Quin Blair Enterprises, Inc. v. Julien Const. Co., s. 5014

• Decision Date: 03 July 1979
• Docket Number: Nos. 5014,5015,s. 5014
• Citation: 597 P.2d 945
• Parties: QUIN BLAIR ENTERPRISES, INC., Appellant (Plaintiff below), v. JULIEN CONSTRUCTION COMPANY, a Wyoming Corporation, and the American Insurance Company, a New Jersey Corporation, Appellees (Defendants below). JULIEN CONSTRUCTION COMPANY, a Wyoming Corporation, and the American Insurance Company, a New Jersey Corporation, Appellants (Defendants below), v. QUIN BLAIR ENTERPRISES, INC., Appellee (Plaintiff below).
• Court: Wyoming Supreme Court

Page 945

597 P.2d 945

QUIN BLAIR ENTERPRISES, INC., Appellant (Plaintiff below), v. JULIEN CONSTRUCTION COMPANY, a Wyoming Corporation, and the American Insurance Company, a New Jersey Corporation, Appellees (Defendants below).

JULIEN CONSTRUCTION COMPANY, a Wyoming Corporation, and the American Insurance Company, a New Jersey Corporation, Appellants (Defendants below), v. QUIN BLAIR ENTERPRISES, INC., Appellee (Plaintiff below).

Nos. 5014, 5015.

Supreme Court of Wyoming.

July 3, 1979.

Tom C. Toner of Redle, Yonkee & Arney, Sheridan, signed the brief for appellant in No. 5014 and appellee in No. 5015. Mr. Toner appeared in oral argument on its behalf.

Ernest J. Goppert, Jr. of Goppert, Day & Olson, Cody, signed the brief and appeared in oral argument on behalf of appellees in No. 5014 and appellants in No. 5015.

Before RAPER, C. J., and McCLINTOCK, THOMAS, ROSE, and ROONEY, JJ.

RAPER, Chief Justice.

The principal questions raised in this appeal concern appropriate damages for delay in completing a building contract, the effect of a contractual provision requiring the contractor to request in writing an extension of time to complete the contract, the effect on other contract remedies of an escrow agreement and a "punch-list" which required the contractor to redo work that was incorrectly or defectively done, and the effect of a failure to timely serve notice of suit upon a surety-defendant whom plaintiff alleges is united in interest with the contractor-defendant.

The plaintiff is Quin Blair Enterprises, Inc. (Blair) and the defendants are Julien Construction Company (Julien) and American Insurance Company (American). ¹ The district court entered a judgment in favor of Blair in the amount of $28,514.38 and costs of $1,104.20 as damages resulting from the failure of Julien to complete on time the construction of a Holiday Inn in Cody, Wyoming owned by Blair and because Julien constructed portions of that building in a negligent and defective manner. The district court's judgment by reference incorporated findings of fact and conclusions of law announced by the trial judge in a memorandum opinion. Rule 52, W.R.C.P. ²

Blair asserts:

"1. The district court extended the time for completing the contract because the owner failed to clear the site. This ruling violates the contract which provides that a time extension could be granted for delay caused by the act or neglect of the owner only if a written claim for extension "2. Using the rental value theory adopted by the district court, the appellant was entitled to damages caused by the delay in completion in the amount of $92,240.

was made by the contractor. No written, or even oral, claim for extension was ever made.

"3. If (the Supreme Court) rejects the rental value approach used by the district court, the appellant contends that it presented evidence which allowed the court to determine loss of profits." (Bracketed material substituted.)

Julien asserts:

"1. * * * Blair's claim for damages for noncompletion within its contractual 240 day period of time should be barred by (Blair's) own actions which contributed substantially to the delay.

"2. The damages found for negligent construction had been resolved by the 'Escrow Agreement' entered into by the parties on April 6, 1973 and the activities pursuant to that agreement and for failure to give written notice of defects as required by the contract.

"3. * * * (T)he damages found by the lower court for delayed completion were excessive in that the court did not include all expenses in determining lost profits and over compensated (Blair) for net profits from the Restaurant, Bar, and Related Activities." (Bracketed material added.)

American asserts:

"1. The action brought by * * * Blair against * * * American * * * should be dismissed as not having been brought timely under the provisions of the Performance Bond."

We will affirm in part, reverse in part and remand with directions.

The factual background is for the most part not in dispute; the legal consequences of the facts are the source of differences. In the late summer of 1971, Julien submitted a bid pursuant to the invitation of Blair to construct a Holiday Inn complex in Cody for the sum of $848,732.00. This bid, along with others, was opened on September 9, 1971, and it was determined that Julien was the "low" bidder. Julien's bid represented that he "proposes to complete the project within total period of 240 calendar days, which time is to commence upon date of signing of the contract." Julien's bid was effective for thirty days to expire on October 8, 1971. After it was determined that Julien was low bidder, there were a series of oral discussions between Blair and Julien which served to inform Julien that he was the "successful" bidder and which eventually resulted in Julien's preparing a contract at the request of Blair. (American Institute of Architects (AIA) Document A101 "Standard Form of Agreement Between Owner and Contractor.") The contract, in its body, sets out that it was made on October 8, 1971, was signed by Blair on October 22, 1971, and by Julien on October 25, 1971.

