Henry Ericsson Co. v. United States

MADDEN, Judge. The plaintiff on September 3, 1936, made a contract with the United States Public Works Administration for the construction of the superstructure of the north sector of the Julia C. Lathrop Homes in Chicago, Illinois, for a consideration of $2,097,600. The contract obligated the plaintiff to complete the work within 365 *325 days after the receipt of notice to proceed. Notice was received on September 23, 1936, which fixed the completion date as September 22, 1937. The plaintiff made a plan for the orderly and economical performance of its work. It was to build 17 buildings, containing in all 484 apartments with a total of 1690 rooms. Eleven buildings were to be 3 story buildings, five 2 story and one, the administration building, one story. The outside foundation walls had already been built. The sequence of the work in each building was first to place the interior foundation- columns and the concrete slabs of the first floors which were to rest on the foundation walls and columns; then build up the brick exterior walls backed with tile, and the interior partitions; then place the interior columns to support the second floor and pour the concrete slab of that floor, resting it on the walls and columns; then build up the exterior walls to the next floor, and so on to the concrete slab roof, covered with insulation, paper and tar, and the parapets and penthouse on top of it. Plastering, wood finishing, and painting were to be done when the buildings were enclosed. The plaintiff planned to move its gangs of labor of the various trades, its machines, and its form lumber, from one building to the next, while waiting for the concrete of each floor to dry sufficiently to permit the placing of the next tier of walls on that floor. It planned to carry seven buildings along in that sequence. But it was seriously delayed, almost at the outset, by the Government’s failure to furnish full size drawings showing how the stone trim for the front entrances of the buildings was to be shaped. Without these drawings the plaintiff could not prepare its shop drawings for the manufacture of the stone; the stone could not be manufactured; and the plaintiff could not complete the exterior walls of even the first floor of the buildings, nor any work coming after that in sequence. Though it was obvious when the contract was made that the full sized drawings would be needed even before the work began, in order to enable the plaintiff to obtain the stone by the time it would be needed, the first of them arrived on October 30, fifty-seven days after the date of the contract and thirty-seven days after the plaintiff had been directed to proceed with the work. When the first full size drawings were received they were for only a part of the buildings, the buildings they related to were not contiguous, and the drawings were incomplete even as to some of the buildings to which they related. The plaintiff had tried in the meantime to avoid some of the delay by improvised procedures but was not permitted to do so. We have found that as a consequence of the defendant’s delay in furnishing the full sized drawings, the plaintiff was delayed forty-seven days in completing its work. The proved damages resulting from this delay were the costs of job and main office overhead; the cost of having its machinery tied up on the job; the cost of additional form lumber which the plaintiff was obliged to buy because its plan of work was disrupted; and the cost of furnishing heat to the buildings for a period at the end of the contract, after the time when the plaintiff would have had the job completed and turned over to the Government, but for the delay. The completion of the job was further delayed by the failure of the Government to have steam available for the cleaning and testing of the pipes and radiators installed by the plaintiff. The boilers for the heating system were in the south sector of the project, built by another contractor. The steam was brought from the boilers by mains to the plaintiff’s sector, and was there transmitted to the equipment installed by the plaintiff. The contract provided that the steam should be turned into the equipment installed by the plaintiff, first to clean it, and then to test it. But the steam could not be turned in until electricity was available to operate the stokers at the power plant and the motors in the vacuum pumps on the steam lines. The plaintiff was ready for the steam tests about September 13, 1937, or would have been except for unreasonable delay by the defendant in making up its mind that electric wire heavier than that specified would be required to operate the pumps. But no steam was available until October 13 because the public utility company which was to supply the electricity did not connect its lines to the project until October 12. We have found that the reason it did not do so was because the Government had not signed a contract with the utility company arranging for the service. The Government says that this finding is based upon hearsay testimony. The testimony was hearsay, but it was not objected to, and the Government had ample opportunity to prove the true facts if they were different from the testimony. Hence *326 our finding is based not only on the hearsay testimony, but upon the corroborative fact that it stands uncontradicted. For the Government to delay the completion of the project for 17 days, as we have found, by failing, without explanation, to make arrangements with the public utility company for electric service, was a breach of contract. We have found that damage to the plaintiff resulted from this delay, and have awarded compensation therefor. The plaintiff seeks to recover the cost of certain laundry tables which it was directed to install, though the specifications were ambiguous and, the plaintiff asserts, did not require the contractor to install them. The contracting officer decided the question against the plaintiff. The plaintiff did not appeal to the head of the department, as it had a right to do under the contract. It cannot, therefore, obtain relief