S. Leo Harmonay, Inc. v. Binks Mfg. Co.

• Decision Date: 26 October 1984
• Docket Number: No. 82 Civ. 6868 (IBC).,82 Civ. 6868 (IBC).
• Citation: 597 F. Supp. 1014
• Parties: S. LEO HARMONAY, INC. d/b/a Harmonay Company, Plaintiff, v. BINKS MANUFACTURING COMPANY, Defendant.
• Court: U.S. District Court — Southern District of New York

597 F. Supp. 1014

S. LEO HARMONAY, INC. d/b/a Harmonay Company, Plaintiff, v. BINKS MANUFACTURING COMPANY, Defendant.

No. 82 Civ. 6868 (IBC).

United States District Court, S.D. New York.

October 26, 1984.

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Ross & Cohen, New York City, for plaintiff; Allen Ross, James F. Oliviero, Brenda Gilmer, New York City, of counsel.

Bleakley Schmidt, P.C., White Plains, N.Y., Kasimer & Ittig, Washington, D.C., for defendant; Gerard W. Ittig, Washington, D.C., and Frederick Martin, White Plains, N.Y., of counsel.

OPINION

IRVING BEN COOPER, District Judge.

This is an action by S. Leo Harmonay, d/b/a Harmonay Company (Harmonay), a New York corporation, against Binks Manufacturing Company (Binks), a Delaware corporation with its principal place of business in Illinois, for breach of a construction contract.^*,¹ Plaintiff was the mechanical piping subcontractor to defendant, one of a number of general contractors on the expansion of a General Motors (GM) automobile assembly plant in Tarrytown, New York. Defendant's project involved the construction of two additions to the plant, known as the Body Phosphate Facility and the Body Elpo Dip System; it subcontracted out the mechanical piping work to plaintiff at a cost of approximately two million dollars.

Plaintiff claims that defendant breached the contract by causing certain project delays which resulted in an increased cost of materials, labor inefficiencies and excess supervision during an acceleration period; that it is entitled to a markup for overhead and profit for overtime work performed; and that it should be compensated for its field office costs incurred after the original job completion date.

Jurisdiction is vested in this court under 28 U.S.C. § 1332. The amount in controversy exceeds $10,000 exclusive of interest and costs.

Facts

In late 1980, defendant contracted with GM to construct the Body Elpo Dip System and Body Phosphate Facility, a new painting system for the GM automobile plant. The GM project site on which the construction was to occur consisted of two buildings, body and chassis plants, parallel to each other. The extension of the south end of the body plant in order to construct the new facilities was referred to as the "Elpo Building addition." (Tr. 8)²

At trial, Edward Klapp, the vice-president of Harmonay, first described the workings of a phosphate machine as follows: "The new partially assembled car comes on an overhead conveyor, and goes through eight stages of washing and cleaning ... inside of a totally enclosed housing where there are spray headers and drain pans to keep the water circulating over the automobile body." (Tr. 15) After the car proceeds through the phosphate system, it is a "nice shiny piece of metal ... and clean."

The Body Elpo Dip System then paints the cleaned automobile body. As explained by Klapp: "After the car drip dries on the third floor it is ... returned by means of conveyor back down to the second floor, at which point it is put through the Elpo system. It starts by having the body totally immersed into paint substance which is basically a primer ... it's an electroly sic charged painting system." (Tr. 15) Following the phosphate and Body Elpo treatments, the auto is conveyed back to the third floor of the body plant where it moves through a series of drying ovens prior to the application of other accessories onto the automobile.

The scope of defendant's work on this project was set forth in the GM "Specifications for Body Phosphating Facilities — GMAD Elpo Building — S-358 and S-359". (Ex. 10) Specification S-358 covered the phosphate facilities and S-359 encompassed the Body Elpo facilities. The GM specifications included instructions to bidders, proposal forms, a time schedule, a scope of work section, technical specifications, and "GM Contract General Conditions". The general conditions set forth, inter alia, basic provisions concerning time extensions, extra work, change orders, and overtime work.³

Harmonay's first contact with Binks was a phone call in October, 1980, from Fred Steinhebel, a representative of Binks, who told Klapp that Binks was bidding on a painting system for new cars and requested a bid from Harmonay on the mechanical piping work. (Tr. 13) As was customary bidding procedure among contractors, plaintiff used the GM technical specifications, including bid drawings or schemactics, in order to prepare its bid for defendant. Klapp, whose duties were to oversee the daily office and field operations, testified that this bid was compiled by pricing materials required by types and sizes, adding labor values based on plaintiff's "experience over the years working at General Motors" and finally adding overhead and profit to arrive at the bid price package. (Tr. 17)

