McGrath v. Electrical Const. Co.

• Decision Date: 28 March 1962
• Citation: 370 P.2d 231,230 Or. 295
• Parties: John E. McGRATH, Respondent, v. ELECTRICAL CONSTRUCTION COMPANY, Inc., a corporation, Appellant.
• Court: Oregon Supreme Court

Page 231

370 P.2d 231

230 Or. 295

John E. McGRATH, Respondent, v. ELECTRICAL CONSTRUCTION COMPANY, Inc., a corporation, Appellant.

Supreme Court of Oregon, In Banc.

March 28, 1962.

Leo Levenson, Norman B. Kobin and Paul R. Meyer, Portland, for the petition.

Deich & Deich, Portland, opposing the petition.

ROSSMAN, Justice.

A reading of the petition for a rehearing induces the belief that the plaintiff-respondent has misconstrued our previous opinion. It made no intimation that a rule prevails which renders the general contractor liable to the subcontractor for delays and time consuming efforts that may unexpectedly beset the subcontractor in the performance of his subcontract. Moreover, this is not a case in which the plaintiff, as a subcontractor, seeks to hold the prime contractor (the defendant) responsible for not having the premises ready so that the subcontractor could proceed expeditiously with the performance of his work. The plaintiff, when he was ready to perform his work, entered upon the premises at his will and without interference from anyone began the performance of his work.

In this case the subcontractor seeks to hold the prime contractor responsible for work, material and efforts which he says he expended in meeting unwarranted demands of the engineer. He claims that the supervision of the engineer and his demands upon the plaintiff went beyond the contemplation of the defendant and the plaintiff when they entered into the subcontract. To the extent that the plaintiff, as subcontractor, was required to work upon the job longer than he had anticipated, the situation was due, so he says, to (1) the dilatory methods of the engineer and (2) the fact (if such it was) that the latter demanded of the plaintiff work beyond the requirements of the plans and specifications. In other words, the delay, to such an extent as any occurred, was due to the fact that the engineer required the work to be performed in a manner that required more time and effort than the plaintiff had foreseen. We believe that our previous opinion states the foregoing as the basis for the claimed liability; but if it does not do so, this opinion--and not the former--must be accepted as the statement of the facts.

Before stating specifically the contentions of the petition for a rehearing we will mention additional facts. The petition does not criticize the part of our decision which ruled that the subcontract to which the defendant and the plaintiff were the parties subjected the latter to the jurisdiction and supervision of the engineer, Ebasco Services, Inc. The plaintiff, in support of his petition for a rehearing, argues that even though he entered into that relationship nevertheless the defendant was responsible if the engineer's directions went beyond those 'contemplated by the parties at the time the contract was entered into.' The quoted words were taken from the plaintiff's (respondent's) brief. The plaintiff's reply (the subject is not mentioned in the complaint) alleges that the plaintiff was required to perform his subcontract in a manner

'* * * more costly than reasonably would be incurred by plaintiff under customary methods and means, * * * all of which were not within the terms of plaintiff's agreement, nor contemplated between plaintiff and defendant * * *. Plaintiff protested to defendant * * * and informed defendant that the work was of a different nature, character and kind from that contemplated by the parties in its alleged contract * * *. By preventing plaintiff from prosecuting his work, pursuant to the usual and customary methods and means * * * the cost of prosecuting said work was increased considerably * * * and constituted a material modification, departure and abandonment of the alleged contract.'

The bid which the plaintiff submitted to the defendant and which the latter accepted stated:

'All of the foregoing per specifications for project, drawings G-143482 * * * and letters of Aug. 15 and Aug. 16, to Electrical Construction.'

It will be recalled from our previous opinion that the letters of August 15 and 16 (1958) directed attention to parts of the specifications that were known as the General Conditions. The letters just mentioned and the General Conditions were prepared by the engineer. Their purpose was to extend the engineer's control over all contractors and subcontractors who worked upon this project, in the event they, like the plaintiff, acquiesced in the general conditions, so that through the engineer's supervision of their efforts they would comply fully with the plans, specifications, and contract. The General Conditions were, as we said, applicable in part to all subcontractors and when their provisions were applied to the plaintiff they required him to subject himself to the supervision of the engineer. They provided 'The Owner contemplates and the Contractor hereby agrees to a thorough, minute inspection by the Owner, or by any of its agents, of all the work and material furnished under this contract.' The engineer, as our previous opinion held, was the agent of the owner. The owner, Portland General Electric Co., was engaged in the construction of a large costly dam and hydroelectric plant. The work and buildings involved in this action were a part of that project. One can readily perceive that 'thorough, minute inspection' very likely is essential in the construction of a large dam and in the building of appurtenant structures that will house electrical equipment. Ebasco Services, Inc., is an engineering concern of national status. On behalf of the Portland General Electric Co. it prepared the plans, specifications, contracts, etc. for the undertaking. As agent for the owner it also awarded the needed contracts and then supervised the work which each contractor and subcontractor performed. The record indicates that it had on the job several engineers, each skilled in a particular phase of the work that was under way, and who inspected and supervised the different types of work such as concrete work, iron work and so on. The general conditions provided that supervision by the engineer should extend over the work performed by the subcontractors 'as if they were employees of the contractor.' There can be no doubt but what the plaintiff, as a subcontractor, was subject, pursuant to his own agreement, to the supervision and direction of the engineer. It is likewise clear that the General Conditions subjected the work which the plaintiff had undertaken to perform to inspection that would be more diligent and searching that 'customary' and 'ordinary' inspection--those being the words that the plaintiff's pleading employs. The General Conditions called for 'thorough, minute inspection.'

Although all the papers pertaining to this job, including the General Conditions, were placed before the plaintiff some days before he submitted his bind, he did not read the General Conditions. Likew...