here, even if the contracting officer’s decision was wrong, which we do not decide. The plaintiff complains that in change order No. 56, which required grading of the area between the sidewalk and the curb on Clybourn Avenue, not required by the original contract, the Government deducted from the compensation for the grading the cost of preparing certain tree pits in the area which, the Government said, the plaintiff was required by the contract to do, but which, the plaintiff says, it was not required to do. The contracting officer and the head of the department on appeal decided this question against the plaintiff, rightly, we think. The plaintiff’s contention is highly technical. The contract drawings showed the proposed tree pits, as well as others elsewhere on the project. But the area, between the sidewalk and the curb, where these pits were shown was outside the property line of the project, as shown by a Property Line Map. We have no doubt that the plaintiff, when it bid on the project without seeking a clarification of this contradiction, expected to have to prepare the pits. If so, the officers were right in deducting their cost when the work was omitted. In computing the plaintiff’s damages resulting from the delays caused by the Government’s breaches of contract, we have included certain elements to which the Government objects, and omitted others for which the plaintiff contends. We have included compensation for machinery owned by the plaintiff and rendered idle by the delay, and have, because of the absence of wear and tear upon it, awarded one-half of the fair rental value of it. Brand Investment Company v. United States, 102 Ct.Cl. 40, 58 F.Supp. 749, certiorari denied, 324 U.S. 850, 65 S.Ct. 684, February 26, 1945. We have included a proportionate part, in this case substantially all, of the plaintiff’s main office overhead for the period of the delay. Brand Investment Company v. United States, supra. In computing the main office expense we have not included a large increase in the salaries as officers of the four members of the Ericsson family who owned the plaintiff corporation. The increase was not made until after November 1, 1937, when the work was substantially completed, and was then made retroactive to January 1, 1937. It was made more as a distribution of profits than as a normal compensation for services rendered, so far as the proof shows. The Government asserts other impediments to the plaintiff’s right to recover. It says that, since the work was completed within the contract time, as extended by change orders, any delay caused by the Government cannot be regarded as a breach of contract. The original completion date was September 22, 1937. During the progress of the work the Government gave the plaintiff several change orders, each extending the time for performance by a specified number of days, the total extensions aggregating 74 days. Some of these change orders involved new or different work. One merely gave more time because of a strike of plasterers. There was no relation between these change orders and the delays which we have found to be breaches of contract. The changes covered by the orders did not in fact delay completion of the work by seventy-four days, or any other substantial period of time. They were not given by the Government, or accepted by the plaintiff, as a compromise or settlement of any dispute between the parties as to whether there had been delays, involving breaches of contract, not related to the subject matter of the change orders. In these circumstances the acceptance of the change orders does not foreclose the plaintiff from a remedy for breaches of contract which in fact delayed and damaged it. The Government urges that we held otherwise in the case of Sanders v. United States, 60 F.Supp. 483. But in that case we concluded that the change order was intended, as regarded the addi *327 tional time given, to foreclose any question between the parties as to the duty to complete, or the right to complete, the contract earlier than the date designated for completion in the change order. In the instant case we do not think there was any such intention. The Government contends that the plaintiff is foreclosed from recovery for the cost of heating the buildings for the period from November 9 to December 3, 1937. We have found that the reason why the plaintiff was still on the job and responsible for the temperature in the buildings at that time was because the Government had delayed the plaintiff in connection with the stone work and the turning on of the steam. The contract made the plaintiff responsible for the temperature in the buildings until the Government accepted the work as completed. The plaintiff asked for a change order compensating it for the cost of the heat during the period in question, asserting as a reason the fact that it would have been finished and gone but for the delays caused by the Government. The contracting officer refused the change order and the plaintiff appealed to the head of the department. He made fifteen numbered findings, none of which related to the plaintiff’s contention as to the reason why it has been subjected to this expense. We find no indication in this decision denying the plaintiff’s claim that the officer who decided it was aware of the basis of the claim. In those circumstances we cannot say that the plaintiff has had the hearing and decision to which the contract entitled him, and is foreclosed from coming here. We see no point in applying words such as “aribitrary,” “capricious,” or “bad faith,” which are obviously inapplicable, in order to reach the result which justice demands. We think that unawareness of the problem on the part of the deciding officer is an equally good reason why his decision should lack finality. We do not decide whether his decision would have been final if he had been aware of the problem and had intended to decide it. We conclude that the plaintiff is entitled to recover $42,306.34. It is so ordered. WHALEY, Chief Justice, and WHITAKER and LITTLETON, Judges, concur. JONES, Judge, took no part in the decision of this case.