Wunderlich Contracting Company v. United States

• Citation: 240 F.2d 201
• Decision Date: 05 March 1957
• Docket Number: No. 5373.,5373.
• Parties: WUNDERLICH CONTRACTING COMPANY, a corporation; Curlett Construction Company, a corporation; and Chas. H. Tompkins Co., a corporation, doing business as a joint venture under the name of Wunderlich Curlett & Tompkins; Continental Casualty Company, a corporation; National Surety Corporation, a corporation; The Travelers Indemnity Company, a corporation, Appellants, v. UNITED STATES of America ex rel. REISCHEL & COTTRELL, a California corporation; and Martin Bros., a co-partnership consisting of W. L. Martin and John Martin, doing business as a joint venture under the name of Reischel & Cottrell-Martin Bros., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

240 F.2d 201 (1957)

WUNDERLICH CONTRACTING COMPANY, a corporation; Curlett Construction Company, a corporation; and Chas. H. Tompkins Co., a corporation, doing business as a joint venture under the name of Wunderlich Curlett & Tompkins; Continental Casualty Company, a corporation; National Surety Corporation, a corporation; The Travelers Indemnity Company, a corporation, Appellants, v. UNITED STATES of America ex rel. REISCHEL & COTTRELL, a California corporation; and Martin Bros., a co-partnership consisting of W. L. Martin and John Martin, doing business as a joint venture under the name of Reischel & Cottrell-Martin Bros., Appellees.

No. 5373.

United States Court of Appeals Tenth Circuit.

January 2, 1957.

Rehearing Denied March 5, 1957.

Allan E. Mecham and Bryce E. Roe, Salt Lake City, Utah (Elliott Lee Pratt, Salt Lake City, Utah, was with them on the brief), for appellants.

Lewis C. Teegarden, Los Angeles, Cal. (John S. Boyden, Salt Lake City, Utah, was with him on the brief), for appellees.

Before BRATTON, Chief Judge, and HUXMAN and PICKETT, Circuit Judges.

PICKETT, Circuit Judge.

The defendants Wunderlich Contracting Company, a corporation, Curlett Construction Company, a corporation, and Charles H. Tompkins Company, a corporation, doing business as a joint venture under the name of Wunderlich, Curlett & Tompkins, entered into a contract with the United States to construct a five hundred bed Veterans Administration hospital at Salt Lake City, Utah, for the sum of $7,898,000. The plaintiffs, also a joint venture, doing business as Reischel & Cottrell-Martin Bros., were the successful bidders to do all of the lathing and plastering work for the hospital for the sum of $244,650, and accordingly entered into a lump sum subcontract with the above named defendants to do this portion of the work, according to the plans and specifications submitted to bidders. The defendants National Surety Corporation, a corporation, Continental Casualty Company, a corporation, and The Travelers Indemnity Company, a corporation, furnished payment bonds as required by the Miller Act. 40 U.S.C.A. § 270b(a) et seq. The plaintiffs brought this action to recover a balance claimed to be due for the labor and materials which they furnished on the construction of the hospital.¹ The trial court found that due to not less than 6,000 substantial changes required to be made in the plans and specifications during construction, the structure which was actually built was not the same as that originally proposed; that the unprecedented and unreasonable number of changes in the plans and specifications and dislocation of work greatly increased the costs to plaintiffs in completing the work and increased the time of performance by 50%; that the performance of the plaintiffs was not rendered under the subcontract, but that the hospital was built under an entirely different set of plans and specifications than those submitted to the plaintiffs by the defendants for bidding purposes, and in consideration of defendants' implied promise to pay therefor. The effect of the court's holding is that the subcontract was abandoned. The defendants concede that considerable work was done by plaintiffs for which they were entitled to compensation over and above the contract price. They contend, however, that all the work was done pursuant to the subcontract and that they are liable only as to the provisions of the contract. The court found that the reasonable value of plaintiffs' services was $340,379.58, of which $270,895.82 had been paid, leaving a balance due of $69,483.76. Judgment was entered for this amount, with interest from August 13, 1952.

