United States v. Blount
| Decision Date | 07 April 1960 |
| Docket Number | 11142.,Civ. No. 11141 |
| Citation | 182 F. Supp. 648 |
| Parties | UNITED STATES of America, for the Use of ARC & GAS WELDER ASSOCIATES, INC., v. Winton M. BLOUNT, William H. Blount and Clara B. Blount, partners, trading as Blount Brothers Construction Co., and United States Fidelity & Guaranty Company, Defendants and Third-Party Plaintiffs (GREEN FUEL ECONOMIZER COMPANY, Inc., a New York corporation, and National Surety Corporation, Third-Party Defendants). ARC & GAS WELDER ASSOCIATES, INC., a Maryland corporation, v. GREEN FUEL ECONOMIZER CO., Inc., a New York corporation, and National Surety Corporation, a New York corporation. GREEN FUEL ECONOMIZER CO., Inc., Defendant and Third-Party Plaintiff, v. AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, Joseph T. Ryerson and Son, Inc., and Winton M. Blount, William H. Blount and Clara B. Blount, Partners trading as Blount Brothers Construction Company, Third-Party Defendants. |
| Court | U.S. District Court — District of Maryland |
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John Henry Lewin, David C. Green and Venable, Baetjer & Howard, Baltimore, Md., for Arc & Gas Welder Associates, Inc.
William L. Marbury, Mathias J. DeVito and Piper & Marbury, Baltimore, Md., and James C. Blair, Birmingham, Ala., for Blount Brothers Construction Co. and United States Fidelity & Guaranty Company.
Byron N. Scott and Frank S. Ketcham, Washington, D. C., for Green Fuel Economizer Company, Inc., and National Surety Corporation.
William B. Somerville, Baltimore, Md., and E. H. Cushman, Philadelphia, Pa., for American Casualty Company of Reading, Pa.
These consolidated cases arise out of the construction of a biological laboratory at Fort Detrick, Frederick, Maryland. The Corps of Engineers, Department of the Army, was in charge of the construction. The laboratory includes two "cloud chambers", air-tight rooms of stainless steel, polished to so smooth a finish that there are no pits, cracks or crevices in which germs may lurk after the cloud chambers have been emptied and cleaned from time to time.
The general contract for the laboratory was let to Blount Brothers Construction Company (Blount), which subcontracted the furnishing of all work and materials for the cloud chambers to Green Fuel Economizer Company, Inc. (Green). Green, in turn, ordered the steel from Ryerson Steel Company (Ryerson), and contracted with Arc & Gas Welder Associates, Inc. (Arc) to do the welding, fabricating, erecting and testing, and to polish the welds.
Gordon, who was in charge of the cloud chamber job for Green, was continually scheming to develop claims for extra work against Blount and the Government. He also induced Knief, the president and sole stockholder of Arc, who was inexperienced and unsophisticated, to do a great deal of polishing which was not required of Arc by its sub-subcontract with Green, but was required of Green by its subcontract with Blount. The work was finally completed, at great cost to Arc. The consolidated cases, which have been tried before the court without a jury, involve:
(2) for additional work, principally polishing, ordered by Green, or made necessary by the condition of the steel plates purchased by Green from Ryerson, or for which Green would be otherwise liable.
(B) Claims by Arc against Blount and its Surety
II. (A) Claims by Green against Blount and Blount's Surety
(3) the so-called "polishing claim", which is chiefly an indemnity claim for any amount payable by Green to Arc under I.(A) (2).
(B) Claim by Green against Blount for wilful interference with and malicious failure to convey certain information to Green.
(C) Claim by Green against Arc and Arc's Surety for delay. This claim was dismissed with prejudice by Green as against Arc's Surety during the trial, without any payment to Green by Arc's Surety.
(D) A claim by Green against Ryerson was part of the case until shortly before the trial, when it was dismissed by Green with prejudice. There is nothing in the record to show what, if anything, Ryerson paid to obtain this dismissal.
