R. A. Weaver and Associates, Inc. v. Haas and Haynie Corp.
| Decision Date | 04 December 1980 |
| Docket Number | 78-1283,Nos. 78-1205,s. 78-1205 |
| Citation | 663 F.2d 168,213 U.S.App.D.C. 404 |
| Parties | R. A. WEAVER AND ASSOCIATES, INC., et al. v. HAAS AND HAYNIE CORPORATION and Blake Construction Company, Inc., Appellants. R. A. WEAVER AND ASSOCIATES, INC., et al., Appellants, v. HAAS AND HAYNIE CORPORATION and Blake Construction Company, Inc., et al. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Robert F. Condon, Washington, D. C., for appellants in No. 78-1205 and cross-appellees in No. 78-1283.
Morris Rosenberg, Baltimore, Md., also entered an appearance for International Stone and Erectors, Incorporated, appellee in No. 78-1205 and cross-appellant in No. 78-1283.
Jerry S. Cohen, Washington, D. C., with whom Michael D. Hausfeld, Washington, D. C., was on the brief, for appellees in No. 78-1205 and cross-appellants in No. 78-1283.
Before WRIGHT, Chief Judge, ROBINSON, Circuit Judge, and LARSON *, United States Senior District Judge for the District of Minnesota.
Opinion PER CURIAM.
At issue are judgments in favor of two plaintiffs, R. A. Weaver & Associates, Inc. (Weaver) and International Stone & Erectors, Inc. (ISE), against two defendants, Blake Construction Company, Inc. (Blake) and Haas & Haynie Corporation, 1 for damages for breach of contract and tortious conversion of property. 2 The District Court predicated the judgments on jury verdicts which, save in one respect, the court refused to set aside. We sustain the award for the conversion found. We reverse, however, the judgments for breach of contract and remand that aspect of the litigation for further proceeding.
In 1971, the General Services Administration (GSA) invited bids for the construction of a federal office building in the District of Columbia designated as the "South Portal" site project. 3 The architectural plans for the project specified black slate from Maine or Virginia as the material to be used in paving the plaza and driveways. 4 Blake submitted a lump-sum bid incorporating the price quoted to it for a Virginia black slate meeting the specifications. 5
GSA awarded the construction contract to Blake in 1972, whereupon Blake commenced negotiations with suppliers for the purchase of the slate required for the plaza and driveways. 6 Weaver and ISE were among those interested in supplying slate for the project. Weaver quoted to ISE a price for Nor Cashire slate-a blue-black slate to be quarried in England and fabricated in the United States 7-and ISE in turn proposed its use to Blake. 8 As a result, on March 19, 1972, Blake and ISE entered into a purchase-order contract, 9 the terms of which are vital in this litigation. The contract evidenced ISE's agreement to furnish, for a stated price, Nor Cashire slate and domestic granite 10 "in full and complete accord with the Specifications and Drawings prepared by the Architect and forming a part of the Contract, for subject project, between the Contractor and the Owner." 11 More finely, the parties stipulated that "(t)his contract ... is subject to the approval by the Owner of imported but domestically fabricated 'Nor Cashire' Blue Black Slate meeting the requirements of the 'Buy America (American) Act;' " 12 still later, they reiterated that "(t)he items to be provided herein are subject to approval by the Owner." 13 The contract was silent, however, on the time within which approval was to be secured. To boot, a nearly contemporaneous letter from ISE to Blake amending the purchase order stated:
The contract is based upon the approval of Nor Cashire Slate by the Owner. (We are) to prepare the necessary documents showing how (we) propose( ) to meet the requirements of the "BUY AMERICA (American) ACT." This also (may be) subject to the Owner's approval if requested. Should we not secure approval of the above, it is understood that the contract will be void without recourse to either party. We stand ready to assist to secure approval. 14
A bit later, ISE contracted with Weaver for the purchase of Nor Cashire on terms similar to those in the Blake-ISE agreement. 15
In June, 1973, in accordance with the specifications governing construction, test data, certifications and samples of Nor Cashire slate were furnished to supervising architects for approval. On July 17, 1973, however, the architects disapproved the proposed slate for three reasons. 16 The modulus of elasticity, they stated, was substantially lower than the value required; 17 the appearance of the slate, they added, was unsatisfactory; 18 furthermore, they pointed out, the slate was a foreign rather than a domestic product. 19