The first issue to be determined is whether the aforementioned findings are sustained by the evidence. Rule 52(a), Fed.Rules Civ.Proc. 28 U.S. C.A., provides that in all actions tried upon the facts, without a jury, the court's findings of fact shall not be set aside unless clearly erroneous. Carter Oil Co. v. McCasland, 10 Cir., 190 F.2d 887, certiorari denied 342 U.S. 870, 72 S.Ct. 113, 96 L.Ed. 654; American Home Fire Assur. Co. v. Mid-West Enterprise Co., 10 Cir., 189 F.2d 528. Where the evidence and reasonable inferences fairly to be drawn therefrom are sufficient to support the findings of the trial court in a non-jury case, they will not be overturned on appeal unless clearly erroneous. Beard v. Achenbach Memorial Hospital Assoc., 10 Cir., 170 F.2d 859. Also, if it is established by facts from which reasonable men might draw different inferences, appellate courts may not substitute their judgment for that of the trial court. Van Dreal v. Van Dreal, 10 Cir., 214 F.2d 715; Keokuk Steel Casting Co. v. Lawrence, 10 Cir., 178 F.2d 788, certiorari denied 399 U.S. 931, 70 S.Ct. 668, 94 L. Ed. 1351; Widney v. United States, 10 Cir., 178 F.2d 880; Carnes v. United States, 10 Cir., 186 F.2d 648.

A careful examination of the record discloses substantial evidence to support these findings. The evidence is without conflict that the original plans, drawings and specifications were completely overhauled and changed and that there were not less than 6,000 changes made in them. The completion date under the original plans was July 31, 1951, but plaintiffs, because of confusion in the plans and specifications and the changes made, were not able to complete their work until August 13, 1952, and then at a much higher cost. In addition to other evidence, defendants' Project Engineer, who the record discloses knew more about the building than anyone else, testified that in his opinion the building which plaintiffs lathed and plastered was not the same building as that contemplated by the original plans. Colonel Thomas, who had had vast experience in government construction work, was employed by defendants as Assistant Project Manager for the construction of the hospital. He testified that in his experience he had never seen anything like the number of changes made in plans and specifications and, as far as the plastering was concerned, they were operating pretty much under a new set of plans. The record discloses that throughout the contract the defendants made claim to the United States to be paid for specific work performed by the plaintiffs which was not contemplated when the subcontract was entered into. It is insisted that those claims were made pursuant to the provisions of the prime contract and the subcontract, and that many of them were pending at the time of trial.

The defendants contend that the contract as a whole contemplated that the hospital might not be built in exact accordance with the submitted plans, drawings and specifications, and made provision for variations which bound the contractor. The prime contract had the usual provisions for change-order work and for extras, and provided a method by which the United States would pay for this type of work. It is urged that the evidence discloses that plaintiffs did rely on the contract in carrying out the work, therefore cannot avoid its terms even though they might have had grounds for rescission. Stated differently, the defendants say that plaintiffs had a contract to do certain work on this project and if the changes were such that their required work was not that which they had agreed to do, they should have rescinded, and having elected to continue, they are bound by the contract. The defendants rely on a line of decisions which hold that even though there were grounds for a rescission of the contract, a party electing to proceed without rescission is bound by the terms of the contract. Typical of these decisions are Lichter v. William R. Goss Co., 7 Cir., 232 F.2d 715, and Frailey v. McGarry, 116 Utah 504, 211 P.2d 840. In most of these cases it is assumed that the work was performed under the subcontract.

In view of the court's finding, which is supported by substantial evidence, that the work performed by the plaintiffs was not that contemplated by the parties when they entered into the subcontract, the rule of the above cases is not applicable. Under these findings, we think the rule of Salt Lake City v. Smith, 8 Cir., 104 F. 457, controls. That case arose in Utah and grew out of a contract whereby the plaintiffs agreed to furnish labor and materials to...