S. S. Silberblatt, Inc. v. The United States

433 F.2d 1314, 193 Ct. Cl. 269, 1970 U.S. Ct. Cl. LEXIS 64
CourtUnited States Court of Claims
DecidedNovember 13, 1970
Docket132-61
StatusPublished
Cited by20 cases

This text of 433 F.2d 1314 (S. S. Silberblatt, Inc. v. The 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
S. S. Silberblatt, Inc. v. The United States, 433 F.2d 1314, 193 Ct. Cl. 269, 1970 U.S. Ct. Cl. LEXIS 64 (cc 1970).

Opinion

OPINION

PER CURIAM:

This case was referred to Trial Commissioner George Willi with directions to make findings of fact and recom *1315 mendation for conclusions of law under the order of reference and Rule 134(h). The commissioner has done so in an opinion and report filed on October 14, 1969. Exceptions to the commissioner’s opinion, findings and recommended conclusion of law were filed by plaintiff. Defendant has requested the court to adopt the commissioner’s opinion, findings and conclusion. The case has been submitted to the court on oral argument of counsel and the briefs of the parties. Since the court agrees with the commissioner’s opinion, findings and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Therefore, plaintiff is entitled to recover $29,300 and judgment is entered for plaintiff in that sum.

OPINION OF COMMISSIONER

WILLI, Commissioner:

Plaintiff, a general contractor operating as a New York corporation, was the successful bidder on a $27,578,000 contract for a 1685-unit Capehart Housing Project for military personnel stationed at the Plattsburgh Air Force Base, Plattsburgh, New York.

The single controversy remaining in the case at this point relates to the defendant’s refusal to accept a portion of the lumber that plaintiff proposed to use on the project. The other major claim originally in suit, relating to the topography of the site as depicted by the contract plans and specifications, was settled by agreement of the parties reached in the course of trial. The defendant’s current acknowledgment on brief that it erred in taking a $29,300 change order credit for allegedly defective lumber in certain of the buildings that had already been enclosed when the impasse over lumber quality aróse, has removed that aspect of the lumber claim from dispute.

What remains is plaintiff’s contention that the contracting officer acted improperly when, about half-way through the job, he refused to permit construction to continue until the lumber in plaintiff’s job inventory and that which had been used in framing uncompleted units (and was still exposed) was inspected for quality by a disinterested official grading agency. After that was done, and the rejected lumber replaced, the job was satisfactorily completed within the contract’s authorized performance period.

In accordance with the Disputes clause of the contract, plaintiff timely appealed the contracting officer’s rejection of its claim for an equitable adjustment on the lumber inspection issue. No action having ever been taken on that, appeal, suit was filed in this court and the question fully tried on the merits. (Findings 5, 39 infra.)

Contending that inspection of the lumber mid-way through performance of the job was improper under the contract as a matter of law and that, in any event, the problem of substandard lumber should have been corrected by an adjustment in the contract price, rather than enforced replacement, plaintiff seeks damages for the cost of the inspection, for the cost of replacing lumber, and for the cost of delay to the job as a whole that resulted from the time consumed by the inspection and subsequent replacement operations.

For the reasons that follow, plaintiff’s claim is without merit.

Though the parties compiled a voluminous trial record in support of their respective positions, reflected in the detailed findings of fact accompanying this opinion, the determinative facts are both relatively few and uncomplicated.

The quality requirements for the 9% million board feet of dimensional lumber needed for the contract were detailed in Section 5-02 of the specifications. (Finding 5.) The applicable quality standard was expressed in terms of the official grades promulgated by the West Coast Lumber Inspection Bureau (WCLIB), with the endorsement of the American Lumber Standards Committee. The latter body is appointed by the Secretary of Commerce and has the responsibility for formulating and maintaining *1316 lumber quality standards that are used on an industry-wide basis. (Finding 6.)

After receiving the housing contract plaintiff contracted in writing with the Baldwin Lumber Company (hereinafter referred to as “Baldwin”) to supply all of the dimensional lumber needed for the job. Plaintiff’s purchase terms with Baldwin expressly included all of the lumber quality requirements contained in the specifications of its contract with the Government, including appropriate grademarking of each piece by either WCLIB or its counterpart PLIB (Pacific Lumber Inspection Bureau). (Finding 7.)

Baldwin was in the millwork business and had never sold lumber in the volume involved in its transaction with plaintiff. To meet its supply commitment Baldwin entered into a subcontract with First Lumber Corporation, a dealer that purchased lumber from mills and brokers for resale. (Finding 8.)

Under this tripartite arrangement plaintiff periodically notified Baldwin of its current lumber needs; Baldwin, in turn, advised First Lumber; and the latter then purchased the lumber from mills or brokers and had it shipped directly to Plattsburgh. (Finding 8.)

After securing its subcontract from Baldwin, First Lumber purchased the Quality Forest Products Corporation of Albert Lea, Minnesota. 1 First Lumber operated its acquisition primarily as a so-called “cut-up” mill, a mill that instead of using logs as raw material, buys undergrade lumber from other mills and by reducing its dimensions attempts to eliminate the flaws that caused it to be undergrade. After the reprocessing is done, the lumber is graded and sold on the market. As essentially scavenger operations, “cut-up” mills do not enjoy a good reputation in the lumber industry and a prudent builder would not knowingly purchase lumber for housing construction from a “cut-up” mill. (Finding 14.) In the instant case, neither plaintiff nor Baldwin knew where the lumber in any particular shipment would be coming from. First Lumber made its purchases from many different sources, including Quality Forest Products, various brokers, and lumber mills. In some instances the lumber was in easterly rail transit, in an unconsigned status, when First Lumber bought it. (Finding 10.)

Paragraph 6 of the General Provisions of plaintiff’s contract with the Government provided as follows:

6. Inspection.
(a) Except as otherwise provided herein, all material and workmanship, if not otherwise designated by the Specifications, shall be subject to inspection, examination, and test by the Contracting Officer at any and all times during manufacture and/or construction and at any and all places where such manufacture and/or construction are carried on. The Department and the mortgagor-builder, or either of them, shall have the right to reject defective material and workmanship or require its correction. Rejected workmanship shall be satisfactorily corrected, and rejected material shall be satisfactorily replaced with proper material, without charge therefor, and the eligible builder shall promptly segregate and remove the rejected material from the premises.

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Bluebook (online)
433 F.2d 1314, 193 Ct. Cl. 269, 1970 U.S. Ct. Cl. LEXIS 64, Counsel Stack Legal Research, https://law.counselstack.com/opinion/s-s-silberblatt-inc-v-the-united-states-cc-1970.