McGuire & Hester v. City and County of San Francisco

• Decision Date: 24 September 1952
• Citation: 113 Cal.App.2d 186,247 P.2d 934
• Court: California Court of Appeals Court of Appeals
• Parties: McGUIRE & HESTER v. CITY AND COUNTY OF SAN FRANCISCO. Civ. 15141.

Page 934

247 P.2d 934

113 Cal.App.2d 186

McGUIRE & HESTER v. CITY AND COUNTY OF SAN FRANCISCO.

Civ. 15141.

District Court of Appeal, First District, Division 1, California.

Sept. 24, 1952.

Hearing Denied Nov. 20, 1952.

Dion R. Holm, City Atty., A. Dal. Thomson, Public Utilities Counsel, San Francisco, for appellant.

Gardiner Johnson, John A. Sproul, San Francisco, for respondent.

BRAY, Justice.

Defendant appeals from a judgment awarding plaintiff $35,841.24 damages for breach of contract.

Questions Presented.

1. Do the terms of the contract prohibit recovery of damages incurred by plaintiff solely due to defendant's failure to obtain rights of way as agreed?

2. Did plaintiff fail to comply with its legal duty to minimize damages?

3. Was interest on the amount of damages from date of completion of contract recoverable?

General Facts.

The case was tried upon an agreed statement of facts. Plaintiff, a general engineering contractor, entered into an agreement with defendant to construct a water supply line from Baden to Colma. The contract required plaintiff to complete the work within 150 calendar days after the first Monday subsequent to the city's notification to plaintiff to commence work. Specifications for the work were expressly made a part of the contract.

Section 70 provided: 'In addition to certain lands which are already owned by the City, the City will acquire the other necessary right of ways or easements for the required construction prior to the time the Contractor commences work in the field.' ¹ On May 13, 1948, defendant notified plaintiff to commence work on the following Monday. Plaintiff had actually commenced work prior to receiving said notice. Due to the failure of the city to procure some of the necessary rights of way until some time after the commencement of the project, thereby delaying its progress and complicating it because the work extended on through the bad weather months of 1948 and 1949, the work was not completed until 182 days after the expiration of the 150 day period. Plaintiff sued for the damage caused it by defendant's delay in procuring the rights of way and for the additional expense caused by the winter weather.

1. Terms of the Contract.

Defendant's main defense is that under the terms of the contract plaintiff's only remedy for defendant's delay in obtaining the requisite rights of way was to apply for and obtain an extension of time to complete the work. The portions of the sections of the specifications upon which it bases its contention follow.

Section 44 provided that should the completion of the work be delayed the commission might grant the contractor additional time for completion, and if the commission believed that such delay was unavoidable, an unavoidable was thereinafter defined, the commission would grant such time.

Section 45 defined unavoidable delays as including all delays beyond the control of the contractor which he could not have provided against by exercise of care, diligence, etc. Orders of the commission changing the amount of the work, the manner in which it was to be prosecuted, unforeseen delays on the part of other contractors, and delay in securing materials, equipment, etc., due to action of the War Production Board, would be considered unavoidable delays. Delays due to adverse weather conditions would not be considered unavoidable.

Avoidable delays (section 46) would include all delays which might have been avoided by the contractor exercising care, diligence, etc. Reasonable loss of time due to submitting plans to the engineer for approval, interruptions on account of reasonable interference of other contractors and other unavoidable delays which did not delay the completion of the whole work beyond the time specified, would not be considered unavoidable delays.

Section 47 provided that whenever the contractor foresaw any delay or when it occurred, he should notify the commission and the engineer so that the commission might prevent such delay or continuance, and determine whether it was avoidable or unavoidable. After completion, the engineer would assume that all delays which had not been called to the commission's attention at the time and not found unavoidable by the commission, were avoidable. The contractor agreed that he would make no claim that any delay not called to the attention of the commission and engineer at the time of its occurrence, had been unavoidable.

Section 48 provides that if the contractor requires an extension he shall file an application therefor in the form therein set forth not later than 20 days before the date of the expiration of the time fixed for the completion of the work.

