bond, upon which the present action was brought): 'System is to establish at least a 30 degree variation from outside temperature for cooling and a fifty degree variation from outside temperature for heating. * * *'

The primary question to be resolved on this appeal is whether the language quoted in the preceding paragraph of this opinion, as embodied in the subcontract and in the bond, constituted a warranty or guaranty on the part of the subcontractor that the air conditioning system which the subcontractor undertook to install would in fact 'establish at least a 30 degree variation from outside temperature for cooling.' As has been noted, the trial court found that the proposal submitted to the general contractor by the subcontractor was prepared upon the basis of the plans and specifications drawn by the owners' architect; the equipment specified in those plans and specifications, or the substantial equivalent thereof, was installed and all of the work necessary to furnish and complete the air conditioning system described in those plans and specifications was done by the subcontractor in a workmanlike manner; but, although the subcontractor reasonably and in good faith relied upon the adequacy of the plans and specifications as a representation of a system which would cool the apartment building by thirty degrees under summer conditions, the air conditioning system 'was incorrectly and inadequately designed for the purpose for which it was intended, that is, the adequate cooling of said 22 unit...