St. Joseph Light & Power Co. v. Kaw Valley Tunneling, Inc.

• Decision Date: 14 November 1979
• Docket Number: No. 60862,60862
• Citation: 589 S.W.2d 260
• Court: Missouri Supreme Court
• Parties: ST. JOSEPH LIGHT & POWER COMPANY, Plaintiff-Appellant, v. KAW VALLEY TUNNELING, INC., I. V. Cunningham, Sr., St. Joseph Water Company, Defendants-Respondents, and City of St. Joseph, Missouri, Defendant-Appellant. CITY OF ST. JOSEPH, MISSOURI, Third Party Plaintiff-Appellant, and St. Joseph Water Company, Third Party Plaintiff-Respondent, v. BLACK AND VEATCH, CONSULTING ENGINEERS, Third Party Defendant-Respondent.

Page 260

589 S.W.2d 260

ST. JOSEPH LIGHT & POWER COMPANY, Plaintiff-Appellant, v. KAW VALLEY TUNNELING, INC., I. V. Cunningham, Sr., St.

Joseph Water Company, Defendants-Respondents,

and

City of St. Joseph, Missouri, Defendant-Appellant.

CITY OF ST. JOSEPH, MISSOURI, Third Party Plaintiff-Appellant, and St. Joseph Water Company, Third Party Plaintiff-Respondent, v. BLACK AND VEATCH, CONSULTING ENGINEERS, Third Party

Defendant-Respondent.

No. 60862.

Supreme Court of Missouri, En Banc.

Nov. 14, 1979.

Rehearing Denied Dec. 6, 1979.

Charles S. Wilcox, St. Joseph, for plaintiff-appellant.

G. Steven Ruprecht, F. Philip Kirwan, Kansas City, for defendants-respondents.

John R. Caslavka, Kansas City, for third party defendant-respondent.

Gary A. Fenner, St. Joseph, for third party plaintiff-appellant.

SEILER, Judge.

This action is by the St. Joseph Light & Power Company ("Power Company") to recover for damages to its buildings and facilities resulting from the construction of a sewer by the city of St. Joseph ("city"). The Power Company's petition was filed in three counts. Counts I and II alleged damages resulting from the negligence of defendants Kaw Valley Tunneling, Inc., and I. V. Cunningham, Sr., joint venturers ("Kaw Valley"), the city, and the St. Joseph Water Company ("Water Company"). Both counts charged negligence on the part of Kaw Valley in (1) causing excessive vibration in the driving of piling; (2) inadequately investigating subsoil conditions; and (3) continuing to pursue an unsafe method of operation, knowing it was likely to cause damage to property adjacent to the work. The Water Company was charged with permitting its mains and valves to leak, resulting in excessive saturation of the subsoil, causing or contributing to cause the sinking of Second Street and the undermining of the duct bank and manhole. The city was charged with negligence in failing to exercise proper control over Kaw Valley and in failing to take proper steps to avoid damage to property of others when it knew that continuation of the original method of construction would be likely to cause such damage.

Count III was an alternative cause of action to recover as a third party beneficiary of the contract between Kaw Valley and the city. The city cross-claimed against Kaw Valley for indemnity, and filed a third party petition against Black and Veatch, consulting engineers employed by it to design the sewer and to prepare plans and specifications for it, alleging breach of the latter's contract with the city and negligence in the performance of its contractual duties. The Water Company filed a third party petition against Black and Veatch and a cross-claim against Kaw Valley. ¹

The trial court, sitting without a jury, entered judgment in favor of the Power Company and against the city in the amount of $18,450.00 and in favor of Kaw Valley and the Water Company. The cross-claims and the third party petitions were dismissed. The city appeals from the dismissal of its cross-claim against Kaw Valley and its third party claim against Black & Veatch, as well as from the judgment against it in favor of the Power Company. The Power Company appeals from the judgment in favor of Kaw Valley and the Water Company, and from the judgment in its favor against the city insofar as the amount of recovery is concerned.

The court of appeals affirmed the trial court in all respects save reversal against Kaw Valley with directions to enter judgment in favor of the Power Company for $18,450.00 as a third party beneficiary of the construction contract as alleged in Count III of the original petition.

Transfer was granted upon application of Power Company and Kaw Valley to deal primarily with two questions. First, whether Kaw Valley is liable to a third party beneficiary of its contract with the city in the face of a trial court finding that Kaw Valley did not breach any provisions of that contract. Second, whether the measure of damages applied by the trial court, diminution of value, is the proper measure or whether the cost of repair or replacement (including cost of razing plaintiff's damaged building), which the Power Company alleges is provided for under the contract, is appropriate. While we will deal with the case as though here on original appeal, we incorporate portions of the opinion of the court of appeals without quotation marks.

