State of Florida v. Wesley Construction Company

• Court: U.S. District Court — Southern District of Florida
• Writing for the Court: Patton, Kanner, Tietig & Segal, Miami, Fla., for defendant, Wesley Construction Co
• Citation: State of Florida v. Wesley Construction Company, 316 F.Supp. 490 (S.D. Fla. 1970)
• Decision Date: 15 July 1970
• Docket Number: Civ. No. 66-40.
• Parties: STATE of FLORIDA, for the Use and Benefit of WESTINGHOUSE ELECTRIC SUPPLY COMPANY, a division of Westinghouse Electric Corporation, a Pennsylvania corporation, and a division of Westinghouse Electric Corporation, a Pennsylvania corporation, Plaintiff, v. WESLEY CONSTRUCTION COMPANY, a Florida corporation, Aetna Casualty and Insurance Company, a Connecticut corporation; and Continental Casualty Company, a foreign corporation, Defendants.

316 F. Supp. 490

STATE of FLORIDA, for the Use and Benefit of WESTINGHOUSE ELECTRIC SUPPLY COMPANY, a division of Westinghouse Electric Corporation, a Pennsylvania corporation, and a division of Westinghouse Electric Corporation, a Pennsylvania corporation, Plaintiff, v. WESLEY CONSTRUCTION COMPANY, a Florida corporation, Aetna Casualty and Insurance Company, a Connecticut corporation; and Continental Casualty Company, a foreign corporation, Defendants.

Civ. No. 66-40.

United States District Court, S. D. Florida.

July 15, 1970.

Heiman & Crary, P. A., Miami, Fla., for plaintiff.

Patton, Kanner, Tietig & Segal, Miami, Fla., for defendant, Wesley Construction Co.

Carey, Dwyer, Austin, Cole & Selwood, Miami, Fla., for defendant, Continental Casualty Co.

MEMORANDUM OPINION

FULTON, Chief Judge.

WESLEY CONSTRUCTION COMPANY entered into a contract with FLORIDA POWER AND LIGHT COMPANY whereby WESLEY agreed to construct for FLORIDA POWER AND LIGHT COMPANY an office building in the City of Miami, Florida. WESLEY, as principal and AETNA CASUALTY AND INSURANCE COMPANY, as surety, executed and delivered unto FLORIDA POWER AND LIGHT COMPANY a payment and performance bond. Thereafter WESLEY and DIPLOMAT ELECTRIC COMPANY entered into a subcontract agreement, whereby DIPLOMAT agreed to install electrical equipment in said building. DIPLOMAT as subcontractor, and CONTINENTAL CASUALTY COMPANY, as surety executed and delivered to WESLEY a subcontractor's performance bond. WESTINGHOUSE ELECTRIC SUPPLY COMPANY supplied to DIPLOMAT the electrical equipment which the latter installed in the FLORIDA POWER AND LIGHT COMPANY building. Nothing in writing between DIPLOMAT and WESTINGHOUSE was produced. WESTINGHOUSE was not in privity with FLORIDA POWER AND LIGHT COMPANY, WESLEY, DIPLOMAT or CONTINENTAL.

For brevity and clarity, the parties to this cause and certain documents therein will hereinafter be referred to as follows:

FLORIDA POWER AND LIGHT COMPANY as "FP & L" or "owner".

WESTINGHOUSE ELECTRIC SUPPLY COMPANY as "WESCO" or "plaintiff" or "materialman".

WESLEY CONSTRUCTION COMPANY as "WESLEY" or "general contractor".

AETNA CASUALTY AND INSURANCE COMPANY as "AETNA" or "surety for general contractor".

DIPLOMAT ELECTRIC, INC., as "DIPLOMAT" or "subcontractor".

CONTINENTAL CASUALTY COMPANY as "CONTINENTAL" or "surety for subcontractor".

The contract between WESLEY and FP & L, as "the general contract" or "prime contract".

The WESLEY-AETNA bond which was executed to FP & L as "the Aetna bond."

The contract between WESLEY and DIPLOMAT as "the subcontract".

The DIPLOMAT-CONTINENTAL bond which was executed to WESLEY as "the Continental bond."

HISTORY OF THIS SUIT

In this cause WESCO sought recovery against DIPLOMAT for electrical materials and fixtures which were delivered to DIPLOMAT and used by DIPLOMAT as subcontractor in the construction of the FP & L building. WESCO also sought to recover from WESLEY, AETNA and CONTINENTAL upon the theory that WESCO is a third party beneficiary under both contracts and both bonds. A cross-claim was filed by WESLEY against CONTINENTAL seeking indemnity from CONTINENTAL for any liability which may be found in behalf of WESCO and against WESLEY.

Heretofore the Court entered a judgment in behalf of WESCO and against DIPLOMAT in the amount of $102,781.26; but dismissed the WESCO claims against WESLEY, AETNA and CONTINENTAL, as they pertain to the FP & L job. The WESCO judgment against DIPLOMAT was appealed and affirmed. Continental Casualty Co. v. Westinghouse Electric Supply Co., 403 F.2d 761 (5 Cir. 1968).