Plaintiff was awarded the contract, and by signed purchase order dated December 9, 1980⁴ agreed to perform the general mechanical piping work for a total compensation of approximately two million dollars. (Tr. 8) The October 31, 1980 quotation confirmed plaintiff's verbal quotation to defendant to perform work "in accordance with specifications titled `Specifications for Body Phosphating Facilities' and `Body Elpo Dip System'" (i.e., "GM Specifications") and certain enumerated drawings. A second written purchase order, dated January 7, 1981 (Ex. 9) modified the original subcontract only to the extent of eliminating and adding various items of work for the prices therein enumerated.

It is well known in the construction business that the schemactics set forth in the owner's specifications are approximations used to enable potential subcontractors to make bids; that they often lack, for instance, exact distances. (Tr. 18-23) Accordingly, a subcontractor who is awarded a contract receives from the contractor precise drawings (contract layout drawings) before the construction work begins so that he may order the proper types and amounts of materials. (Tr. 31) To that end, Klapp, prior to bidding, discussed with Steinhebel the defendant's responsibility to provide contract layout drawings so that Harmonay could "make take-offs and order materials that would be needed to start the installation of the project." The drawings were to be prepared by another Binks subcontractor, Industrial Finish Engineering, Inc. (IFE), whose principal was Edwin Schacterle, and were to include, inter alia, plan views, elevations, equipment locations, tie-ins between the equipment and piping, and all pipe sizes. In addition, defendant retained IFE and Schacterle to render engineering services for the project as set forth by a purchase order dated December 9, 1980.

Pursuant to the GM Specification "Time Schedule," bids were due on October 27, 1980; the bid award target date was November 3, 1980; and "Major Drawings Submittal (Layouts, Sections, Schemactics and Equipment Data) Complete" were to be submitted from "12/15/80 to 1/15/81." Klapp testified that Steinhebel referred to the "importance of having the drawings as quickly as possible, hopefully by the first of January, so that Harmonay could make our take-offs drawings and order the material that would be needed to start the installation of this project." (Tr. 30-31) The GM Specifications further provided that the project site was to be available to defendant and its subcontractors to begin their work by February 1, 1981. The original date for substantial completion of the project was between August 15 and September 20, 1981. Two "Binks Bar Charts" (Exs. 80 and 80A) mounted over the desk of Mr. Norm Smith, Binks' superintendent, were allegedly used to plan the sequencing of the project work. (Tr. 314-16) A "bar chart" as explained by Klapp, "is a descriptive means of tying in a piece of work that has to be performed. It will tie it into dates on a calendar, either weekly or monthly and show when that area of work will start and be completed ... That will be tied in to dates ... to tell the contractors involved in the project the amount of time that they have within which they must start the project and complete the project ... or various phases of it." (Tr. 86) At trial, defendant objected to plaintiff's introduction of the Bar Charts, and their use in preparing Exhibits 103, 104 and 105; we reserved decision and address this motion below.

Pre-Acceleration Period

Prior to the "Binks job," plaintiff installed mechanical piping on a different portion of the Elpo Building addition as subcontractor to the Polera Building Corporation (Polera). Klapp testified that in January, 1981, the Elpo building was substantially completed. The Binks project was located on the second floor where "¾ of the floor was ready and prepared." (Tr. 11) Steinhebel and Schacterle promised the delivery of the layout drawings to plaintiff "shortly."

In February, 1981, the month in which the project site was supposed to be available for construction to begin, Klapp again requested the layout drawings from Steinhebel and told him that plaintiff was hiring a draftsman, Robert Fisher, to develop some fabrication drawings which would allow plaintiff to start ordering material and to fabricate piping. Steinhebel allegedly agreed that this was a good idea. (Tr. 49-50)

By letter dated March 6, 1981 (Ex. 15), plaintiff requested specific information and drawings from defendant. In pertinent part, the letter reads: "Confirming our phone conversation of this date, it is imperative that we be given sufficient information now to allow us to purchase out the material required for the subject project. To date, we have approximately ten percent (10%) of the total information we need to allow us to purchase pipe, fittings, and valves. We have already been hit with a 12% material escalation in price ..." Plaintiff's job superintendent, Ray Camardella, testified that despite repeated requests to Steinhebel, drawings, piping layout information and dimensions were ...