Oregon State Highway Commission v. DeLong Corp.

Decision Date07 April 1972
Citation94 Adv.sh. 983,9 Or.App. 550,495 P.2d 1215
PartiesState of OREGON by and through its STATE HIGHWAY COMMISSION, Respondent and Cross-Appellant, v. DeLONG CORPORATION and Travelers Indemnity Company, Appellants and Cross-Respondents.
CourtOregon Court of Appeals
Norman E. Bayles and Bert B. Rand, Washington, D.C., argued the cause for appellant and cross-respondent DeLong Corp. With them on briefs was George W. Mead, Portland

Lamar Tooze, Portland, argued the cause for appellant and cross-respondent Travelers Indemnity Co. With him on briefs was Arden E. Shenker and Tooze, Powers, Kerr, Tooze & Peterson, Portland.

Alan H. Johansen and George A. Rhoten, Sp. Asst. Attys. Gen., Salem, argued the cause for respondent and cross-appellant. With them on brief were Lee Johnson, Atty. Gen., and Jacob B. Tanzer, Sol. Gen., Salem.

Before SCHWAB, C.J., and FOLEY and FORT, JJ.

FORT, Judge.

This declaratory judgment proceeding seeks a determination of the rights and liabilities of the parties arising out of a contract for construction of major components of the Columbia river bridge between Astoria, Oregon, and the state of Washington. The DeLong Corporation was the contractor and Travelers Indemnity Company the surety on the performance bond. The case was tried to the court without a jury. Following the conclusion of the trial, 1 the court:

(1) Found that plaintiff properly terminated DeLong's contract prior to its completion;

(2) Granted judgment against both defendants for general damages in the amount of $1,719,864.19;

(3) Granted judgment against both defendants in the amount of $952,000, representing liquidated damages accruing on and after the date the contract was canceled by plaintiff;

(4) Dismissed DeLong's counterclaim;

(5) Awarded plaintiff attorneys' fees in the amount of $250,000.

Defendants appeal and plaintiff cross-appeals, each asserting numerous errors.

SCOPE OF REVIEW

In Reif v. Botz, 241 Or. 489, 406 P.2d 907 (1965), the Supreme Court considered the scope of review on an appeal from a declaratory judgment proceeding. The court said:

'* * * This proceeding being legal in nature, the defendant was entitled to a resolution of the questions of fact as in an action at law. See specially concurring opinion on rehearing in Oregon Farm Bureau v. Thompson, 235 Or. 162, 199, 378 P.2d 563, 384 P.2d 182.

'Since the findings of a trial judge sitting as a trier of the facts in an action at law are entitled to the same finality as the verdict of a jury, his findings must be sustained if there is any evidence in the record to support them. We measure the evidence against this standard.' 241 Or. at 491, 406 P.2d at 908.

The defendants cite us to Consolidated Freightways, Inc. v. Flagg, 180 Or. 442, 176 P.2d 239, 177 P.2d 422 (1947), in support of their contention that we are at liberty in this proceeding to review the record de novo. The most recent pronouncement of our Supreme Court on the issue, decided since the briefs were filed and the argument heard here, is found in May v. Chicago Insurance Co., 93 Or.Adv.Sh. 846, 490 P.2d 150 (1971), and is as follows:

'As a preliminary matter, we consider the scope of our review. Plaintiffs contend, citing Consolidated Freightways, Inc. v. Flagg, 180 Or. 442, 176 P.2d 239, 177 P.2d 422 (1947), that on review of declaratory judgment proceedings this court is not bound by the trial court's findings of fact. Defendants respond that even though this court may not be bound by findings of fact in a declaratory judgment proceeding, it normally accords weight to the circuit court's decision.

'The parties' contentions on this question are applicable only to declaratory judgment proceedings which are basically equitable in nature. The broad language in Consolidated Freightways on which plaintiffs rely, 180 Or. at 458, 176 P.2d 239, 177 P.2d 422, is no longer controlling in all declaratory judgment proceedings. It is now clear that such proceedings will be treated as either legal or equitable, depending upon their nature. Mayer v. First National Bank of Oregon, Or., 489 P.2d 385, 392 (September 29, 1971); Oregon Farm Bureau v. Thompson, 235 Or. 162, 179, 378 P.2d 563, 384 P.2d 182 (1963). We have treated declaratory judgment proceedings to determine coverage under insurance policies as legal in nature, rather than equitable, with the consequence that the trial court's findings of fact in such cases are binding on us if supported by any substantial evidence.

