Longview Const. & Dev., Inc. v. Loggins Const. Co., 801

• Decision Date: 08 May 1975
• Docket Number: No. 801,801
• Citation: 523 S.W.2d 771
• Parties: LONGVIEW CONSTRUCTION AND DEVELOPMENT, INC., Appellant, v. LOGGINS CONSTRUCTION COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 771

523 S.W.2d 771

LONGVIEW CONSTRUCTION AND DEVELOPMENT, INC., Appellant, v. LOGGINS CONSTRUCTION COMPANY, Appellee.

No. 801.

Court of Civil Appeals of Texas,

Tyler.

May 8, 1975.

Rehearings Denied June 5, 1975.

Holcomb & Norwood, Tyler, Fred Erisman, Longview, Ramey, Flock, Hutchins, Grainer & Jeffus, Mike A. Hatchell, Tyler, for appellant.

John R. Brumbelow, Tyler, for appellee.

MOORE, Justice.

This is a suit brought by a prime contractor against a sub-contractor for damages for breach of contract. Plaintiff Loggins Construction ¹ of Tyler, Texas, brought the suit to recover damages alleged to have resulted from defendant Longview Construction and Development, Inc.'s breach of its sub-contract with Loggins to perform certain excavation and earth work in conjunction with construction of a football stadium for Stephen F. Austin University of Nacogdoches, Texas. ² The case was tried before a jury and judgment was rendered in favor of Loggins for the sum of $49,255.00, based on the jury's finding that Longview failed to complete the work and failed to substantially perform its contract. Longview duly perfected this appeal.

We affirm in part and reverse and render in part.

The evidence shows that Loggins Construction Company, as general contractor, contracted with Stephen F. Austin University to construct the stadium. One of the component parts of the project was site clearing and certain dirt work encompassing (1) clearing, grading, and filling the site, (2) stripping and stockpiling the top soil, (3) making a 20-foot excavation for the football field, (4) spreading sand on the football field, (5) construction on the east and west sides of the field of two earth mounds, called 'berms,' upon which bleachers, walks, concession stands and a press box were to be constructed, and (6) some grading and filling on two parking lots.

Longview Construction and Development, Inc., was the successful bidder on the foregoing work and contracted with Loggins to do the work for the sum of $101,000.00.

The pertinent parts of the sub-contract are as follows:

'FIRST: The SUB-CONTRACTOR agrees to furnish all labor, materials, insurance, taxes, tools and equipment to perform all work necessary to complete the,

Site Clearing--(No Burning of Trees or Brush)

Strip Top Soil & Stockpile

Machine Excavation, Fill & Select Fill to Subgrade

Spread Sand Fill at Football Field (Sand by LCC) for the above named structure, according to plans, specifications, and addendum No's 1 & 2 heretofore furnished by above named architect, and to the full satisfaction of said architect.

'EIGHTH: In consideration whereof, the said CONTRACTOR agrees that he will pay to the said SUB-CONTRACTOR in monthly payments, the sum of $101,000 for said materials and work, said amount to be paid as follows: Ninety per cent (90%) of all labor and material which has been placed in position by said SUB-CONTRACTOR to be paid on or about the 15th of the following month, based on estimate submitted to CONTRACTOR by SUB-CONTRACTOR no later than the last day of the month, except the final payment which the said CONTRACTOR shall pay to the said SUB-CONTRACTOR within 30 days after the SUB-CONTRACTOR shall have completed his work to the full satisfaction of the said architect or owner.'

The plans and specifications provided that the football field and surrounding area were to be excavated below ground level and the soil was to be piled on each side to serve as a foundation for the bleachers. The specification provided that the soil was to be excavated and stacked at a certain specified grade.

Longview commenced work on the project on or about January 1, 1972 . By September 20, 1972, the football field and parking lots had been cleared and excavated, and the slopes on both sides of the field had been constructed. Relying upon the conclusion of its foreman, Mr. Sipes, Longview determined that the sub-contract had been completed and informed Loggins of the completion. Upon inspection of the work, Ray Loggins, President of Loggins, determined that the work was not satisfactory and did not conform to the plans and specifications because the slopes on both the front and back sides contained too much soil and were not constructed on the grade level required by the specifications. Loggins testified that the subgrade on parking lots A and B and other areas was not excavated to the level required by the plans and specifications because it was too high in some areas and too low in others. Two surveyors, Chris Marek and Frank Mitchell, who worked on the job for a registered engineer employed by Loggins, corroborated Loggins' testimony. They testified that neither the slopes nor the excavated areas were on grade at the time Longview left the job. Mitchell stated that he told Longview's Mr. Sipes that the slopes were not on the required grade and he replied that he 'just couldn't do it.'

