Schiavone Const. Co., Inc. v. Nassau County

• Citation: 717 F.2d 747
• Decision Date: 20 September 1983
• Docket Number: 1449 and 1451,Nos. 1448,D,s. 1448
• Parties: 14 Fed. R. Evid. Serv. 254 SCHIAVONE CONSTRUCTION COMPANY, INC., and Edward B. Fitzpatrick, Jr., Associates, Inc., A Joint Venture, Plaintiffs-Appellees, Cross-Appellants, v. COUNTY OF NASSAU and Gibson & Cushman Dredging Corp., Defendants-Appellees, County of Nassau, Defendant-Appellant, Cross-Appellee, Gibson & Cushman Dredging Corp., Defendant-Appellee. COUNTY OF NASSAU, Defendant and Third-Party Plaintiff-Appellant, Cross-Appellee, v. CONSOER, TOWNSEND & ASSOCIATES, Third-Party Defendant and Defendant-Appellant, Cross-Appellee. ockets 83-7024, 83-7110 and 83-7112.
• Court: U.S. Court of Appeals — Second Circuit

Page 747

717 F.2d 747

14 Fed. R. Evid. Serv. 254

SCHIAVONE CONSTRUCTION COMPANY, INC., and Edward B.

Fitzpatrick, Jr., Associates, Inc., A Joint

Venture, Plaintiffs-Appellees, Cross-Appellants, v. COUNTY OF NASSAU and Gibson & Cushman Dredging Corp.,

Defendants-Appellees,

County of Nassau, Defendant-Appellant, Cross-Appellee,

Gibson & Cushman Dredging Corp., Defendant-Appellee.

COUNTY OF NASSAU, Defendant and Third-Party Plaintiff-Appellant, Cross-Appellee, v. CONSOER, TOWNSEND & ASSOCIATES, Third-Party Defendant and

Defendant-Appellant, Cross-Appellee.

Nos. 1448, 1449 and 1451, Dockets 83-7024, 83-7110 and 83-7112.

United States Court of Appeals Second Circuit.

Argued June 16, 1983.

Decided Sept. 20, 1983.

Robert O. Boyhan, Deputy County Atty., Mineola, N.Y. (Edward G. McCabe, County Atty., Mineola, N.Y., on the brief), for defendant-appellant, cross-appellee and defendant third-party plaintiff-appellant cross-appellee county of Nassau.

Leslie F. Ruff, New York City (Hart & Hume and Maryellen Chomsky, New York City, of counsel), for third-party defendant and defendant-appellant, cross-appellee Consoer, Townsend & Associates.

Robert A. Kennedy, Garden City, N.Y. (Colleran, O'Hara, Kennedy & Mills, P.C., and David Westermann, Jr., Garden City, N.Y., of counsel), for plaintiffs-appellees and cross-appellants Schiavone Const. Co., Inc. and Edward B. Fitzpatrick, Jr., Associates, Inc.

Stanley J. Norton, Goshen, N.Y. (Norton & Christensen and Harold J. Gabriel, Goshen, N.Y., of counsel), for defendant-appellee Gibson & Cushman Dredging Corp.

Before VAN GRAAFEILAND, PIERCE and WISDOM, ^* Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

This litigation arises out of the failure of a sewerage pipeline constructed by a joint venture, Schiavone Construction Co. and its wholly owned subsidiary Edward B. Fitzpatrick, Jr. Associates, Inc. (Schiavone) under a contract awarded in 1971 by the County of Nassau. The pipeline ran from a waste treatment plant in Wantagh, Long Island to a point in the Atlantic Ocean four miles offshore. It was designed for the County by Consoer, Townsend & Associates, Inc. (Consoer), a Chicago engineering firm. Gibson & Cushman Dredging Corp. (Gibson), a subcontractor, did the dredging for the installation.

The County began to use the pipeline in January, 1974, although there had not been a formal and final acceptance of the project. Shortly thereafter, a break occurred in the line, requiring extensive repair work which was performed under protest by Schiavone. When the County refused to pay Schiavone contract retainage which the County had withheld, or to reimburse Schiavone for the cost of the repair work, litigation was commenced in the United States District Court for the Eastern District of New York. Schiavone sued the County and Gibson. The County counterclaimed for liquidated damages based on delay. Gibson counterclaimed for withheld retainage and for dredging necessitated by the repair work. The County impleaded, and also brought an independent, but subsequently consolidated, action against, Consoer, which, in turn, counterclaimed for indemnification or contribution. Both Consoer and the County cross-claimed against Gibson.

