United States v. Ramstad Construction Co.

• Decision Date: 25 May 1961
• Docket Number: Civ. No. A-54-60.
• Citation: 194 F. Supp. 379
• Parties: UNITED STATES of America for the use and benefit of WYATT & KIPPER ENGINEERS, INC., a corporation, Plaintiff, v. RAMSTAD CONSTRUCTION CO., a corporation, and American Casualty Company, Inc., a corporation, Defendants.
• Court: U.S. District Court — District of Alaska

194 F. Supp. 379

UNITED STATES of America for the use and benefit of WYATT & KIPPER ENGINEERS, INC., a corporation, Plaintiff, v. RAMSTAD CONSTRUCTION CO., a corporation, and American Casualty Company, Inc., a corporation, Defendants.

Civ. No. A-54-60.

United States District Court D. Alaska.

May 25, 1961.

Burr & Boney, Anchorage, for plaintiff.

Hughes & Thorsness, Anchorage, for defendants.

HODGE, District Judge.

Plaintiff brings this action under the provisions of the Miller Act (Sec. 270b, Title 40 U.S.C.A.), also alleging jurisdiction of the court by reason of a federal question (Sec. 1331, Title 28 U.S. C.A.) inapplicable here, and by reason of diversity of citizenship (Sec. 1332, Title 28 U.S.C.A.). The action is based upon a subcontract between the use plaintiff as subcontractor and the defendant Ramstad Construction Co. as prime contractor, covering specified portions of work required of the defendant under a contract with the United States of America for the furnishing and erection of complete water tanks at Newenham Air Force Station and Cape Romanzof Air Force Station in Alaska. Plaintiff seeks recovery against the contractor and its surety, the American Casualty Company, Inc., upon three claims, in substance as follows: (1) for the value of tools and equipment of the use plaintiff which were to be returned to it by defendant at Seattle and Anchorage, free of charge to the subcontractor, after the plaintiff completed the work, which had not been returned as required by the terms of the subcontract, amounting to $3,015.40; (2) for the cost of repairing a welding machine which it is claimed was belatedly returned to the plaintiff by the defendant in a damaged condition, in the sum of $395.05; and (3) for freight charges for shipment from Anchorage to Seattle of tools and equipment of the plaintiff which were finally returned by Ramstad but the shipping charges on which were not paid by Ramstad as required under the terms of the contract, in the sum of $402.74.

The defendants first filed a joint answer admitting the allegations of the complaint with respect to the execution of the contract, subcontract, and the payment bond but denying the claims of plaintiff and alleging plaintiff has been paid in full for all work or obligations arising out of the subcontract, and that plaintiff did, on June 24, 1959, execute a full release of all claims against the defendant Ramstad as shown by copy of said written release signed by the president of the plaintiff corporation. Subsequently the defendant Casualty Company filed a separate amended answer setting up the same release as an affirmative defense, together with an allegation of accord and satisfaction between the parties, and that plaintiff's complaint fails to state a claim upon which relief can be granted against said defendant; also asserting a cross-claim against its codefendant Ramstad Construction Co. based upon an indemnity agreement, which is not pertinent here.

The defendant Casualty Company now files a motion for summary judgment

"on all issues of controversy in this case upon the ground and for the reason that there is no genuine issue as to any material fact and that the defendant is entitled to judgment as a matter of law." (Rule 56, F.R.Civ.P., 28 U.S.C.A.)

This motion is supported by the release filed with and attached to defendants' answer.

In response to said motion, plaintiff has filed an affidavit of counsel setting forth copies of correspondence between the parties relative to the tools, which are the subject matter of the action, indicating some correspondence from September 19, 1958, to October 11, 1958, relative to the return of the tools and that on July 30, 1959, subsequent to the date of the release, the defendant advised of the pilferage and loss of the tools in storage at "designated storage areas," stating that defendant would not be responsible for any damage to the tools and equipment; and a further letter under date of January 28, 1960, denying liability under the subcontract to make payment to plaintiff for the missing tools and equipment.

The pertinent parts of the release relied upon are as follows:

"Now, therefore, in consideration of the premises" (completion and acceptance of all work required under the subcontract) "and the payment by the contractor to the subcontractor of the amount due under the subcontract * * * the subcontractor hereby releases, remises, and discharges Ramstad Construction Co. of and from all manner of debts, dues, sum or sums of money, accounts, claims, and demands whatsoever, in law or in equity, under and by virtue of said subcontract except None."

It is well settled that there cannot be a release without unequivocal acts showing expressly or by necessary implication an intention to release, and that a person does not, by a general release, relinquish claims of which he has no knowledge; or that the operation of the release will be limited to those things within the contemplation of the parties at the time of its execution; further, that the actual intent of the parties presents a question of fact to be determined from the surrounding conditions and circumstances, construed with reference to the amount of consideration paid and the language of the release itself. 45 Am.Jur., Release, Sec. 28, pp. 692-693; Williston on Contracts, Rev. ed., Vol. 6, Sec. 1825, pp. 5167-5169; Annotation 171 A.L.R. 184, 188; Mayle v. Criss, D.C., 169 F.Supp. 58, 60; Zurich General Accident & Liability Ins. Co. v. Klein, 181 Pa.Super. 48, 121 A.2d 893; Cahill v. Regan, 5 N.Y.2d 292, 184 N.Y.S.2d 348, 157 N.E.2d 505.

It is true that the parol evidence rule applies to releases in writing and that where a release is given in terms which are broad enough to cover the facts complained of, extrinsic evidence is not admissible to show that the release did not in fact relate to and was not intended to discharge such cause of action. 45 Am.Jur., supra, Sec. 46. However, this rule must be held subordinate to the broad rule that the intention which the words of the instrument express in the light of the circumstances existing at the time shall prevail.

The question here presents genuine issues of material fact, as well as law, in construing the release with respect to the intention of the parties under the facts and circumstances, especially in that...