Seattle Western Industries, Inc. v. David A. Mowat Co.
| Decision Date | 11 February 1988 |
| Docket Number | TIPPETTS-ABBETT-M,No. 52560-9,CARTHY-STRATTON,52560-9 |
| Court | Washington Supreme Court |
| Parties | SEATTLE WESTERN INDUSTRIES, INC., a Washington Corporation, Respondent, v. The DAVID A. MOWAT COMPANY, et al, Defendants, Tippetts-Abbett-McCarthy-Stratton, a partnership and the individual partners John Low III and Jane Doe Low, husband and wife and the marital community composed thereof, Winston V. Binger and Jane Doe Binger, husband and wife, and the marital community composed thereof, Raymond J. Hodge and Jane Doe Hodge, husband and wife, and the marital community composed thereof, Austin E. Bryant, Jr., and Jane Doe Bryant, husband and wife, and the marital community composed thereof, John E. Bardes and Jane Doe Bardes, husband and wife, and the marital community composed thereof, Robert F. Heins and Jane Doe Heins, husband and wife, and the marital community composed thereof, Dana E. Low and Jane Doe Low, husband and wife, and the marital community composed thereof, Eugene O'Brien and Jane Doe O'Brien, husband and wife, and the marital community composed thereof, Donald Pierce and Jane Doe Pierce, husband and wife, and the marital community composed thereof, Patrick J. McAward and Jane Doe McAward, husband and wife, and the marital community composed thereof, Philip Perdichizzi and Jane Doe Perdichizzi, husband and wife, and the marital community composed thereof, Appellants. Don L. COONEY and Walter D. McHugh, d/b/a Don L. Cooney Company, a partnership, Respondents, v.c, a partnership, and the individual partners John Low III and Jane Doe Low, husband and wife, and the marital community composed thereof, Winston V. Binger and Jane Doe Binger, husband and wife, and the marital community composed thereof, Raymond J. Hodge and Jane Doe Hodge, husband and wife, and the marital community composed thereof, Austin E. Bryant, Jr. and Jane Doe Bryant, husband and wife, and the marital community composed thereof, John E. Bardes and Jane Doe Bardes, husband and wife, and the marital community composed thereof, Robert F. Heins and Jane Doe Heins, husband and wife, and th |
Diamond & Sylvester, Albert O. Prince, David A. Peters, Terrence I. Danysh, Seattle, for appellants.
Taylor, Bryan & Hintze, Carroll L. Bryan, III, Mary E. O'Brien, Seattle, for respondents.
Following a jury trial, Seattle-Western Industries, Inc. (SWI) obtained a judgment against Tippetts-Abbett-McCarthy-Stratton (TAMS) in the amount of $441,175. We affirm in part and reverse in part.
The dispute between SWI and TAMS grew out of the Merrill-Ring Bridge Reconstruction Project in Everett, Washington. The City of Everett contracted with TAMS to analyze the proposed renovation of the bridge, to develop design alternatives and to complete a final design for the project following the City's selection from the alternatives presented. TAMS subcontracted with the firm of Bush, Roed and Hitchings (BRH) for field surveys of the bridge in connection with TAMS's analysis and design.
Following the selection of a design, the City engaged the David A. Mowat Company (Mowat) as general contractor on the project. The contract between Mowat and the City stipulated that the dimensions stated in the design were not guaranteed and that Mowat was to be responsible for verifying dimensions. Mowat subcontracted the steel fabrication and erection portion of the project to SWI and SWI subcontracted the job of steel erection to the Don L. Cooney Company (Cooney). Both the SWI and Cooney subcontracts provided that the subcontractor was to make field measurements.
TAMS's design called for the fabrication of new trusses, which would support an expanded roadway, to be attached to the existing trusses. In designing the project, TAMS assumed that the vertical members of the existing trusses of the bridge were oriented plumb. Mowat began work in the spring of 1980 and by June had discovered that the existing trusses were not oriented plumb. It did not communicate this to TAMS or SWI. In August, Mowat discovered that the existing trusses were in fact oriented perpendicular to the bridge roadway. This discrepancy resulted in a 41/2 inch variance at the bridge piers.
