U.S. Industries, Inc. v. Edmond J. Vadnais, General Contractor

• Decision Date: 10 March 1969
• Court: California Court of Appeals Court of Appeals
• Parties: U.S. INDUSTRIES, INC., a corporation, Plaintiff and Appellant, v. EDMOND J. VADNAIS, GENERAL CONTRACTOR, a co-partnership, Edmond J. Vadnais, Norman G. Vadnais, Defendants and Appellants. Civ. 32599.

Page 44

76 Cal.Rptr. 44

270 Cal.App.2d 520

U.S. INDUSTRIES, INC., a corporation, Plaintiff and Appellant, v. EDMOND J. VADNAIS, GENERAL CONTRACTOR, a co-partnership, Edmond J. Vadnais, Norman G. Vadnais, Defendants and Appellants.

Civ. 32599.

Court of Appeal, Second District, Division 1, California.

March 10, 1969.

Rehearing Denied March 25, 1969.

Hearing Denied May 8, 1969.

Paul, Hastings, Janofsky & Walker, Oliver F. Green, Jr., and William B. Campbell, Los Angeles, for plaintiff and appellant.

Monteleone & McCrory, David P. Yaffe, Los Angeles, Mize, Larsh, Mize & Hubbard and Royal E. Hubbard, Santa Ana, for defendants and appellants.

LILLIE, Associate Justice.

Plaintiff (referred to hereinafter as 'USI') appeals from portions of a judgment made and entered after motions pursuant to section 631.8, Code of Civil Procedure, which (1) denied any recovery for breach of a written agreement to pay the full contract price for steel pipe and other items delivered by it to defendant Vadnais for specified public work and (2) determined that Vadnais and other defendants were not liable to plaintiff for the purchase price of 5,112 feet of pipe rejected by one co-defendant (Woolley), who was also exonerated from any liability under a separate cause of action of the complaint as amended alleging tortious interference with the USI-Vadnais contract. Finally, the judgment awarded attorney's fees in the sum of $6,500 to defendant Fidelity & Deposit of Maryland, surety on Vadnais' bond (Gov.Code, § 4207).

Defendant Vadnais partnership and its partners have also appealed, from that portion of the judgment denying them recovery on their counterclaims by reason of their failure to produce any evidence in support thereof. It is apparent that this appeal is purely precautionary in nature and intended to protect their right to seek affirmative relief from plaintiff should the portions of the judgment challenged by USI be reversed.

The public work or improvement here involved consisted of a water distribution system servicing certain communities in Orange County by means of an underground pipeline approximately six miles long and of varying depth and direction, plans and specifications for which were drawn by defendant Woolley, a consulting engineer. Vadnais was the successful bidder on the project advertised by defendant West Orange County Water Board. Previously, plaintiff had submitted a written proposal to Vadnais to supply the pipe required for the project; on May 9, 1963, Vadnais accepted the proposal, being the contract herein. It called for the manufacture and delivery of approximately 31,473 feet of pipe having a value of $447,403; because of later developments, when suit was commenced there assertedly was an unpaid balance of $105,675. Under the agreement USI promised to commence delivery to the jobsite about 55 days later (July 3, 1963) at the rate of 5,000 feet per week, thus delivery should have been completed within seven weeks thereafter (August 21, 1963). Construction having been thus delayed, the trial court found that said delay was not the result of matters beyond plaintiff's reasonable control; to the contrary, it concluded that the delay was directly and proximately caused by the wilful refusal of plaintiff, throughout the months of May, June and July, 1963, to manufacture said pipe and fittings in accordance with the plans and specifications for the project. It further determined that instead of so doing, plaintiff concentrated its efforts during that period on attempting to get defendant Woolley to alter the plans and specifications to enable plaintiff to manufacture the pipe and fittings more conveniently and cheaply. As a result, according to additional findings, Vadnais was prevented from commencing the project during the months of July and August, 1963, to its substantial damage; plaintiff did not perform, substantially or otherwise, the terms and conditions of the contract by it to be performed and such failure of performance was not caused by any act of Vadnais. While still other findings were made covering the refusal to accept the additional 5,112 feet of pipe manufactured by plaintiff and further disposing of other issues involving Vadnais and its codefendants, we first discuss the problems incident to the question of substantial performance.

