Case ID: us-ct-cl_62/html/0549-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Hat, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LUSTBADER CONSTRUCTION COMPANY v. THE UNITED STATES
    [No. C-61.
    Decided November 1, 1926]
    
      On the Proofs
    
    
      Contract; application for additional compensation. — Where the contract provides the method to be pursued for obtaining additional compensation for increase in the rate of wages, and the contractor does not follow the method so prescribed, it is estopped from asldng for relief in the Court of Claims.
    
      
      The Reporter’’s statement of the case:
    
      Mr. Ewing Everett for the plaintiff. Miller & Ghevalier were on the briefs.
    
      Mr. James J. Lenihan, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. The Lustbader Construction Company is a corporation organized under the law of the State of New York, haying its principal office and place of business in the city of New York, and had been for many years and was at the times hereinafter mentioned conducting a general construction business.
    II. On the fifth day of December, 1918, plaintiff entered into a contract with the United States, represented by Admiral C. W. Parks, Chief of the Bureau of Yards and Docks, said contract being number 3551, for the construction of a light machine and electrical shop in the navy yard, Brooklyn, New York, together with hot and cold water, sewer, plumbing, heating, and electric lighting systems, crane runways, monorails, and water, tank, and to furnish and install certain miscellaneous equipment in accordance with provisions of the plans and specifications accompanying contract 3551, for which the United States agreed to pay upon completion the lump sum of $760,375.
    On the 11th day of January, 1919, plaintiff and the defendant entered into a supplemental agreement, numbered 3551 X, in which the plaintiff agreed to make certain alterations and additions to said light machine and electrical shop, and for which additional work the United States agreed to pay the sum of $18,473 in addition to the original contract price.
    Copies of these contracts are filed with the petition as Exhibits B, C, D, E, F, H, I, K, and L and are made a part hereof by reference.
    III. The work was to be completed within 210 days from the date of delivery of a copy of the contract to the contractor. A copy of the contract was delivered to the contractor on the 6th of January, 1919, and the work should have been completed on August 2, 1919. But the work was not completed until January 20, 1920. A telegram was sent from the Bureau of Yards and Docks on December 9,1918, ordering work to commence, and the contractor actually started work on that day. The building was completed and accepted on January 20, 1920.
    The Government was to clear the site for the building above grade and to supply a dump for the surplus excavated material not required or desirable for filling within 500 feet of the said building site. The plaintiff assumed the risk of all buried constructions. It was necessary to do the excavation by derrick and not by steam shovel, because of the existence of pipe lines and mains in the ground.
    IV. The building was to be erected in a navy yard under the supervision and control of the Bureau of Yards and Docks Avhich possessed full knowledge of every detail of the yard, the proximity of other buildings, and the site of dumps. There was no dump within 500 feet to receive the material from the excavation, and it was necessary to haul the material so excavated to 4 different dumps; namely, the navy-yard dump, one-quarter of a mile, the Wallabout dump, 134 miles, the Maspeth dump, 3y2 miles, and Long Island City dump, 4% miles, and to pay a dumping charge ranging from 50 cents to $2.50 per load.
    Paragraph 17 of the general provisions attached to and forming a part of the contract, provided that the Government reserved the right to make changes in the contract plans and specifications, and that if the cost of the changes as estimated by the officer in charge was more than $500, the same should be ascertained by a board of not less than three officers or other representatives of the Government. It further provided that the costs of changes so ascertained “ when approved by the Chief of the Bureau of Yards and Docks shall be added to or deducted from the contract price, and the contractor agrees and consents that the contract price thus increased shall be accepted in full satisfaction for all work done under the contract.”
    Pursuant to the aforementioned provisions a board of naval officers was appointed to ascertain the cost of the change due to the failure of the Government to provide a dump within 500 feet from the site. The board awarded to the contractor the net sum of $2,242.72, to which it added 10 per cent profit for the subcontractor in the amount of $224.27, 10 per cent profit for the contractor in the amount of $246.70; and 1% per cent for bond in the amount of $40.71; making1 a total of $2,754.40. The findings and recommendation of the board were approved by the Bureau of Yards and Docks of the Navy Department, and thereafter that bureau issued to plaintiff its Change Order D and increased the contract price for the excess haul by the aforementioned sum of $2,754.40. Thereafter said sum was paid to plaintiff and accepted by plaintiff without protest at the time of such payment.