Section 49 provides: 'Apart from granting the Contractor extensions of time for unavoidable delays, no payment ro allowance of any kind shall be made to the Contractor by way of compensation or damages on account of any hindrance or delay from any cause in the progress of the work or any portion thereof, whether such delay be avoidable or unavoidable.'

It will be noted that the definitions of 'unavoidable' and 'avoidable' delays in the contract refer primarily to delays by, or beyond the control of, the contractor and not of the defendant, except to orders issued by defendant's commission changing the amount of work to be done, the quality of material to be furnished or the manner in which the work is to be prosecuted, and to delays due to other contractors. Nowhere is there the slightest suggestion that defendant will be absolved from damages caused by its not keeping its agreement to secure rights of way prior to the starting of the work. To construe that language in section 49, which says, 'no payment * * * shall be made to the Contractor' for 'hindrance or delay from any cause * * * whether such delay be avoidable or unavoidable' to mean that it was thereby intended by the parties that the only remedy for the contractor, when the city broke its solemn agreement to procure rights of way in advance, was for the contractor to obtain an extension of time to do the work, would be to give the clause and the contract as a whole a strained, unreasonable and unfair interpretation. Particularly is this so, when it is remembered that the contract was drawn by defendant's attorney. Considerable portions of it are devoted to outlining what are avoidable and unavoidable delays and this type of delay is not included. Nor is there any provision for extension of time for avoidable delays. The delay here was avoidable. As said by the trial judge, Hon. Edward Molkenbuhr, in his excellent opinion: 'It cannot be said that it was within the contemplation of the parties that the City would be permitted to delay the securing of right of ways for months, thereby causing plaintiff's expensive and heavy equipment to remain idle, finally causing them to complete the job under extreme adverse weather conditions, and then relegate it to an extension of time only. If the City had such an intention then the contract should have so provided in explicit, unambiguous language. It is a fundamental rule that stipulations against liability are not favored and are to be strictly construed; * * *.'

The cases relied upon by defendant are readily distinguishable from the case at bar. In Hansen v. Covell, 218 Cal. 622, 24 P.2d 772, 89 A.L.R. 670, where the court held the exclusive remedy of the contractor for the delay caused by the acts of the owner was an extension of time in which he might complete the contract, the contract provided, 'the time during which the contractors may be delayed by the acts or neglect of the owner * * * shall be added to the time of completion.' 218 Cal. at page 627, 24 P.2d at page 774. Again in Christhilf v. Mayor and City Council, 152 Md. 204, 136 A. 527, the contract expressly provided that for any delay due to the failure or inability of the city to obtain title to the land required, the contractor 'shall be entitled to such an extension of time for the completion of the work as the engineer shall certify * * *' but 'he shall have no claim or right of action against the city for damages or loss of profit for such delay * * *.' 136 A. at page 528. Likewise, in Manerud v. City of Eugene, 62 Or. 196, 124 P. 662, the contract provided that 'The contractor shall not be entitled to damages on account of delay, but if such delay be occasioned by the city the contractor shall be entitled to an extension of time in which to complete the work * * *.' 124 P. at page 663. Rogers v. United States, 99 Ct.Cl. 393, is a case similar to the Manerud case. The specifications specifically provided that the government would not be responsible for any delay in furnishing rights of way, that where there was a possibility of delay the remedy was an extension of time.

Defendant relies greatly upon the fact that section 49 provides that no payment shall be made 'by way of compensation or damages on account of any hindrance or delay from any cause * * *.' In Hill v. City of Duluth, 57 Minn. 231, 58 N.W. 992, the contract had a provision which required the contractor, if he desired an extension of time, by reason of 'any hindrance or delay from any cause whatever' to follow a certain procedure. In construing that language the court held that 'The phrase 'from any cause whatever' must be held to refer to any other cause than the act of the city.' In Milovich v. City of Los Angeles, 42 Cal.App.2d 364, 108 P.2d 960, the time of completion of the contract was delayed by defendant's failure to furnish certain materials as agreed. In an action by plaint...