Frank Sullivan Company v. Midwest Sheet Metal Works

335 F.2d 33, 1964 U.S. App. LEXIS 4581
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 31, 1964
Docket17406
StatusPublished
Cited by24 cases

This text of 335 F.2d 33 (Frank Sullivan Company v. Midwest Sheet Metal Works) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frank Sullivan Company v. Midwest Sheet Metal Works, 335 F.2d 33, 1964 U.S. App. LEXIS 4581 (8th Cir. 1964).

Opinion

BLACKMUN, Circuit Judge.

Midwest Sheet Metal Works, a Minnesota partnership, instituted this diversity suit against Frank Sullivan Company, a Boston contractor, to recover damages for breach of contract. The jury returned a verdict in favor of Midwest for $85,000. Judge Devitt denied Sullivan’s motion for judgment n. o. v. or a new *35 trial. 215 F.Supp. 607. The controversy arises out of the project for the extension and remodeling of the United States Post Office and Customs House at Saint Paul. Minnesota law controls. Although Sullivan asserts twenty separate points on its appeal, these come down essentially to four primary issues:

1. The identity of Midwest’s Exhibit 5 as the agreement between the parties, and its effectiveness as a contract.

2. The effect of the absence of the prime contractor’s consent to the agreement.

3. The authority of Sullivan’s agent to sign the agreement.

4. Damages.

The prime contractor on the project was Electronic & Missile Facilities, Inc., of New York City (EMF). On December 4, 1961, EMF and Sullivan executed a lengthy and detailed subcontract whereby Sullivan undertook all plumbing, heating apparatus, air conditioning, and ventilation work on the job for an agreed price of $1,650,000. This contract was executed on behalf of Sullivan by Francis J. Sullivan (Frank) as its president.

In the fall of 1961, before the formal execution of the agreement between EMF and Sullivan, Frank had contact with Michael J. Elnicky, the dominant partner of Midwest, about Midwest’s taking on the sheet metal and air conditioning portion of Sullivan’s subcontract. Sullivan had even invited a quotation from Midwest for this work. On November 1 Midwest quoted a figure in excess of a million dollars. Frank by telephone told Elnicky that this bid was about $200,000 too high. Elnicky indicated he might reduce his price somewhat but could not approach Sullivan’s suggested figure. Frank testified that he then told Elnicky, “Well, look, we have got a fellow going out there, and I will show you that these are not prices that we dreamed up, these' are prices that we used in making our bid, and we got them confirmed by letters by reputable people”.

Near the close of 1961 EMF told Sullivan that it was imperative that the work in Saint Paul be started. Sullivan promised EMF that it would get a superintendent, a foreman, and men and material on the job by the end of January. Sullivan sent John Sullivan (Jack) from Boston to Saint Paul in early January. On this trip he conferred with EMF’s superintendent on the project. Jack was back in Minnesota later in the same month with Byers who was to be Sullivan’s general superintendent on the job. Before he left Boston on this second trip Jack had been instructed by Frank to look over the labor situation in the area, to cheek in. with prospective subcontractors, to see Elnicky and give him quotations which “will back up the reduction of his bid”, and to “get the job started”. Frank gave Jack the job estimates which had been prepared by Sullivan but he was not given and had not seen the prime contract.

Upon their arrival Byers called upon local union business agents, purchased material and tools, received other equipment from Boston, and placed four steamfitters on the job.

On Monday, January 22, Jack came to Midwest’s office. This was the first time Elnicky saw him. Elnicky and some of his employees testified that Jack told him on this visit that he was “part of the [Sullivan] organization” and had “a piece of it”. Jack denied that he made any such statement. Elnicky conceded that he made no attempt to check Jack’s authority with the Sullivan home office and that he did not ask for written evidence of it.

Elnicky also testified that Jack early in this first meeting suggested that Midwest price off “the whole works”; in any event, Elnicky indicated that he was interested in taking over the entire Sullivan job. Jack did not object and said that he would try to get a copy of the prime contract for him. The two men met again on Tuesday when Jack permitted Elnicky and his people to review the bids Sullivan had received. By Wednesday Jack obtained a copy of the prime contract from EMF’s office on the job. He gave it to Elnicky who kept it over *36 night. Meanwhile, Jack talked with other prospective subcontractors. Elnicky and Jack met further, and sometimes socially, during the same week. Jack told him that Sullivan would have to have a minimum of $100,000 if Elnicky took over. On Thursday Jack told Frank by telephone of the discussions he was having with Midwest. As to this conversation Frank testified that he told Jack that this could not be done; that EMF wanted Sullivan on the job; and that Jack should “Pick up what you got and come home”. Midwest finished its estimating on Saturday, January 27. That evening Jack was at Elnicky’s home with Elnicky and two of the latter’s men. They discussed costs and what Elnicky might offer to do the job but no conclusion was reached.

Early in the afternoon of the next day, Sunday, Elnicky came to Jack’s hotel room. Jack was planning to return to Boston. Elnicky arrived with a fifth of scotch. The men were together for three and one-half hours, discussing the job and drinking the entire fifth. Byers was present but left for a time to get the copy of the prime contract which had been left elsewhere. Elnicky made an offer of $1,550,000 to perform the work. This was discussed as was the question of what to do with the equipment and materials which Sullivan already had on the job. Jack then started to write something out. Elnicky dictated part of it. Several drafts were made. Later Jack dictated a draft to a hotel typist and he and Elnicky signed it. Elnicky then took Jack to the airport. The typed draft is Midwest’s Exhibit 5 * and is the doeument in controversy. It was admitted in evidence over Sullivan’s objection.

The testimony as to the execution of the exhibit is in sharp conflict. Jack testified that he told Elnicky that this agreement was subject to approval by Frank and EMF; that there was no sense in working out other details until this was done; that it was his intention that Exhibit 5 be merely a proposal by Elnicky to Sullivan; and that he did not intend thereby to turn the Sullivan contract over to Midwest. Byers testified that Jack told Elnicky that it had to be approved by Frank and EMF; that El-nicky acknowledged this; and that he, Byers, had expressed a hope that Frank would approve it so he “could go home”. Elnicky flatly denied that Jack had said Exhibit 5 was subject to approval by Frank and EMF.

The next day, Monday the 29th, Jack called Byers from Boston to see if El-nicky had someone on the job as the writing provided. Byers called Elnicky who told him he would have someone there on Tuesday. On Tuesday Jack and Elnicky conferred by telephone. Byers then sent Elnicky’s men away from the job. On the same day, January 30th, Jack, signing on behalf of the Sullivan Company, wrote Midwest that “The agreement made on January 28th, 1962, between the Midwest Sheet Metal Company and the Frank Sullivan Company is hereby cancelled”, and that they would try to arrange for Midwest to quote on the job’s ventilating, air conditioning, and refrigeration.

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Bluebook (online)
335 F.2d 33, 1964 U.S. App. LEXIS 4581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frank-sullivan-company-v-midwest-sheet-metal-works-ca8-1964.