Lindbrook Const., Inc. v. Mukilteo School Dist. No. 6

• Decision Date: 21 August 1969
• Docket Number: No. 39335,39335
• Citation: 76 Wn.2d 539,458 P.2d 1
• Parties: LINDBROOK CONSTRUCTION, INC., Respondent, v. MUKILTEO SCHOOL DISTRICT NO. 6, Appellant.
• Court: Washington Supreme Court

Page 539

76 Wn.2d 539

458 P.2d 1

LINDBROOK CONSTRUCTION, INC., Respondent, v. MUKILTEO SCHOOL DISTRICT NO. 6, Appellant.

No. 39335.

Supreme Court of Washington, En Banc.

Aug. 21, 1969.

Robert E. Schillberg, Pros. Atty., Everett, for appellant.

Short, Cressman & Cable, William L. Hintze, Seattle, for respondent.

HILL, Judge.

There are on this appeal ten assignments of error; four relate to claimed errors in the findings of fact made by the trial court; five relate to a failure to make findings proposed by the defendant-appellant; and one relates to the trial court's conclusion of law No. 2:

That judgment should be entered in favor of the plaintiff and against the defendant in the sum of $42,834.20 together with plaintiff's taxable costs.

The findings of fact give a succinct statement of what the controversy is all about. The plaintiff is a construction company; the defendant is a school district. Findings of fact Nos. 3 to 8 inclusive are as follows:

That on or about the 17th day of July, 1963, plaintiff submitted to defendant its bid for the grading and drainage work at the site of the Lake Stickney Elementary School, Mukilteo, Snohomish County, Washington. That defendant furnished Specifications, Drawings and other contract documents to plaintiff for use in the preparation of its bid.

(Finding of fact No. 3)

That the specifications, drawings and other contract documents furnished plaintiff by defendant showed the work to be performed and made specific representations with respect to the conditions to be encountered, the source and amount of cut and fill, the depth of required excavation and that the fill material required would be available from areas of proposed cuts. That plaintiff reasonably relied upon said representations in the preparation and submission of its bid.

(Finding of fact No. 4)

That plaintiff was awarded the contract for said work upon its lump sum bid of $33,617.00 and proceeded with the performance of the work as directed by the defendant through its authorized agents. That in the performance of the work plaintiff encountered unanticipated conditions at substantial variance with the conditions represented by the contract documents necessitating extra work as follows:

(a) Extensive shortage of fill material from areas of proposed cuts requiring plaintiff to open and utilize a borrow pit operation (b) Extra excavation, fill and select fill in the building area;

(c) Extra excavation and fill in the south parking area;

(d) Extra excavation, fill and gravel for the interceptor ditch; and

(e) Extra excavation and fill in the drainfield.

That the said extra work required plaintiff to obtain and utilize additional and heavier equipment, caused the work to extend into the fall and winter months resulting in increased weather and moisture problems and caused plaintiff to remain on the job for more than double the time which would have been required to complete the work as originally represented by the contract documents.

(Finding of fact No. 5)

That plaintiff gave notice to defendant of such changed conditions within a reasonable time after they were first observed and claimed an equitable adjustment for the extra work involved. That at all times defendant had knowledge of the conditions encountered and the extra work performed by plaintiff and defendant directed plaintiff to proceed with the said extra work.

(Finding of fact No. 6)

That the extra work plaintiff was required to perform by reason of the changed conditions and defendant's directions as hereinabove set forth was and is of the reasonable value of $39,355.09. That in addition thereto defendant has withheld from plaintiff on the basic contract price the sum of $3,479.11 which amount is due, owing and unpaid.

(Finding of fact No. 7)

That defendant has waived any claim for liquidated damages against plaintiff by its actions in directing the extra work, making payments during the alleged delay and leading plaintiff to believe that no liquidated damages would be assessed.

(Finding of fact No. 8)

As these findings indicate, on a contract for $33,617 the extras, as found by the trial court, amounted to $39,355.09. This seems extraordinary, but the School District, rather than questioning the cost figures of the contractor ¹ and presenting any of its own, urged that what the contractor was claiming to be extra work because of changed conditions was actually within the contract.

