Seubert Excavators, Inc. v. Eucon Corp.

• Decision Date: 03 March 1993
• Docket Number: No. 19096,19096
• Citation: 125 Idaho 744,874 P.2d 555
• Court: Idaho Court of Appeals
• Parties: SEUBERT EXCAVATORS, INC., an Idaho corporation, Plaintiff-Appellant, v. EUCON CORPORATION, an Idaho corporation d/b/a Steelman-Duff and United States Fidelity & Guarantee Company, Defendants-Respondents, and EUCON CORPORATION, an Idaho corporation, Third-Party Plaintiff, v. EMPLOYERS INSURANCE OF WAUSAU, Third-Party Defendant-Appellant.

Page 555

874 P.2d 555

125 Idaho 744

SEUBERT EXCAVATORS, INC., an Idaho corporation, Plaintiff-Appellant, v. EUCON CORPORATION, an Idaho corporation d/b/a Steelman-Duff and United States Fidelity & Guarantee Company, Defendants-Respondents, and EUCON CORPORATION, an Idaho corporation, Third-Party Plaintiff, v. EMPLOYERS INSURANCE OF WAUSAU, Third-Party Defendant-Appellant.

No. 19096.

Court of Appeals of Idaho.

March 3, 1993.

Petition for Review Granted May 12, 1993.

Clark & Feeney, Lewiston, for appellants. Paul T. Clark (argued).

Clements, Brown & McNichols, Lewiston, for respondents. Michael E. McNichols (argued).

WALTERS, Chief Judge.

This is an appeal from a judgment entered in favor of a subcontractor and against the general contractor on a road construction project. For the reasons explained below, we affirm the judgment in part, reverse in part, and remand the proceeding for entry of a modified judgment.

I. Facts and Procedural Background.

In January 1983, the Washington State Department of Transportation ("the state") awarded Seubert Excavators, Inc. ("Seubert") the prime contract for the reconstruction of approximately seven miles of roadway in south-central Washington. The contract called for three distinct types of work to be performed: excavating and grading the existing roadway; placing crushed rock on the excavated roadway; and finally, paving the roadway. Seubert subcontracted the excavation and grading work to Eucon Corporation, d/b/a/Steelman-Duff ("Steelman-Duff"), retained the rock-crushing and rock-placing work for itself, and subcontracted the paving work to TransState Paving ("TransState"). ¹ The project required cooperation and coordination among the prime contractor, the subcontractors, and the state in several stages of construction. Before starting work the parties drew up a progress schedule projecting By June 22, Steelman-Duff had finished excavating all but a small section in the middle of the roadway, where Seubert was operating its rock-crushing equipment. Concluding that it could not complete this section with Seubert still on the site, Steelman-Duff temporarily moved its personnel and equipment, on June 23, to another project. Seubert remained in this section, crushing rock, until July 19. The section was then drilled and blasted on August 2 and 4, and Steelman-Duff returned to the site on August 8. Steelman-Duff completed all of its work by September 12, 1983, and TransState began the final paving on September 19. However, the project was not substantially completed until September 30, six working days beyond the contract deadline. Pursuant to the prime contract's liquidated damages clause, the state charged Seubert liquidated damages and additional engineering costs totalling $10,622.93. The state withheld this amount from its final payment to Seubert, who in turn withheld the same from Steelman-Duff.

[125 Idaho 747] the time and sequence in which the various tasks were to be performed. The terms of the prime contract provided that all work was to be completed within 120 working days, between April 1, 1983, and September 21, 1983, and that liquidated damages and actual engineering costs would be assessed in the case of delay.

Challenging the propriety of Seubert's withholding, Steelman-Duff filed a notice of claim with the state to collect the $10,622.93 and also to recover additional damages allegedly caused by Seubert's delay. Seubert, in response to Steelman-Duff's claims, filed a complaint in the district court of Nez Perce County, Idaho, asserting various claims against Steelman-Duff including a claim to recover its costs of stockpiling rock during Steelman-Duff's absence from the jobsite and a claim for the refund of $977.60 it allegedly overpaid to Steelman-Duff. Steelman-Duff filed an answer and a counterclaim against Seubert and Seubert's bonding company, Employers Insurance of Wausau ("Wausau"), to recover the damages set out in the notice of claim and for its attorney fees incurred in the action.