    V. The piling work was done by plaintiff through subcontractors, and the price fixed for the work in the subcontract was upon the basis of length of piles driven before the cutoff was made. The price obtaining in contract No. 3551 was based upon the length of pile after cut-off.
    Plaintiff presented claim for an increase due to a change in the contract with reference to piling and for delays due to such changes and for damages due to such delays, and the claim did not purport to represent plaintiff’s actual cost, but it represented its estimated cost under the subcontract.
    Pursuant to paragraph 17 of the general provisions forming a part of the contract, a board of naval officers was appointed to hear and determine the claim.
    In a report dated January 30, 1920, the board found that plaintiff was entitled to an increase in the contract price in the sum of $8,361.27. The board found further that plaintiff was entitled to an extension of time for delays caused by the Government of 64 days. The plaintiff notified the board that it agreed with the findings of the board. In accordance with its findings the board recommended that the contract price be increased by the amount of $8,361.27, and also recommended that the plaintiff be given an extension of time of 64 days. The commandant of the navy yard forwarded this report to the Bureau of Yards and Docks and' recommended approval.
    Under date of March 25, 1920, the Bureau of Yards and Docks issued to plaintiff a Change Order F confirming directions previously given, and directing plaintiff to “ jet Che piles required by the contract and furnish them longer than required, as directed by the officer in charge,” and increasing the price therefor by the sum of $6,681.44.
    An item of $1,679.83 was deducted from the amount allowed by the board because it was held by the Bureau of Yards and Bocks that that item being for cost due to delays in starting and waiting delivery of 50-foot piles was in the nature of unliquidated damages and as such could not be allowed by an officer of the executive branch of the Government.
    YI. Owing to the impossibility of procuring the specified foundation plates, which could not be purchased at that time at any steel mill, different plates were substituted, and this change occasioned a delay of 23 days until the substituted plates arrived. An extension of time for this delay was granted.
    On June 30th the Government failed to furnish gravel and granted an extension of time for one day.
    On July 26th an extention of time for eight days was granted because of the rain.
    VII. On August 7th, during the progress of the brick work, the lintels on the sixth story buckled and threatened to collapse, and it was necessary to remove all brick from that portion of the building, and to strengthen and redesign the lintels. The steel lintels had been designed by the Bureau of Yards and Bocks and checked and redesigned by the officer of public works at the navy yard. It was necessary to redesign the steel work on the sixth floor, reinforce the steel, and tie it into the other work. The collapse of the lintels was due to faulty designing by the Government. The contractor was in no way responsible. The removal of the brick from the sixth floor took the brick masons from the regular work on the other sections of the building and resulted in a loss of 11,000 bricks.
    Pursuant to paragraph 17 of the general provisions a board of naval officers and employees, duly appointed, considered the matter of excess cost 'due to the failure of the lintels, and in a report dated April 21, 1920, found and recommended that the contract price be increased by $3,583.39 for the plaintiff’s work and materials in demolishing the brickwork and strengthening the lintels. On April 21, 1920, the commandant of the navy yard forwarded the board’s report to the Chief of the Bureau of Yards and Docks, recommending approval. The report and findings of the board were approved.
    Thereafter, and under date of May 5, 1920, the Bureau of Yards and Docks issued to plaintiff its Change Order H confirming instructions previously given, and directing plaintiff to “ furnish the necessary labor and materials, and install bracing at the top flange of the general lintels over the sixth-story windows, together with the removing and replacing of certain brickwork incidental thereto, as directed by the officer in charge,” and increasing the contract price therefor by the sum of $3,583.39. This sum was paid to plaintiff.
    yin. The failure of the lintels was first noted on August 6, 1919. At that time the westerly half of the building was up to the top of the sixth story, and the easterly half of the building was up only to the third story. From August 8 to 11, inclusive, a large number of the contractor’s brick masons were employed in removing all brick on the westerly half of the building which had been laid on the lintels. Upon the completion of this work the masons were employed on building interior partitions.