The sequence of events giving rise to the damage complained of by the Power Company is as follows: The construction of the interceptor sewer resulted from an order of the federal court for the western district of Missouri in a suit brought by the United States against the city of St. Joseph to secure abatement of the pollution of the Missouri River by the city. Prior to construction of the sewer, untreated sewage was dumped into the Missouri River. The city employed Black & Veatch, consulting engineers, to design and prepare specifications for a 48 interceptor sewer running some 5,200 linear feet between Mitchell Avenue and Powell Street, to include five diversion structures and seven line manholes. The design called for the location of the sewer approximately thirty to forty feet below the ground. For the most part, and in the area of immediate concern in this litigation, the line of the sewer was driven underground in tunnel fashion. Plaintiff, Power Company, received notice of the planned sewer tunnel construction in August, 1970.

Between Edmond and Felix Streets, the sewer runs beneath Second Street, generally in the center of the street at the above stated depth below the surface. The Power Company owned property on the west side of Second Street, including a three-story building at the southwest corner of Second and Felix which was leased to Chesmore Seed Company (the Chesmore Building), a three-story plant office building immediately south of the Chesmore Building and a two-story building at the northwest corner of Second and Edmond, used for lockers and a lunch room. A substation was located between the locker building and the office building.

A Power Company duct bank was located below the surface of Second Street, between the sewer location and the west curb of the street. This duct bank entered a manhole known as "Manhole No. 2" in the intersection of Second and Edmond Streets. The duct bank proceeded from the manhole east under Edmond Street. An 8 main of the Water Company ran parallel to the duct bank along Edmond Street. The Missouri River ran only a few blocks away.

Tunneling for the sewer proceeded in a generally south to north direction between access shafts constructed by Kaw Valley located at each of the seven manhole sites. An 18' diameter shaft was excavated to the depth of the sewer and lined with metal plates to support the walls. A metal shield was used to cut out the earth for the sewer tunnel in an operation described as "like a cookie cutter." Hydraulic jacks pushed against timbers on the rear of the shield in three-foot "pushes." Spoil material was drawn through the face of the shield like toothpaste from a tube. Timbers were immediately placed behind the shield, on both sides and the top of the tunnel, to avoid cave-in until the permanent cement collar for the sewer was laid. The spoil material moved on a conveyor belt to the access shaft where it was removed by a clam shell bucket. As the tunneling proceeded north toward Edmond, considerable water was encountered. In September, 1971, cave-ins large enough for a truck to fall into appeared along the tunneling route which had been completed between Charles and Edmond Streets.

Excavation for an access shaft at Second and Edmond had begun in early March, 1971, but the work stopped because of excessive water. Work on that shaft resumed September 9, with the removal of liner plates previously placed in the shaft and their replacement by sheet piling installed by a pile driver. On September 17, employees of the Power Company noted the activity at the shaft and observed cracks in the street pavement around the shaft and some subsidence in the street to the south. Ralph B. Mayer, the Power Company's vice-president of operations, noted that the pile driving operation was causing considerable vibration in the area. Mr. Mayer was concerned about possible damage to the Power Company's duct bank which ran near the shaft and had Mr. Endebrock, the city's director of public works, request the contractor to stop. At Mayer's request, the contractor then removed the street pavement from the duct bank so that it could be examined for damage. The duck bank and the Power Company's Manhole No. 2 were inspected and found to be intact. Work then proceeded on the shaft and the tunnel.

On September 24, Mayer went to the Second and Edmond location in response to a call from Black & Veatch's inspector. The duct bank had cracked in three or four places and some twenty feet of the bank were sagging and portions of it had moved horizontally. There was mud under the duct bank and between it and the access shaft, and dirt had washed from under the duct bank, permitting it to settle. An 8 main of the Water Company some three feet south of the duct bank was found to have broken. The water was shut off and the break repaired by the Water Company. The breaks in the displacement of the duct bank rendered it unusable and the Power Company was obliged to make emergency arrangements to supply power to the portions of the downtown area served by the duct bank. Eventually forty feet of the duct bank, as well as Manhole No. 2, had to be replaced.

At about this time cracks appeared in the walls of the locker room building and the sidewalk pulled away along the front of the building. The Power Company arranged for a coat of granite to be applied to the south wall of the building. Near the end of September, the tunneling operation stopped for some time while alternative methods of completing the job were considered and discarded as not feasible or too expensive....