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SMITHER & CO. v. CALVIN-HUMPHREY CORP.

July 10, 1964

SMITHER & COMPANY, Inc., a corporation, Plaintiff,
v.
CALVIN-HUMPHREY CORPORATION, a corporation and New Amsterdam Casualty Company, a corporation, Defendants



The opinion of the court was delivered by: YOUNGDAHL

Plaintiff's claim and defendants' counter-claim came on for trial before this Court sitting without a jury, on April 22, 23, 24, 25, and 28, 1964. Subsequent thereto, both plaintiff and defendants filed memoranda at the request of the Court, and on May 28, 1964, plaintiff filed a reply memorandum with the permission of the Court after defendants had sought and received additional time for the filing of their memorandum.

The Court has carefully considered the testimony adduced before it (both as it was adduced and in the form of a full transcript), exhibits admitted into evidence, as well as all of the above memoranda, and has reached the following conclusions, which shall be considered as findings of fact and conclusions of law pursuant to Rule 52(a), Federal Rules of Civil Procedure:

 2. The intended agreement between the parties is embodied in plaintiff's exhibit 4, a letter from Paul Burgoldt for Smither & Company (and approved by James M. Smither, president of Smither & Co.) to the Calvin-Humphrey Corporation, attention Mr. William T. Hannan, President. The letter is dated June 2, 1961, and was accepted on June 8, 1961 by Mr. Hannan, who signed the letter in a blank labeled 'accepted.'

 3. Mr. Hannan added to the document, at the bottom of the last page below the above three signatures, the following typewritten words: 'WORK TO BE COMPLETED BY AUGUST 15, 1961.' This was followed by his signed initials, 'WTH.' This date of completion was never agreed to by Mr. Burgoldt or Mr. Smither, but they never protested this date. Plaintiff had begun work on the project before June 2, and continued to perform the work with knowledge that defendant had added an August 15 date. The date of August 15 was passed with the work not completed and without an official notification by defendant that it considered the contract breached by plaintiff, and after August 15, defendant made certain change-orders and instructions for additional work to be performed by plaintiff. (Tr. 18; 113-117; 142-145.) Substantial portions of the work set forth in the letter of June 2, as well as certain additional demolition work, were being performed throughout September, 1961. (Tr. 18; 113; 143-144; 347-353; 358; 359; defendant's exhibits 2 and 4.) The Court therefore finds that time was not of the essence of this contract, and to the extent that plaintiff waived its objection to the target date of August 15 by performing work under a document to which this date had been added by Mr. Hannan, to the same extent the defendant waived its right to insist upon completion by August 15 by permitting plaintiff to continue working in September. On October 19, 1961, defendant notified plaintiff 'to discontinue any further work * * * for the reason that you have unreasonably delayed the completion of this job.' (Plaintiff's exhibit 8.) Plaintiff did no further work, and defendant hired another contractor, E. L. Klavans Co., to complete the job.

 4. By October 19, 1961, plaintiff had substantially completed its obligations under the contract. (Tr. 21-28; 127-155.) Delays in completing the demolition and preparation of partitions were caused primarily by delay in receiving final notification of the exact requirements of the incoming tenant, the General Services Administration. (Tr. 29; 51; 118-119; 167; 274-275; 380-381; plaintiff's exhibit 9). Much of the work, such as plastering ceilings and painting, depended upon the final placing of these office partitions. (Tr. 118-119; 126; 167). Defendant therefore breached the contract on October 19, 1961, by dismissing plaintiff from the job. Plaintiff is entitled to all losses sustained as a result of this breach by defendant, less any damage to defendant for improper or negligent workmanship.

 5. Plaintiff has proven by a fair preponderance of the evidence that it expended $ 11,964.12 for labor. (Tr. 77; 79-80; defendant's exhibit 2.)

 6. Plaintiff has proven by a fair preponderance of the evidence that it expended $ 4,945.70 for materials. (Tr. 78; 80-81; defendant's exhibit 4.) This figure includes the full cost of the fire doors installed, which is the only item disputed by defendant in its memorandum. It is true that the contract of June 2 called for 'Class C' doors instead of the 'Class B' doors that were installed. But defendant's own witness testified that 'the difference is nonexistent between a Class C and Class B door.' (Tr. 201.) Defendant failed to establish what, if any, difference in price existed between the two types of doors. (Tr. 201; 264-265.) The argument that any replacement of the fire doors was unnecessary under the District of Columbia Code (Tr. 198-201) is irrelevant in view of the requirement of the June 2 contract that they be provided by plaintiff. The total of $ 4,945.70 includes $ 425.54 for plans and permits (including all charges for 'prints). (Defendant's exhibit 4.) If the amount expended on plans and permits is subtracted (for purposes of computing profit, see paragraph 9 below), $ 4,520.16 remains in the category of materials.

