Pacific Northwest Bell Telephone v. DeLong Corp.

• Decision Date: 22 March 1967
• Citation: 425 P.2d 498,246 Or. 369
• Parties: PACIFIC NORTHWEST BELL TELEPHONE COMPANY, a corporation, Respondent, v. DeLONG CORPORATION, a corporation, Appellant.
• Court: Oregon Supreme Court

Page 498

425 P.2d 498

246 Or. 369

PACIFIC NORTHWEST BELL TELEPHONE COMPANY, a corporation, Respondent, v. DeLONG CORPORATION, a corporation, Appellant.

Supreme Court of Oregon, In Banc.

Argued and Submitted Feb. 2, 1967.

Decided March 22, 1967.

Edwin J. Peterson, Portland, argued the cause for appellant. With him on the briefs were Tooze, Powers, Kerr, Tooze & Peterson, Portland.

Howard M. Feuerstein, Portland, argued the cause for respondent. With him on the brief were Davies, Biggs, Strayer, Stoel & Boley, and Cleveland C. Cory and Robert L. Ridgley, Portland.

Before PERRY, C.J., and SLOAN, O'CONNELL, GOODWIN, DENECKE, LUSK and FORT, JJ.

SLOAN, Justice.

While defendant DeLong was building the bridge across the Columbia river at Astoria its employees cut plaintiff's telephone cable that ran under the Columbia from Point Ellice, in Washington, to Astoria. In this action for the resulting damage, the jury returned a verdict for defendant. Later, the court entered a judgment n.o.v. for plaintiff. Defendant appeals.

In its complaint plaintiff had alleged, in separate counts, a claim that DeLong had regligently damaged its cable and a second claim that the contract between DeLong and the highway commission made DeLong contractually liable for the damage to the telephone cable and that the contract authorized plaintiff to bring this action. DeLong countered that any negligence on its part was excused by contributory negligence of plaintiff in having its cable too close to the construction area. DeLong denied that it was bound contractually for any damage to plaintiff or that plaintiff could sue as a third party beneficiary of the contract.

The negligence argument is renewed here. However, the real issue presented, and the one which we decide, is the claim of the telephone company that certain provisions of the contract between DeLong and the state highway commission imposed a contractual liability upon DeLong to pay for the damage to the cable. If plaintiff's contention is wrong, the jury verdict must be reinstated.

The following are the pertinent paragraphs of the contract:

'1.7.8--Protection of Property and Persons

'In the performance of the work to be done under the contract, the contractor shall use every reasonable and practicable means to avoid damage to property, injury to persons and loss, expense, inconvenience and delay to property owners, users of the highway and others.

'At points where the contractor's operations are adjacent to properties of railway, telegraph, telephone, and power companies, or are adjacent to other property, damage to which might result in material expense, loss, or inconvenience, work shall not be commenced until all arrangements necessary for the protection of the interests of the State, as well as any interest that a third party may have herein, have been made.

'1.7.10--Responsibility for Damages

'The contractor shall be responsible for all damages to property, injury to persons, and loss, expense, inconvenience, and delay that may be caused by or that may result from any act, omission, or neglect of the contractor, his subcontractors, or his employees in the performance of the work to be done under the contract.

'1.7.11--Damage to Telephone, Telegraph, and Power Lines

'The provisions given elsewhere herein, which require the contractor to protect property against damage, and which place upon the contractor all responsibility for damage to property, injury to persons, and loss, expense, inconvenience, and delay to owners of property and others shall be understood to apply in connection with telephone, telegraph, and power lines the same as in connection with other kinds of property; provided, however, that in the cases of telephone, telegraph, and power lines which are within publicly-owned highway right of way, and not within right of way owned, or, in some manner, controlled by the owners of the lines, and the terms of the franchise or permit under which these facilities are allowed on such right of way do not make the state, county, city, or other public body responsible for such damage, the contractor will not be responsible for damage to the lines, if, before beginning work which has damaged the lines, the contractor has given proper notification thereof to the owners of said lines, and if the damage has not been willful or the result of a failure on the part of the contractor to exercise reasonable care in the performance of his work to avoid such damage.'

It is plaintiff's theory that these requirements of the contract subjected Delong to a contractual liability for the damage to the cable, that DeLong breached the contract and that the contract entitled plaintiff to bring this action for the breach. We agree.

The evident purpose of the conditions in the contract is to make the contractor directly responsible for damage to property, in this instance, which results from highway construction. It does not appear that these provisions were intended to indemnify the highway commission nor to limit the liability to negligent conduct. The highway commission is justified, for obvious reasons, in relieving a property owner, whose property is damaged by highway construction, of the burden of finding a negligent actor who caused the damage. It is also evident that the contract was intended to make the contractor directly liable to a damaged third person.

The authorities sustain our decision. Restatement, Contracts, § 145; 4 Corbin, Contracts, 1951, § 805,...