The dismissal of the claims against WESLEY, AETNA and CONTINENTAL was appealed and reversed on the ground that the contracts were not included in the appellate record, and hence it was impossible for the Appellate Court to review and determine whether WESCO was in fact a third party beneficiary under the contracts and bonds. Westinghouse Electric Supply Company v. Wesley Construction Company, 414 F.2d 1280 (5 Cir. 1969).

Upon remand this Court reinstated the claims against WESLEY, AETNA and CONTINENTAL. WESLEY, AETNA and CONTINENTAL have denied plaintiff's third party beneficiary claim. There were other defenses which need not be specified at this time, except to mention the contention by CONTINENTAL that WESCO executed and delivered to DIPLOMAT a "Release of Lien", which was thereafter delivered by DIPLOMAT to CONTINENTAL and that said Release constitutes an estoppel against WESCO. Hence, the controlling issue in this controversy is whether WESCO has any action upon the contracts and bonds, as a third party beneficiary; and whether the execution and delivery of the release of lien by WESTINGHOUSE to DIPLOMAT, and by DIPLOMAT to CONTINENTAL, is a bar by estoppel of the WESCO claim against CONTINENTAL.

At the beginning of the instant trial counsel for WESCO announced that WESCO did not claim any right of recovery under the Mechanic's Lien Law or against FP & L, but restricted its claim for recovery upon the theory that WESCO was a third party beneficiary of the contracts and bonds in suit. The Court is compelled to express its amazement that WESCO did not protect itself by using the simple, easy to follow, and well understood procedures of the Florida Mechanic's Lien Law—Chapter 713 of the Florida Statutes. The obvious purpose of that law is to protect the interests of laborers and materialmen by giving a lien for work done and materials furnished in improving land and enhancing its value. Atkins v. Kendrick, 138 Fla. 776, 190 So. 248 (1939). All of this extensive and expensive litigation could have been thereby obviated.

STIPULATION

The splendid lawyers who conducted the trial of this case substantially eased the Court's burden by stipulating certain facts, including the following:

1. No claim of lien against FP & L property was filed or recorded by WESCO.

2. No 90-day notice of performance and nonpayment, as required by the Florida Mechanic's Lien Law, was ever furnished by WESCO to WESLEY.

3. WESCO completed delivery of its electrical materials as of December 31, 1964.

4. No materials for the FP & L job were furnished directly to WESLEY by WESCO. No payments were made by WESLEY to DIPLOMAT after December 11, 1964, the date upon which WESCO executed and delivered said release of lien.

5. The law of Florida applies to the construction of the contract documents.

Counsel further assisted the Court in expediting the trial by stipulating that WESCO could offer in evidence its business records to establish the amounts and dates of its delivery of materials to DIPLOMAT, and the amounts billed to and unpaid by DIPLOMAT, without any contest as to the reasonableness of the charges or proof of delivery to the FP & L job site, or in any proof of the incorporation of the WESCO materials into the building.

In short, plaintiff was permitted to prove its claim for materials delivered to DIPLOMAT, for use in the FP & L building, by simply introducing in bulk the voluminous material which was used for that purpose in the prior trial. It was thereby quickly demonstrated, and the Court hereby finds and adjudges that WESCO furnished to DIPLOMAT electrical materials which were used in the FP & L job in the total amount of $102,681.26.

THIRD PARTY BENEFICIARY CLAIM

WESCO insists that the contracts and the bonds contain provisions which, when fairly construed, establish WESCO as a third party beneficiary thereunder. However, the Court finds and concludes that these documents were executed and delivered only for the benefit of the parties thereto, and that there was no intention on the part of the contracting parties to make WESCO a third party beneficiary thereof.

In reaching this conclusion, the Court has painstakingly waded through the contract and bond documents, and has especially inspected and considered each paragraph and subparagraph to which its attention has been directed. In performing this duty, the Court has placed itself as nearly as possible in the exact situation of the parties as of the time of the execution of the contracts and bonds in suit, and has sought to determine the intention of the contracting parties, the objects to be accomplished, the obligations which were created, and the other essential features.

It is utterly impossible, within the confines of a memorandum opinion such as this, to repeat and discuss all of the multiple provisions of each of these documents, and deal with them separately or collectively.

The Court must limit the following discussion to those provisions of each document which bear upon the Court's decision, just above announced.

THIRD PARTY CLAIM UPON PRIME CONTRACT

The WESLEY-FP & L contract is upon a standard AIA long form which consists of more than 30 pages, together with the plans, shop drawings and other items. It is apparent from this contract that it simply spells out the relationship of the contracting parties and imposes upon and grants unto each of them certain obligations and benefits. No matter how much "nit-picking" is done throughout the prime contract documents the intention to make WESCO a third party beneficiary thereunder cannot be found. However, to avoid the impression that the Court has brushed this aspect lightly, the Court will now discuss Article 1 (c) and the first unnumbered paragraph of Article 9 and the first and third unnumbered paragraphs of Article 24 of the General Conditions of the prime contract which are stressed by WESCO and which read as follows:

"ARTICLE 1

c) The term Subcontractor, as employed herein, includes only those having a direct contract with the Contractor and it includes one who furnishes material worked to a special design according to the plans or specifications of this work, but does not include one who merely furnishes material not so worked. (italics supplied).

ARTICLE 9

Unless otherwise stipulated, the Contractor shall provide any pay for all materials, labor, water, tools, equipment, light,

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