McDermott, Inc. (Harvey Supply Div.) v. M-Elec. & Const. Co., Inc.

• Decision Date: 09 October 1986
• Docket Number: CA-4941,M-ELECTRIC,Nos. CA-4940,s. CA-4940
• Citation: 496 So.2d 1105
• Parties: McDERMOTT, INC. (HARVEY SUPPLY DIVISION) v.& CONSTRUCTION CO., INC.& CONSTRUCTION CO., INC. v. McDERMOTT, INC. (HARVEY SUPPLY DIVISION), G & W Electric Specialty Co., and General Electric Company.
• Court: Court of Appeal of Louisiana — District of US

Page 1105

496 So.2d 1105

McDERMOTT, INC. (HARVEY SUPPLY DIVISION) v. M-ELECTRIC & CONSTRUCTION CO., INC.

M-ELECTRIC & CONSTRUCTION CO., INC. v. McDERMOTT, INC. (HARVEY SUPPLY DIVISION), G & W Electric

Specialty Co., and General Electric Company.

Nos. CA-4940, CA-4941.

Court of Appeal of Louisiana Fourth Circuit.

Oct. 9, 1986.

Clement P. Donelon, Mary M. Ferry, Donelon & Donelon, Metairie, for defendants-appellees, G & W Elec. Co. and Jeanes Enterprises.

Lawrence J. Ernst, Joseph R. Ballard, Christovich & Kearney, New Orleans, for defendant-appellee, General Elec. Co.

Douglas A. Kewley, Bruce A. North, Molony, North & Hanewinckel, Metairie, for appellant, M-Electric & Const. Co., Inc.

Before GARRISON, KLEES, and CIACCIO, JJ.

CIACCIO, Judge.

M-Electric & Construction Co., Inc. appeals from a judgment of the district court which sustained the peremptory exception of prescription filed by G & W Electric Specialty Company, General Electric Company and Jeanes. We affirm.

There are two issues on appeal: (1) From which date did prescription begin to run? and (2) Which prescriptive period(s) apply?

On January 9, 1980, M-Electric and Construction Company (hereafter referred to as M-Electric) was awarded a contract to build an electrical distribution system for the United States Navy at Callender Field Air Station. As part of the contract M-Electric made stress cone terminations on high voltage switches. The high voltage switches were contained in boxes buried below ground. The bottom of each switch box contained 6 to 12 terminations wherein the high voltage cables were connected to the stud bushings. The terminations were made from materials contained in termination kits. Pursuant to the Navy's instructions the termination kits with the switches were purchased by M-Electric from G & W Electric Specialty Company (hereafter referred to as G & W) through Harvey Supply Co. G & W requested that it be supplied ATK5-G3 termination kits. The initial ATK5-G3 termination kits contained a varnished cambric tape.

M-Electric personnel made the initial terminations. In order to install these new switches and terminate the cable into them a power outage schedule was created by the Navy. During the outages the hot switches were terminated. The cold switches were those new switches being terminated to new cable and did not require power outages.

The first power outage was scheduled to start on January 19, 1981 and involved the termination of Switch Number One. On January 21, 1981 when Switch Number One was re-energized, it failed.

Following this failure, M-Electric questioned the qualifications of their personnel to make terminations. It thereafter hired General Electric Company (hereafter called G.E.) technicians to terminate the high voltage switches. M-Electric removed all of the terminations which its personnel had made. On January 27, 1981 M-Electric ordered additional ATK5-G3 termination kits from G & W through Harvey Supply, a division of McDermott, Inc. The ATK5-G3 kits supplied pursuant to this order contained nozone insulating tape. These kits arrived on February 7, 1981.

On January 21, 1981 G.E. began to build the terminations using the termination kits with the varnished cambric tape. Beginning on February 9, 1981 until the end of their term of work, G.E. used both types of termination kits. On February 3, 1981 the second failure occurred on a G.E. built termination in Switch Number Six. On February 13, 1981 there was a third failure in Switch Number Seven. On February 19, 1981 the Navy personnel and M-Electric personnel met and it was decided that work on the job would be halted until the oil utilized in the switches could be verified and all switches tested. The Navy also questioned the qualifications of the splicers on the job. M-Electric was also notified of this decision in writing on February 23, 1981. The Navy would allow no more outages to occur after March 10, 1981 and so advised M-Electric by letter of March 16, 1981.

By March 10, 1981 M-Electric felt that there was a problem with the tape utilized in the termination kits. It was at this time that all work on the job ceased. On April 7, 1981, the Navy advised M-Electric of another failure in the system at the new Switch Number One and of a punch list of ongoing problems with the high voltage system. Continual efforts to satisfy the Navy as to the qualifications of the G.E. technicians were unsuccessful. At this time the job was 80% complete. On July 18, 1981 the Navy required all terminations be removed and replaced. On July 27, 1981 M-Electric agreed to meet A.S.T.M. specifications on the insulating oil, open all switches, inspect contacts for proper alignment and if necessary remove, test and replace all oil in the switches.

