Tobin Quarries v. Central Nebraska Public P. & I. Dist., Civil Action No. 57.
| Decision Date | 08 January 1946 |
| Docket Number | Civil Action No. 57. |
| Citation | 64 F. Supp. 200 |
| Parties | TOBIN QUARRIES, Inc., v. CENTRAL NEBRASKA PUBLIC POWER & IRRIGATION DIST. |
| Court | U.S. District Court — District of Nebraska |
W. C. Fraser (of Crofoot, Fraser, Connolly & Stryker) all of Omaha, Neb., and John M. Martin and Frank L. Martin, both of Los Angeles, Cal., for plaintiff.
R. O. Canaday and Paul E. Boslaugh (of Stiner, Boslaugh & Stiner) all of Hastings, Neb. for defendant.
On October 26, 1945, for reasons set forth in an unpublished memorandum, the court declined to enter a summary judgment upon the motion of the plaintiff. That memorandum sufficiently recognizes the jurisdiction of the court resting on diversity of citizenship and the existence of a situation warranting the employment of the statutory procedure for a declaratory judgment. 28 U.S.C.A. § 400. The record then appeared to contain certain issues not wholly legal, which the court was unwilling abruptly to foreclose by a summary judgment. Promptly thereafter the parties stipulated in writing for the final submission of the case upon its merits on the basis of "the pleadings, exhibits and affidavits submitted in support of and in opposition to the plaintiff's motion for summary judgment and upon the argument and briefs of the parties submitted to the court on said motion." Further trial or hearing was waived by both parties.
The defendant is a public corporation erected by act of the Nebraska legislature. One of its properties is the Kingsley Dam, a large multiple purpose structure in the Western part of Nebraska. In 1944 it publicly invited competitive bidding upon certain contract work consisting of the "completion of the construction of the riprap on the upstream slope of the Kingsley Dam and abutments, the north bank of the stilling basin and on road dikes approaching the south abutment." One of the designated principal items of work in the venture was: "Furnishing and Placing Gravel or Rock Spall Filter Layer — 243,500 tons." It is with respect to that item that the present controversy has arisen. The defendant prepared and published detailed plans and specifications for the entire work, upon which the plaintiff, a Missouri corporation engaged in business as a building contractor, made the prevailing bid, resulting in a formal contract dated September 22, 1944.
Section 2.4 of the detailed specifications incorporated into the contract, is in the following language:
in greatest dimension.
Touching it, the plaintiff, besides quoting the specification of gravel, alleges in the complaint that it "gives to the plaintiff the option to construct the filter layer at its option, of (1) gravel, (2) small quarry stone, (3) a mixture of gravel and stone, or (4) a mixture of gravel or stone with broken concrete blocks not exceeding four inches in their greatest dimension." The court understands the defendant to admit both the exactly quoted and the generally averred provisions of Section 2.4. (See Paragraph V of complaint and Paragraph II of answer.)
From the showings made in support of the motion for summary judgment and now before the court, it satisfactorily appears that the plaintiff, entering upon the performance of the contract, elected to furnish gravel for the filter layer, or the major portion thereof, and proceeded, and proposes to continue, to furnish gravel, of which engineers for the defendant in a series of sixteen tests by samples found that the following several percentages by way of an average throughout the tests were retained on the following respective sized screens:
Retained on 2½" 2" 1½" 1" ¾" ½" No 4. Screen
----- ---- ----- ----- ----- ----- ------------
3% 5.2% 10.2% 23.6% 34.9% 55.8% 96.7%
Thus 3.3% of the gravel furnished passed through a No. 4 screen.1
The defendant, through its engineer, after the work had been partially done declined to allow the plaintiff to continue to furnish the gravel thus tendered and notified the plaintiff in writing that the only filter layer prepared from gravel which would be accepted by the engineer and the defendant must comply with a gradation, in consequence of which the following several percentages would be retained on the following respective sized screens:2
Retained on 2½" 2" 1½" 1" ¾" ½" No. 4 Screen
----- ------ ------- ------- ------- ------- ------------
0%-5% 5%-40% 20%-60% 35%-72% 44%-80% 54%-86% 95%-100%
Compliance with the defendant's demands for specific intermediate gradations of gravel would very substantially increase the cost to the plaintiff of its work in comparison with the cost involved in its furnishing of gravel as originally furnished and still tendered by it.
Contending that its gravel already furnished and tendered not only meets, but actually surpasses, the requirements of the specifications, and that, if the defendant now desires a specific intermediate gradation between the identified maximum and minimum size requirements it must issue a change order as contemplated in section 1.31 of the specifications3 and pay the increased cost thus resulting, the plaintiff instituted this action, and in its complaint prayed for a declaratory decree, finding and decreeing that gravel of the sizes and percentages furnished and tendered by it meets its obligations under the contract; that if the defendant is unwilling to accept such gravel, the defendant is obliged by the contract forthwith to issue a change order as provided in the cited section 1.31, and for general relief and costs.
The defendant, answering, maintains the propriety of its engineer's directions, and prays for a declaratory decree to the effect "that the defendant is entitled to a filter layer constructed of pieces of gravel between the sizes of ¼ to 2½ inches that have been graded and is acceptable to the engineer; * * * that the grading of the gravel pieces involves a question of fact and that any dispute with reference thereto must be referred to the engineer for settlement and that his decision thereon shall be final"; and for general relief and costs.
The contract was executed, and is to be performed, in Nebraska. The parties to it are a Nebraska corporation and a Missouri corporation which, in its performance, operates under a license to do business in Nebraska. It is, therefore, a Nebraska instrument; and the law to be administered in this controversy arising out of it is that of Nebraska, Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, which is to be sought after the fashion suggested in Yoder v. Nu-Enamel Corporation, 8 Cir., 117 F.2d 488, 489, 490.
In support of its reliance upon the declared position of its engineer, the defendant relies principally upon two features of the contract, its general prescriptions touching his authority in the matter of inspection and approval and its more specific provision for the reference to him of certain designated disputes.
The general clauses dealing with the supervisory and inspectional authority of the engineer, which the defendant cites,4 are:
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