Carpenter International, Inc. v. Kaiser Jamaica Corp.

393 F. Supp. 396
CourtDistrict Court, D. Delaware
DecidedApril 10, 1975
DocketCiv. A. No. 4352
StatusPublished
Cited by1 cases

This text of 393 F. Supp. 396 (Carpenter International, Inc. v. Kaiser Jamaica Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carpenter International, Inc. v. Kaiser Jamaica Corp., 393 F. Supp. 396 (D. Del. 1975).

Opinion

FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

LATCHUM, Chief Judge.

Plaintiff, Carpenter International, Inc. (“Carpenter Int’l”), a Texas corporation having its principal place of business in Texas, seeks to recover a total of $534,942.38 from the defendants, Kaiser Jamaica Corp., Reynolds Jamaica Aluminum, Ltd. and Anaconda Jamaica, Inc., each a Delaware corporation having a principal place of business in a state other than Texas, and each a partner in Alumina Partners of Jamaica (“Al-part”), for an alleged breach of a concrete construction contract which Carpenter Int’l had entered into with Al-,part. Jurisdiction of this court is asserted under 28 U.S.C. § 1332.

The defendants first moved for summary judgment pursuant to Rule 56, F.R.Civ.P., on the grounds that a release executed by the plaintiff bars thp present action. The plaintiff also moved for summary judgment to strike as insufficient at law the defense that the present action is barred by the proffered release. Both motions were denied. Carpenter International, Inc. v. Kaiser Jamaica Corp., 369 F.Supp. 1138 (D.Del.[399]*3991974). Defendants thereafter moved pursuant to Rule 42(b), F.R.Civ.P., for a separate trial of the issue of the validity, enforceability and effect of the release executed by the plaintiff.1 This motion was granted2 and the issue as to the effect of the release was tried by the Court without a jury on January 6, 1975. The Court, having considered the testimony and evidence adduced at trial, makes the following findings of fact and conclusions of law.

I. FINDINGS OF FACT

By 1969 construction had been completed on the defendants’ 950,000 ton alumina plant located in Nain, Jamaica. (Trial transcript, Tr. 7). Kaiser Engineers (“Kaiser”) performed the engineering and construction management for the defendants. (Tr. 7). Thereafter, Kaiser entered into another contract to provide the defendants with detailed engineering and construction management on an expansion project to increase the capacity of the Nain alumina plant from 950,000 to 1,350,000 tons. (Tr. 7-8).

On June 24, 1970 the plaintiff contracted with the defendants to perform certain concrete construction work in connection with the expansion project. (Tr. 7; Docket Item 1, par. 6; Docket Item 5, par. 6). That contract provided that the plaintiff was to receive ninety percent of the value of work completed on a monthly basis, the remaining ten percent was to be withheld as “retention money.” (Defendant’s Exhibit, DX 19; Tr. 9, 49). Exhibit C, par. 23 E of the contract also provided:

“As conditions precedent to final payment under this Contract, Contractor shall execute a written general release of all claims against Owner and Engineer and their property, agents and employees arising under or in any way connected with this Contract, and Owner may further require Contractor to furnish written general releases and waivers of all claims by Contractor or any and all subcontractors, assignees, vendors or others furnishing labor, materials, services, or equipment in connection with Contractor’s performance of this Contract.” (DX 19).

In addition the plaintiff had no control under the contract over the wages paid to the union labor used because these wages were set by an island-wide agreement which was scheduled to expire in November 1970. (Tr. 23, 108-09).

The cast of personalities .needed to understand the background of this suit include: A. R. Gill (“Gill”) defendants’ representative who was located in Oakland, California (Tr. 10-11); Richard W. Hart (“Hart”) Kaiser’s project manager for the Jamaica expansion project who reported to Gill (Tr. 10, 40-41); Douglas A. Robertson (“Robertson”), plaintiff’s project manager who was located at the project site and who had frequent contact with Hart (Tr. 12-13, 16; DX 1, 18), and Robert D. Carpenter (“Carpenter”) president of the plaintiff who was located in Dallas, Texas. (Tr. 106, 121).

A. Conduct Before Release Was Signed.

In performing its contract on the Jamaica expansion project, the plaintiff claimed it lost a considerable amount of money. (Tr. Ill, 146; Plaintiff Exhibit PX 5). As a consequence, Carpenter attempted to secure for the plaintiff a percentage of the retention money by a letter dated February 26, 1971. (Tr. 146-47; DX 1). In response to this attempt, Robertson was verbally advised by Hart that the defendants would not release any retention money until the contract had been completely performed. (Tr. 9).

In a second letter dated February 26, 1971 the plaintiff declined an invitation by Kaiser to submit a competitive bid on additional work because of alleged low [400]*400productivity of the labor force supplied to the plaintiff under the expansion project contract. (DX 2; Tr. 9).

By a telex dated March 30, 1971 Gill was warned by Hart that the plaintiff might be laying a basis for a claim for losses due to low productivity of the labor force. (PX 9). Hart based his warning on the plaintiff’s day-to-day activity at the project site and on the refusal of the plaintiff to bid on additional work. Hart also advised Gill that the plaintiff had turned the administration of its contract over to Kenneth L. Sipes, Jr. (“Sipes”) who was plaintiff’s “claim expert.” (Tr. 85-86, PX 9). Hart was not particularly concerned since he believed “our contract documentation is in excellent shape.” (PX 9).

In April 1971 as the expansion project neared completion, a strict policy directive was sent from Gill to Hart that no retention money would be paid out by the defendants unless a contractor provided a full release from all claims except for the wage escalation and specific insurance claims. (Tr. 42; DX 3). This policy was instituted to discourage contractors from “dribbling in” with claims many months after their work was completed. (DX 3; Tr. 11). Hart made Gill’s views known to the plaintiff through Robertson and to all the other subcontractors on the project. (Tr. 12).

Events leading to this suit began to unfold rapidly in May 1971 when island-wide labor negotiations resulted in a new labor contract to replace the prior contract which had expired in November 1970. Hart was one of the Kaiser men to sign the new agreement. (Tr. 58). The new agreement provided for a wage escalation retroactive to November 1970 which was to be paid by June 11, 1971. (Tr. 58-60). Although the plaintiff played no part in the negotiations, it was obligated under its contract to make the wage escalation payments to its union laborers (Tr. 67, 73, 125, 132, 150) and only after the plaintiff had made the payments and presented verified proof of payment to the defendants would it be reimbursed. (Tr. 23, 65). By this point in time the plaintiff’s work on the project was substantially completed. (Tr. 110).

Shortly thereafter three letters were sent by the plaintiff to Kaiser. By letter dated June 1, 1971, Carpenter reminded Hart of plaintiff’s “need to secure some relief” from the economic losses allegedly incurred under the contract. (DX 5). In this letter Carpenter refers to a suggestion by Hart that relief could possibly be obtained through additional work, but that now no such offer for work was forthcoming. After reviewing the history of the contract on the expansion project, Carpenter closed the letter by stating:

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