    On August 15,1919, a strike of the brick masons occurred, and this tied up the whole work. The navy yard had a considerable number of brick masons and could call in additional brick masons through the labor board. Plaintiff proposed that the navy yard furnish brick masons to lay brick under its direction until such time as the strike might be settled. This proposition was accepted, and under date of September 16, 1919, the public-works officer notified plaintiff in writing of such acceptance.
    Navy yard brick masons began work on September 16, 1919. The strike was settled on September 30, 1919. Plaintiff was ready to take over the work on October 1, 1919, and it then requested to have the use of the navy-yard bricklayers discontinued. This request was denied, the contractor being notified that the Government would finish the brickwork. Plaintiff was a member of the Building Trades Employers’ Association of New York City, and the strike was due to a disagreement between the union brick masons and that association. During the time of the strike brick masons were being employed by contractors other than those belonging to that association.
    Pursuant to paragraph 17 of the general provisions forming a part of the contract, a board of naval officers was appointed to consider the cost of placing by yard labor the remaining brickwork under the contract. Plaintiff presented data to the board attempting to show the cost of brickwork installed by it before the failure of the lintels, and the strike, and also the amount which it would have cost to complete the brickwork had plaintiff been permitted to use its own brick masons.
    The board found that the navy-yard brick masons had installed all brick above the sixth-story lintels on the westerly half of the building; all brick on the easterly half of the building from the third story up; about 97 per cent or 98 per cent of interior air lock brick partitions, and all of the terra-cotta hollow tile. The board further found from the accounts of the accounting officer of the navy yard that the sum of $8,681.83 was the cost of the work eliminated, the sum being made up of $6,983.04 for direct labor and $1,698.79 for indirect labor, and recommended that the contract be reduced by the sum of $8,681.83. The board further found that plaintiff protested against the deduction of that amount, and presented a statement indicating that there was a balance of $464.74 due as a result of the procedure followed. The board’s report and findings were forwarded to the Bureau of Yards and Docks by the commandant of the navy yard, who recommended approval. The findings of the board were approved by the Bureau of Yards and Docks.
    Pursuant to the board’s findings and recommendations there was, under date of March 19, 1920, issued to plaintiff by the Bureau of Yards and Docks Change Order E confirming directions previously given and directing plaintiff to “ omit the labor of laying brickwork above the sixth-story lintels on the west half of the building, all brickwork on the east half of the building from the third story up, about 98 per cent of the interior air lock brick partitions, and all terra-cotta hollow tile, same being performed by yard labor, as directed by the officer in charge,” and deducting therefor ' from the contract price the sum of $8,681.88.
    IX. Cold weather set in before the building was completed and the contractor was ordered to dry out the nalecode by artificial heat. The contractor furnished salamanders at a cost of $1,192.21 for fuel and labor. No charge was made for the salamanders.
    The use of salamanders became necessary by reason of the delay of the plaintiff in laying the nalecode when the building was ready for it.
    Pursuant to paragraph 17 of the general provisions forming a 13art of the contract, a board of naval officers and employers considered this claim and found and recommended that no allowance be made for the same. The findings and report of this board, dated April 21,1920, were approved by the commandant of the navy yard and by the Chief of the Bureau of Yards and Docks.
    X. A discrepancy existed as to the requirements of cold-water paint between paragraphs 155 and 165, respectively, of the specifications. Paragraph 165 apparently required more cold-water pumping than did paragraph 155. Paragraph 5 of the general provisions provided that in the case of discrepancies between parts of the specifications, “the officer in charge shall decide as to the true intent and meaning.” The officer in charge determined that the work should be done in accordance with the provisions of paragraph 165 of the specifications and ordered it to be so performed. The work was done as directed, and the added cost of doing the same in accordance with the provisions of paragraph 165 of the specifications was $5,306.40.
    XI. In pouring the concrete slabs the cement streaked and water ran down and marked the steel. The contractor had. applied a field coat of paint before the pouring of the cement and cleaned off the steel with a brush, but the marks remained. A decorative coat of paint was required to obliterate the stains. The cost for this paint was $1,783.41,
    