Other facts will be considered in connection with our discussion of the issues raised: first, the time to complete the contract, the delay charged and damages in that connection; next, faulty construction; and finally, the performance bond.

With respect to time, Article 4 of the contract states:

"The Work to be performed under this Contract shall be commenced Immediately and completed 240 days " (emphasis indicates blanks in the contract form which were filled in by a typewriter).

The general conditions provide in part:

8.1.2 "The date of commencement of the Work is the date established in a notice to proceed. If there is no notice to proceed, it shall be the date of the Agreement or Such other date as may be established therein." (Emphasis added.)

Article 4 was followed by a parenthetical sentence: "(Here insert any special provisions for liquidated damages relating to failure to complete on time.)" No special provisions were inserted. Article 8, paragraph 8.2, made a listing of the contract documents which constituted the entire agreement between the parties. One of the documents there listed was, "Contractor's Proposal, Pages A4a-01 & A4A-02 dated There was much testimony in the record about the clearing of the site on which the Holiday Inn was to be constructed. The site was occupied by a number of small log cabins which were a part of the original "Buffalo Bill Village" complex. Blair undertook to remove these cabins so as to preserve them for reuse within the Village. Julien asserts that as a result of Blair undertaking to clear the site, he was delayed in beginning his construction work for a substantial period of time. Another contractual document, AIA Document A201 "General Conditions of the Contract for Construction," was made a part of the Contract by Article 1. Article 8 of AIA Document A201 deals with "Time." The pertinent paragraphs read:

Sept. 9, 1971 Submitted by the Julien Construction Company and signed by H. W. Julien, Pres." This document is the one referred to above as Julien's Bid which contained the language that Julien was to complete the building project within 240 days commencing Upon date of signing the contract. ³

"8.3 DELAYS AND EXTENSIONS OF TIME

"8.3.1 If the Contractor is delayed at any time in the progress of the Work by any act or neglect of the Owner or the Architect, or by any employee of either, or by any separate contractor employed by the Owner, or by changes ordered in the Work, or by labor disputes, fire, unusual delay in transportation, unavoidable casualties or any causes beyond the Contractor's control, or by delay authorized by the Owner pending arbitration, or by any cause which the Architect determines may justify the delay, then the Contract Time shall be extended by Change Order for such reasonable time as the Architect may determine.

"8.3.2 All claims for extension of time shall be made in writing to the Architect no more than twenty days after the occurrence of the delay; otherwise they shall be waived. In the case of a continuing cause of delay only one claim is necessary." (Emphasis added.)

The record is clear that no written request for extension of time was ever made. ⁴

Julien was obligated to complete the construction work within 240 days. However, there was a significant amount of finishing work that had to be done by Blair under separate contracts before the motel rooms would be ready for use. This work is described in Specification Number 20200 entitled "Holiday Inn, Cody, Wyoming," listed as one of the contract documents in the signed contract:

"WORK A. FOLLOWING ITEMS SHALL BE

NOT FURNISHED AND INSTALLED BY THE

INCL. OWNER UNDER OTHER CONTRACTS

FOLLOWING PRIME CONTRACTORS

COMPLETION OF THE PROJECT.

TWX--PBX

FURNITURE

MIRRORS (FRAMED-FURNITURE TYPE)

OFFICE FURNISHINGS AND

EQUIPMENT

TELEVISION SETS AND MOUNTING

SHOWER CURTAINS AND PINS

CARPET AND METAL CARPET

EDGING STRIPS.

DRAPERIES AND DRAPERY TRACKS.

UNIT FOR HOUSE-KEEPING RECORDS.

MIRRORS.

FILE IN REGISTRATION COUNTER

AND METAL FILE CABINETS.

FRAMES FOR PLACARDS ON BACKS

OF DOORS TO RENTAL UNITS.

RECORD PLAYER OR SOUND SOURCE

RESERVATIONS CONSOLE

CASH REGISTERS

SHOWER CURTAINS AND PINS

LANDSCAPING AND SOD WORK"

Julien testified that the first block of 18 rooms were turned over to Blair on July 17, 1972. However, these rooms were ready for rental at that point with furniture installed. The construction work by Julien was completed at least two weeks prior to that time which means that Julien had substantially completed his contract obligations with regard to those rooms on July 3, 1972. Julien also testified that all rooms were completed insofar as his obligations were concerned on August 7, 1972. The record is somewhat confusing on this matter and it is difficult to sort out exactly when the rooms were finished by...