UNITED STATES, ETC. v. Guy H. James Construction Co.

• Decision Date: 05 September 1972
• Docket Number: Civ. A. No. 504.
• Citation: UNITED STATES, ETC. v. Guy H. James Construction Co., 390 F.Supp. 1193 (M.D. Tenn. 1972)
• Parties: UNITED STATES of America for the Use of E & R CONSTRUCTION CO., INC., Plaintiff, v. GUY H. JAMES CONSTRUCTION CO. and Federal Insurance Company, Defendants.
• Court: U.S. District Court — Middle District of Tennessee

390 F. Supp. 1193

UNITED STATES of America for the Use of E & R CONSTRUCTION CO., INC., Plaintiff, v.GUY H. JAMES CONSTRUCTION CO. and Federal Insurance Company, Defendants.

Civ. A. No. 504.

United States District Court, M. D. Tennessee, Northeastern Division.

September 5, 1972.

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John K. Maddin, Jr., Nashville, Tenn., Edward Gallagher, Washington, D. C., for plaintiff.

J. Olin White, Nashville, Tenn., Thomas R. Brett, Tulsa, Okl., C. J. Watts, Oklahoma City, Okl., for defendants.

MEMORANDUM OPINION

MORTON, District Judge.

This action was commenced on September 28, 1967, by plaintiffE & R Construction Co., Inc. based upon the provisions of the Miller Act, 40 U.S.C. §§ 270aand270b.The plaintiff is an Ohio corporation.Defendant, Guy H. James Construction Company, is an Oklahoma corporation, and defendantFederal Insurance Company is a New Jersey corporation which is authorized by the United States to write performance and payment bonds under the terms of the Miller Act.

On June 26, 1964, defendantGuy H. James Construction Company(hereinafter "James") entered into a prime contract with the United States Corps of Engineers providing for the construction of a project in Tennessee known as Cordell Hull Lock and Dam, consisting of a lock and dam on the Cumberland River, including items applicable to this action as follows:

(1) Construction of a lock with cofferdam surrounding the entire worksite, with an elevation of 480 feet around the lock excavation area, referred to as Stage I.

(2) Construction of a cofferdam around lower approach channel to an elevation of 456 feet, referred to as Stage II.

(3) Common excavation, consisting of removal of all earth, including the cofferdam, to final elevations, according to plans of U. S. Corps of Engineers.

The James contract was a successor to earlier contracts held by other parties for the initial excavation and construction of a cellular cofferdam in the dam area, and for road construction and site preparation, and preceded a subsequent contract for the completion of the dam and for construction of the powerhouse.

James, as principal, and Federal Insurance Company(hereinafter "Federal"), as surety, executed to the United States separate bonds, each in a penalty sum of $2,500,000, with performance bond conditioned for faithful performance of the contract, and payment bond conditioned for payment of all labor and material used in prosecution of the contract work.

On July 1, 1964, E & R Construction Company(hereinafter "E & R") entered into a subcontract with James for what may be described generally as the execution of the earth-moving or dirt excavation items under the prime contract.(A copy of the subcontract is included in the Appendix to this Opinion.)

The position of the prime contract undertaken by plaintiff can be more particularly described as follows:

Item                               Estimated      Unit
                 No.        Description             Quantity      Price       Amount
                --------------------------------------------------------------------
                 1    Mobilization &amp
                       Preparatory Work                          Lump Sum   $   17,900
                 2    Lock Cofferdam               100,000 c.y.    0.64         64,000
                 5    Clearing & Grubbing                        Lump Sum       11,000
                 6    Common Excavation          1,480,000 c.y.    0.64        947,200
                15    Filter Drainage Layer          5,200 c.y.    5.28         27,456
                16a   Compacted Impervious Fill     86,000 c.y.    0.14         12,040
                17    Random Fill                  103,000 c.y.    0.08          8,240
                18    Coarse Rock Fill               8,100 c.y.    2.00         16,200
                19    Fine Rock Fill                 2,000 c.y.    2.00          4,000
                20    12-inch Concrete Pipe            200 l.f.    4.00          1,040
                21    15-inch Concrete Pipe            240 l.f.    5.00          1,200
                22    Bedding for Riprap             7,500 c.y.    5.28         39,000
                23    Riprap                        24,500 c.y.    1.50         36,750
                                                                            __________
                                                                            $1,187,2661

The cofferdam system which was utilized on the project was referred to as being in four parts: the "upstream" 480 dike, meaning an elevation of 480 feet; the "downstream" 480 dike; the downstream 456 dike (sometimes referred to as the 460 dike); and the cross-dike.The terms "upstream" and "downstream" are used in relation to a cellular cofferdam that had been constructed under a preceding contract.Stage I of the project refers to the upstream portion of the work; Stage II refers to the downstream portion of the work.²The removal of the 456 and 480 dikes, which was accomplished during the latter part of the work, is sometimes referred to as Stage III.