      Paragraph 27 of the general provisions, which was a part of the contract, provided that the contractor should make good any damages to the property of the Government caused by his operations. The plaintiff presented a bill to the public-works officer dated June 22, 1920, in the amount of $1,783.41 for “painting steel work where stained with cement.” The Bureau of Yards and Docks considered the claim and rejected it as a matter of cleaning rather than a matter of a second coat of paint.
    XII. The original contract provided for monorails which were steel I beams forming single loops, and were structural steel, and were included in the structural steel item for the building. By supplemental contract additional monorails were provided for to the extent of an additional rail the length of the building on two of the floors, and three rails the length of the building on two other floors, and plaintiff agreed to furnish such additional monorails, together with switches, as shown on the plans and specifications. The plans did not show the details of switches, but did show location of the same. Paragraph 4 of the general provisions provided that the contractor should perform such work as was necessary, though it might be omitted from or misdescribed in the plans. Paragraph 5 of the general provisions provided that in case of discrepancies in the plans or specifications the officer in charge should make the determination, and the work should be performed by the contractor in accordance with such determination.
    Plaintiff on several occasions contended to the navy yard officials that switches were not included in the contract, and that if it were requested to install them it should be paid for the additional cost involved. The Bureau of Yards and Docks determined that the contract called for the furnishing and installation of switches by the contractor.
    Thereafter the plaintiff was requested to substitute 12 turntables for switches and to omit 40 switches. This substitution was made, and plaintiff presented a claim for the change in the total amount of $6,084.68.
    Pursuant to paragraph 17 of the general provisions forming a part of the contract a board of naval officers and employees was appointed, and considered this claim. Under date of April 27, 1920, the board rendered a report and found that the change involved the omission of 40 switches and the substitution of 12 turntables for switches. The board further found that the amount due plaintiff for the turntables was $416.34 per turntable, as shown by a letter from plaintiff dated November 5, 1919, quoting prices of turntables, or a total of $4,996.08 for the 12 turntables. The board further found that the omission of 40 switches involved the omission of structural steel in the amount of 16 tons, which at $135 per ton, was the bid of the plaintiff for structural steel, and there should be deducted the sum of $2,160. On this item the board allowed the difference between $4,996.08, the cost of the turntables, and $2,160, the value of the switches omitted, or a net amount of $2,836.08.
    The board further found that the amount of additional frames required for the monorails as due to the change was 18,689 pounds of steel, for which the board allowed $135 per ton, as shown by figures submitted by plaintiff, or a total of $1,261.51.
    The board therefore found that plaintiff was entitled to a total on both items of $4,097.59, and recommended an addition to the contract price in that amount.
    Pursuant to the findings and recommendations of the board there was issued to plaintiff on May 21, 1920, Change Order J, and plaintiff was paid the aforementioned sum of $4,097.59.
    The claim of plaintiff in the sum of $6,084.68, for which the board allowed the sum of $4,097.59, which sum was paid to plaintiff, included all of plaintiff’s charges for switches and turntables, and for additional framing for monorails. The total amount of the claim as shown by plaintiff’s books was $5,510.62, instead of $6,084.68, a difference of $574.06, which is unexplained and unaccounted for.
    XIII. The-contractor was required to install a power wire to operate the pump, which was not a part of the electric-light system, at a cost of $482.20.
    XIV. Due to delays, for some of which the Government was responsible, -and for some of which the plaintiff was responsible, and for some of which neither party was responsible, the contract was not completed by August 2, 1919, the completion date provided therein. After August 1, 1919, plaintiff paid increased wages. Paragraph 1 of Addendum I to the general provisions forming a part of the contract provided for additional compensation to the plaintiff for the payment of increased wages in the event that before granting increased wages or paying excess wages the plaintiff would notify the Bureau of Yards and Docks in writing or secure from the bureau approval in writing to pay such increased wages; and it provided further that plaintiff should present a claim to the Bureau of Yards and Docks for such additional compensation. Plaintiff did not present any claim to the Bureau of Yards and Docks for excess wages so paid, nor did plaintiff procure from the Bureau of Yards and Docks its approval in advance of granting such excess wages, nor notify such bureau in writing of its intention to grant such excess wages.
    The record does not disclose what proportion, if any, of the excess wages was due to delays for which the Government was responsible and what proportion was due to delays for which the Government was not responsible.
    Due to the delays, the plaintiff incurred extra expense in maintaining its force, which, with the increased cost of labor, amounted to the sum of $14,989.16.
    XY. The contractor was required by the contract to furnish two pumps. The specifications did not call for any particular make of pumps. The drawings did not show the details of foundations for the pumps, but they did show the location of the same. The cost of the foundations was $188.43.
    XYI. On the 16th day of December, 1920, a release was executed by the contractor, and the balance admitted to be payable was paid. A reservation in the release was made for additional compensation under the contract for an amount not to exceed $41,481.07 for the items enumerated and incorporated in the release.
    The court decided that plaintiff was entitled to recover, in part.
   Hat, Judge,