 7. Plaintiff has proven by a fair preponderance of the evidence that it expended a total of $ 25,829.91 for subcontracts. (Tr. 78-79; defendant's exhibit 3; plaintiff's exhibits 2, 7, 14, 15, 16, 18a and b, 21a and b, 22, 23.) Plaintiff submitted to defendant all of its subcontracts and cancelled checks in payment thereof. (Tr. 79-84.) This figure includes payment for all of the subcontracts listed in defendant's exhibit 3 except item (a) below, and specifically includes items (b), (c), and (d) below. These latter three items are the subcontracts which defendant disputes in its memorandum, except for item (a) below and except for the subcontract dealing with air-conditioners, which will be treated separately in paragraph 11 below.

 (a) Plaintiff concedes (Tr. 137-139) that the claim of William R. Lone for 'supervision' (in the amount of $ 1,171.10) 'could' be a duplication of the charge (in the amount of $ 562.50) which was paid to Lone on an hourly basis as 'superintendent' and which is included in the amount spent for labor (defendant's exhibit 2.) In this state of the evidence, the Court concludes that plaintiff has failed to prove by a fair preponderance of the evidence that it owes Lone the additional $ 1,171.10, and the Court will disallow this amount in its entirety. Plaintiff does not claim that it is entitled to the $ 1,200 for 'supervision' set forth in the contract of June 2.

 (b) The subcontract with the Haughton Elevator Company was orally authorized by defendant, thus modifying the provision in the contract of June 2 that such authorization was to be in writing. (Tr. 388-339; plaintiff's exhibit 16.) $ 4,558 was the cancellation charge for not completing this contract. (Tr. 82; 396-399.)

 (c) Plaintiff's payments to Coakley under the plastering subcontracts were amply proven (Tr. 83-84; 90-93) as consisting of $ 2,670 paid initially and $ 4,136.02 paid in settlement of a lien filed by Coakley against plaintiff -- which taken together total the $ 6,806.02 which plaintiff claims. However, since this is more plastering than was called for in the June 2 contract, and since plaintiff has failed to prove by a fair preponderance of the evidence that the additional plastering was authorized by defendant (Tr. 140-141; plaintiff's exhibits 17a, b, c, and d), plaintiff will be limited to the amount set forth in the June 2 contract, namely, $ 5,100.

 8. Plaintiff seeks to recover an amount for 'Overhead' -- namely, 10% Of the amounts expended for labor, materials, insurance, and subcontracts. However, the proposal of June 2, 1961 (plaintiff's exhibit 4), which became the contract when accepted by defendant, contains no specific provision for overhead. The absence of any provision for overhead as such in the June 2 contract is partly explained by reference to a proposed contract (which was rejected by defendant) dated May 12, 1961. (Defendant's exhibit 1.) In the first place, the proposal of May 12, submitted by Mr. Burgoldt, contained a provision for overhead in the amount of 5% On certain items, and while the entire proposal was not acceptable to either Mr. Smither or Mr. Hannan, there was no specific objection to the figure of 5%. (Tr. 40-45; 295.) Some explanation of an increase in the amount of 10% Would therefore be required before the Court would conclude that any such provision was included, sub silentio, in the agreement eventually reached by the parties, but plaintiff has offered no such explanation. This unexplained difference in the percentages is made even more important by the fact that in early May, defendant's president signed a written authorization ot Mr. Burgoldt 'to draw up a contract for approx. $ 100,000.00 at 5% 10%.' (Emphasis added.) (Plaintiff's exhibit 3; Tr. 11-12.) In addition to this difference in the percentages, further comparison of the documents of May 12 and June 2 reveals that for eleven separate items the 'projected' totals in the May 12 proposal and the totals in the June 2 contract are identical (ignoring differences of less than one dollar): Demolition & Preparation, Plumbing, Electric, Terrazzo, Painting, Entrance Doors, Boiler Conversion, Plans, Insurance, Supervision, and Permits. Yet in the May 12 proposal, nine of these items were computed without adding 5% For overhead, while only two items -- Demolition & Preparation, and Painting -- contained such an allowance for overhead. Thus plaintiff's present claim for overhead on all items would increase the totals on an item-by-item basis even above the totals of the proposal which defendant rejected as too high. In this ...


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