Van Meter v. Bent Const. Co.
| Decision Date | 01 June 1956 |
| Citation | 297 P.2d 644,46 Cal.2d 588 |
| Court | California Supreme Court |
| Parties | Morris S. VAN METER, Plaintiff and Appellant, v. BENT CONSTRUCTION COMPANY et al., Defendants and Respondents. L. A. 23369 |
Higgs, Fletcher & Mack and Ferdinand T. Fletcher, San Diego, for appellant.
Procopio, Price, Cory & Schwartz, San Diego, Hill, Farrer & Burrill, Los Angeles, Alec L. Cory, San Diego, and Stanley S. Burrill, Los Angeles, for respondents.
Defendants contracted with the city of San Diego to construct a dam and remove brush and trees from the reservoir basin, and thereafter they entered into a subcontract with plaintiff for clearance of the basin, representing to him that the area to be cleared had been marked with flags. Plaintiff later discovered that the flagged area covered only a part of the reservoir basin, and he notified defendants that unless some adjustment was made he would not proceed with the work. It was then agreed that plaintiff should clear the entire basin without prejudice to his rights under the subcontract. Upon completion of the work he brought this action seeking, in separate counts, a declaration of rights, reformation of the subcontract, recovery of the reasonable value of services performed, and damages for false representations.
Certain issues were submitted to a jury on special interrogatories, and its answers were supplemented by findings of the court. It was found that defendants made false representations believing them to be true and that plaintiff relied on the misrepresentations and failed to use reasonable care in ascertaining the extent of the area to be cleared. The court concluded that, because the fraud perpetrated by defendants was not wilful, plaintiff's negligence precluded him from obtaining any relief. He has appealed from the ensuing judgment contending that the finding that he was negligent is not supported by the evidence and that the judgment is not supported by the findings. 1
The provisions of the general contract between the city and defendants relating to clearance of the reservoir basin are found in section H of Specification No. 9-Sutherland Dam, under the designation 'H-01 Clearing.' Insofar as material here, the section states that The contract, which is in book form, consists of 110 typewritten pages, including the table of contents, and 27 folded pages at the back of the book containing drawings and maps. One of the maps is entitled 'Sutherland Dam Area to be Cleared and City Camp.' This map, which is not referred to in the table of contents or in section H, shows elevation contour 2,073 enclosing an area irregular in shape consisting of two basins joined by a narrow neck. The Santa Ysabel Creek runs west through the upper basin, truns at the narrow neck and flows north through the lower basin. The upper basin, which is long and narrow, contains approximately 220 acres. The lower basin covers approximately 420 acres and is nearly as broad as it is long. The dam site is shown on the map as being located at the north end of the lower basin, and the map contains a notation on the lower basin area: 'Contractor shall clear area below contour 2073 about (1) sq. mile.'
Mr. Daley, a representative of defendants, asked plaintiff to submit a bid for removing trees and brush and showed him a copy of the contract, calling his attention to section H. Together they read the provisions dealing with the clearance of the reservoir basin, and Daley told plaintiff that the area to be cleared had been flagged by the city and that it was the area on which he was to bid. Plaintiff kept the copy of the general contract and marked with a paper clip the page containing section H. Daley made no reference to the map, which, as we have seen, was not mentioned in section H or listed in the table of contents, and plaintiff did not see it until after he had commenced work. When plaintiff examined the area prior to making his bid he found that flags had been placed in the lower basin along contour 2,073. He looked for additional flags but found none, and it is undisputed that no flags had then been placed in the upper basin.
Plaintiff submitted a bid in the sum of $29,750, informing defendants that he was bidding on the flagged area, and he was again told by defendants that the area to be cleared was that flagged by the city. The bid was accepted, and plaintiff executed the subcontract which states that he is familiar with the terms of the general contract and that he 'agrees to perform fully and completely all that portion of the work required to be done by Contractor under the General Contract which is hereinbelow particularly described as follows: All that work named in Specification No. 9, Sutherland Dam Section H Clearing Reservoir Basin, H-01 Clearing Bid Item No. 76.'
Plaintiff commenced work about August 1, 1952, and early in September he was informed by a city employee that a larger area than the one flagged was to be cleared. Shortly thereafter the city placed flags in the upper basin. Plaintiff notified defendants that he had learned that all of the area had not been flagged during the bidding period as required by section H of the general contract, that he had made his bid on the assumption that the flags marked the boundary of the area to be cleared, and that unless defendants made an adjustment he would stop work on October 1. The parties then agreed that plaintiff should complete the clearance of the entire reservoir basin without prejudice to their rights under the subcontract.
Evidence as to the amount of damages was deferred until determination of liability, and only a prima facie case as to costs and values was presented. Defendants' bid for constructing the dam and clearing the reservoir basin was $2,896,485, which included an estimated profit of $267,707.66. In their bid defendants listed $116,500 for clearing the reservoir area, but their accountant testified that $89,350 was included in that item to cover part of the general overhead expense of the project. Plaintiff's books showed that the cost of removing the trees and brush from the flagged area was $25,240.25 and that his cost of clearing the remaining portion of the reservoir basin which, although smaller, was more heavily wooded, was $50,085.25.
The findings may be summarized as follows: The general contract with the city required defendants to clear all of the reservoir basin below the elevation of 2,073 feet, and by the terms of the subcontract plaintiff undertook to perform that part of the general contract providing for clearing the reservoir basin. Plaintiff has completed the work required of him and has earned the sum of $29,750 specified in the subcontract. When he entered into the subcontract he believed in good faith that the area required to be cleared was that portion of the reservoir basin below contour elevation 2,073 which had been flagged by the city. Prior to the execution of the subcontract, defendants made untrue representations to plaintiff with regard to the extent of the area to be cleared. Defendants believed that flags had been placed around the entire contour, and they did not know that their representations were false, but defendants made the representations as positive assertions in a manner not warranted by their information. Plaintiff believed the representations, relied upon them in entering into the subcontract and was thereby caused to believe that by its terms he was to clear that portion of the reservoir basin lying below the flags which were then on the ground. A contractor of ordinary skill in the exercise of ordinary care should have known that the contract required that trees and brush be removed from both basins, and, had plaintiff made the inquiries reasonably suggested by the contract and an inspection of the premises, he would have discovered that it was intended that the entire reservoir basin be cleared. Plaintiff, who was an experienced contractor, failed to use reasonable care to ascertain the extent of the area involved.
The court concluded that because the fraud perpetrated upon plaintiff was not wilful and since plaintiff did not use reasonable care in ascertaining the extent of the work to be performed under the subcontract, he was entitled to no relief and that 'The findings heretofore made are determinative of all the issues involved in this action and that it becomes unnecessary to make any further findings of fact.'
In view of the positive misrepresentations made by defendants, the trier of fact could have...
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