The trial was bifurcated, and the issues of liability were tried before Judge Pratt and a jury. Consoer's and the County's cross-claims against Gibson were dismissed on motion before trial. The jury's verdict, which was elicited by Special Interrogatories, was that the pipe broke because of inadequate design, plans, or specifications and not because of improper means or method of construction, but that Consoer was not negligent in preparing the inadequate design, plans, or specifications.

The damage issues then were disposed of by either summary judgment or a trial before a magistrate, and judgment was entered on January 13, 1983, which:

1. Dismissed all claims against Gibson and awarded Gibson $1,000,386.67, plus interest, on its counterclaim against Schiavone.

2. Awarded Schiavone $1,382,620.35, plus interest, on its claims against the County, dismissed all other claims against the County, and dismissed the County's claims against Schiavone.

3. Awarded the County $1,755,236.70, plus interest and litigation costs, against Consoer.

Schiavone, Consoer and the County have appealed. We affirm the judgment in all respects, except as to the award in favor of the County and against Consoer, which we vacate, remanding the County's claim for further proceedings.

Except as addressed to the award which we vacate, appellants' arguments require only brief discussion. Although there was serious disagreement as to why the pipeline broke, Schiavone contended that the break was caused by the use of improper backfill material. When the pipeline contract first was put out for bids, the specifications provided that materials excavated or dredged in navigable channels should be deposited in a "Spoil" area and replaced with suitable materials which did not contain organic materials or silts. The only bid received on the original offering was rejected as too high. The County then revised certain of the specifications in an apparent effort to reduce costs. The revised specifications provided, among other things, that material excavated for the sewer line might be used as backfill. Schiavone argued that this material should not have been used because it was not suitable for the purpose, and introduced testimony in support of its claim. The County disputed Schiavone's theory as to the cause of the break with expert testimony of its own. It was for the jury to determine whose testimony was more believable, and we are not prepared to say that the jury reached a seriously erroneous result. See Bevevino v. Saydjari, 574 F.2d 676, 683-87 (2d Cir.1978).

The district court did not abuse its broad discretion in admitting evidence concerning the superseded specifications, because the evidence was relevant to the litigated issues and its probative value was not outweighed by the danger that it would be unfairly prejudicial. See United States v. Birney, 686 F.2d 102, 106-08 (2d Cir.1982). Likewise, in view of the testimony of defense experts concerning the use of excavated material as backfill, the district court did not err in admitting evidence in this contract action that the County directed the use of other "select" materials in connection with the pipeline repairs, this being evidence in the nature of impeachment. See Patrick v. South Cent. Bell Tel. Co., 641 F.2d 1192, 1196-97 (6th Cir. 1980).

We find no merit in the contentions of Consoer and the County that they were harmed prejudicially by the language of the district court's first interrogatory to the jury, which was, "Did the pipe break because of inadequate design, plans, or specifications?" They assert that the court erred in refusing the request of Consoer's counsel that the court ask whether the break occurred "only because of inadequate plans, specifications, or design and for no other reason." In response to counsels' expressions of concern, the district court instructed the jurors that, if they were "unable to determine that the break was caused by any of the factors listed in the questions," the cost of the repairs would fall on Schiavone. Because the matter was covered adequately in the district court's instructions, the court did not err in refusing to elaborate thereon in its interrogatories. See Perzinski v. Chevron Chem. Co., 503 F.2d 654, 659-60 (7th Cir.1974).

For the reasons set forth in Judge Pratt's Memorandum and Order of June 3, 1982, we agree that the repair work performed by Schiavone constituted "extra work" within the meaning of the contract and that, therefore, Schiavone should be reimbursed in accordance with the terms of the contract rather than on a theory of quantum meruit.

This brings us to the County's award against Consoer, which required the interpretation of an indemnity clause in the engineering contract. Because of inherent ambiguity in this clause, we believe that the district court erred in holding as a matter of law that it imposed absolute liability upon Consoer for all expenses incurred as a result of the broken pipeline.

The Indemnity Clause

Paragraph 4 of the "General Provisions" of the engineering contract provides:

The Engineers agree that in the performance of its services hereunder, they will comply with any and all...