Great American Indemnity Co. v. Flour City Ornamental Iron Co.

48 F. Supp. 999, 1943 U.S. Dist. LEXIS 3007
CourtDistrict Court, W.D. Louisiana
DecidedFebruary 18, 1943
DocketNo. 355
StatusPublished

This text of 48 F. Supp. 999 (Great American Indemnity Co. v. Flour City Ornamental Iron Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Great American Indemnity Co. v. Flour City Ornamental Iron Co., 48 F. Supp. 999, 1943 U.S. Dist. LEXIS 3007 (W.D. La. 1943).

Opinion

DAWKINS, District Judge.

M. T. Reed Construction Company (hereafter called Construction Company) made a contract with the Police Jury of Natchitoches Parish to construct a new courthouse, with funds partially furnished by the P. W. A. It subcontracted the furnishing of certain window frames, doors, etc., to the defendant, Flour City Ornamental Iron Company (hereafter called Flour City). The latter filed a lien against the project and threatened to sue the principal contractor in the courts of Minnesota. Thereupon the present suit was brought by Reed Construction Co., and the surety upon its bond, for a declaratory judgment, fixing their liability under the subcontract and bond, and for damages alleged to have been caused by delays of the Flour City in performing its contract. The Police Jury, having been made a party defendant, deposited the balance due to the general contractor and was discharged from the case.

A motion to dismiss, and in the alternative, for a bill of particulars, having been overruled, defendant answered, denying that it was at fault, and by counterclaim, prayed for judgment for the balance alleged to be due, with interest and attorneys’ fees.

The issues are largely of fact. The contract between the Construction Company and the Police Jury was dated March 8, 1939, while that with the Flour City was signed April'24th of the same year. The latter agreement stipulated that the work undertaken should be “in accordance with the general conditions of the contract * * * and * * * the drawings and specifications”; that it be completed “without delay” to the general contractor. “Subcontractor agrees to pay general contractor cost of any delay to work caused by him. Subcontractor further agrees to have his work completely in place, 'ready for final inspection by the time the general contractor has completed general contract and subcontractor agrees that if he does not meet this completion date, he will bear all penalties charged to contractor because of his failure to so perform, including overhead and expenses of general contractor and any other subcontractor, due to such failure”. The last quoted verbiage was typed into the printed form.

In brief, counsel for defendant, before discussing the facts, contends that the petition and proof did not establish grounds for relief under this language. We quote below material portions of the complaint:

“That due to the delay caused by the failure of the subcontractor to perform its work with diligence, and as required by the subcontract, the M. T. Reed Construction Company sustained the following items of actual damage, which it is entitled to be repaid by the Flour City Ornamental Iron Company, and to claim from that company in the adjustment of their rights:

Overhead as shown on pay rolls 1,736.31

Additional labor on mill work 387.00

Labor firing boiler for temporary heat 112.00 2,235.31

Compensation insurance and public liability @ 10.01 223.76

Builders Risk Insurance — three months 155.10

Social Security & Old Age Benefits — 4% 89.41

Gas Bills — three months —for temporary heat 351.20

Light Bills — three

months 61.98

Expense of Owner, charged Reed Construction Co. 329.50

Percentage Office overhead — three months 793.80

Interest 3 months on $19,964.38 — retained percentage of contract price @ 5% 249.55

Total charges 4,489.61”

The word “cost” in the sense it is used here, it would seem, was meant to cover any additional outlay the general contractor might have to make due to the failure of the subcontractor to perform as agreed. This is borne out by the words “including overhead and expenses of general Contractor”. Taking the items up in the order alleged, “overhead” is specifically included. “Additional labor on mill work” undoubtedly means that it was performed, over what was contemplated, due to the alleged delay; “labor firing boiler for temporary heat” was an expense incurred in heating the building and to keep it dry, due to the failure to install windows; “compensation insurance and public liability” is charged on a pro-rata basis covering the additional period alleged to have been caused by the delay; “social security and old age benefits — 4%” was evidently calculated on the additional labor; “gas bills . — for three months — for temporary heat” refers to the heating of the boilers; “light [1001]*1001bills — three months” was occasioned by having to close the windows in which frames had not been installed, with canvas; “expenses of owner” charged Construction Company is covered by an item paid or credited to the Police Jury for the keep of prisoners, etc., during the period of the delay; “percentage office overhead — three months” has reference to the expense of maintaining the general contractor’s office over the alleged three months of delay; and “interest three months on $19,964.38 — retained percentage of contract price at 5%” is based upon the withholding of the funds by the Police Jury during this period, which it is alleged would have otherwise been paid to the general contractor but for the delay. I am of the opinion therefore, that the defendant’s contention as to these items on the face of the pleadings, is not tenable.

On the facts, approximately 450 pages of testimony were taken, and almost 100 documents were introduced. However, the important facts hinge largely on the documentary evidence. The principal contract was dated, as above stated, March 8, 1939, and work began on the 27th following, in accordance with work order from the architects and the 300 days in which it was to be completed, expired January 20, 1940, but it was not finished until March 21, and was formally accepted by the Police Jury on March 29, 1940. The contract carried a penalty clause providing liquidated damages at $20 per day for failure to complete the work on schedule. On March 25, 1940, four days before acceptance, the Construction Company wrote the Police Jury, requesting “an extension of sixty-nine days to complete our contract * * * waiving liquidated damages to the extent of this additional time”, for the reason that the “owner and architects have made numerous changes, such as changing the jail equipment and elevator, additional electric, plumbing and heating work, rearranging partitions, etc., all of which required considerably more time”. This request was approved by the architects and granted, thus eliminating all demurrage and delay penalties, which otherwise might have been claimed by the Police Jury. It was proven by the Construction Company, and not refuted, that the placing in the request for extension of the statement that the “owner and architects have made numerous changes” was done to avoid questioning by the P. W. A. when, in reality, the delay had been caused by Flour City’s failure to timely furnish and install the windows.

The subcontract bound Flour City to perform its work in accordance with the contract and specifications of the general contractor, and specifically to

“Furnish and install completely in place all aluminum sash, * * * with necessary caulking, weather stripping, glass, putty and glazing, hardware and window stools, and metal screens;

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Bluebook (online)
48 F. Supp. 999, 1943 U.S. Dist. LEXIS 3007, Counsel Stack Legal Research, https://law.counselstack.com/opinion/great-american-indemnity-co-v-flour-city-ornamental-iron-co-lawd-1943.