Lichter v. Goss

163 F.2d 1000, 1947 U.S. App. LEXIS 3166
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 29, 1947
DocketNo. 9311
StatusPublished
Cited by4 cases

This text of 163 F.2d 1000 (Lichter v. Goss) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lichter v. Goss, 163 F.2d 1000, 1947 U.S. App. LEXIS 3166 (7th Cir. 1947).

Opinion

MAJOR, Circuit Judge.

This is an appeal from an order entered December 18, 1946, dismissing plaintiffs’ complaint which prayed for a declaratory judgment on the ground that it failed to show compliance, as a condition precedent to bringing the action, with the provision of a contract entered into between plaintiffs and defendants providing for arbitration. The failure of plaintiffs to allege such compliance was raised by defendants’ motion to dismiss.

On October 3, 1944, defendants, being the contractors under a contract with the Government for the construction of a veterans’ hospital at North Little Rock, Arkansas, entered into a subcontract with the plaintiffs to do certain masonry work as a part of such construction. Defendants’ contract with the Government was dated September 22, 1944, and called for the completion [1001]*1001of such contract within 350 calendar days after notice to proceed. Defendants’ contract with the Government is designated as Exhibit A, and that with the plaintiffs as Exhibit B. Both contracts are attached to and made a part of the complaint.

Article IV of Exhibit B provides:

“The work shall be commenced immediately upon notice to do so by the Contractor, and the Subcontractor shall thereafter diligently prosecute the work to completion in such manner as the Contractor may deem best calculated to coordinate with the work of the Contractor and others * * *.
“But, in any event, said work shall be completed on or before the 1st day of June, 1945, unless delayed by Acts of God, or causes beyond the control of the parties hereto as defined in Article VIII(c, d) of this agreement.”

Article VIII consists of three paragraphs, (a) , (b) and (c). It contains no paragraph (d). The reference, therefore, in Article IV to (d) was an error, and it evidently was intended to refer to paragraphs (b) and (c).

Thus, Article IV provided for the completion of plaintiffs’ contract by June 1, 1945, unless delayed by certain acts therein specified. Plaintiffs, however, for reasons alleged in the complaint hereinafter referred to, were prevented from commencing their work under the contract (Exhibit B) until on or about the 18th day of May, 1946. Shortly prior to this date, a controversy arose between plaintiffs and defendants as to whether plaintiffs were obligated to proceed with the masonry work, and as -a result another contract dated April 6, 1946 was entered into between the parties. This contract, designated Exhibit C, is also attached to and made a part of the complaint. Exhibit C will be subsequently referred to in more detail.

At this point it appears appropriate to relate the material portions of Article VIII, (b) and (c), Exhibit B, referred to in Article IV, as already noted. Paragraph (b) provides:

“In the event that the Subcontractor shall claim to have sustained any damage by reason of delays, or for the perform-anee of additional or different work, or for any other cause whatsoever, which claimed damage is or may be due to any act, omission, direction, or order of the Owner, the' Subcontractor shall not have or assert any" claim, or prosecute any suit, action or proceeding therefor against the Contractor * * *»

The paragraph continues by providing a method by which the plaintiffs may present a claim to the defendants, and imposes upon the latter the duty of presenting such claim to the owner (Government).

Paragraph (c) provides:

“In the event that the Subcontractor is delayed by the Contractor or any other Subcontractor in the progress of the work provided for in this contract, the Subcontractor shall be allowed one day extension of time for each calendar day that he has been so delayed, and no claim shall be made or allowed to the Subcontractor for damages which may arise out of any delay caused by the Owner, unless the Contractor is allowed and compensated by the Owner for such delay or delays.”

This paragraph continues by providing that if the defendants are compensated for delays caused by the owner, plaintiffs shall be entitled to their proportionate share of such recovery.

Plaintiffs did not commence the work to be done under their contract with the defendants (Exhibit B) until May 18, 1946, subsequent to the execution of Exhibit C on April 6, 1946, which was some nineteen months after the execution of Exhibit B, eleven and one-half months after the completion date set forth in Article IV of Exhibit B, and some eight months after the date defendants had agreed under their contract with the Government (Exhibit A) to complete the entire project.

The contention of the respective parties arising from this delay is embodied in Exhibit C. Plaintiffs’ contention is stated, “that by reason of said delay in making the work ready for it, there was no obligation upon its part to proceed with the work provided for in the contract on and after the 18th day of May, 1946.” Defendants’ contention as stated is that the plaintiff “is obligated to perform the said contract com[1002]*1002mencing on and after the 18th day of May, 1946, in accordance with the terms of said contract.”

The parties, after having thus stated their respective contentions, agreed that the plaintiffs should proceed to perform the work provided for in their contract (Exhibit B), and that the prosecution of the work under the terms of the contract should not be deemed a waiver of any rights of the plaintiffs to claim that they were entitled to damages for the delay in making the work jready for them.

'The agreement further provided that if fhe plaintiffs established that the defendants were liable to the plaintiffs “for the increased cost in the performance of the contract * * * with damages consequent to” the plaintiffs “through delay in the performance of said contract and should such ascertainment of liability be found to be had upon the part” of the defendants, “the damages shall be those listed below and shall be calculated and paid * * * upon the following formulae: * * *.” Then follow under separate headings the formulae for calculating “Amount due to Increases in Wage Rates,” “Amount due to Increases in Cost of Materials,” “Amount due to Drop in Labor Efficiency,” and “Other Costs and Damages.”

The complaint, so far as pertinent, alleges “that defendants failed to perform and furnish and to complete the work, labor and materials involved and required of them to be performed under the terms of said contracts, Exhibits A and B, within the time specified and reasonably contemplated by the terms of said contracts, by reason of which plaintiffs were delayed, hindered and prevented, until on or about the 18th day of May, 1946, from entering upon and proceeding with the work, labor and materials required of them to be furnished and performed under their contract with defendants, Exhibit B.”

Defendants’ motion to dismiss, sustained by the lower court, alleged a failure on the part of the plaintiffs to show compliance with Article VIII, paragraphs (a), (b) and (c), of Exhibit B, as a condition precedent to the bringing of the suit.

Paragraph (a) of this Article (we have heretofore referred to paragraphs (b) and (c) ) provides:

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Bluebook (online)
163 F.2d 1000, 1947 U.S. App. LEXIS 3166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lichter-v-goss-ca7-1947.