During the first part of the job E & R was responsible for the removal or excavation of the overburden on the rock underlying the Stage I area and the construction of the 480 dike; during the second part of the job E & R was responsible for the excavation or removal of the overburden on the rock underlying the Stage II area and the construction of the 456 dike; during the final part of the job E & R was responsible for the general maintenance of the dike system, and the eventual removal of the 456 dike, the 480 dikes, and the cross-dike.

The excavation or removal operations by E & R were planned as a use of certain mobile equipment and a dredge that E & R had purchased for this purpose.Stage I excavation was primarily completed with automotive-type earth-moving equipment, although towards the end of this stage a dredge was used to assist in the disposal of Stage I material.Stage II excavation, although begun at higher elevations with automotive-type equipment, was primarily a dredging operation.Stage III, the removal of cofferdams and dikes, was also primarily done by dredge.Stage II was begun before Stage I was completed, but there was a substantial time interval between the completion of Stage II and the commencement of Stage III.

This action is based on twelve separate claims or "items."Plaintiff claims James materially breached the parties' contract and that plaintiff is entitled to recover in quantum meruit, or, in the alternative, entitled to recover for the damages incurred.

STATUTE OF LIMITATIONS DEFENSE

Defendants maintain that several items, i.e., Items (b), (c), (e), (f), (g), (h), (j), and (l) of No. 7 of plaintiff's amended complaint were asserted as claims against defendants for the first time in the amended complaint, filed on September 22, 1971, and they are barred by the one-year statute of limitations, 40 U.S.C. § 270b.Therefore, the threshold question for the court's determination is whether the alleged new claims asserted by plaintiff in the amended complaint are barred by the one-year statute of limitations provision in 40 U.S.C. § 270b which provides, in part:

"(b) . . . no such suit shall be commenced after the expiration of one year after the day on which the last of the labor was performed or material was supplied . . . ."

Defendants contend that in the original complaint filed in this action on September 28, 1967, plaintiff was proceeding on a theory of breach of contract and sought damages therefor.On September 22, 1971, plaintiff filed a motion to amend the complaint and specifically referred to seeking damages and recovery against the defendants for several items of claim on the basis of quantum meruit in addition to breach of contract.The court did not receive any pleadings in opposition to the plaintiff's motion to amend, and an order granting said motion was entered October 6, 1971.At trial defendants asserted as a defense that the claims based on a theory of quantum meruit were new and consequently time-barred under the Miller Act's one-year statute of limitations.

The court finds that the original complaint in this case covered all the items mentioned in the amended complaint.The amended complaint uses different language in part and is more specific.Additionally, the court finds that the original complaint contained the essential elements of a suit in quantum meruit.The court finds no substantive differences between the allegations in the original complaint and those in the amended complaint.In the original complaint jurisdiction is based on the Miller Act and specifically included are claims in reference to: refusal to pay for work performed, material change in plan of construction of cofferdam, unreasonable interference with performance of subcontract work by placing of shot rock, change in filter drainage material, failure to supply riprap bedding, material, and filter drainage material, change in location of access road, failure to supply coarse rock fill and other rock materials, interference with subcontractor's use of dredge, and failure to pay for additional excavation.

All items growing out of this same contract were mentioned in the original complaint, breach of contract based on interference was claimed, and relief was sought on the basis of work performed but not paid for, all of which can be interpreted as a claim based on quantum meruit.The court finds that the allegations of the original complaint contained the essential elements of a suit in quantum meruit.

The court finds the facts and claims asserted in the amended complaint are not barred by the one-year statute of limitations, but instead they fall within the scope of Rule 15(c) of the Federal Rules of Civil Procedure, which provides:

"Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. . . ."(Emphasis supplied.)28 U.S.C.,Fed.R.Civ.P. 15(c).³

Defendants contend...