Preliminarily, there are settled principles governing the scope of review where the challenged judgment is one rendered pursuant to section 631.8, Code of Civil Procedure. Thereunder '(t)he court as trier of the facts shall weigh the evidence and may render a judgment in favor of the moving party, in which case the court shall make findings * * *.' Accordingly, '(i)f the motion is granted, (its) findings are entitled to the same respect on appeal as any other findings and are not reversible if supported by substantial evidence. (Citations.)' (Greening v. General Air-Conditioning Corp., 233 Cal.App.2d 545, 550, 43 Cal.Rptr. 662, 665--666.)

The evidence reveals the following relevant facts: Before submitting its bid to Vadnais, USI had purchased a computer with which experimental use was made to determine the various sizes, shapes and pieces of pipe required to construct a given pipeline. Although it could have been programmed so to do, the USI computer was unable to compute certain 'flanged fittings' required by the plans and specifications for the project. We briefly explain the use of such fittings--the pipeline comprised many sections; when it made a turn, either vertical or horizontal, the plans and specifications required an elbow flanged at both ends; the straight pieces of pipe adjoining the elbow also required flanging at both ends so that they could be bolted thereto. Because the USI computer was not programmed to compute these 'flanged fittings' and because the pipeline was designed in such a way that the design could not be run through the computer, some of the flanges required by the plans and specifications had to be deleted. After the bids were opened and Vadnais ordered the pipe from USI, the latter endeavored to obtain the consent of defendant Woolley, the consulting engineer for defendant Water Board, to such deletions. Woolley refused. There then followed a series of exchanges, both oral and written, continuing from the latter part of May 1963 through August 30, some three months later. On July 26, 1963, Vadnais wrote USI regarding West Orange County Water Board Feeder No. 2 as follows: 'We are seriously concerned about your complete failure to date to adhere to our agreed upon delivery schedule for pipe for the above referenced project. You will recall that on May 24, 1963 you agreed to commence the delivery of pipe to the job on July 22, 1963 and continue to deliver at the rate of 5,000 feet per week thereafter. As of this date no pipe has been delivered to the job and we have no definite commitment from you as to when delivery will commence.

'This delay has already caused a loss to us because we have equipment standing by ready to commence construction operations which of course cannot be started until pipe is delivered. In addition, the delay threatens to throw the job into the winter months when rainy weather will hamper our construction operations and increase our costs. Our contract with the Water Board contains a liquidated damages clause, and the Consulting Engineer for the Board advised us by letter dated July 17, 1963, a copy of which was sent to you, that at that time there were thirty-two days delay for which we would be held responsible.

'We will of course hold you directly responsible for any and all losses which we sustain as a result of your failure to perform according to our subcontract agreement.

'We understand that now, after several weeks of discussions with the Consulting Engineer over the number and locations of pipe flanges, you are considering manufacturing said flanges yourself. We wish it distinctly understood that if this change in procedure involves any additional delay in meeting your delivery schedule, we will sustain additional losses for which we will hold you strictly accountable.

'We urgently request that you expedite the manufacture of the pipe required by our contract, and that you immediately advise us as to when we can expect delivery to commence.'

On July 29, 'in confirmation of our telephone conversation on July 26,' USI wrote to Vadnais, a copy of such communication being sent to Woolley, expressing plaintiff's agreement to eliminate certain flanges specified by Woolley and stating, among other things, that production would start on July 29. The letter concluded as follows: 'We trust that all parties are now in agreement and that those conditions set down by Mr. J. A. Woolley have been complied with. Please advise should you have any questions.' During the next ten days USI's calculations and shop drawings were submitted and resubmitted for correction to Woolley who finally approved them on August 7. The first pipe was shipped to the jobsite on August 30, 1963, although USI had originally contracted to start such shipments on July 3.

Recently the doctrine of substantial performance was once again set forth by our Supreme Court: 'Where a person agrees to do a thing for another for a specified sum of money, to be paid on full performance, he is not entitled to any part of the sum until he has himself done the thing he agreed to do, unless full performance has been excused, prevented or delayed by the act of the other party.' (Lowy v. United Pacific Ins. Co., 67 Cal.2d 87, 92, 60 Cal.Rptr. 225, 228, 425 P.2d 577, 580.) Applied to building contracts, 'where the owner has taken possession of the building and is enjoying the fruits of the contractor's work in the performance of the contract, if there has been a substantial performance thereof by the contractor in good faith, if the failure to make full performance can be compensated in damages to be deducted from the price or...