United States v. Stringfellow, 26853.

• Decision Date: 30 July 1969
• Docket Number: No. 26853.,26853.
• Citation: 414 F.2d 696
• Parties: The UNITED STATES of America For the Use and Benefit of CITIZENS NATIONAL BANK OF ORLANDO, a National Banking Corporation, Plaintiff-Appellee, v. V. O. STRINGFELLOW, Burl Johnson and K. H. Vitt, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

414 F.2d 696 (1969)

The UNITED STATES of America For the Use and Benefit of CITIZENS NATIONAL BANK OF ORLANDO, a National Banking Corporation, Plaintiff-Appellee, v. V. O. STRINGFELLOW, Burl Johnson and K. H. Vitt, et al., Defendants-Appellants.

No. 26853.

United States Court of Appeals Fifth Circuit.

July 30, 1969.

Wayne P. Sturdivant, Simpson, Adkins, Fullingim & Hankins, Amarillo, Tex., for appellants.

L. A. White, Culton, Morgan, Britain & White, Amarillo, Tex., Charles E. Davis, Fishback, Davis, Dominick, Troutman & Salfi, Orlando, Fla., for Citizens National Bank of Orlando and West Construction Co.

Before AINSWORTH and GODBOLD, Circuit Judges, and DAWKINS, District Judge.

AINSWORTH, Circuit Judge:

Appellant, Stringfellow Amarillo Associates, was engaged as the prime contractor for the construction of a Capehart Act (42 U.S.C. § 1954 (1964)) housing project at the Amarillo Air Force Base, Potter County, Texas. On September 17, 1958, Stringfellow separately subcontracted to appellee, West Construction Company, the following work on this project: (1) the excavation, area grading, and landscaping, (2) the construction of paved streets, and (3) the construction of curbs, drives, and walks. Under the first of these subcontracts West was to move dirt in conformance with specified contour lines. As the work progressed, West discovered that more soil had to be moved than West had originally contemplated. Moreover, "West's labors were increased by the delays of Stringfellow in removing spoil for which it had responsibility and by other conduct of Stringfellow. * * *" Citizens National Bank of Orlando v. Vitt, 5 Cir., 1966, 367 F.2d 541, 543. Because of these and other difficulties encountered by West and to resolve differences that arose between West and Stringfellow, a compromise agreement was made by the parties on May 15, 1959. Subsequent to that agreement, however, further differences arose, and West ultimately suspended its operations on the project.

An action was brought in the United States District Court for the Northern District of Texas in which Judge Joe B. Dooley denied West's claim in quantum meruit against Stringfellow. On October 5, 1966, a panel of this Court reversed and remanded the case:

"Deciding, as we do, that Stringfellow breached its contractual undertakings to West, and that West was justified in terminating the contract, we come to the question as to the effect of such termination upon the rights of Stringfellow, the prime contractor, and West, the subcontractor. Succinctly stated, this is the rule, `Once a subcontractor has established a breach of contract by the prime, he can recover the value of the work he has done or the service he has rendered. In other words, he is entitled to a quantum meruit.\' Citations omitted

* * * * * *

"* * * The quantum meruit, on which West may recover, is different from the contract prices. * * *"

Citizens National Bank of Orlando v. Vitt, supra at 546, 547.

Upon remand¹ the District Court held that West was entitled to $236,249.39 from Stringfellow. This amount was computed as follows. The parties did not dispute that subcontractor West was due $399,564.84 from contractor Stringfellow or that Stringfellow was entitled to offset $425,671.85 against the sum of the undisputed amount due West and the value of the dirt work performed by West. The parties did not agree, however, upon the value in quantum meruit of that dirt work. The District Court (Judge Hughes) found that $1.15 per net cubic yard of dirt moved was the reasonable value of the work performed by West and that West was entitled to $661,921.24 ($262,356.40 for the moving of 228,136 cubic yards of dirt plus $399,564.84, the undisputed amount) minus the offset of $425,671.85, or $236,249.39.

The original contract price for the dirt work was to be computed at 45¢ per cubic yard of dirt moved. The District Judge found, however, that this price would have been the reasonable value of the services performed by West "only if West had been able to work unhampered by the numerous obstacles and interferences occasioned by Stringfellow's failure to properly co-ordinate the project." Specifically, the trial judge held that West's costs had been increased significantly by the excess dirt and other obstacles scattered over the jobsite, by the necessity of reworking some sections as many as four times, and by delays caused by Stringfellow's interference. The original trial court had found that the reasonable value of the dirt work performed by Stringfellow to finish the job left uncompleted by West when West quit was $1.15 per cubic yard of dirt moved, and the retrial court concluded that this value was also the reasonable value of the dirt work performed by West. The retrial judge found that the services were substantially the same and reasoned that "if anything the fair value of West's work was greater than Stringfellow's since Stringfellow did not have to rework sections and was not hampered by the numerous interferences which confronted West."

In this appeal Stringfellow attacks the District Court's determination of the fair value of the dirt work performed by West on the grounds that (1) the May 15, 1959 compromise agreement establishes as a matter of law that the value of the work at issue cannot exceed $97,947.90² because that agreement conclusively settled between the parties that West was to receive this amount for moving 233,450 cubic yards of dirt and West actually moved 228,136 cubic yards, (2) the District Court's determination of value is clearly erroneous and unsupported by any evidence, and (3) the evidence conclusively establishes that the value of the work is to be measured at the rate of 45¢ per cubic yard (the original contract price). We disagree with these...