Todd Shipyards Corporation v. Jasper Electric Service Co.

• Decision Date: 03 July 1969
• Docket Number: No. 25846.,25846.
• Citation: 414 F.2d 8
• Parties: TODD SHIPYARDS CORPORATION, Appellant, v. JASPER ELECTRIC SERVICE COMPANY et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

414 F.2d 8 (1969)

TODD SHIPYARDS CORPORATION, Appellant, v. JASPER ELECTRIC SERVICE COMPANY et al., Appellees.

No. 25846.

United States Court of Appeals Fifth Circuit.

July 3, 1969.

COPYRIGHT MATERIAL OMITTED

Charles R. Vickery, Jr., Vickery & McConnell, D. Graham Moore, Houston, Tex., for appellant, Todd Shipyards Corp.

George A. Weller, Beaumont, Tex., Floyd W. Addington, Jasper, Tex., Robert C. Maley, Jr., Houston, Tex., Wheelus & Green, Beaumont, Tex., for appellee, United States Fidelity and Guaranty Co.

Addington & McGraw, Jasper, Tex., Sheinfeld & Maley, Richard S. Donoghue, Houston, Tex., for appellee, Jasper Electric Service Company.

Joe H. Tonahill and Monte D. Lawlis, Jasper, Tex., for appellee, First National Bank of Jasper.

Before GEWIN, McGOWAN^* and MORGAN, Circuit Judges.

GEWIN, Circuit Judge:

The nucleus of this diversity case is a subcontract covering the electrical work involved in the construction of an immense derrick barge.¹ The subcontractor, Jasper Electric Service Company, filed this suit in the United States District Court for the Southern District of Texas against the prime contractor, Todd Shipyards Corporation, seeking recovery of, inter alia, an amount allegedly due under the subcontract or, in the alternative, an amount due in quantum meruit, as well as actual and exemplary damages for allegedly wrongful conduct on the part of Todd. In response, Todd answered denying liability and counter-claimed alleging, inter alia, that Jasper had breached the subcontract in numerous instances causing Todd to suffer damages. In addition, Todd cross-claimed against Jasper's performance surety, United States Fidelity and Guaranty Company, alleging that USF&G was liable to Todd for costs and damages caused by Jasper's failure to perform the subcontract. Finally, the First National Bank of Jasper, Texas intervened seeking judgment against Jasper for any amount recovered from Todd on the ground that First National was the assignee of Jasper's accounts receivable, including the account receivable from Todd.

This case appears to have gone to trial without any attempt being made by the parties to narrow and define the issues. If pre-trial conferences were held, nothing appears to have resulted from them.² However, the trial court narrowed the issues in its charge to the jury by simply eliminating many of the questions raised by the pleadings. This approach was required by the plain necessity for some narrowing of the issues; the special interrogatories would otherwise have been so complex and confusing that the bluest of the blue-ribbon juries could not disentangle the vipers' nest of facts and alternative theories urged in this case.

The district court's charge to the jury contains basic facts which place the controversy in context. In the early summer of 1964, Todd entered into the prime contract with Brown & Root, Inc. to construct the barge. Todd subcontracted the electrical work on the barge to Jasper which appears to have begun work in December 1964. Jasper performed the subcontract work until July 19, 1965 when Todd took over part of the subcontract work. However, Jasper continued to work on the barge until its completion on August 20, 1965. Todd states in its second amended answer, cross-action and counterclaim:

Todd notified Plaintiff that Todd would take over and complete the welding stations and the "high bay" lighting in addition to the crane wiring and the electronic stations because of Jasper\'s defaults; at this time, Plaintiff acting through Mr. Jack Rahar, agreed:

(1) To furnish Todd with the materials necessary to begin work.

(2) Plaintiff to continue working on the other phases of the subcontract.

