Seger v. United States

• Decision Date: 10 November 1972
• Docket Number: No. 359-64.,359-64.
• Parties: James F. SEGER et al. v. The UNITED STATES.
• Court: U.S. Claims Court

199 Ct. Cl. 766, 469 F.2d 292 (1972)

James F. SEGER et al. v. The UNITED STATES.

No. 359-64.

United States Court of Claims.

November 10, 1972.

Jordan N. Peckham, Chico, Cal., atty. of record, for plaintiffs.

Edward J. Friedlander, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant.

Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.

ON PLAINTIFFS' MOTION AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT

PER CURIAM:

This case was referred to Trial Commissioner Kenneth R. Harkins with directions to file his opinion on the issues of plaintiffs' motion and defendant's cross-motion for summary judgment under the order of reference and Rule 166(c). The commissioner has done so in an opinion and report filed on May 4, 1972, wherein such facts as are necessary to the opinion are set forth. Plaintiffs filed a request for review of the report and opinion by the court, defendant urged its adoption and the case has been submitted to the court on oral argument of counsel and the briefs of the parties. Since the court agrees with the opinion and recommended conclusion of the trial commissioner it hereby adopts the same, as hereinafter set forth, as the basis for its judgment in this case. Therefore, plaintiffs' motion for summary judgment is denied, defendant's cross-motion for summary judgment is granted as to plaintiffs' first and third causes of action, defendant's motion to dismiss is granted as to plaintiffs' second cause of action and plaintiffs' petition is dismissed.

OPINION OF COMMISSIONER

HARKINS, Commissioner:

This contract case is before the court on cross-motions for summary judgment under Rule 163(b). Plaintiffs seek review pursuant to the standards of Section 1 of the Wunderlich Act,¹ of decisions by the Corps of Engineers Board of Contract Appeals,² which denied claims on behalf of a principal subcontractor for additional compensation for extra work on changes and for 51 days' standby and delay costs.

The prime contract, awarded May 8, 1958, No. DA-04-167-CIVENG-58-65, was for channel improvements and levee construction on Little Chico and Butte Creeks in Butte County, California. Plaintiff James F. Seger was awarded a subcontract on May 20, 1958, for alteration and construction of various structures and placement of stone bank protection. Plaintiff Seger's subcontract included 88 of the 174 work items of the prime contract, and represented 46 percent of the dollar value of the work.³ The prime contract was to be completed by November 14, 1958 (185 days). Completion time was extended 49 days to December 24, 1958 (234 days). Seger's subcontract had a completion date of November 1, 1958. Subcontract work was completed on December 19, 1958, after 136 actual working days.

There were many changes before completion of the work. Twenty-six Change Order Modifications to the original prime contract have been negotiated and accepted: Nos. 1 through 21 for changes recognized as such during the job; Nos. 22 through 24 to adjust claims filed after completion of the work, and Nos. 25 and 26 as a result of the first board opinion on January 13, 1961.

On January 13, 1961, the board denied, under the Severin rule,⁴ Mr. Seger's claims for an equitable adjustment for 51 days' delay. The subcontractor's claims for extra costs for changed work were considered as part of the prime contractor's claim and allowed in part.⁵

On March 28, 1969, on remand from the Court of Claims, the board denied Mr. Seger's claims for extra work on the ground that all such claims had been settled and paid in the 26 Modifications to the prime contract, and on the merits denied, for failure of proof, all claims for 51 days' standby and delay, except for a minor adjustment for the standby time of a pipe layer and a labor foreman for 2 days.⁶

In this court, plaintiffs' Second Amended Petition seeks relief based on three causes of action: (1) $155,526.50 for Seger's extra work, time, materials and delays for Government ordered changes; (2) indemnification for Ukropina-Polich-Kral and Darrough and Sons for any liability to Seger that may be ordered in an action brought by Seger in Butte County, California, Superior Court, to recover the reasonable value of the same extra work, time, materials and delays;⁷ and (3) reasonable value of the same extra work, time, and materials and delays on the theory that direct dealing by the Government caused the original prime contract to be superseded or supplemented by express oral contracts and implied contracts with each plaintiff.