Meanwhile, SWI had begun to cut and assemble the new trusses. SWI was ordered to halt fabrication when the discrepancy in the design was discovered, and in September 1980 was ordered by the City to change the orientation of the vertical portion of the trusses from plumb to perpendicular. SWI was able to resume fabrication in October 1980. Based on a recommendation by TAMS, the City refused to issue SWI a change order (which would have entitled SWI to extra compensation) for the change in orientation. SWI finished fabrication work on the Merrill-Ring Project early in 1981.
SWI had been scheduled to begin work in September 1980, on another job known as the Swamp Creek Project, Phase I. Mowat was the general contractor on this project, and had implicitly approved SWI's plan to complete work on the Merrill-Ring job in time to begin work on fabrication for Swamp Creek. The delay in the Merrill-Ring fabrication led to delays and added expenses in SWI's Swamp Creek work, because SWI was not equipped or staffed to conduct two such projects simultaneously.
SWI sued the City, BRH, TAMS and Mowat and its surety, alleging breach of contract, negligence and misrepresentation. Cooney sued the City, SWI and Mowat and its surety. SWI filed a third party claim against TAMS in the Cooney action. The two lawsuits were consolidated for trial.
Cooney eventually settled with all defendants in its action. SWI settled with all defendants in its action with the exception of TAMS. SWI and TAMS failed to settle the third party claim SWI had asserted in the Cooney lawsuit.
As part of the settlement agreements, SWI received assignments of the other parties' claims against TAMS. The trial court permitted SWI to amend to add only the Cooney claim.
At trial, the jury found TAMS negligent and awarded SWI $596,175. The trial court subtracted the amount SWI had received in settlement and entered judgment for $441,175.
TAMS's first contention is that SWI's settlement with the other defendants has the effect of releasing TAMS. We do not agree. TAMS relies on Glover v. Tacoma Gen. Hosp., 98 Wash.2d 708, 658 P.2d 1230 (1983), in which we held that the last sentence of RCW 4.22.040(1) permits a trial judge to discharge a principal from liability when the victim and the tortfeasor-agent have entered into a settlement. RCW 4.22.040(1) provides in part:
However, the court may determine that two or more persons are to be treated as a single person for purposes of contribution.
The holding of Glover must be read in light of RCW 4.22.060(2) which applies directly to the effect of settlements on nonsettling defendants. That subsection provides:
A release, covenant not to sue, covenant not to enforce judgment, or similar agreement entered into by a claimant and a person liable discharges that person from all liability for contribution, but it does not discharge any other persons liable upon the same claim unless it so provides.
Thus the presumption is that TAMS was not released by SWI's agreements with the other defendants unless this case falls within the narrow limits of Glover. It does not. Glover was a case of respondeat superior. SWI's claims against the City and BRH are distinct and separate from its claims against TAMS. SWI sued the City for negligence in administering the construction contract. It sued BRH for negligence in performing field surveys of the bridge. SWI's claim against TAMS, however, was for negligence in designing the bridge addition. See Annot., Tort Liability of Project Architect for Economic Damages Suffered by Contractor, 56 A.L.R.3d 249 (1975). Since Glover is inapplicable to this case, permitting SWI's settlement agreements to extinguish TAMS's liability would defeat the legislative goal of the tort reform act, RCW 4.22, which is to encourage settlement while ensuring full compensation to tort victims.
TAMS next contends that the trial court erred in sending the case to the jury because SWI's proof of damages from the Merrill-Ring and Swamp Creek projects was based on an impermissible total cost method of calculation. We disagree.
The total cost method of proving damages consists of subtracting the bid on the project or the estimated cost of completion from the actual total cost. This approach has been termed a "last resort" method of determining damages, and is sometimes permitted only where no better method of proof of damages is available. See New Pueblo Constructors, Inc. v. State, 144 Ariz. 95, 696 P.2d 185 (1985); John F. Harkins Co. v. School Dist., 313 Pa.Super. 425, 460 A.2d 260 (1983). The usual objections to the method are that it assumes the initial bid was reasonable and fails to take into account causes of cost overruns other than the defendant's acts. SWI points out that it used a "modified" total cost approach in that it deducted from the total cost minuend whatever additional costs it or its subcontractors caused. See Nebraska Pub. Power Dist. v. Austin Power, Inc., 773 F.2d 960, 966 (8th Cir.1985). We find nothing objectionable in the proof of damages in this case.
The difficulty of calculating damages should not be confused with proof of damage as a necessary element of the plaintiff's case. Once...
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