M & W Masonry Const., Inc. v. Head

• Decision Date: 01 June 1976
• Docket Number: No. 48321,No. 2,48321,2
• Citation: M & W Masonry Const., Inc. v. Head, 562 P.2d 957, 1976 OK CIV APP 34 (Okla. Civ. App. 1976)
• Parties: M & W MASONRY CONSTRUCTION, INC., a Oklahoma Corporation, Appellant, v. John HEAD et al., Appellees
• Court: United States State Court of Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Page 957

562 P.2d 957

M & W MASONRY CONSTRUCTION, INC., a Oklahoma Corporation, Appellant, v.John HEAD et al., Appellees.

No. 48321.

Court of Appeals of Oklahoma, Division No. 2.

June 1, 1976.

Rehearing Denied July 13, 1976.

Certiorari Denied March 25, 1977.

Released for Publication by Order of Court of Appeals March 31, 1977.

Ronald D. Fulkerson, Oklahoma City, for appellant.

Charles L. McBride, Stillwater, for appelleeJohn Head d/b/a Head Construction Co.

BRIGHTMIRE, Judge.

A masonry subcontractor brought this action to recover $10,810 it claims is due for 94,000 bricks laid in veneering an apartment building in Stillwater, Oklahoma.The trial court, in the jury-waived case, sustained a demurrer to its evidence and then rendered an $11,668.67 net 'excess cost'(supracontract cost) judgment on defendants' counterclaim for completion of the brickwork against plaintiff.The latter assails the adjudication on two grouns--(1)plaintiff's proof supported a cause of action while defendants' did not and (2) the award to defendants was excessive.

I

On November 20, 1972plaintiff, M & W Masonry Construction, Inc.(M & W) of Purcell, Oklahoma, entered into a 'Standard Sub-Contract Agreement' with Head Construction Company(Head) to furnish all labor, tools, and equipment for completion of all masonry work on an apartment complex (Southern Heights Apartments) being built by Head for the owner, Southern Heights, Inc. Head was to furnish all brick, block, sand, cement and wall ties.M & W was to use diligence in completing the work and to receive $115 per thousand for bricks laid and $.50 per block for firewall blocks laid payable as follows:

'. . . in installments as the work progresses, on estimates to be made of the proportionate amount of materials delivered and work or labor performed by Sub-contractor.Reference is hereby made to the general contract between Contractor and Owner, and the payments be paid to Sub-contractor shall be payable as and when Contractor receives payment from the Owner for the work performed and materials furnished hereunder.Subcontractor shall receive his proportionate part promptly as payments are made on estimates to Contractor.In the event that said contract between Contractor and Owner shall not provide for retained percentages, the payments made to the Sub-contractor hereunder shall be 90 per cent . . . of the estimates . . .'

The general contract referred to contemplated monthly progress payments.Article 3B. reads:

'Each month after the commencement of work hereunder, the Contractor shall make a monthly request for payment(in quadruplicate on FHA FormNo. 2448) by the Owner for work done during the preceding month.Each request for payment shall be filed at least five (5) days before the date payment is desired.Subject to the approval of the Lender and the Commissioner, the Contractor shall be entitled to payment thereon in an amount equal to (1) the total value of classes of the work acceptably completed; plus (2) the value of materials and equipment not incorporated in the work, but delivered to and suitably stored at the site; less (3) 10 percent holdback and less prior payments.The 'values' of both (1) and (2) shall be computed in accordance with the amounts assigned to classes of the work in the 'Contractor's and/or Mortgagor's Cost Breakdown,' attached hereto as Exhibit 'A'.The Contractor agrees that no materials or equipment required by the Specifications will be purchased under a conditional sale contract or with the use of any security agreement or other vendor's title or lien retention instrument.'

