Nat Harrison Associates, Inc. v. Gulf States Utilities Co., 73-1013.

• Citation: 491 F.2d 578
• Decision Date: 01 May 1974
• Docket Number: No. 73-1013.,73-1013.
• Parties: NAT HARRISON ASSOCIATES, INC., Plaintiff-Appellee, v. GULF STATES UTILITIES COMPANY, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

491 F.2d 578 (1974)

NAT HARRISON ASSOCIATES, INC., Plaintiff-Appellee, v. GULF STATES UTILITIES COMPANY, Defendant-Appellant.

No. 73-1013.

United States Court of Appeals, Fifth Circuit.

March 25, 1974.

Rehearing and Rehearing Denied May 1, 1974.

COPYRIGHT MATERIAL OMITTED

C. W. Phillips, Baton Rouge, La., for defendant-appellant.

James E. Glass, John Robert Terry, Miami, Fla., Carlos G. Spaht, Baton Rouge, La., for plaintiff-appellee.

Before WISDOM and AINSWORTH, Circuit Judges and RUBIN, District Judge.

Rehearing and Rehearing En Banc Denied May 1, 1974.

AINSWORTH, Circuit Judge:

This appeal by Gulf States Utilities Company arises from a diversity suit by Nat Harrison Associates, Inc., against appellant, seeking damages of $1,200,000 resulting from claims for acceleration and breach of a construction contract and for retainage held under the contract.

The district court granted partial summary judgment, with respect to the retainage, which judgment has been satisfied and is not before us in this appeal. Trial before a jury on the acceleration and breach of contract claims resulted in a verdict of $225,000 for Harrison. Judgment was entered for that amount with interest at 5 per cent per annum from the date of acceptance of the contract. Attorneys' fees, stipulated by the parties at 15 per cent, were awarded on both the retainage recovered and on the jury verdict. Gulf States appeals the judgment entered on the jury verdict, the award of interest, and both awards of attorneys' fees. We affirm in part and reverse in part and remand.

The pertinent facts are these. On December 18, 1964, Harrison and Gulf States entered into a written contract under which Harrison agreed to construct approximately 158 miles of 500 KV single-circuit, three-phase transmission line in Louisiana. Under the contract and specifications, Gulf States was obligated to obtain and furnish to Harrison both a cleared right of way in several 10-mile sections and all of the basic materials necessary above the ground for the construction of the transmission line. The contract specified time sequences within which various sections of the line were to be constructed, as well as the starting points and termination points of construction. The contract allowed extensions of time for delays attributable to the "elements, war, riot, strikes and other unavoidable casualties" and for an "equitable extension of time" in the event Gulf States failed to meet the delivery schedule for materials and right of way. "No additional compensation of any nature," however, was to be paid as a result of Gulf States' delays in furnishing right of way and materials. Provision was made for liquidated damages of $500 per day for failure to finish the work by the completion date. The contract also provided that Harrison give Gulf States immediate written notice of extra costs caused by any instruction of Gulf States and that written approval of Gulf States be obtained for such cost or charge prior to incurring it. Completion of the contract was scheduled for February 15, 1967. The foundation work under the contract was subcontracted to American Piling Company, Inc., and the wirestringing operation was subcontracted to Jackson-Morgan.

In January 1966, Gulf States invited Harrison to submit a bid to construct an "underbuild" on a portion of the transmission line. This portion of the line was known as line 342. An underbuild is an additional tower arm on which, in this instance, a 138 KV line was to be strung under the 500 KV line. Harrison submitted several price proposals based on different delivery dates for materials to be furnished by Gulf States. These bids ranged from $454,140 to $567,675. After further negotiation, a new price proposal was submitted and an agreement reached. On February 28, 1966, Gulf States issued to Harrison a revision order for construction of the underbuild at a price of $383,035. Construction was to begin about March 1, 1966, and be completed by October 1, 1966.

Line 342, containing the underbuild, was completed by October 15, 1966. Construction of the entire line was completed by approximately March 15, 1967, and Gulf States accepted the work under the contract as of July 19, 1967.