(3) To cooperate and work with Todd in order to expedite completion of the electrical subcontract.³

The district court defined the basic respective positions of the parties as follows:

Jasper\'s claims in this lawsuit are that Todd still owes Jasper $41,181.50, which represents the unpaid portion of the original contract price, plus approved extras, and retainage. It is undisputed that this sum of $41,181.50 is correct and includes the unpaid portion of the original contract price, the approved extras, and the retainage. Todd denies that it is obligated to pay Jasper this sum. Also, Jasper claims that Todd breached the subcontract agreement and that Jasper is due additional sums of money as damages for this breach. Also, Jasper claims that it is due additional sums of money because of interruptions to its work brought about by Todd\'s coordination and supervision of the job. Todd, on the other hand, disputes that it is obligated to pay Jasper any sum of money, including the $41,181.50. Todd claims that Jasper breached its contract and, by virtue of this breach, it was necessary that Todd supplement the work subcontracted to Jasper and actually perform through its own forces a part of the work subcontracted to Jasper. Todd further claims that in performing this work and in supplementing Jasper\'s work, it utilized all of the $41,181.50, and, in addition thereto, spent additional sums of money in the form of labor and materials, and Todd seeks to recover this additional sum of money from Jasper. Todd further claims that Jasper, in the manner and methods in which Jasper performed its work on the barge, interrupted Todd\'s work and the work of other subcontractors, and that this interruption caused Todd to suffer damages, and for which Todd seeks to recover these damages from Jasper.

There appears to be no dispute that Jasper performed some work under the subcontract after July 19, 1965. Jasper's position is that it performed a considerable amount of extra work for which it is entitled to recover in quantum meruit. Todd's position is that the alleged extra work was actually required by the subcontract. In addition, it is clear that Jasper wrongfully refused to perform some items of work which were clearly covered by the subcontract. The court instructed the jury that the evidence proved inescapably that the subcontract covered the electrical wiring on the revolver crane and the electronic equipment, which Jasper had refused to perform and which Todd had been required to perform.

On the parties legal rights under the subcontract, the court instructed the jury as follows:

In this case, Jasper is not to be held to a strict and literal performance of its contract in order to enable Jasper to recover on the contract. If Jasper has substantially performed its contract, then Jasper is entitled to recover whatever sums of money under the instructions the Court gives you that you might determine it is entitled to. By substantial performance is meant that there has been no willful departure from the terms of the subcontract between Jasper and Todd, and no omissions of essential work, and that Jasper has honestly and faithfully performed in all material and substantial particulars of the subcontract, and the only variance from a strict and literal performance consists of technical or unimportant details not so essential that the safe operation of the barge was affected.

You are further instructed that A may breach its obligations under a contract with B where A, by wrongful means, has been prevented by B from performing or completing the contract, or where B by its actions makes performance of the contract by A impossible. If such a breach of contract occurs, A who was not guilty of acts bringing about a breach of the contract is excused from further performance under the contract and may recover proper damages it sustained by reason of the breach of the contract by B.

You are further instructed that before Jasper can recover from Todd, Jasper must show that it was not in default under the terms of the contract, or, if in default, such default had been waived by Todd, and Jasper was at all times ready, willing and able to complete and perform the remaining portions of the contract.

In connection with Todd\'s claim against Jasper, you are instructed that before Todd can recover from Jasper, Todd must show that its actions of July 19, 1965, in taking over the contract did not constitute a breach of the contract; you are further instructed that before Todd can recover from Jasper, Todd must show that it was not at any time in default under the terms of the contract; that at the time of the taking over by Todd on July 19, 1965, Todd had reasonable grounds to believe that Jasper could not complete its contract within a reasonable time from that date, or at that time Jasper had failed to make reasonable progress of sic its obligations under the contract.

The court submitted the case to the jury on fifteen Special Issues. A reading of the Special Issues and the answers of the jury is necessary to a full understanding of this case. In our view, they demonstrate that the jury did not and probably could not understand or correctly decide the questions involved. There are inconsistencies in the Special Issues and conflicts in the jury's answers. It would be impractical and impracticable to undertake in this opinion to catalogue all the evidence which bears on each side of the questions presented by the Special Issues. Instead, our undertaking in this case is limited to discussing facts generally and setting forth the principles of law which apply in the given context. The Special Issues, together with the jury's answers, are set out fully in an Appendix to this opinion.

On the basis of the jury's answers, the court awarded Jasper (1) $41,181.50 as the unpaid portion of the subcontract price and (2) $23,890.18, which was derived by including the $5,325.39 which the jury awarded Jasper for unapproved extras⁴ under Special Issues Nos. 5, 6, 7, 9 and 10, and the $24,000 the jury gave in answer to Special Issue No. 15, and by excluding or offsetting $9,210.50 which the court found to be the estimated value of the work that Todd performed in connection with the electrical wiring of the revolver...