Seeds v. United States

92 Ct. Cl. 97, 1940 U.S. Ct. Cl. LEXIS 149, 1940 WL 4088
CourtUnited States Court of Claims
DecidedOctober 7, 1940
DocketNo. 44279
StatusPublished
Cited by14 cases

This text of 92 Ct. Cl. 97 (Seeds 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
Seeds v. United States, 92 Ct. Cl. 97, 1940 U.S. Ct. Cl. LEXIS 149, 1940 WL 4088 (cc 1940).

Opinions

Whitaker, Judge,

delivered the opinion of the court:

I

The contract between the plaintiffs and the defendant for the building of alterations to the Emsworth Dam on the Ohio Biver required plaintiffs to use the old dam as the downstream arm of the cofferdam already constructed and those to be constructed by the plaintiffs. Plaintiffs insist that the defendant thereby impliedly warranted that this dam was sufficient for this use, but that it was discovered that the old dam had holes at the bottom of it which made it impossible to use it for this purpose. When this condition was discovered, the defendant, after consultation with the plaintiffs, issued change order No. 1 providing for the building of a steel sheet cut-off wall one foot upstream from the old dam and to fill in the intervening space with concrete. While this work was being done plaintiffs were delayed in the performance of their' original contract, resulting, they allege, in damage to them, measured by .the reasonable rental value of their plant, inescapable overhead and labor made idle.

Defendant defends on the ground that when this condition was discovered plaintiffs agreed with it on a modifica[109]*109tion of the original contract calling for the payment of approximately $110,000, in addition to the original sum, and that plaintilfs are bound thereby.

We think this is a good defense. When it was discovered that the old dam could not be used as had been intended, defendant proposed to modify the contract to provide for the building of this cut-olf wall. Plaintilfs, instead of claiming defendant had breached its contract and standing on their rights arising from the breach, consented to the modification of the contract and proceeded with the work.

The change order providing for this additional work, after reciting the unforeseen condition that had been discovered, stated “it is necessary and in the best interest of the United States to modify said contract in certain particulars as follows: * * *” [Italics ours]. It also provided, “It is further understood and agreed that all other items and conditions of said contract shall be and remain the same”; and the change order concluded,

Therefore, if the foregoing modification of said contract is satisfactory, please note your acceptance thereof in the space provided below. [Italics ours.]

This was accepted by the plaintiffs in these words:

The foregoing modification of said contract is hereby accepted. [Italics ours.]

The contract as modified was the entire agreement between the parties, embracing all of the undertakings on each side to be performed. The contract as modified has not been breached.

Indeed, when the original contract was entered into, the parties realized that some such modification might be necessary. Article 4 provides that if “subsurface and (or) latent conditions at the site materially differing from those shown on the drawings or indicated in the specifications” are discovered, the contracting officer shall “make such changes in the drawings and (or) specifications as he may find necessary,”' and “any increase or decrease of cost and (or) difference in time resulting from such changes shall be ad[110]*110justed as provided in article 3 of this contract.” Article 3 provides:

* * * If such, changes cause an increase or decrease in the amount' due under this contract. * * * an equitable adjustment shall be made and the contract shall be modified in writing accordingly. * * *

The increase or decrease of cost referred to is the increase or decrease of cost for doing the entire work, which, of course, would include any expenses to which the plaintiffs had been put by reason of a change in the plans and specifications, whether from delay or otherwise. The modification, agreed to by both parties on January 24, 1936, called for an estimated additional payment of $110,159.66. This ■additional sum, according to the express terms of the contract, was supposed to represent what the parties considered “an equitable adjustment” on account of the entire “increase or decrease of cost * * * resulting from such changes.”

The plaintiffs evidently understood that the additional sum to be paid was intended to cover the entire increase in cost, whether from delay or otherwise, because they made no claim for any additional compensation until over a year later when their attention happened to be directed to an opinion of this court in Karno-Smith Co. v. United States, 84 C. Cls., 110, wherein it was held that a contractor was entitled to. damages where the defendant had failed to fulfill its agreement to furnish a suitable foundation on which a building was to be erected. In their claim they say:

This claim is presented in accordance with the decision of the Court of Claims of the United States filed December 7,1936, holding that under circumstances such as exist in this case the contractor is entitled to be compensated for the losses that he has suffered. We have prepared the claim in strict accordance with the decision in that case, (see article Engineer News Record page 256-Feb. 18-1937).

It is clear that the claim now presented is an afterthought, and that the plaintiffs understood at the time they agreed to the change order that the sum therein stipulated was to cover the entire increase in cost.

[111]*111Moreover, it appears from the contracting officer’s finding on this claim that, while the additional sum “included no definite provision for payment for idle equipment and labor that was forced to stand by,” “it appears that you have not been put to additional expense under change order No. 1, due to idle plant, labor, and overhead, but that the change order allowed you $4,275.47 in excess of your actual cost for these items.”

This case is clearly distinguishable from the cases of Karno-Smith, Co. v. United States, supra; Rust Engineering Co. v. United States, 86 C. Cls. 461; and Charles Thompson, et al. v. United States, 91 C. Cls. 166.

In the case of Karno-Smith Co. v. United States, supra; there was no agreement by the plaintiff for a modification of the contract. Payment was made for the extra work done,, but it was not accepted by the plaintiff in full for all sums; due under a modified contract. The findings show that the sum was paid only to cover the extra work, and that the plaintiff protested to the defendant against the furnishing, of the defective foundation immediately upon this condition being discovered.

In Rust Engineering Co. v. United States, supra, the findings state expressly—

* * * The additional price named in such change orders and paid covered only the additional cost of the excavation work and materials made necessary by the enlarged footings and included nothing for the additional and extra costs caused by and directly resulting from the delay for which plaintiff was in no' wise responsible.
‡ $ $ $
* * * It was understood between the parties that plaintiff’s claim for these increased costs, because of the delays, would be considered later.

There was no such understanding in this case.

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Cite This Page — Counsel Stack

Bluebook (online)
92 Ct. Cl. 97, 1940 U.S. Ct. Cl. LEXIS 149, 1940 WL 4088, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seeds-v-united-states-cc-1940.