delivered the opinion of the court:

The plaintiff entered into a written contract with the-United States on December 5, 1918, whereby it agreed to construct a light machine and electrical shop in the navy yard, Brooklyn, New York, together with hot and cold water, sewer system, plumbing, etc., for which the United. States agreed to pay the plaintiff the sum of $760,375; and on January 11, 1919, a supplemental agreement was entered, into by the parties in which the plaintiff agreed to make-certain alterations and additions to said building for which, the United States agreed to pay the sum of $18,473.

It was agreed that the building should be completed within 210 days from the date of the delivery of the contract to the plaintiff. A copy of the contract was delivered toil on January 6,1919, and the work was not completed until January 20, 1920. The plaintiff has been paid in full the-sums fixed in the contracts.

The plaintiff at the time the final payment was made executed a qualified release of its claims, except those which, are the subject of this suit.

The plaintiff is now claiming that it should be paid the-sum of $38,663.72, which sum is made up of 11 different, items.

The contract provides as follows:

‘ The Government reserves the right to make such changes' in the contract, plans, and specifications as may be deemed necessary or advisable, and the contractor agrees to proceed, with such changes as directed in writing by the Chief of <he Bureau of Yards and Docks. The cost of said changes; shall be estimated by the officer in charge, and, if less than $500, shall be ascertained by him. If the cost of said changes is $500 or more, as estimated by the officer in charge,, the same shall be ascertained by a board of not less than three officers or other representatives of the Government.. The cost of the changes as ascertained above, when approved by the Chief of the Bureau of Yards and Docks, shall be-added to or deducted from the contract price, and the contractor agrees and consents that the contract price thus increased or decreased shall be accepted in full satisfaction for all work done under the contract: Provided, That the-increased cost shall be the estimated actual cost to the contractor at the time of such estimate and that the decreased. cost shall be the actual or market value at the time the contract was made, both plus a profit of 10 per cent.”

Of the 11 items, 6 of them were passed upon by the board provided for in the contract, and the decision of the board was approved by the Chief of the Bureau of Yards and Nocks. In five of these cases the plaintiff accepted the money allowed by the board; in the other case a certain amount was deducted from the purchase price by the decision of the board, and this decision was approved by the Chief of the Bureau of Yards and Docks. These six items 50 passed upon by the board were the items set out in Bindings IV, Y, VIII, IX, X.

This court has repeatedly held that when the parties to a •contract agree that the decision of an officer shall be final the court will not set aside such a decision unless the decision is fraudulent or so grossly erroneous that fraud will be implied. There is no evidence in this case of fraud, nor does it appear that the decision of the board as to these items was grossly erroneous, or erroneous at all. The plaintiff having agreed and consented that the contract price should be added to or deducted from the contract price in accordance with the decision of the board, and having agreed to accept the price so fixed in full satisfaction for all work done under the contract, and having been paid and having accepted said sum so fixed, it is bound by its contract and is not entitled to relief here. It is not necessary to cite authorities m support of this rule of law. They are too numerous and too well known.