The findings go directly to the heart of the controversy and, contrary to the contention of the School District, find that in the performance of the work the contractor encountered unanticipated conditions at substantial variance with the conditions represented in the contract documents, which necessitated extra work; that the contractor gave notice of such changed conditions and claimed an equitable adjustment for the extra work; and that the School District at all times had knowledge of the changed conditions and directed the plaintiff to proceed with the extra work.

Although the School District assigns error to four of these findings (4, 5, 6 and 7) there is substantial (though conflicting) evidence to sustain them. These findings bring the case within our holding Bignold v. King County, 65 Wash.2d 817, 399 P.2d 611 (1965). The conclusion of law (quoted on page 1) to which error is assigned necessarily follows from the findings made.

The School District strenuously urges that Articles 25 and 26 of the contract preclude any recovery. Article 25, in part, provides:

Should conditions encountered below the surface of the ground be at variance with the conditions indicated by the drawings and specifications the contract sum shall be equitably adjusted upon claim by either party made within a reasonable time after the first observance of the conditions.

Article 26 provides:

If the Contractor claims that any instructions by drawings or otherwise involve extra cost under this contract, he shall give the Architect written notice thereof within a reasonable time after the receipt of such instructions, and in any event before proceeding to execute the work, and the procedure shall then be as provided for changes in the work. No such claim shall be valid unless so made.

It is the School District's position that there was no variance, but if it be assumed that conditions were at variance with the drawings and specifications, that no written notice having been given before proceeding to do the extra work, there can be no recovery.

The trial court held squarely notice in writing had been waived, saying:

It is clear to this Court that the architect knew of this work, that he directed that it proceed, and at such time he indicated he did not feel that such was an extra; so I do not feel the failure to give written notice set forth in the contract would apply. The fact he was never informed of the actual extra, in my opinion, would not have added anything. I feel failure of notice had been waived in the manner he handled such orders.

Bignold v. King County, Supra, supports the trial court in that position. See also American Sheet Metal Works, Inc. v. Haynes, 67 Wash.2d 153, 407 P.2d 429 (1965).

The School District's attack on that holding, formalized in Finding No. 6 is that there is no testimony that the School District (i.e., the School Directors) knew that extra work was being done.

There is no contention that the architect did not have full and complete knowledge of the conditions which developed in the course of this contract. He is apparently the only person connected with the School District with whom the contractor had any significant contacts. He was the one who told the contractor what to do, and what not to do. It strains credulity to believe that he failed to keep the School District authorities advised of what was happening. When this action against the District came on for trial, the architect was the sole witness presented by the District. At the trial level no one testified that there was any breakdown in communications between the architect and the School District. It is only on appeal that this inference is urged.

Findings of fact made by the trial court which are supported by substantial evidence will not be disturbed on appeal. Nielson v. King County,72 Wash.2d 720, 724, 435 P.2d 664 (1967). For a statement of the reasons for that oft-repeated rule see Thorndike v. Hesperian Orchards, Inc., 54 Wash.2d 570, 343 P.2d 183 (1959).

The contractor's right to recover under the circumstances of this case is clear. Bignold v. King County, Supra; Kieburtz v. Seattle, 84 Wash. 196, 146 P. 400 (1915).

Another contention made by the appellant School District is that if anybody has been injured it is the subcontractor (West Brothers Construction, Inc.) which actually did the work and should recover the damages. This apparent concern for the subcontractor seems a little hypertechnical. The only party with whom the School District had any contractual relations is maintaining the action. In the absence of proof that the prime contractor has been released from its liability to its subcontractor, the former is entitled to bring suit for equitable adjustment of the contract price for extra work performed by the latter. Kaiser Industries Corp. v. United States, 340 F.2d 322, 169 Ct.Cl. 310 (1965); Garod Radio Corp. v. United States, 307 F.2d 945, 158 Ct.Cl. 596 (1962).

The judgment is affirmed.

HUNTER, C.J., and FINLEY, WEAVER and ROSELLINI, JJ., concur.

NEILL, Judge (dissenting).

I dissent for reasons which are briefly discussed in the majority opinion, but which are not substantiated by the record. There is here involved a basic agency issue of importance to public bodies engaged in public works contracts.

The facts giving rise to this litigation are adequately set forth in the majority opinion. These facts show that the defendant district awarded a public work contract to plaintiff to perform certain site preparation work at a lump sum...