Tiffany Const. Co. v. Hancock & Kelley Const. Co.
| Decision Date | 11 September 1975 |
| Docket Number | CA-CIV,No. 1,1 |
| Citation | 24 Ariz.App. 504,539 P.2d 978 |
| Parties | TIFFANY CONSTRUCTION COMPANY, and Fireman's Fund Insurance Company, Appellants, v. HANCOCK & KELLEY CONSTRUCTION COMPANY, an Arizona Corporation, and John Kissinger, dba B & K Construction, Appellees. HANCOCK & KELLEY CONSTRUCTION COMPANY, an Arizona Corporation, Cross- Appellant, v. John KISSINGER, dba B & K Construction, Tiffany Construction Company, and Fireman's Fund Insurance Company, Cross-Appellees. 2508. |
| Court | Arizona Court of Appeals |
Cunningham, Goodson & Tiffany, Ltd. by James P. Cunningham, Phoenix, for appellants.
Jennings, Strouss & Salmon by William F. Haug, M. Byron Lewis, Phoenix, and William C. Kennedy, Kingman, for appellees.
This appeal presents the interesting question of whether a supplier of materials should be classified as a materialman or a subcontractor.
This question arose out of two separate actions instituted by appellees-cross-appellants, Hancock and Kelley Construction Co. (Hancock & Kelley) and Diversified Petroleum Products, Inc. (Diversified) against appellant-cross-appellees, Tiffany Construction Company (Tiffany) its bonding company, Fireman's Fund Insurance Co. and John Kissinger dba B & K Construction (Kissinger). The two separate actions were consolidated for trial purposes, and, after intermediate procedural orders not pertinent to the issues presented here, the trial court entered judgments generally in favor of the appellees and against Tiffany. The exact effect of these judgments will be set forth later in this opinion.
The operative facts giving rise to this litigation are as follows. On June 28, 1968, the Arizona State Highway Department awarded a contract to Tiffany for the seal coating of several miles of state highway known as the Davis Dam-Kingman Highway Project, located in Mohave County, Arizona. Fireman's Fund posted the labor, material and performance bond for this project.
The seal coating operation required the application of rock chips to the existing bituminous highway surface with a sealer. The chips themselves (called type C chips) had to meet specific state specifications and were subject to rejection by the state if these specifications were not met. Type C chips do not occur in nature and are produced in a crushing operation. Moreover, these chips must be manufactured on a job-by-job basis and normally cannot be stockpiled for any length of time as they will 'go out of specs'.
After Tiffany had obtained the contract with the state, it originally contracted with WMK Materials Company to supply type C chips but a default was occasioned by this supplier. 1 At the time of the WMK default, Kissinger was employed by that company and through this employment learned of Tiffany's need for type C chips. After learning that WMK was terminating its contract with Tiffany, Kissinger and a fellow employee named Dean Belding decided to form a partnership known as B & K Construction Co., leave the employment of WMK and contact Tiffany and see if they could obtain the contract to supply type C chips. Tiffany was contacted by Kissinger on July 25, 1968 and informed that Kissinger was interested in producing the chips, that they had the equipment available to handle the job and quoted a price per ton for type C chips. In fact, at that time, Kissinger had no equipment for this job except some hand tools and a truck. Moreover, Kissinger was not a licensed contractor in the State of Arizona.
As a result of this initial contact, Tiffany entered into a written contract with Kissinger whereby Kissinger agreed to supply Tiffany with 3,100 tons of chips at $6.00 per ton and guaranteed that these chips would meet state highway specifications. It was apparently contemplated that Kissinger could produce the desired tonnage of chips in time to allow Tiffany to complete its contract by the completion date of August 19, 1968.
After obtaining the contract with Tiffany, Kissinger made arrangements with Hancock & Kelley to rent the crusher needed to produce the chips. The terms of the rental agreement were that Kissinger would pay Hancock & Kelley a rental on the basis of 30 days or 3,100 tons of chips at $1.00 per ton, for a total rental of $3,100.00. Before Kissinger started the crushing operation, it contacted Diversified to secure the necessary gas, oil grease and diesel fuel to conduct the crushing operation. Diversified agreed to supply these materials to Kissinger on credit.
The materials necessary to produce the chips were to be obtained from a material pit owned by the State of Arizona. Tiffany had obtained permission from the state to use this pit at a no royalty cost.
Apparently Kissinger moved onto the job site around August 1, 1968, but after three weeks, the State Highway Inspector informed Tiffany by letter that 'To date your cover material producer has not produced any material which complies with specification.' By the end of August Kissinger had produced no more than 800 tons of usable chips.
Because of the job completion date of August 19, 1968 and a penalty clause for delay in completion, Mr. Herb Tiffany, president of Tiffany, determined he had three alternatives, insofar as Kissinger's production was concerned: (1) allow Kissinger to continue as he had been doing, (2) send up another crusher and equipment and keep Kissinger on to assist in production, or (3) terminate Kissinger and perform the job itself. Tiffany decided the second alternative was the most economical.
