Wyatt v. Ruck Const., Inc.

• Decision Date: 26 August 1977
• Docket Number: CA-CIV,No. 2,2
• Citation: 571 P.2d 683,117 Ariz. 186
• Parties: Argyle F. WYATT, a widow, d/b/a Sunset Roofing Company, Appellant, v. RUCK CONSTRUCTION, INC., an Arizona Corporation, the City of Tucson, a Municipal Corporation, Arthur G. Sweet, a single man, Richard L. Stapp, a single man, and United States Fidelity & Guaranty as surety, Appellees. 2436.
• Court: Arizona Court of Appeals

Page 683

571 P.2d 683

117 Ariz. 186

Argyle F. WYATT, a widow, d/b/a Sunset Roofing Company, Appellant, v. RUCK CONSTRUCTION, INC., an Arizona Corporation, the City of Tucson, a Municipal Corporation, Arthur G. Sweet, a single man, Richard L. Stapp, a single man, and United States Fidelity & Guaranty as surety, Appellees.

No. 2 CA-CIV 2436.

Court of Appeals of Arizona, Division 2.

Aug. 26, 1977.

Rehearing Denied Oct. 5, 1977.

Review Denied Oct. 25, 1977.

DeConcini, McDonald, Brammer & Yetwin, P.C. by J. Wm. Brammer, Jr. and Robert M. Struse, Tucson, for appellant

Lesher, Kimble & Rucker, P.C. by E. F. Rucker, Tucson, for appellees Ruck and United States Fidelity & Guaranty.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears by Robert E. Brown and P. Michael Whipple, Phoenix, for appellees City of Tucson, Stapp and Sweet.

OPINION

HOWARD, Chief Judge.

This case arises out of a contract for the construction of the Eastside police and fire building in Tucson, entered into between the City of Tucson and the general contractor, Ruck Construction Company. A separate contract was entered into between Ruck Construction Company and its subcontractor, Sunset Roofing Company.

The contract between Ruck and the City provided that the City could order extra work or make changes with a concomitant adjustment in the contract price. No extra work or changes involving extra costs were authorized unless they were in writing, signed by the proper City personnel, except in an emergency endangering life or property when such written authorization was not necessary. The contract between the City and Ruck also provided:

" § 7B Thermal Insulation

1. ROOF AND DECK INSULATION:

A. Perlite insulation board: non-combustible boards, FS HH-1-529, as indicated on the drawings.

JM Fesco board: Manufacturers meeting or exceeding this specification may submit to the architect for prior approval.

§ 7C ROOFING

3. MATERIALS:

A. Contractor shall arrange for the inspection of the roofing materials by the manufacturer's representative on installation of roofing.

B. Roofing . . . shall be applied in accordance with the following Johns-Manville specifications:

Roof J-M Spec. No. 151-P

C. Manufacturers meeting or exceeding this specification may submit to the architect for prior approval."

The contract entered into between Ruck and his subcontractor, Sunset Roofing, obliged Sunset to follow the terms of the contract between Ruck and the City and to perform its work as directed by the contractor so that the entire project could be completed on or before October 31, 1975. The contract further provided that termination could result from the failure of Sunset to follow the contractor's instructions.

In August 1975 Sunset Roofing began taking the roofing materials to the job site. On August 12, Joe Cain, an architect from the Firm of CNWC Architects which had been hired as the fee architect on the job by the City, sent a letter to Tony Matz, the vice president of Ruck. This letter stated, inter alia:

"I note that your roofing contractor is Sunset Roofing which, I believe, is owned and operated by Mr. Chuck Osterman. I'm sure you are aware that Mr. Osterman has been in the roofing business in Tucson under many different company names. We have had several roofing failures on projects where the material was applied by Mr. Osterman's company which sometimes was due to faulty materials, sometimes due to poor workmanship and sometimes a combination of both. To date, we have never been successful in getting Mr. Osterman to pick up the tab for necessary remedial work."

The letter went on to suggest that for the reasons listed, Ruck Construction should give serious consideration to retaining a qualified fulltime inspector on the job in order to see that Sunset Roofing performed properly. Matz, surprised at the content of the letter, spoke with the owner of Ruck. They decided to place the letter in the file and not take any action.

