WR Grimshaw Company v. Nevil C. Withrow Co.

• Decision Date: 15 November 1957
• Docket Number: No. 15768.,15768.
• Citation: 248 F.2d 896
• Parties: W. R. GRIMSHAW COMPANY and National Surety Corporation, Appellants, v. NEVIL C. WITHROW CO., Inc., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

248 F.2d 896 (1957)

W. R. GRIMSHAW COMPANY and National Surety Corporation, Appellants, v. NEVIL C. WITHROW CO., Inc., Appellee.

No. 15768.

United States Court of Appeals Eighth Circuit.

October 21, 1957.

Rehearing Denied November 15, 1957.

COPYRIGHT MATERIAL OMITTED

Remington Rogers, Tulsa, Okl. (Paul W. Brightmire, Tulsa, Okl., was with him on the brief), for appellants.

Cooper Jacoway, Little Rock, Ark., for appellee.

Before SANBORN, WOODROUGH and VAN OOSTERHOUT, Circuit Judges.

WOODROUGH, Circuit Judge.

On September 12, 1951, the University of Arkansas entered into a contract with the W. R. Grimshaw Company, an Oklahoma corporation, as general contractor, to construct the University Medical Center at Little Rock, Arkansas. In compliance with the requirements of the contract, the Grimshaw Company executed, as principal, a bond on which the National Surety Corporation of New York was surety.

In compiling their prime bid for the overall contract on the Medical Center, the Grimshaw Company prepared detailed cost estimates on the work they planned to perform themselves, but left specialty items, such as windows, doors, terrazzo, et cetera, to specialty companies that are familiar with them. They depend on these companies to quote a price for which the companies, under sub-bids, can furnish the necessary materials and perform the required labor. In that connection and in order to prepare a sub-bid for the aluminum windows, ornamental doors and X-Ray protection, the Nevil C. Withrow Company, Inc., an Arkansas corporation specializing in aluminum windows — subcontracts and furnishing material and supplies in connection therewith, secured a set of blue prints and specifications from the architect for use in compiling their sub-bid on the Little Rock Medical Center.

On September 28, 1951, Nevil C. Withrow, president of the plaintiff company, confirmed his sub-bid to the Grimshaw Company covering "Item 1, aluminum windows, Section M-1 to M-5 for $310,000.00 and the erection thereof for $25,000.00 more, a total of $335,000.00". The bid was accepted and the amount was included in the sub-contract between the Grimshaw Company as prime and Withrow Company as sub-contractor, dated September 26, 1951.

In June of 1952, the Shop Drawings, required under the contract, showing in detail the material the window manufacturer expected to supply in connection with the sub-contract, were submitted to Grimshaw Company by Withrow. They indicated that Ware Laboratories were to do work for Withrow Company. On July 7, 1952 the Shop Drawings were returned to Withrow for correction and resubmission. The Shop Drawings at "Section 29" were labeled "Not by Ware Laboratories." This referred to the Shop Drawings that Ware Laboratories prepared for the Withrow Company and in each case that the sills — interior and exterior — were indicated on the Shop Drawings, there was a notation "Not by Ware Laboratories nor W. C. Withrow Company." A conference with the superintendent for the Grimshaw Company and subsequent correspondence between Withrow and the Grimshaw Company during the period March through July, 1953, shows a dispute between the companies with Grimshaw contending that under the specifications, Section M-1 through M-5, Withrow was required to furnish the specified window stools and sills. Withrow maintained that Section M-1 through M-5 did not provide for the stools and sills and that he had bid on the stools and sills under Section J¹ of the specifications, a section not awarded his company under the sub-contract.

During the correspondence that followed, over a period of 15 weeks, the Grimshaw Company insisted that unless Withrow installed the window sills and stools under the sub-contract, the work would have to be performed by someone else and back-charged to Withrow or Withrow's sub-contract cancelled in its entirety. On June 23, 1953, Withrow wrote Grimshaw that he recognized that their position was sincere and on July 2, 1953, Withrow wrote the Grimshaw Company:

"* * * We dislike involving others in the controversy that has arisen between your Company and ours as to whether the exterior sills and interior sills (as shown on the architect\'s plans) are included in our Company\'s sub-contract. It would seem impractical to do so at this time although our construction of what is covered by our sub-contract remains unchanged.

"Therefore, Nevil C. Withrow Company, Inc., is proceeding to include and furnish said exterior sills and interior sills (as shown on the architect\'s plans) which are in dispute and future shop drawings will be changed accordingly.

