Falls Sales Co. v. Board of Transportation

MARTIN, Judge. Third-party defendant contends that its motions to dismiss, for summary judgment and for directed verdict, should have been granted. It argues that defendant was required to allege and offer evidence of negligence on the part of the third-party defendant in order to survive those motions but failed to do so. Further, third-party defendant contends that the responsibility for damages contemplated by Section 7.11 of the contract means only such damage for which the contractor might be held liable due to a breach of due care. Third-party defendant points out that all the evidence establishes conclusively that it exercised the utmost care and since defendant failed to allege negligence, third-party defendant’s motions should have been granted. As support for its position, third-party defendant cites Highway Commission v. Reynolds Co., 272 N.C. 618, 159 S.E. 2d 198 (1968) and Millsaps v. Contracting Company, 14 N.C. App. 321, 188 S.E. 2d 663 (1972), cert. denied, 281 N.C. 623, 190 S.E. 2d 466 (1972). We think those cases are distinguishable from the case at bar. In Highway Commission v. Reynolds Co., supra, the Highway Commission brought action against the contractor (Reynolds) for compensation paid to the owner of a building damaged by the contractor in the construction of a highway for the Commission. The. trial court in that case found that the contractor’s operations were conducted pursuant to and in accordance with its contract with the Commission and under the supervision of the Commission’s resident engineer and two inspectors. The trial court further found as a fact that whatever damage was done to the restaurant building “ . . . arose out of the ordinary and customary use [by the contractor] of standard and accepted machinery and road-building equipment used in the work in accordance with standard and accepted methods and techniques in the road construction industry; that any such damages did not result from blasting operations.” (Emphasis added.) In Reynolds the court was talking about damages arising from the ordinary and custo7Yiary use of machinery under the supervision of the Commission’s resident engineer. It did not involve blasting damages and this fact was noted in the opinion. In Millsaps the property owner brought suit against the contractor for blasting damages to his property, having previ [102] ously recovered from the Highway Commission by condemnation proceedings for the identical damage. The court was concerned with the liability of a contractor to a property owner and not the liability of the contractor to the Board of Transportation. Moreover, there was no mention or discussion of any contract provisions dealing with blasting (Section 7.11 of the Standard Specifications) and liability in connection therewith. Blasting is an ultrahazardous activity, the results of which are impossible to predict. Thus, the Board should have the right to contract for its protection against an unusual hazard. We hold that the contract between defendant and third-party defendant specifies strict liability, regardless of negligence, by the contractor to the Commission for any damages caused by blasting. See Insurance Co. v. Blythe Brothers Co., 260 N.C. 69, 131 S.E. 2d 900 (1963). Thus, allegation and proof of negligence by defendant in its action against the third-party defendant was unnecessary and third-party defendant’s motions to dismiss, for summary judgment and directed verdict were properly denied. The next question presented by the third-party defendant is whether the court erred in allowing defendant’s witness Fred Davidson to testify regarding third-party defendant’s offer to effect certain repairs on plaintiff’s property. It contends the agreement amounted to an offer to compromise a liability, and that such offers are always excluded in order to encourage the settlement of disputes out of court. In support of this argument third-party defendant cited 2 Stansbury, N. C. Evidence 2d, § 180 (Brandis Rev. 1973). There was no claim to be compromised at the time of third-party defendant’s offer to make repairs and the statements did not amount to an offer to compromise a disputed claim. In addition, the testimony was not prejudicial since the State was proceeding at all times on the theory of breach of contract and at no point did it claim that the third-party was liable because of negligence. Thus, it made no difference what the third-party defendant stated to the plaintiff. Moreover, in ruling on the motion for directed verdict, it is presumed that the judge considered only competent evidence in making his determination. This assignment of error is overruled. Finally, third-party defendant contends the court abused its discretion in severing the third-party action for trial prior to [103] the trial of the principal action because a determination as to whether or not plaintiff had in fact sustained damages and to what extent should have been made before the determination as to which party would ultimately bear the responsibility for those damages. In view of the numerous issues contended by third-party defendant to be involved in the third-party action, we hold that the court did not abuse its discretion in severing the third-party action from the principal action, and that the third-party defendant was not prejudiced by the severence since it has had, or will have, its day in court on all issues. The directed verdict in favor of defendant is Affirmed. Judge Britt concurs. Judge Vaughn dissents.