III. Claims by Blount against Green and Green's Surety
(A) for delays chargeable to Green,
(B) for exoneration from and indemnity against Arc's Miller Act claim against Blount, I.(B) (2), above, and
(C) for counsel fees.
In addition to the contracts, plans, specifications, physical exhibits, records, bills, computations, etc., the parties offered hundreds of letters and over 2,000 pages of testimony. Arc, Green and Blount have each submitted over fifty proposed findings of fact, many very elaborate, some covering several typewritten pages. It is impractical to rule on all the proposed findings; the important facts are set out below in the two major sections of this opinion, headed "Underlying Facts" and "Findings of Fact and Conclusions of Law on the Several Claims".
On June 30, 1955, Blount entered into a general contract with the Corps of Engineers to construct a biological laboratory, including two cloud chambers, at Fort Detrick, Maryland, for the Chemical Corps (the Using Agency). As required by the Miller Act, 40 U.S. C.A. § 270a, Blount furnished a payment bond, with United States Fidelity and Guaranty Company (U.S.F. & G.) as surety, in the penalty of $1,677,700.
The outer walls of the cloud chambers were to be constructed of stainless steel plates, 3/16ths of an inch thick, welded together, and supported by carbon steel structural beams tack-welded to the outside of the plates. Each cloud chamber contained a vertical baffle, to be constructed of welded stainless steel sheets,1 and a horizontal baffle, of welded stainless steel plates.
The following provisions of the specifications are particularly pertinent:
Surface finishes on stainless steel sheet and plate are commonly sold by number designations, e. g. No. 1 finish, No. 4 finish, and No. 7 finish, the higher numbers indicating smoother finishes. They are not customarily sold in terms of a measurable smoothness in micro-inches. No. 1 finish, sometimes called "mill finish", is not polished at all. The leading steel mills regularly produce and sell stainless steel sheet and plate designated as having a No. 4 finish.
It is understood in the industry that a No. 4 finish is a finish arrived at by grinding the surface of the plate or sheet with coarse abrasives and then polishing the surface with abrasives no coarser than 120 grit. Some mills use an even finer grit, but 120 grit is standard. While the various mills do not achieve precisely the same surface smoothness for all No. 4 finish and do not ordinarily produce or sell No. 4 finish in terms of a micro-inch measure or other specific measure of surface smoothness, the No. 4 finishes produced and sold by the various reputable mills fall within a range of surface smoothness which does not exceed 42 micro-inches. It is also recognized in the industry that to qualify as a No. 4 finish the surface of the plate must have no pits visible to the naked eye, and that all such pits are to be removed in the grinding and polishing operations necessary to produce a merchantable No. 4 finish.
There is no material difference between a No. 4 finish on plate that has been polished to that finish by a mill and on plate that has been polished to that finish in the field, except that field-polished plate may be streaked in appearance. Nor is there any material difference between a No. 4 finish on stainless steel plate and a No. 4 finish on stainless steel sheet, although they may not look the same at a casual glance.
On July 28, 1955, Blount entered into a subcontract with Green, in which Green agreed that it would furnish all labor, materials, equipment, etc., and would perform all work necessary to furnish, erect and complete two stainless steel cloud chambers in all respects as was required of Blount by the general contract, including the plans and specifications.
With certain limitations, the contract documents allowed the contractor to choose the details of the method of fabrication and erection.
It was agreed, however, that all work would be done under the direction of the Corps of Engineers, which was designated as the Engineer and/or Architect, and that its decision as to the true construction and meaning of the drawings and specifications would be final.
Green agreed to prosecute its work efficiently and promptly, and not to delay the work carried on by Blount or by other subcontractors. If Green was delayed by Blount, Green would be entitled only to an extension of time.
During the course of the work, progress payments were to be made by Blount to Green based upon estimates made by the Corps of Engineers, with the option in Blount to retain 10% of each estimate until final settlement and to withhold payment of any estimate until Green...
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