Saran Industries, Inc. v. Marathon Oil Co.

666 F.2d 85
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 23, 1981
DocketNo. 80-3022
StatusPublished
Cited by1 cases

This text of 666 F.2d 85 (Saran Industries, Inc. v. Marathon Oil Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Saran Industries, Inc. v. Marathon Oil Co., 666 F.2d 85 (5th Cir. 1981).

Opinion

PER CURIAM:

In this action for the breach of a contract for the application of paint to an offshore platform there was a trial which ran along for over three weeks. At its conclusion the jury was presented with no less than nineteen interrogatories. The lawsuit had degenerated into a cyclone of claims and counterclaims, factual and legal, some of them outside the scope of the pleadings and the pretrial order. The way things turned out, the jury awarded Saran damages against Marathon in the sum of $248,200 on a contract which had called for a total of $207,000, on which all but $41,645 had been paid prior to the filing of the lawsuit. The parties, including those yet to be mentioned, have appealed, asking this Court to sort and appraise the fall-out from the storm. An explanation of how an unpaid balance of $41,645 turned into a verdict for $248,200 presents an unusual story.

The Pretrial Order

We think the best thing to do is to state the case as the parties stated it for themselves in the pretrial order:

A brief summary of the material facts claimed is as follows:

A. Plaintiff, Saran Industries, Inc.: On or about October 1, 1976, Saran Industries, Inc., entered into a written contract with Marathon Oil Company whereby it agreed to paint an offshore production platform in the Gulf of Mexico. The contract was later amended to enlarge the original job. Under the contract, Marathon Oil Company was to supply the paint and perform certain other obligations. Under the agreement, Saran allowed Marathon 36 crew hours of delay for every 30-day period caused by Marathon but for any delays beyond that amount, Marathon was to be penalized $200 per hour. Because Marathon supplied defective paint, incompetent inspectors, interfered with the Saran painters, spilled oil in painting areas, supplied improper blasting sand, gave inadequate and/or improper instructions, and interfered in other ways, Saran was delayed approximately 2138 hours above the 36 crew hours per 30 days allowed. Saran seeks $427,600 in delay damages. Additionally, the balance of the contract price of $41,645.00 has not been paid and there was $15,819.00 in experts and other expenses incurred resulting in damages to Saran.

Saran has also filed a claim against Glidden-Durkee, Division of SCM Corporation. Glidden was the manufacturer and vendor of the paint sold to Marathon for use on the platform. Saran was the beneficiary of this contract and of the express and/or implied warranty that the paint was fit for the purpose intended. The paint was not fit for the purpose intended. Additionally, when Glidden sold the paint to Marathon, it knew the purpose intended for the paint, the agreed upon method of application, and that Saran would be the applicator. It also knew or should have known that the paint was defective and could not be applied with airless spray equipment. Because this paint was sold when the manufacturers knew it was not fit for its intended application or purpose, Glidden was in bad faith and/or intended to defraud Saran. Therefore, Saran demands $760,512.19 in damages from Glidden plus attorneys’ fees. Saran also claims this amount from Marathon as a supplier of the paint.

Marathon alleges that Saran is liable to it in damages for certain defective work which had to be repaired. Saran answers that this was due to Marathon’s own actions or to the defective Glidden paint.

B. Defendant: Marathon Oil Company denies that the penalty provision in its contract with Saran Industries refers to man-hours instead of crew hours and further denies that Saran Industries, Inc., suffered the number of hours of delay that are being claimed. It is further contended that any delays in the work caused by Marathon Oil Company were relatively insignificant in nature and did not exceed the number of [87]*87hours allowed without penalty in the subject contract. The bulk of the delays claimed by Saran Industries was caused by the plaintiff’s inexperience, fault, and/or method of applying the paint, or alternatively, by defects or deficiencies in the paint itself, Which was supplied by SCM Corporation. In the latter event, Marathon Oil Company denies any responsibility for the condition or formulation of the paint and claims a right of indemnity over against SCM Corporation for any penalties imposed on Marathon Oil Company because of delays caused by the paint itself. Marathon Oil Company also denies any responsibility under the contract for delays caused by weather.

Saran Industries, Inc., exceeded by 27 days the time specified in the contract for completion of the work and is therefore obligated to Marathon Oil Company for penalties in the amount of $13,500 under the terms of the contract. In addition, Marathon Oil Company is entitled to recover from plaintiff the sum of $60,000 for corrective work performed on the platform as the result of improper workmanship by the plaintiff. If it is established in court that the subject delays in the work and the subsequent corrective work resulted from defects or deficiencies in the paint supplied by SCM Corporation, Marathon Oil Company is entitled to indemnity to the extent of any recovery by plaintiff as well as the cost of said corrective work.

C. Defendant: SCM Corporation denies that the paint that it furnished was in any way defective or that it or its products caused any delay in the job in question; it denies any defects or deficiencies in any specifications and/or instructions supplied by it; denies that the paint was not fit; denies that it had knowledge of any defects; denies that it was in bad faith or that it acted with intent to defraud and denies any liability for indemnity or contribution to any other party hereto. SCM Corporation further contends that the alleged delays in the job were caused by things other than the paint supplied by SCM Corporation, among others, such things being the ineptitude of the painters and improper methods of application utilized by the painter and improper preparation for the paint job.

A comprehensive statement of all uncontested material facts:

1. Saran Industries, Inc., and Marathon Oil Company entered into a written contract for the painting of Marathon’s East Cameron Block 321, production platform “A”. The original contract was signed on or about October 1, 1976, for a consideration of $137,000; it was amended on or about December 6, 1976, to enlarge the job and the consideration was increased to $207,000.

The single listing of the contested issues of fact are:

1. The actual number of hours of delay suffered by plaintiff.
2. The correct interpretation of the penalty and other provisions in the subject contracts.
3. The cause and extent of the aforesaid corrective work.
4. Causes of delays in plaintiff’s completion of the job.
5. Whether or not the paint was defective.
6. Whether or not improper application was employed by the painter.
7. Whether or not the platform was properly prepared to receive the paint.
8. Whether or not the crew employed by the painter was competent.

A single listing of the contested issues of law are:

1. The correct interpretation of various contract provisions.
2. Marathon’s responsibility for defective paint.
3.

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666 F.2d 85, Counsel Stack Legal Research, https://law.counselstack.com/opinion/saran-industries-inc-v-marathon-oil-co-ca5-1981.