Promptly, on July 20, Blake objected, and on August 19, transmitted a Weaver-prepared letter with attachments protesting the architects' decision. 20 About November 1, Blake augmented these submissions with a formal petition for approval of the slate under the Buy American Act. 21 Meanwhile, the architects modified their July 17 position. In a letter to GSA's contracting officer dated September 11, 1973, they expressed the opinion that the Nor Cashire slate "substantially meets the requirements of" the specifications; 22 "(p)rovided that the test data submitted applies to the Grade 'A' and to the Select Stock, both samples would have the physical properties required for paving stones." 23
Walter E. Huber, however, the GSA contracting officer who alone had authority to substitute Nor Cashire slate for the slate originally designated, 24 did not act immediately to approve the slate. Though perhaps prepared to authorize the change if need be, 25 he desired instead to investigate with Blake the possibility of substituting granite for slate with an equitable adjustment making the substitution economically feasible for GSA. 26 For this reason, three months went by without any decision by the contracting officer as to whether Nor Cashire slate would be accepted. On December 14, 1973, after unfruitful discussion of the matter with ISE, Blake gave formal notice that it was cancelling its contract with ISE for nonsatisfaction of the contractual requirement of GSA approval of the Nor Cashire slate. 27 Some months later, after negotiations with Blake, GSA substituted charcoal black granite for slate as the paving material for the plaza and driveways. 28
One more episode completes the factual background. Weaver had prepared a 13-page set of shop drawings showing the size and placement of slate and granite to be used in the South Portal site project. 29 Weaver had submitted these drawings to ISE, and ISE had delivered them to Blake. After cancellation of the Blake-ISE contract, Blake turned the drawings over to Cold Spring Granite Company (Cold Spring), the supplier of the granite ultimately employed in the project, a step by which Blake benefited to the tune of a $13,000 credit on Cold Spring's contract price to Blake. 30 Later, Blake offered ISE and Weaver $10,000 for the drawings, but only on condition that they execute a full release of all claims against Blake arising out of the contract cancellation. 31 Not surprisingly, ISE and Blake declined this proposition. 32
In 1975, ISE, Weaver and another 33 instituted an action in the District Court against Blake and others, 34 and the case reached trial before a jury. Claims of breach of contract and tortious conversion of the shop drawings survived a defense motion for a directed verdict, 35 the court reserving decision on the motion. 36 The jury returned verdicts favoring the plaintiffs on each of these claims, finding, in the court's words, "that plaintiffs had proved by a preponderance of the evidence that: (1) (Blake) had breached (the) contract with (ISE); (2) (Weaver) was a third-party beneficiary of the contract between (Blake) and ... ISE; and (3) (Blake) tortiously converted the shop drawings of ... ISE and Weaver." 37 For the contract breach, the jury awarded ISE $30,000 and Weaver $86,000 as compensatory damages; for conversion of the shop drawings, the award to them was $17,000 as compensatory and $100,000 as punitive damages. 38
Blake thereafter moved for judgment notwithstanding the verdict. 39 The District Court granted the motion with respect to profits assertedly lost by the claimants, thus limiting them to out-of-pocket expenses of $2,000 and $12,000, respectively, but denied the motion in all other respects. 40 These appeals followed. 41
We first consider Blake's multifaceted assault on the verdict finding a conversion of the shop drawings furnished Blake, and assessing compensatory and punitive damages therefor. Careful examination of Blake's objections in light of the trial record satisfies us that the District Court was eminently correct in its refusal to upset the jury's decision on this segment of the litigation.
Blake argues initially that the evidence did not support findings establishing the elements of a tortious conversion, as distinguished from a breach of contract. More specifically, Blake asserts that ISE and Weaver were legally entitled, not to return of the drawings, but only to be paid for them. On that promise, and since punitive damages are not ordinarily recoverable for breach of contract, 42 Blake insists that an allowance of punitive damages was in error. The fallacy in Blake's position is that it overlooks the claimants' proprietary interest in the drawings 43-an interest quite apart from their contractual right to payment, and one that they retained throughout. Fairly appraised, the evidence shows that Weaver prepared and submitted the drawings as part of the joint endeavor with ISE to sell their slate and granite products for use in the South Portal site project. We perceive nothing in the evidence that would demonstrate that ISE and Weaver ever surrendered their ownership of the drawings to Blake. Moreover, as the District Court stated,
ample evidence was adduced at trial to prove that defendants unlawfully exercised...
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