United States v. Woods Construction Company

• Decision Date: 10 July 1963
• Docket Number: Civ. No. 5155.
• Citation: 224 F. Supp. 406
• Parties: UNITED STATES of America for the Use of TOM P. McDERMOTT, INC., an Oklahoma Corporation, Plaintiff, v. WOODS CONSTRUCTION COMPANY, Inc., an Oklahoma Corporation, Smith Road Construction Company, Inc., an Oklahoma Corporation, and American Casualty Company of Reading, Penna., Defendants.
• Court: U.S. District Court — Northern District of Oklahoma

224 F. Supp. 406

UNITED STATES of America for the Use of TOM P. McDERMOTT, INC., an Oklahoma Corporation, Plaintiff, v. WOODS CONSTRUCTION COMPANY, Inc., an Oklahoma Corporation, Smith Road Construction Company, Inc., an Oklahoma Corporation, and American Casualty Company of Reading, Penna., Defendants.

Civ. No. 5155.

United States District Court N. D. Oklahoma.

July 10, 1963.

Clarence Warren, Tulsa, Okl., for plaintiff.

Houston, Klein & Davidson, Tulsa, Okl., for defendants.

DAUGHERTY, District Judge.

The Court, after trial, arguments and briefs in the above matter, makes the following Findings of Fact, Conclusions of Law and Decision:

FINDINGS OF FACT

1. Defendant Woods Construction Company was the general contractor for the "Big Creek Section" (approximately 6 miles) of the relocation of Oklahoma State Highway No. 28 project.

2. Defendant Smith Road Construction Company was a subcontractor under Woods on this project.

3. Defendant American Casualty Company made and executed a payment bond on the project for Woods.

4. Plaintiff Tom P. McDermott, Inc., supplied tires, tubes and oil to and made tire repairs for Smith Road.

5. Woods and Smith Road in January, 1960, first entered into a subcontract whereby Smith Road was to perform the entire work. (See Defendants' Exhibit No. 11.) Apparently this arrangement ran afoul of the requirement that the general contractor cannot subcontract more than 50% of the project for thereafter Woods wrote the Resident Engineer on January 26, 1960, advising that it had sublet less than 50% of the total work to Smith Road. (See Plaintiff's Exhibit No. 2.) In this letter the items of the contract to be sublet to Smith Road were specified in an exhibit. No gravel was included. The Corps of Engineers were requested to approve this subletting. No official written approval is shown but it is assumed that the Corps of Engineers approved. No further written contract between Woods and Smith Road in keeping with the January 26, 1960, letter to the Resident Engineer was produced or put in evidence.

6. In undertaking the work required by this project by Woods as general contractor and Smith Road as subcontractor, William Smith, President of Smith Road was made superintendent of the entire project by and for Woods. The Board of Directors of Woods by resolution made William Smith the representative of Woods for the project. Woods had no equipment on the job at any time. All equipment used on the project was Smith Road equipment. In attempting to obtain rock or gravel for the job, Smith Road located its rock crusher first in a cut on the highway and then at another nearby location, both proving unsuitable. Finally Smith Road obtained the right to take needed rock from the Maude Lay quarry to which location its crusher was moved. Quarry employees were carried on Woods's payroll and were so reported to the U. S. Engineers.

7. Based on the foregoing, the Court finds that actually Smith Road as subcontractor performed all the work on the entire project beginning in January, 1960, and continuing until the project was completed in April or May, 1961. This finding embraces the quarry operation as a part of the project and not separate or divisible therefrom. This is so notwithstanding some rock or gravel from the quarry, the exact amount not being specifically shown, and therefore believed to be insignificant, found its way to other projects. The rock used in the project was provided by Smith Road as the subcontractor on the project and as a part of its subcontractor operation. The facts show that Smith Road did the rock work on the entire project, using its men and equipment, and including the quarrying of the rock, notwithstanding the outward attempt by Woods to assert that it did such work as a part of that portion of the project it retained as the general contractor.

8. Upon learning that Woods had the "Big Creek Section" project and that Smith Road was a subcontractor on the job, a salesman of Tom P. McDermott, Inc., called on Smith Road to obtain it as a customer for tires and tubes, tire repairs and other related services.

9. Such salesman called on Smith Road because of said project and its extent and duration and with the intent of furnishing products and services for such project.

10. McDermott had no knowledge that Smith Road was selling some rock from the final crusher location to other projects and had no knowledge or word from either Woods or Smith Road that they considered the quarry operation as distinct and separate from the Highway 28 project.

11. Smith Road used its moving equipment at both the quarry and on the road itself with most of it being used on the road. Some little of such equipment may have been used at the quarry only.

12. McDermott furnished tires and tubes, tire repairs and related services to Smith Road during the period of August, 1960,...