On December 16, 1969, Harrison brought this action in the United States District Court for the Middle District of Louisiana. Count I of the complaint was the claim for retainage, Count II sought damages resulting from acceleration of the contract, and Count III claimed damages for breach of Gulf States' duties under the contract to furnish the right of way and materials so that Harrison could perform its work timely and in sequence. After partial summary judgment was granted on the retainage claim, Gulf States was denied summary judgment on Harrison's remaining contentions, and a trial, split on the issues of liability and damages, was held before a jury.

At the trial Harrison offered evidence to show that the alleged breach and acceleration of the contract took place largely in 1966 and pertained principally to the construction of line 342. The testimony indicated that beginning in March 1966 Harrison was unable to perform its work on schedule and in sequence due to Gulf States' failure to provide the necessary right of way and materials, and due to inclement weather, strikes, and other conditions. During 1966, Harrison, as a result of delays due to inclement weather, strikes, and other conditions, requested extensions of time totaling 46 work days. These requests were apparently ignored or refused by Gulf States. In April 1966, moreover, Gulf States, through its engineers, issued a letter setting up a schedule for completion of line 342 by October 15, 1966. The engineers indicated that the completion date was not to be changed for any reason, including time lost due to inclement weather. In addition, Harrison was directed to take immediate steps to provide additional manpower and equipment in order to maintain the October 15, 1966, completion date. Further testimony indicated that Gulf States' late deliveries of materials and failure to provide right of way on schedule persisted through the year, both in the construction of line 342 and on other portions of the transmission line.

When the case was first submitted to the jury on the liability question, a verdict was returned in favor of Harrison. The claim was then tried before the jury on the issue of damages, and the jury assessed damages against Gulf States in the amount of $225,000, for which judgment was entered.

On appeal, Gulf States raises several contentions. First, it seeks reversal of the judgment below on the ground that the provision in the contract requiring Harrison to give Gulf States immediate written notice of "extra costs" caused by any instruction of Gulf States and to first obtain written approval for such costs acts as a bar to Harrison's recovery of the costs of acceleration. Alternatively, Gulf States argues that a new trial should be granted because of the district court's failure to instruct the jury that prior notice was a prerequisite to recovery. Second, Gulf States contends that Harrison released its acceleration and breach of contract claims by executing a letter dated April 24, 1967, purporting to settle all outstanding claims for a stated cash consideration. Alternatively, Gulf States assigns error to the trial court's failure to instruct on estoppel with respect to this letter.

Gulf States' third contention is that the jury lacked a sufficient basis on which to assess damages. Again, Gulf States urges in the alternative that a new trial should be granted. Its alternative contention rests on the trial court's failure to give certain requested instructions pertaining to damages and on the court's admission in evidence of a certain exhibit relating to the damage issue. Finally, Gulf States challenges the trial court's awards of attorneys' fees on the retainage and of interest on the judgment from the date of Gulf States' acceptance of the contract.

I.

A. Notice Requirement

Gulf States' initial contention is that Harrison's suit is barred as a matter of law because of the latter's failure to comply with the notice provision of the contract. That provision provides in relevant part:

No alterations shall be made in the work, nor shall any charge be made by Contractor for extra work, without the prior written approval of such duly authorized representative of Gulf States. If Contractor claims that any instructions from the Company involve extra costs under the Contract, or will delay the completion date of the contract work, Contractor shall give Company immediate written notice of such and shall first obtain written approval by Company\'s duly authorized representative of such additional charge and new completion date prior to commencing such work.

The general rule in Louisiana favors the validity of contract provisions requiring notice for extra work:

No claims for extra work or materials shall be allowed unless made in writing * * * and that when the contract so provides, and there is no written order for such extras, no recovery can be had for them in the absence of a waiver of that stipulation. (Citations omitted.)

Welch-Eckman Const. Co. v. Vancouver Plywood Co., La.App., 3 Cir., 213 So.2d 134, 135 (1968), quoting Meaux v. Southern Constr. Corp., La.App., 3 Cir., 159 So.2d 156, 161 (1963); see French Market Homestead Ass'n v. Usner, 170 La. 783, 129 So. 202, 208 (1930). During the course of the contract, Harrison submitted more than two hundred requests for extra payments. The first notice of the amounts here in issue, however, was by letter from Harrison dated July 21, 1967, after completion of the work and after acceptance by Gulf States. The dispute at the trial centered on whether the costs allegedly incurred by Harrison were "extra costs" within the meaning of this notice provision. The jury was instructed on the assertions of both sides with respect...