Rheem Manufacturing Co. v. United States

153 Ct. Cl. 465, 1961 U.S. Ct. Cl. LEXIS 89, 1961 WL 8667
CourtUnited States Court of Claims
DecidedMay 3, 1961
DocketNo. 387-57
StatusPublished
Cited by1 cases

This text of 153 Ct. Cl. 465 (Rheem Manufacturing Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rheem Manufacturing Co. v. United States, 153 Ct. Cl. 465, 1961 U.S. Ct. Cl. LEXIS 89, 1961 WL 8667 (cc 1961).

Opinion

Whitaker, Judge,

delivered the opinion of the court:

Plaintiff entered into a contract with defendant under which it purchased, for the account of the defendant, four furnaces, to be used by plaintiff in the production of shells for defendant. The manufacturer designed and installed the hardening furnace, one of the four plaintiff purchased, according to plaintiff’s instructions, but the refractory material in the furnace was installed by a subcontractor. A monolithic inner dome at the top of the furnace was a part of the refractory material installed.

The furnaces were placed in operation in May 1958. About a year later, in July 1954, the electric company which supplied electric power to heat the furnaces temporarily cut off that service, making it necessary for plaintiff to shut down the furnaces. Upon inspection of the furnaces after they had cooled, it was found that the inner dome of the hardening furnace had partially collapsed. Plaintiff sues for the cost of replacing it.

The question presented is whether this was “in excess of normal requirements for maintenance or in excess of fair wear and tear.” If it was, defendant is required by the contract to reimburse plaintiff for the cost thereof.

When plaintiff presented a claim therefor to the contracting officer, he rejected it as not being in excess of normal wear and tear. He reduced his findings to writing as required by the contract. Plaintiff took an appeal to the [467]*467Armed Services Board of Contract Appeals, the authorized representative of the head of the department. This Board decided against plaintiff for the reasons set out in an extract from its opinion, quoted in Finding 10.

Our Trial Commissioner has found that “the decision of the Board, when viewed in the light of the entire record, is supported by substantial evidence.”

We agree with the Trial Commissioner. The only witness on the issue of whether this was ordinary wear and tear was defendant’s chief of the operations division of the San Francisco Ordnance District. A summary of his testimony is set out in Finding 12. If that testimony is to be credited, it was wear and tear which in the normal course of events might have been expected. Often such material lasted much longer than in this case; sometimes it did not. It was not possible to predict how long it would last. Because this was so, the manufacturer guaranteed the furnace, except the refractory material, against defects in workmanship and materials for one year, but it would not guarantee the refractory material at all.

The only evidence that might be considered to be contrary to defendant’s expert witness was three letters written plaintiff in response to telephone calls made by its officers. One was from another shell manufacturer, who said he had operated his furnace for three years without having to make such repairs. The other two were from the sales representative who had sold plaintiff the furnaces. In one the agency said this was the first such experience it had had, and in the other it expressed the opinion the trouble was due to faulty refractory material used by the subcontractor who installed the furnace.

Such testimony, if such it can be termed, does not show that there was no substantial evidence to support the finding of the Armed Services Board of Contract Appeals. If there was substantial evidence to support it, it was final under the disputes clause of the contract, which is Article V-A thereof.

We repeat: Our Trial Commissioner was warranted in finding there was substantial evidence to support the Board’s conclusion, and we agree.

[468]*468Plaintiff is not entitled to recover, and its petition will be dismissed.

It is so ordered.

Durfee, Judge; Laramore, Judge; Madden, Judge; and Jones, 0kief Judge, concur.

FINDINGS OF FACT

The court, having considered the evidence, the report of Trial Commissioner Wilson Cowen, and the briefs and argument of counsel, makes findings of fact as follows:

1. The plaintiff is a corporation organized and existing under the laws of the State of California, with an office in New York, New York.

2. On May 10,1951, plaintiff entered into a facilities contract with defendant, acting through the Ordnance Corps, Department of the Army. The contract provided for (1) purchase by plaintiff on behalf of the Government of certain machinery and equipment, (2) delivery by the Government to the plaintiff of certain other facilities, (3) use of such facilities by the plaintiff in production for the Government, and (4) preservation, maintenance, repair and standby of such facilities. The machinery and equipment were to be used by plaintiff under a related supply contract for the manufacture of 155 mm-110 shells.

3. Under the facilities contract, plaintiff purchased from a manufacturer selected by it four furnaces: a forging furnace, a nosing furnace, a draw furnace, and a jet rotary hardening furnace. They were installed by the manufacturer, but the refractory material used in them was installed by a subcontractor.

4. The facilities contract contained the following pertinent provision:

ARTICLE m-C. MAINTENANCE AND PRESERVATION
The Contractor shall at no expense to the Government protect, preserve, maintain and repair all schedules A and B facilities in accordance with sound industrial practice so as to insure their full availability and usefulness during the course of this contract; provided, however, that the Government shall reimburse the Contrae[469]*469tor for the reasonable cost of all repairs, replacements and restoration measures which are in excess of normal requirements for maintenance or in excess of fair wear and tear, when such repairs, restoration and replacements are directed or approved by the Contracting Officer. Nothing in this article shall preclude the Contractor from being reimbursed such costs as are properly alloca-ble under other contracts.

5. The furnace involved here is 17 feet in diameter and approximately 12 feet high with a rotating hearth and a single door for loading and unloading. The hearth is lined with firebrick. The outside walls are steelplate. The inside wall is lined with firebrick and serves as a foundation for the inner and outer domes. The inner dome is monolithic and is composed of a refractory material which is poured into forms in the manner of concrete. The outer dome is of firebrick with a covering of refractory material. The domes are about 13 inches apart and form what is actually the combustion chamber. Heat generated in this chamber is transmitted to the hearth below it through a series of holes in the inner dome. The furnace is fired with a mixture of gas and oil.

6. The four furnaces were placed in operation in May 1953. During the last week of June 1954, the Pacific Gas and Electric Company, which supplied power to plaintiff, advised that service would be cut off from July 3 through July 5, 1954. Therefore, on July 3, 1954, it was necessary for plaintiff to shut down the four furnaces, and in doing so it cooled them in accordance with the manufacturer’s cooling schedule. The hardening furnace had been shut off and cooled down twice previously — once in the summer of 1953 and again in December of that year.

7. The four cooled furnaces were examined on Sunday, July 4, 1954.

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159 Ct. Cl. 254 (Court of Claims, 1962)

Cite This Page — Counsel Stack

Bluebook (online)
153 Ct. Cl. 465, 1961 U.S. Ct. Cl. LEXIS 89, 1961 WL 8667, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rheem-manufacturing-co-v-united-states-cc-1961.