As to the item of cold-water, paint (Finding X). In this case a dispute arose as to the meaning of the specifications. The contract provides as follows:

“ The specifications and plans forming part of the contract shall be considered as supplementary one to the other, so that materials and workmanship indicated, called for, or necessarily implied by the one and not by the other shall be supplied and worked into place the same as though specifically called for by both. Should any discrepancy be found to exist between plans and specifications or any parts of either, or should the language of any part of the contract prove to be ambiguous or doubtful, the officer in charge will, decide as to the true intent and meaning.”

The officer in charge made his decision, and the plaintiff, is bound by it.

As to the item of painting interior steel (Finding XI) we think the plaintiff is not entitled to recover. The plaintiff by its operations made it necessary to have the painting done, and it can not be held that it should be paid for its own negligence.

The next item is for excess wages and extended overhead (Finding XIV). The plaintiff bases its claim for recovery upon the theory that the Government is liable in damages to the amount of $14,989.16 by reason of the delays which it claims were caused bjr the United States, and for which the Government was responsible. As a matter of fact the Government was not responsible for all the delays which are claimed by the plaintiff. The contract provides how the plaintiff should proceed to obtain additional compensation for increased wages. The contract provides as follows:

“ If, after the date of the contract there shall be any increase in the rates of wages prevailing in the vicinity of a place where work contemplated by the contract is done,, that shall necessitate payment by the contractor, on account of labor employed exclusively upon such work, of rates of wages in excess of those prevailing in such vicinity at the date of the contract, he shall receive additional compensation in a sum equal to one-half the amount of the increase in the rates of wages so required to be paid by him over the rates prevailing at the date of the contract: Provided, That in determining such additional compensation wages paid by the contractor at any time during the continuance of the contract in excess of the rates prevailing in the vicinity at the time of such payment shall be disregarded to the extent of such excess: And provided further, That any increase over wage rates prevailing at the date of the contract before being granted by the contractor shall be notified to and approved in writing by the Bureau of Yards and Docks. For the purposes of this paragraph rates of wages prevailing in the vicinity of a place where work contemplated by the contract is done shall be understood to mean the established rates of wages in the nearest navy yard or station if there be one within 50 miles of such place, or, if there be none within that distance, the rates of wages paid under a well-established wage scale, if any, in such vicinity, or, if there be none, such reasonable rates of wages as may be determined by the Navy Department, Bureau of Yards and Docks. The burden shall be upon the contractor of establishing to the complete satisfaction of the Bureau of Yards and Docks all facts upon which any claim for additional compensation hereunder shall rest, and all questions growing out of any such claims shall be determined by the Navy Department, Bureau of Yards and Docks, whose decision thereof shall be final and conclusive. Determination of such claims shall be deferred until the completion of the contract.”

The plaintiff failed to submit its claims for excess wages in accordance with the provisions of the contract; and having failed to do so, and having failed to pursue the remedy provided for it in the contract, is estopped from asking for relief here.

The item of $1,679.83, which the defendant does not contest, is allowed.

It is also admitted that the board made an error of $146.96 in its computation of allowances in making its finding as to the amount due the plaintiff for turntables, switches, and monorails (Finding XII), but the court can not revise the decision of the board in this case. If it did so, it would follow that it could and would exercise revisory powers over all the findings of the board and thus nullify the provisions of the contract.

The court has allowed the plaintiff the sum of $670.63 for the two items of power wiring and pump foundations and the amount of $1,679.83 above referred to in Finding V, a total of $2,350.46. Judgment will be entered for that amount, and the petition will be dismissed as to all the other items of the plaintiff’s claim.

It is so ordered.

Moss, Judge; Graham, Judge; Booth, Judge; and Campbell, Chief Justice, concur.