A copy of Cain's letter was also sent to Arthur Sweet who was employed by the City as a staff architect and was one of the City's representatives under the contract between Ruck and the City. As far as he was concerned, the letter only expressed a personal opinion by Cain and it did not change his opinion of Osterman.

Around August 27 Ruck and Sunset discovered that the specified Johns-Manville fesco board was inadequate. They notified both Cain and Sweet. Cain investigated the matter and recommended to Sweet that the situation be solved by increasing the thickness of the fesco board to 1 and 1/2 inches. Cain also told Sweet that Johns-Manville would not inspect the roofing application unless the City purchased a Johns-Manville roof guarantee and he recommended that the guarantee be secured. Based on a conversation with a Johns-Manville representative, Sweet knew that if Sunset did the roofing application, Johns-Manville would not inspect the roof and issue a guarantee. However, Sweet felt that since the specifications called for an inspection by the manufacturer and specified Johns-Manville products, Cain's recommendation was in keeping with the intent of the specification. Sweet concurred in Cain's recommendations and Ruck was notified orally of the decision. Sweet also instructed Cain to submit a written change order to Ruck but complications ensued. Sunset tried to get Johns-Manville to authorize it as a roofing applicator so that it could comply with the change. Johns-Manville refused. Cain discussed with Ruck the necessity of Ruck's cancelling its subcontract with Sunset if Sunset could not comply. However, Ruck, fearful of a lawsuit by Sunset, balked at putting any pressure on Sunset and felt that the Johns-Manville guarantee was not necessary.

The problems with the roof were delaying the whole project and on September 25, Ruck met with Sweet. Ruck brought with him a proposal by Sunset to remedy the situation. Sunset proposed to do the additional work for the sum of $5,167.50 and provide the City with a 20-year bond by a company called "Bird & Son". The bond would cost the City $1,500. Sweet refused to accept the Sunset compromise. He was not familiar with the Bird & Son Company and from his point of view the Johns-Manville's materials and guarantee had the advantage of a nationally known firm so that if troubles came 10 or 15 years later the City would be able to get reasonable service. In order to prevent further delay in the project, the City contract administrator, appellee Stapp, was placed on notice that Sunset was not technically qualified to do the work. He was told by the City architect that Sunset could not get certification as to the roofing process and that Sunset's inability to comply with the specifications and the prime contractor's refusal to take action to remedy the situation were delaying the entire project. Stapp checked the contract and the specifications to see whether or not they mandated some sort of "certification" and he was satisfied that they did. It was his impression that the Johns-Manville guarantee was required by the contract.

On September 26 Cain sent a letter to Ruck requesting it to submit a written proposal for the additional cost of changing to 1 and 1/2 inch-thick Johns-Manville fesco board and providing a 20-year and $20 per square foot Johns-Manville roof guarantee. Cain instructed Ruck that the roofing must start immediately. He also sent a letter to the City architect explaining the necessity of increasing the thickness of the fesco board and stating:

"Additionally, it has been brought to our attention that it is no longer possible to obtain inspection of the roofing materials or application by the manufacturer, as referred to in our specifications, without purchasing a Roof Guarantee from the manufacturer of the roofing materials.

We therefore recommend that the insulation board should be 11/2 thick J M Fesco board or equal and that a 20-year Roof Guarantee be furnished by the manufacturer."

Cain attached to the letter a copy of the Ruck proposal to do the additional work for the sum of $3,656.73 which included the cost of a Johns-Manville roof guarantee. In the meantime, Mr. Stapp had sent a letter to Ruck stating:

"This office has been advised that the construction of subject project is seriously behind schedule, and that no constructive effort has been made by your firm to correct the deficiencies which have occasioned the delays and other factors affecting this public works project.

You are, therefore, directed to cure the following defects within ten (10) calendar days from receipt of this letter, or the City will seriously consider exercising its rights under Article VI, § 8 of the contract and hold your firm in breach.

Specifically, you are directed forthwith to remove from the construction site Sunset Roofing Company, which subcontractor, in the opinion of the City, is not qualified to perform the work called for within the specifications of this contract. . . . " (Emphasis added)

Ruck cancelled the contract with Sunset Roofing. Pursuant to its proposal, Universal Roofers, the second lowest bidder on the job, was authorized to do the roofing by virtue of a written change order signed on October 10, 1975.

The termination of Sunset's contract with Ruck...