Case ID: or-app_43/html/0207-01.html
Source: Caselaw Access Project
Author: {"author": "\n      JOSEPH, J. BUTTLER, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Argued and submitted July 23;
    resubmitted in banc November 6,
    affirmed in part; reversed in part and remanded November 13, 1979,
    reconsideration denied January 17,
    petition for review allowed March 18, 1980
    LINCOLN CONSTRUCTION, INC. Respondent, v. THOMAS J. PARKER & ASSOCIATES, INC. Appellant.
    
    (No. 77-2278-L-3, CA 11335)
    602 P2d 676
    
      Sidney Ainsworth, Ashland, argued the cause for appellant. On the briefs was Jack Davis, Ashland.
    William Ferguson, Medford, argued the cause for respondent. With him on the brief was Grant, Ferguson, & Carter, Medford.
    JOSEPH, J.
    Buttler, J., dissenting opinion.
   JOSEPH, J.

In this action for breach of contract defendant ipeals from a judgment in favor of plaintiff. The trial urt, sitting without a jury, made a general finding in vor of plaintiff on its complaint and a general find-g for plaintiff on defendant’s counterclaim and warded plaintiff $75,765 in damages, plus $22,500 in tomey’s fees.

Defendant had a contract with Weyerhaeuser for e construction of roads which Weyerhaeuser was ligated to construct under a timber sale contract it d entered into with the United States Forest Serv- }. Defendant subcontracted with plaintiff to perform at portion of the contract requiring blasting, crush- % and stockpiling of aggregate material (rock) neces-cy to construct the roads.

Defendant’s contract with Weyerhaeuser provided part:

"* * * Weyerhaeuser will pay Contractor during the term hereof, at the later to occur of two-week intervals or within ten (10) days after receipt of an invoice from Contractor, an amount equal to 90% of the value, proportionate to the total amount of the contract, of labor expended and material purchased and incorporated into the work, less the aggregate amount of previous payments, but subject to satisfactory completion or partial completion of a road, roads or crushing of rock; either documented by the United States Forest Service (U.S.F.S.) 'Report of Pirn-chaser’s Credit for Specified Road Construction’ or a statement of work completed furnished by Weyer-haeuser representatives.”

defendant’s subcontract with plaintiff provided:

"* * * Contractor agrees to pay and subcontract,rr. agrees to perform the work described hereú? ? ■>>■ ■ sum of Three and 10/100 ($3.10) per yarJ ured and determined in accordance with agreements.
"Payment is to be made as set forth in the attached agreements, including the ten percent (10%) deductions, and upon full compliance with the terms of this agreement and the attached agreements said ten percent (10%) reserve shall be paid to subcontractor. (Paragraph IV)
"It is agreed that Subcontractor shall fully perform that portion of both said contracts fully and completely as it relates to the work described herein. (Paragraph II).” (Emphasis supplied.)

The "attached agreements” referred to in the subcontract were the contract documents for the agreement between defendant and Weyerhaeuser.

Both contracts were executed in August, 1976, and plaintiff commenced its performance under the subcontract in September of that year. In May, 1977, plaintiff determined that it had crushed and stockpiled rock in excess of the estimated requirements specified in the contract documents between defendant and Weyerhaeuser and thereupon removed its equipment from the site. Plaintiff sought payment from defendant for the difference between the amount it had already received in periodic payments and the contract price per cubic yard times the estimated requirements specified in the contract documents, that is, 81,451 cubic yards. Weyerhaeuser did not agree that the required quantity of rock had been crushed, and when defendant refused to pay plaintiff according to plaintiff’s demand, plaintiff filed a "construction lien” against the property. Shortly thereafter, Weyer-haeuser terminated its contract with defendant.

Subsequently, defendant and Weyerhaeuser negotiated a settlement of their dispute as to what was owing to defendant by Weyerhaeuser, and in doing so they jointly hired an independent surveyor from Klamath Falls to determine the quantity of rock plaintiff had crushed and stockpiled. The surveyor determined that 60,118 cubic yards was then stockpiled, and defendant and Weyerhaeuser added to that volume 6,300 cubic yards of rock which had been put i place to determine what Weyerhaeuser owed ifendant for this portion of the contract. Defendant sed that measurement in offering to settle with laintiff. Plaintiff was advised of the fact that the idependent surveyor would be measuring the stock-le, but it refused to participate in the supervision of is measurement.