The questions presented are whether there is substantial evidence in the administrative record to support the findings by the Corps of Engineers Board of Contract Appeals that (1) modifications to the prime contract have included payment for all of Seger's claims for extra work performed pursuant to Government ordered changes; (2) Seger's tender of proof of time and costs claimed to be due subcontractor was useless as a basis to determine an equitable adjustment; (3) only one of Seger's claims for standby or delay time could be considered to be caused by unreasonable acts of the Government; (4) on an overall basis, Seger was not unreasonably delayed or caused additional expense by Government acts which can be equated to a partial suspension of work for the convenience of the Government; and (5) Government personnel did not act toward Seger other than as a subcontractor. Additional questions are whether the exculpatory provisions in the subcontract require denial of Seger's claim under the Severin rule,⁸ and whether the prime contractor should be indemnified by the Government for any liability Seger may establish in the California State Court action.

The board's decision in its second opinion is legally correct and is supported by substantial evidence. Plaintiffs' Motion for Summary Judgment should be denied and Defendant's Cross-Motion should be granted as to plaintiffs' first and third causes of action. Plaintiffs' second clause of action on behalf of Ukropina should be dismissed.

History of Litigation. The course of this case has been long, tortuous, and characterized by extensive delays, which for the most part are attributable to plaintiffs' procrastinations and lack of diligence. This court has been extremely tolerant in its indulgence of plaintiffs' indifference to requests for information and for action.

In his original petition, filed October 23, 1964, plaintiff Seger brought an action on his own behalf on a theory of express or implied contract to recover $155,526.50 for extra work, time and materials over and above the prime contract specifications. Defendant answered on February 23, 1965, and the Commissioner's Pretrial Order issued on February 25, 1965. After three extensions requested by plaintiff,⁹ plaintiff's pretrial submission was filed June 10, 1965.

On October 1, 1965, defendant moved for summary judgment on the ground that information in plaintiff Seger's contemporaneous action in Butte County, California, Superior Court, established that all of the work and alleged delays were within the scope of the prime contract, were directed by the prime contractor, and that there was no privity of the contract between plaintiff Seger and the Government.¹⁰ By Order on November 7, 1966, this court denied Defendant's Motion for Summary Judgment, allowed plaintiff Seger 30 days to join the prime contractor as plaintiff, and to amend the petition to allege specifically facts claimed to show an implied contract. This court suspended the case for 180 days to permit the prime contractor to obtain a decision on behalf of the subcontractor before the Corps of Engineers Board of Contract Appeals "* * * on the claims for delay that can be allowed under the suspension of work clauses and for extra work that should have been covered by a change order."¹¹ On December 6, 1966, plaintiffs Seger and Ukropina-Polich-Kral and Darrough and Sons, a Joint Venture, filed a First Amended Petition that set forth three causes of action.

The Corps of Engineers Board of Contract Appeals took prompt action to implement the court's November 7, 1966, Order. After many delays, a 4-day full-scale adversary hearing was held in July 1968, in which testimony and documentary evidence were received and arrangements were made, by stipulation, for an audit of Seger's existing business records and for review and comments on such audit report by the Government. The board's decision was rendered on March 28, 1969, and forwarded to the court in April 1969 by defendant.

Plaintiffs' First Amended Petition, filed on December 6, 1966, did not comply with Rule 95 of the court in effect at that time, nor with new Rule 162(a) effective September 1, 1969, in that it did not make clear the relationship of the Wunderlich Act to the relief sought.¹² On May 29, 1969, defendant gave notice of its intention to file a motion to dismiss for failure to comply with requirements of the court rules for Wunderlich Act cases. From June 12, 1969, to September 23, 1969, four letters were sent to plaintiffs to ascertain their intention with respect to further amendment of the petition. On September 23, 1969, plaintiffs were referred to the rules and advised that unless a satisfactory explanation was given by October 6, 1969, involuntary dismissal under Rule 102 for failure to prosecute would be recommended. On October 14, 1969, with no reply from plaintiffs, defendant filed its motion to dismiss the First Amended Petition.¹³

This court, on February 9, 1970, heard argument on its rule to show cause why the case should not be dismissed and, on February 17, 1970, granted plaintiffs' oral request to amend the Petition. Plaintiffs' Second Amended Petition was filed on February 17, 1970.¹⁴

Defendant answered the Second Amended Petition on March 19, 1970, and the administrative record was filed with the court on March 26, 1970. On September 30, 1970, ...