"Please delete from shop drawings in your possession note pertaining to exterior and interior sills so that resubmission will not be necessary."

Grimshaw Company acknowledged receipt of the letter containing the agreement on July 6, 1953, and wrote Withrow as follows:

"We acknowledge receipt of your letter dated July 2, 1953, wherein you state, `Nevil C. Withrow Company Inc., is proceeding to include and furnish said exterior sills and interior sills (as shown on the architect\'s plans) which are in dispute and future shop drawings will be changed accordingly.\'

"Please be advised the sills referred to are to be furnished and installed in strict accordance with the specifications Section M-1 through M-5, applicable drawings, Addenda No. 1, 2, 3, and 4, and subject to the terms of the contract. The foregoing are the provisions of your contract, and under these conditions you may proceed with the execution of your contract in its entirety."

Withrow then proceeded to furnish the stools and sills and perform the necessary labor and the percentage payments made to and accepted by him under the subcontract, as the work progressed, included allowance therefor. Withrow was paid in full, except as to the ten per cent retainage.

On February 26, 1956, the Withrow Company brought this action at law in the United States District Court for the Eastern District of Arkansas and alleged in substance that on or about October 23, 1951, Withrow Company entered into an agreement with Grimshaw Company which provided that Withrow Company should furnish certain labor and materials in connection with the construction of the University of Arkansas Medical Center and that Grimshaw Company agreed to pay to Withrow Company, for said labor, material, et cetera, the sum of $335,000.00; that Withrow Company has now completely performed all its obligations under the contract; that on or about June 8, 1952, Grimshaw Company and Withrow Company entered into a further agreement in which Withrow Company agreed to furnish certain other labor, material, et cetera, in connection with the seventh floor addition to the Medical Center and Grimshaw Company agreed to pay to Withrow Company the sum of $64,589.95 for said labor, material, et cetera, and that Withrow Company has now completely performed all its obligations under said contract; that Grimshaw Company has retained the sum of $24,180.42 as retainage on the original contract and Withrow Company is entitled to that sum with 6% interest; that in connection with the original contract dated September 26, 1951, Grimshaw Company requested Withrow Company to furnish certain additional material, labor et cetera, not included in the contract dated September 26, 1951, or in the subsequent contract; that said materials were furnished by Withrow Company, as extras and in addition to either or both contracts, and Grimshaw Company received the benefit of the extras and was paid for same by the Board of Trustees of the University of Arkansas; that Grimshaw Company ordered and directed Withrow Company to furnish said extras and agreed to pay for them; that the fair and reasonable value of said extras totals $23,555.94, said amount has been due and owing to Withrow Company since on or about December 8, 1954; that Withrow Company has repeatedly requested Grimshaw Company to pay said sum and Grimshaw Company refuses to pay. Judgment was prayed accordingly.

Grimshaw Company and National Surety Company answered, specifically denying that Grimshaw Company ever requested the Withrow Company to furnish any additional material, labor, et cetera, not included in their contracts; that the sub-contract dated September 26, 1951, did require Withrow Company to furnish the sills and stools (which were the "additional materials, labor, et cetera," referred to in plaintiff's complaint and claimed to be extras); that they had been furnished and paid for; that after a dispute had arisen as to said requirement of the sub-contract, Withrow Company had agreed to furnish the disputed items under its sub-contract and they were so furnished, not as extras.

Grimshaw Company admitted owing the $24,180.42 retainage, paid that amount into court and on January 28, 1957, the judgment as to the retainage was satisfied.

Withrow Company in reply to Grimshaw Company's answer admitted the written agreement to furnish the sills and stools and that: "the plaintiff furnished said extras at the request of the Defendant Grimshaw Company and at a time when the Defendant Grimshaw Company exercised economic duress and economic coercion over the plaintiff. Said duress and coercion were employed by the Defendant Grimshaw Company after the Plaintiff had expended and had caused to be expended large amounts of time and money in preparing to discharge and in discharging its obligation under its contract with Grimshaw Company; said duress and coercion were exercised by the Grimshaw Company's threatening, without warrant or right, to deprive Plaintiff of the benefits of its contract by violating the contract and by threatening to attempt to cancel the contract between the Plaintiff and Defendant * * * and by threatening, without warrant or right, to have said extras furnished by someone else and to charge the cost of said extras to this Plaintiff."

The issues were tried to a jury and were decided by having the court...