Following a trial before the court, the district judge issued an opinion rejecting all Seubert's claims with the exception of its claim to recover certain costs of road maintenance, totaling $1,032.00. The court also rejected Steelman-Duff's counterclaims against Seubert, except for the claim that Seubert had wrongfully withheld $10,622.93. The court originally issued findings and conclusions omitting any mention of Wausau. When Steelman-Duff later moved to recover attorney fees from Wausau under I.C. § 41-1839, which provides for attorney fees against a surety, Wausau protested on the grounds that none of the pleadings mentioned Wausau, that no proof had been introduced against Wausau, and that the court's memorandum decision did not provide for any judgment against Wausau. Over Seubert's objection, the district court granted Steelman-Duff's motion to reopen the evidence to admit the contract bond, which had been issued in favor of the state. The court then entered an order amending its findings and conclusions to reflect that Steelman-Duff was a third-party beneficiary of the bond contract, that Wausau was jointly liable with Seubert for the amount due Steelman-Duff under the contract bond, and that Steelman-Duff was entitled to recover a portion of its attorney fees from Wausau under I.C. § 41-1839.

The court entered judgment for Steelman-Duff in the amount of $9,590.93--the difference between the parties' offsetting awards--and allowing prejudgment interest on that amount from the time payment originally was due from Seubert. Seubert and Wausau joined in this appeal.

II. Issues Presented and Standard of Review.

Seubert and Wausau raise the following issues:

(1) whether the district court erred in failing to find Steelman-Duff at least partly responsible for the delay and the liquidated damages and costs assessed by the state;

(2) whether the court erred in finding that Steelman-Duff was not liable for Seubert's (3) whether the court erred in finding that Seubert had failed to prove its claim of overpayment to Steelman-Duff;

[125 Idaho 748] costs of stockpiling crushed rock during Steelman-Duff's absence from the jobsite;

(4) whether it was error for the court to award prejudgment interest on offsetting claims arising under the same contract, and whether the date from which such interest should run was sufficiently established; and

(5) whether the court erred when it reopened the evidence to permit Steelman-Duff to establish its third-party beneficiary claims against Wausau.

Our review of the district court's factual findings is limited. We do not weigh the evidence, nor do we substitute our view of the facts for that of the trial judge. I.R.C.P. 52(a); Alumet v. Bear Lake Grazing Co., 119 Idaho 946, 812 P.2d 253 (1991). We merely determine whether the findings are supported by substantial, even if conflicting, evidence in the record. If so supported, the findings cannot be deemed clearly erroneous. Barber v. Honorof, 116 Idaho 767, 780 P.2d 89 (1989). However, we exercise free review of the trial court's application of relevant legal principles to the facts found.

III. Steelman-Duff's Liability for the Delayed Completion of the Project.

Seubert contests the district court's finding that it had wrongfully withheld the $10,622.93 from Steelman-Duff. According to Seubert, Steelman-Duff's 46-day absence from the job site, from June 23 to August 8, constituted a breach of the subcontract that caused or at least contributed to the delayed completion of the project, and that Seubert was entitled to withhold some or all of the damages and costs assessed by the state. Because we reject Seubert's assertion that Steelman-Duff breached the contract, we decline to consider Seubert's argument that the court erroneously attributed the cause of delay to other parties.

Preliminarily, we note that Seubert does not argue that Steelman-Duff failed to complete any of its work within the time specified by the contract. The record unequivocally demonstrates that Steelman-Duff had completed all its work by September 12, 1983, more than a week before the September 21, 1983, deadline specified in the prime contract. Moreover, the trial court found that all the parties willingly deviated from their original progress schedule and held that the schedule was not a binding part of the contract. Rather, Seubert contends that Steelman-Duff's 46-day absence constituted a breach of other contractual provisions that allegedly required Steelman-Duff to perform its work continuously and without interruption. Specifically, Seubert argues that Steelman-Duff's absence violated the provision requiring Steelman-Duff to "continue diligently," and that the district court's contrary finding of diligence was clearly erroneous.

The record in this case shows that on June 23, the day Steelman-Duff decided to move its personnel and machinery from the jobsite, Seubert was crushing rock in the section that Steelman-Duff was to excavate. Seubert did not leave until July 19. Although Steelman-Duff had planned to return to the site in mid-August, it immediately accelerated its plans when told to do so by Seubert's letter of July 29. Steelman-Duff arranged for the site to be drilled and blasted on August 2 and 4, to loosen the rock for removal. The following Monday, August 8, Steelman-Duff returned to the site and began excavating the final section. It completed all of its work on the project by September 12, 1983. These facts, which are supported by substantial evidence, are sufficient to support the district court's finding that Steelman-Duff performed diligently. Accordingly, that finding will not be disturbed.

Seubert further asserts that, notwithstanding the finding that Steelman-Duff diligently performed its duties, the court should have found that Steelman-Duff's absence from the jobsite breached the contract provisions requiring that it provide adequate labor and machinery to meet the...