The job resumed in May, 1982. It was completed on June 9, 1982 with the use of Hi Voltage Testing's personnel and termination kits which utilized 3 M Tape. The Navy accepted the job under the contract on January 28, 1983 although each item in the system had to be approved as it was placed into service.

On February 18, 1983, McDermott filed suit against M-Electric claiming monies due for materials supplied. (Doc. No. 25-119) On April 6, 1983, defendant, M-Electric answered the suit with a general denial and filed a third party action against G.E. for "poor workmanship" and against G & W through Harvey Supply, alleging "improperly supplied" materials and "defective" materials.

On July 19, 1983 M-Electric filed suit against McDermott, Inc. and G & W alleging "improperly supplied" materials and the supplying of "defective" materials by these defendants. It also sued G.E. for "poor workmanship". (Doc. No. 25-573). These two suits were consolidated for trial.

On February 28, 1985 McDermott and M-Electric compromised their claims against each other and dismissed their actions against each other with prejudice, while reserving their respective claims against all remaining parties. On March 18, 1985 G.E. dismissed its action against Harvey Supply, without prejudice. All the remaining parties proceeded to trial on February 25-26, 1985 and May 21-22, 1985.

On May 31, 1985 the trial court rendered judgment in favor of the defendants and against plaintiff maintaining the pleas of prescription and dismissing plaintiff's suit. Plaintiff appeals this judgment contending that the trial court erred in finding that prescription began to run from March 10, 1981 and in applying a one year, rather than a ten year, prescriptive period.

Applicable Date

The trial court found that M-Electric was fully aware of the damages to the system by March 10, 1981. The court reasoned as follows:

The Court cannot agree with plaintiff that its cause of action arose on June 17, 1982. All of the evidence introduced and all of the testimony of plaintiff's witnesses prove [cleary] and [unequovically] that all plaintiff's employees, supervisors and or superintendants were aware that serious questions of workmanship and quality material existed well before June 17, 1982.

The record is abundantly clear that both of plaintiff's witnesses, Mr. Ainsworth and Mr. Bowers who were in charge of the operation for M-Electric were aware as of March 10, 1981 that either the materials furnished by G & W and the technical work performed by G.E. splicers had caused the failure of the terminations.

Both Mr. Ainsworth and Mr. Bowers testified that G.E. splicers were called on to perform work on January 21, 1981 which was the first time that G.E. splicers were on the job and further testified that G.E. splicers continued to perform scheduled work until March 10, 1981.

By March 10, 1981 M-Electric was fully aware that either G.E. had performed in an unworkmanlike manner or the material used by G.E. and furnished by G & W was defective or inadequate to perform the work [satisfactorily].

It was at this time that the Navy informed M-Electric that all of the work on the terminations had to be removed and replaced because of the [defected] material or improper workmanship.

M-Electric's cause of action arose at the time it became aware that it had been damaged in tort by the wrongful acts or negligence of G.E. and/or the furnishing of defective material by G & W.

The court is of the opinion that prescription commences to run from the date that damages are sustained and therefore M-Electric was derelict in failing to file suit for the tortious acts at the time it became aware of the damages.

Prescription for delictual actions begins to run from the day injury or damage is sustained. C.C.Art. 3492.

In Cartwright v. Chrysler Corp., 255 La. 597, 232 So.2d 285 at 287 (1970), the Louisiana Supreme Court discussed the type of notice which would begin the running of time for purposes of prescription:

Also, it is not necessary that the party have actual knowledge of the conditions as long as there is "constructive notice." Whatever is notice enough to excite attention and put the owner on his guard and call for inquiry is tantamount to knowledge or notice of every thing to which inquiry may lead and such information or knowledge as ought to reasonably put the owner on inquiry is sufficient to start the running of prescription.

In this case the appellant argues that, until June 17, 1982, when the terminations were dissected and a report received of the laboratory findings, the cause of action had not been manifested to such a degree as to start the running of time for prescription. We disagree.

The trial court found that "By March 10, 1981 M-Electric was fully aware that either G.E. had performed in an unworkmanlike manner or the materials used by G.E. and furnished by G & W were defective or inadequate to perform the work satisfactorily." This finding by the trial court is entitled to great weight and will not be disturbed unless clearly wrong. Canter v. Koehring Co., 283 So.2d 716 (La.1973); Arceneaux v. Domingue, 365 So.2d 1330 (La.1978), writ denied, 374 So.2d 660 (La.1979).

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