Instead, plaintiff employed its own expert, who itermined that plaintiff had crushed and stockpiled tore than the estimated contract requirement. It then immenced this lawsuit.

Defendant contends that its contract with plaintiff provided that plaintiff was to be paid for the rock it ushed and stockpiled as measured and determined r Weyerhaeuser (or the Forest Service), and therefore aintiff was not entitled to rely upon the measure-ent made by it or by experts employed by it. Generly, contracts which provide that determinations are be made by a third party are valid and binding on e contracting parties. Mayer v. Eastside Logging Co., 30 Or 341, 278 P 957 (1929); Annot, 110 ALR 137. hen payment is conditioned upon the certificate of l engineer, an architect or other party the judgment that person is conclusive upon the contracting parties, Gillespie Land and Irrigation Co. v. Hamilton, 43 Ariz 102, 29 P2d 158 (1934), unless the determination is ade in bad faith or there is fraud. State Highway Comm. v. Heintz Constr. Co., 245 Or 530, 423 P2d 175 (1967); Friberg v. Elrod, 136 Or 186, 296 P 1061 (1931). the absence here of bad faith or fraud, the plaintiff is bound under these rules by the words of the levant documents. The trial court erred by failing to force the contract as written.

Defendant’s counterclaim was based on a conten-in that plaintiff’s filing of a lien against Weyer-euser and the Forest Service caused Weyerhaeuser terminate its contract with defendant. Defendant limed both compensatory and punitive damages, ere was evidence at trial from which the trier of fact could have found that Weyerhaeuser terminated its agreement with defendant for other reasons. Therefore, we cannot disturb the trial court’s general finding in favor of plaintiff on defendant’s counter-claim.

The judgment is reversed insofar as it awarded plaintiff damages and attorney’s fees, affirmed as to defendant’s counter-claim and remanded for such further proceedings as may be appropriate.

Affirmed in part; reversed in part; and remanded.

BUTTLER, J.,

dissenting.

I would affirm the judgment; therefore I dissent.

The majority states the applicable law correctly and also concludes correctly that plaintiff, under its subcontract with defendant, agreed to be bound by the determination of volume of rock crushed and stockpiled as made by Weyerhaeuser or the Forest Service. However, a fundamental requirement to attributing finality to a determination by a third party is that the delegation be clearly expressed, Highway Com. v. Heintz Constr., 245 Or 530, 423 P2d 175 (1967), and a reasonable corollary to that rule is that the provision be adhered to strictly.

That strict adherence is lacking here. The plaintiff did not agree to be bound by a measurement made jointly by Weyerhaeuser and defendant. After all, defendant was bound under its prime contract with Weyerhaeuser to accept Weyerhaeuser’s determination of volume. However, after the prime contract was terminated a dispute arose with respect to the amount of money Weyerhaeuser owed defendant, and in negotiating a settlement they agreed to employ a land surveyor to determine the amount of rock plaintiff had rushed and stockpiled, and the volume of rock defend-int had put in place, to arrive at a settlement figure as o how much Weyerhaeuser owed defendant with re-pect to that portion of the prime contract. It was that neasurement defendant used in offering to settle with ilaintiff.

Because that measurement was one by which plain-iff had not agreed to be bound, the question of how ouch rock was crushed and stockpiled became an open uestion of fact.

We must view the evidence and all reasonable in-srences which may be drawn therefrom in a light aost favorable to plaintiff, and when so viewed the eneral finding for plaintiff must be affirmed if supported thereby. Progress Quarries, Inc. v. Lewis, 281 Or 441, 575 P2d 158 (1978). The trial below was ssentially a battle of experts, and there was evidence 3 permit the trier of fact to find that plaintiff had rushed substantially more rock than defendant laimed. Since there was evidence to support the trial Iourt’s general finding for plaintiff, and the amount etermined by the trial court was within the permisible range of the evidence, we may not disturb it.

I would also affirm the trial court’s award of attor-ey’s fees to plaintiff, although the amount of $22,500 on the high side. The subcontract clearly authorizes n award of attorney’s fees to the prevailing party in ny litigation commenced to enforce the contract, the xmplaint properly alleged plaintiff’s entitlement to ttomey’s fees, and claimed $30,000 as a reasonable ount. Expert witnesses testified at the trial, and on e basis of that evidence, the trier of fact was entitled conclude that the amount awarded was reasonable.

Accordingly, I respectfully dissent.

Thornton, Roberts and Campbell, JJ., join in this Issent.