United States v. Marietta Manufacturing Co.

53 F.R.D. 390, 1971 U.S. Dist. LEXIS 11353
CourtDistrict Court, S.D. West Virginia
DecidedOctober 6, 1971
DocketCiv. A. No. 2173
StatusPublished
Cited by5 cases

This text of 53 F.R.D. 390 (United States v. Marietta Manufacturing Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. West Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Marietta Manufacturing Co., 53 F.R.D. 390, 1971 U.S. Dist. LEXIS 11353 (S.D.W. Va. 1971).

Opinion

CHRISTIE, District Judge:

This action was brought by the United States against Marietta Manufacturing Company (hereinafter referred to as “Marietta”), a shipbuilder, and The Travelers Indemnity Company (hereinafter referred to as “Travelers”), surety on a performance bond executed by Marietta, for default in the construction of two hydrographic survey ships which Marietta, by contract designated No. MA-3156, agreed to build for the Maritime Administration. There are presently before the Court the following motions of the parties: (1) A motion by the defendants for summary judgment, (2) a motion by the defendants to strike plaintiff’s claim for liquidated damages, and (3) a motion by plaintiff for severance and separate trial of the issues of liability and damages. The Court will first consider defendants’ motion for summary judgment made pursuant to the provisions of Rule 56(b) of the Federal Rules of Civil Procedure.

MOTION FOR SUMMARY JUDGMENT

The facts in this case have been set forth in some detail in a previous opinion issued by the Court and, for the purposes of this opinion, they need to be set forth herein only in a summary manner.1 In November of 1962, the Maritime Administration, on behalf of the Coast and Geodetic Survey, entered into a contract with Marietta in which Marietta agreed to construct two hydro-graphic survey ships. The contract contemplated completion and delivery of one of the two ships by November 18, 1964, and the other by March 18, 1965.2 On October 1, 1963, subsequent to the commencement of work on the two ships, employees of Marietta’s shipyard went out on strike. This strike was not settled until February 8, 1964, and during the strike, work on the ships was completely halted. As a consequence of this strike, as well as other difficulties which Marietta was experiencing at its shipyards, work on the two ships fell behind schedule and on July 24, 1964, L. C. Hoff-[393]*393mann, Chief, Office of Ship Construction of the Maritime Administration, advised Marietta by letter that the progress of the work on the two ships was not satisfactory. Hoffmann advised Marietta to request an extension of the contract delivery dates and to submit evidence in support of the requested extensions pursuant to the provisions of their contract.3 In the same letter, Hoffmann requested certain additional information from Marietta relative to Marietta’s plans for future construction work on the ships. Included were requests for information concerning Marietta’s production schedule, material control schedule, prospective subcontracts and proposed manpower during the remainder of the period required to build the ships. Hoffmann requested a reply to this letter-request within fourteen (14) days of the receipt of the letter.

Subsequently, by letter dated September 15,1964, Hoffmann advised Marietta that, as a result of the strike at its shipyards, the Maritime Administration was allowing an additional 132 days for delivery on each of the ships, pursuant to the provisions of Article 5 of the contract. On the same day, September 15, 1964, J. W. Gulick, the then Acting Maritime Administrator, informed Marietta by letter that it (Marietta) had failed to make any appreciable progress on the construction of the two ships since July 24, 1964, and that the Maritime Administration had had no indication of any improvement in the situation. The Acting Administrator then informed Marietta that, as a consequence of the unsatisfactory progress of the work on the two ships, as well as Marietta’s current financial condition and reduced labor force, he was, by that letter, giving notice of default pursuant to the provisions of Article 29 of the General Provisions of their contract. Mr. Gulick then informed Marietta that it had 15 days from the date of the receipt of the notice of default in which to remedy the failures and conditions cited by the Administrator as constituting defaults under the contract. Marietta responded to the letter of default by forwarding a telegram to the Administrator of the Maritime Administration, dated October 2, 1964, in which it asserted that the allegations contained in the default letter of September 15, 1964, were unjustified and erroneous and further asserted that it was not in default. On October 5, 1964, Marietta requested an extension of 455 days for delivery of each of the two ships, setting forth in the request the various causes which, in its opinion, had resulted in the delays, and which entitled it to the 455-day extension. By telegram dated October 7, 1964, Nicholas Johnson, the Maritime Administrator, requested Marietta to submit additional data in order that the Administrator might have all relevant information before him prior to proceeding under either Articles 29 and 30 (the default clauses) or Article 5 (the extension clause). By letter dated October 30,1964, Marietta advised the Maritime Administration that, in view of the fact that a representative of the Maritime Administration had acted as a full-time resident-supervisor of the construction work in the Marietta yards since 1961 and the further fact that a representative of the Coast and Geodetic Survey also had been present in the shipbuilding yards during the same period, it felt that the Maritime Administration was fully aware of the facts concerning the causes of delay in production. Based upon this fact, and the further fact that the request for additional information was made in order to enable the Maritime Administration to proceed under the default clauses of the contract, Marietta declined to furnish any further information.

On November 10, 1964, the Chief of the Office of Ship Construction advised Marietta that it had been given an ex[394]*394tension of 193 days for delivery of each of the two vessels. This letter also informed Marietta that the extension was a final decision of the Chief, Office of Ship Construction, and as such was subject to procedures of the Disputes Article of the contract. Marietta was further instructed in the letter that it had 30 days in which to file notice of appeal with the Chief of the Office of Ship Construction and that the Administrator of the Maritime Administration had authority to hear and determine such disputes.

Eight days after sending the letter to Marietta granting the extension of 193 days for delivery of the two vessels, the Chief of the Office of Ship Construction, by letter dated November 18, 1964, informed Marietta that he had determined that “events of default” under their contract had occurred. The events which the Chief considered to have placed Marietta in default were: (1) A failure on the part of Marietta to prosecute the contract work with such diligence and in such manner as to enable it to complete the work in accordance with the contract delivery dates, (2) Marietta’s financial condition, and (3) the failure of Marietta to assign and maintain sufficient manpower to complete the work under the contract. The Chief indicated in this letter that the decision finding Marietta in default was a “final decision” and that an appeal could be made from that decision in accordance with the provisions of Article 35 of the contract. If an appeal was contemplated, Marietta was directed by the Chief to mail written notice of its appeal within 30 days. The Chief further informed Marietta that the Maritime Administrator had the authority to hear and determine such appeals.

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Cite This Page — Counsel Stack

Bluebook (online)
53 F.R.D. 390, 1971 U.S. Dist. LEXIS 11353, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-marietta-manufacturing-co-wvsd-1971.