Falk v. Sul America Terrestres, 255 Or. 246, 248, 465 P.2d 714 (1970); Oregon Farm Bureau v. Thompson, supra, 235 Or. at 199, 200--205, 378 P.2d 563 (concurring and dissenting opinions on rehearing, representing the views of five members of the court on this question). See, also, Reif v. Botz, 241 Or. 489, 406 P.2d 907 (1965). We cannot, therefore, accept the parties' invitation to review the evidence in this case de novo. We must accept the trial court's findings of fact if those findings have adequate support in the evidence.' 93 Or.Adv.Sh. at 851, 852, 490 P.2d at 153.

The complaint and the cross-complaint here are both in the nature of an action to recover damages for breach of contract and as such are legal in nature. Accordingly, in reviewing this case on questions of fact we do so only to determine 'if those findings have adequate support in the evidence.' See, also: Oregon Farm Bureau v. Thompson, 235 Or. 162, 176, 378 P.2d 563, 384 P.2d 182 (1963); Williams v. Stockman's Life Ins., 250 Or. 160, 441 P.2d 608 (1968); Western Bank v. Morrill, 245 Or. 47, 61--62, 420 P.2d 119 (1966).

STATEMENT OF FACTS

The facts established by the evidence and necessary to an understanding of the trial court's findings are as follows: The Astoria bridge was to be constructed across the mouth of the Columbia river by the Oregon State Highway Commission, plaintiff herein, pursuant to agreements between the states of Oregon and Washington. Plaintiff and defendant DeLong, on June 29, 1962, entered into a written contract for the construction of certain piers which were to constitute a major portion of the substructure of that bridge. This contract was preceded by years of extensive engineering and financial studies by the federal government and both states. Core borings across the proposed alignment of the bridge were made and the detailed results were reported in boring logs and laboratory reports.

On May 19, 1962, the Commission put out for bids its proposal for construction of the substructure of the Astoria bridge. It included detailed drawings, the Oregon State Highway Department's 'Standard Specifications for Highway Bridge Construction' and the 'Special Provisions for Highway Construction.' The proposal called for the construction of 27 concrete river piers and five concrete shore piers. Bids were to be submitted on June 27, 1962.

DeLong assembled a team of engineers to study the available data. They visited the site and talked with a number of special consultants familiar with the project area. Thereafter DeLong submitted its bid, and on June 29, 1962, the Commission approved the award of the contract to DeLong.

The bid proposal required the bidder receiving the award to submit a performance bond prior to the actual execution of the contract. Pursuant to this requirement, DeLong contacted defendant Travelers Indemnity Company, who, after carefully examining the plans, special provisions, bond and contract, executed and delivered to plaintiff on June 29, 1962, a performance bond to secure performance by DeLong of its contract.

The contract was executed on June 29, 1962, and was to be completed in two years. It provided for the following dates of completion:

Unit I: Piers 170 through 175 and spans over 172, 173 and 174 to be completed by October 31, 1963.

Unit II: Piers 5 through 12, 160 through 167 to be completed by November 30, 1963.

Unit III: Piers 168 and 169 to be completed by January 31, 1964.

Unit IV: Piers 13 through 20 and all other work under the contract to be completed by June 30, 1964.

Pier 169

It is Pier 169, the largest of all the piers, around which much of the factual controversy Generally, the tremie method involves extending one or more pipes to the bottom inside each cofferdam. After a pipe is cleared of water, concrete is poured into a hopper attached to the top of the pipe by a telescoping joint. The initial concrete poured down and out the open end of the tremie pipe forms a small mound on the bottom. Thereafter the lower end of the pipe is kept imbedded in the concrete. If the pour is continued at the proper rate and pressure and with proper techniques, the 'live' pile or piles of concrete continuously expand internally, ultimately filling the cofferdam to the desired elevation. The result is a solid block of concrete, the water having affected only the outside layer. This construction process was undertaken by DeLong, but, for reasons discussed below, the concrete in the seals was found to be defective in January 1964, and controversy arose between the plaintiff and DeLong as to its cause. Basically, each claimed it was the other's fault and duty to absorb the extensive removal and replacement cost.

in this case centers. This pier was designed to stand upon two seals, the east seal and the west seal. Each one was rectangular, measuring about 45 feet by 90 feet, and was to be placed at or below the river bottom level. The work first involved underwater excavation where each of the pier seals was to be placed. The next step was to drive 528 steel foundation pilings into the river bottom. They were to be equally divided between the two seals. Then came the construction of the cofferdams. These consisted of interlocking sheets of steel extending around the perimeter of each seal area, in effect making two steel boxes approximately 45 by 90 feet. Next was the pouring of the concrete within the cofferdams. This underwater pour...

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