In its case in chief M & W established it began work under the subcontract by completing some firewalls someone else had started.The brickwork, which was estimated to total around 250,000 bricks, was not begun until February of 1973.Once the bricklaying started, plaintiff requested monthly progress payments but none were received.¹One excuse given for failure to pay came after plaintiff had laid about $50,000 bricks.It was that the brickwork was faulty--some were crooked and some had head joints that were not full.Nevertheless, defendants told plaintiff if it would go on working and finish Building 'D' on a trial basis, that the other work would be approved.Plaintiff went back and corrected the items contained on the 'punch list'-- construction parlence for a list of items needing repair or correction.This was in March or April.One of the complaints was about the color of the brick--a complaint which should have been addressed to defendants, who furnished them.Defendants shut plaintiff down until the contractor and the architect got the brick problem worked out.Still no progress payment was made.Later there was a weather delay.On March 23defendants sent plaintiff a letter demanding it resume work within five days.'D' Building was completed.By then some 94,000 bricks had been laid.On May 3 a statement for $10,810 was sent to defendants.Neither a punch list nor progress payment was forthcoming.According to Herman Williams--half owner of plaintiff and overseer of the Southern Heights job--it was around the 9th of May when he talked to the head of Head, Mr. Head, about a progress payment, saying, 'We got to a point where I, you know, jumped them about some money and that's when this here came up.They said, 'We can't give you no money because your work's unsatisfactory,' so I dropped it there and that's when this all started.'Williams reviewed the work and corrected what he could find wrong, then checked with the architect who told him, 'everything looked good then.'

On the 11th of May, Williams pulled his men off the job after defendants again refused to make a progress payment.Said Williams, '. . . I went to the architect and I went, I don't know whether it was Head or Louis (O'Haver, Head's partner) now, but they said the work was satisfactory so I went down and asked them, 'Well, is the D Building all right?' and they said, 'Just fine,' and so I said, 'Well, I'd like to have some money,' and they said, 'No money' and so I said, 'I can't operate like this' so, I'd been there since February, and . . . that was the reason I pulled off because I'd been there since February without a payroll and I had gone as far as I could go because I had five bricklayers there. . . .I didn't know what else to do and they were talking about starting another building and I said, 'I cannot start another building until I get some money . . ..''

Williams also said he never submitted a payroll report to Head because one was not requested until May 16, five days after he left the job.He complied by filing such a report on June 25.Williams testified that he had worked on other FHA projects and had not had to furnish payroll reports yet had received monthly progress payments.

Head's Mr. Head had moved to Costa Rica and did not appear at the trial.Head's co-head, Louis O'Haver, did appear and was called to the stand by plaintiff.He said he had paid plaintiff nothing by May 11 because 'I couldn't.'The contractor, he said, usually received progress payments from the owner 'anywhere from 45 to 60 days after we submitted our estimates.'

However, about two weeks after plaintiff terminated the subcontract, leaving it up to defendants to complete the brickwork themselves, defendants managed to obtain a $12,810 progress payment.On May 22plaintiff filed a mechanic's lien against the apartment property for $10,810.Defendants discharged the lien June 24, 1973 by depositing $10,810 and posting a costs bond with the county clerk.Thus the status remained until this action was filed May 16, 1974, seeking judgment for $10,810, attorney's fees, and foreclosure of the lien based on the allegation that plaintiff performed the subcontract according to its terms and conditions.

In their amended answer defendants admit plaintiff performed under the subcontract until May 11 and then say it breached the contract by walking off the job.The breach, continue defendants, caused them to have to spend $24,058.91 over and above the agreed contract price and they prayed for judgment in that amount.

II

The trial judge sustained a demurrer to plaintiff's evidence after concluding that it had 'failed to sustain the allegations of its Petition.'He then proceeded to grant defendants judgment on their 'counterclaim' by granting an 'excess cost judgment' in the amount of $22,478.67 ($50,943.12 total costs less contract price of $28,464.45) and against it set off the $10,810, leaving balance due on the judgment of $11,668.67, along with an award of $2,248 for defendants' attorney's fees.

III

Plaintiff begins its argument by asking this question: 'Did the plaintiff have the right to terminate or rescind the contract for failure of defendant to withhold (make) progress payments (to it) . . .?'The answer is, of course, according to plaintiff, that he did because defendants' failure to make prompt progress payments constitute a material breach of contract.The masonry company relies on the provisions of 15 O.S.1971 § 233--allowing a party to rescind where, through fault of other party to contract, the consideration fails in whole or in part--and two decisions applying them,...