Ray Loggins requested Longview to return and complete the job, but Longview maintained that the job was completed according to the plans and specifications and refused to return. Since Loggins was unable to get another contractor to complete the work on a bid basis, he hired Simon Traylor & Son to complete the job on an hourly basis. The evidence shows that in order to complete the job, Traylor & Son were required to remove from one to three feet of soil from the slopes constructed by Longview. In order to meet the requirement of the plans and specifications, approximately 30,000 yards of soil had to be removed. The removal of the soil from the upper part of the slopes required the use of specialized equipment making the work more expensive. It took approximately five months to complete the work. According to Ray Loggins, the total cost to complete the job according to the plans and specifications amounted to the sum of $63,976.58. His testimony as to the amount paid Simon Traylor & Son was corroborated by unmerous cancelled checks.

After the project was completed, Lkoggins brought this suit against Longview seeking to recover (1) the sum paid Simon Traylor & Son to complete the subcontract, (2) the value of the time and equipment used by Loggins to complete the contract, and (3) for special damages as a result of a $250.00 per day penalty assessed against Loggins by the owner for delay in completing the contract. Longview answered with a general denial and filed a cross-action in the nature of a sworn account alleging that it had completed its sub-contract and praying for a recovery of the balance due on the sub-contract in the amount of $20,395.58.

The jury found in response to the respectively numbered special issues (1) that Longview failed to perform all work necessary to complete the contract according to the plans and specifications, (2) that the reasonable cost to Loggins to complete the contract according to the plans and specifications was $63,400.58, (3) that Loggins failed to prove by a preponderance of the evidence that Longview knew that Loggins would be required to pay the owner liquidated damages for failure to complete the stadium on time, (4) that Longview reasonably should have known that Loggins would be liable for liquidated damages in the event the project was not completed on time, (5) that Longview's failure to complete the job in a workmanlike manner so as to meet the progress of the job (6) which was a proximate cause of Loggins' delay of (7) 25 days, (8) that Longview did not substantially perform the contract, and (9) that Loggins did not substantially interfere with the performance of the work by Longview.

The final judgment of $49,255.00 was computed as follows: (1) completion cost found by the jury, $63,400.58, (2) plus special damages caused by delay attributable to Longview of $6,250.00, and (3) less retainage admittedly due Longview in the amount of $20,395.58.

By the first point of error Longivew urges that the trial court erred in overruling its motion for instructed verdict and motion non obstante veredicto. Longivew takes the position that the sub-contract provides for monthly payments as the work progressed based on the architect's estimate of the percent of the work performed and that the estimate of the architect is final and conclusive. Based on this premise Longview argues that since the evidence conclusively shows that the architect certified the work to be 98% Complete when it stopped work, Loggins was obligated, as a matter of law, to pay the full contract price, less 2% Or $2,573.00 which would be required to bring the work to full completion. We cannot agree with this proposition.

The evidence shows that Loggins, in accordance with the contract, certified to the architect as to the percentage of the work completed each month. In turn, the architect certified the same percentage to the owner and recommended payment on that basis. The last such certification was made on August 25, 1972, and shows that both Loggins and the architect certified that 98% Of the work had been completed.

In support of its contention Longview relies on the holding in Kilgore v. Northwest Texas Baptist Educational Soc., 89 Tex. 465, 35 S.W. 145 (1896). The contract involved in that case was one in which the parties expressly agreed that the owner would pay the contractor as the work on the building progressed according to the estimate of the architect, whose estimates were by the terms of the contract made binding upon the owner. In the instant case the parties did not agree that the estimates for payment by the architect would be final and conclusive. Hence the decision cited is not applicable. Funk v. House, 168 S.W. 481, 485 (Tex.Civ.App., 1914, dism'd.). The rule announced in Kilgore is operative only where it appears from the express terms of the contract that it was the intention of the parties that the determination of the person to whom the decision was entrusted would be final and conclusive; and such a provision will not be implied. Black v. Acers,...