As a result of this decision, on September 4, 1968, Tiffany sent a second crusher to the job site which was immediately put into operation. It appears that the Hancock and Kelley crusher was used on only one occasion after this date. In addition to the crusher supplied by Tiffany, three additional men were supplied who were paid directly by Tiffany. Tiffany, after September 4, 1968, considered its contract with Kissinger as being breached, that Kissinger was in effect job superintendent for Tiffany and that Tiffany was supplying its own type C chips. Kissinger did not return the Hancock & Kelley crusher until the job was finally completed on October 19, 1968.
Although the record in this regard is in dispute, Tiffany contends it did not know of the existence of Hancock & Kelley or Diversified until some months after the contract was completed.
Tiffany paid Kissinger $8,095.00 for his part performance of the contract. Kissinger in turn did not pay Hancock & Kelley or Diversified.
As the result of the litigation initiated by Hancock & Kelley and Diversified, the following legal stances were assumed by the various parties:
(1) Hancock & Kelly and Diversified sought payment of their respective claims against Kissinger on express contract and against Tiffany and Fireman's Fund on two alternative theories: First, that Kissinger was a subcontractor of Tiffany and by reason of the language contained in the Fireman's Fund bond, 2 Tiffany and its bonding company were liable for Kissinger's bills.
Second, they maintained that a joint venture relationship existed between Kissinger and Tiffany, making Tiffany liable for their claims. Plaintiffs also sought attorney's fees under the provisions of the bond.
(2) Tiffany cross-claimed against Kissinger, claiming Kissinger breached its contract with Tiffany. Moreover, Tiffany sought indemnity against Kissinger for any liability it might have against Hancock & Kelley and Diversified.
(3) Kissinger in turn cross-claimed against Tiffany likewise claiming a breach of their contract and seeking full payment thereunder.
The trial court's judgment resolved these claims as follows. As to the claims of Hancock & Kelley and Diversified, it held Kissinger liable for the total amount of these claims. As to Tiffany, the trial court found it had no liability on these claims for rental or fuel supplied prior to September 4, 1968. However, on that date the trial court found that Tiffany and Kissinger became 'joint venturers' in the production of the type C chips and thus were jointly liable for rental and fuel supplied after this date. Moreover, the trial court found Tiffany and Fireman's Fund liable for $1,500 in attorney's fees but allowed interest on the total of these claims from the date of judgment only.
As to the Tiffany-Kissinger dispute, the trial court found that Kissinger had not breached its contract with Tiffany and therefore dismissed Tiffany's cross-claim against Kissinger. However, the trial court did find that Tiffany had wrongfully interfered with Kissinger's contract and therefore Tiffany was liable to Kissinger for the balance of the contract price.
Tiffany and Fireman's Fund have appealed those portions of the judgment denying Tiffany's cross-claim against Kissinger, the Kissinger judgment against Tiffany and the Hancock & Kelley and Diversified judgment entered against Tiffany and Fireman's Fund. Hancock & Kelley and Diversified have cross-appealed from that portion of the judgment denying the total of its claim against Tiffany and Fireman's Fund and denying interest on their claim from the date their respective bills became due. Hancock & Kelley also contend the trial court miscalculated the amount due it by omitting $300 as rental for a generator. These cross-appellants also seek attorney's fees on appeal.
Kissinger filed no appeals nor did it make any appearance in this court in opposition to the appeal or the cross-appeals.
Turning first to that portion of Tiffany's appeal dealing with its cross-claim against Kissinger and Kissinger's judgment against it, we find that Tiffany has raised justiciable issues as to the correctness of the trial court's judgment in these regards. As indicated, Kissinger has not responded to these justiciable claims and in the opinion of this court such a failure constitutes a confession of reversible error....
To continue reading
Request your trial
-
Vulcraft, a Div. of Nucor Corp. v. Midtown Business Park, Ltd.
...uniquely or specially by the contractor for the requirements of the particular project. See Tiffany Constr. Co. v. Hancock & Kelley Constr. Co., 24 Ariz.App. 504, 511, 539 P.2d 978, 985 (1975) (chips for road surfacing, although required to be individually manufactured for each order, were ......
-
Jacobsen Const. Co., Inc. v. Industrial Indem. Co.
...(millwork and related items according to plans and specifications). See also Tiffany Construction Company v. Hancock & Kelly Construction Company, 24 Ariz.App. 504, 539 P.2d 978 (1975) for an analysis of who is a Under the definition of a subcontractor given the jury in the instant case, i.......
-
Marmis v. Solot Co.
...be determined from the contract of the parties and the nature of the joint venture. See Tiffany Construction Company v. Hancock & Kelley Construction Company, 24 Ariz.App. 504, 539 P.2d 978 (1975). Sind v. Pollin, 356 A.2d 653 (D.C.1976); Ghiz v. Millett, Here, the agreement between Chaparr......
-
Chavez v. Tolleson Elementary School Dist.
...262, 475 P.2d 246 (1970); Matter of Estate of Beaman, 119 Ariz. 614, 583 P.2d 270 (App.1978); Tiffany Construction Co. v. Hancock & Kelley Construction Co.,24 Ariz.App. 504, 539 P.2d 978 (1975). We do so here upon such authority. The issue was squarely ALTERNATIVE MOTION FOR NEW TRIAL Plain......