Case Title: State Ex Rel. Graddick v. St. Paul Fire & Marine Ins. Co.

Citation: 431 So. 2d 1237

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1983-05-20T00:00:00Z

Document:
431 So. 2d 1237 (1983)
STATE of Alabama, ex rel. Charles A. GRADDICK, Attorney General of the State of Alabama, et al.
v.
ST. PAUL FIRE & MARINE INSURANCE COMPANY, INC., Chris C. Rush, and Franklin Group Architects, P.A., etc., et al.
81-205.

Supreme Court of Alabama.
May 20, 1983.
*1238 J. Knox Argo of Argo & Enslen, Montgomery, for appellants.
John Patterson of Patterson & Rinehart, Montgomery, and W. Terry Bullard of Moody, Burford, Phillips & Bullard, Birmingham, for appellee St. Paul Fire & Marine Ins. Co., Inc.
James W. Garrett, Jr. of Rushton, Stakely, Johnston & Garrett, Montgomery, for appellee Franklin Group Architects.
EMBRY, Justice.
This is an appeal by the State of Alabama from a judgment which denied the State's claims on its complaints against St. Paul Fire and Marine Insurance Company, a corporation (St. Paul); Chris C. Rush d/b/a Rush Building Company (Rush); and James R. Franklin, James R. Franklin Architects/Planners P.A., Franklin Group Architects, P.A. (Franklin) and granted relief for Rush on his third party complaint and directed that a writ of mandamus issue to the Director of the State Department of Conservation and Natural Resources ordering him to take the necessary action to pay Rush $28,028.22 for extra work performed by Rush under contract No. 28-P-20. We affirm.
Plaintiff, State of Alabama, brought suit against St. Paul, Rush, and Franklin for breach of contract and fraud against Rush; breach of contract, fraud and deceit, and negligence against Franklin. In addition it was alleged that Franklin and Rush acted in collusion to plaintiff's detriment. Suit was brought against St. Paul on a performance bond issued by St. Paul as surety for Chris Rush naming the State of Alabama Department of Conservation as obligee. Rush by third party complaint against John M. McMillan, Jr., as Director of the Department of Conservation and Natural Resources of the State of Alabama sought a writ of mandamus ordering payment of $28,028.22 for extra work performed by Rush for plaintiff under contract. Defendant Franklin denied any breach of contract, fraud or negligence and pleaded that the actions were barred by the statute of limitations, laches, estoppel, failure to give proper notice; that plaintiff negligently contributed to its own damages, failed to *1239 mitigate its damages, and that plaintiff's damages were caused by its failure to let contracts for roads and utilities simultaneously with the buildings contract. Defendants, Rush and St. Paul, denied any breach of contract or bond or fraud and pleaded that the actions were barred by the statute of limitations, laches, estoppel, failure to give proper notice; that plaintiff failed to mitigate its damages, that its damages were caused by its failure to let contracts for roads or utilities simultaneously with the buildings contract or failing to let them in the proper order, that the suit was not timely brought, and acceptance and waiver. Defendant St. Paul, further defended on the grounds that the final payment, including retainage, to Rush, without notice to it, discharged it as surety. Plaintiff denied the allegations in Rush's third party complaint.
Plaintiff brought a second suit (utilities contract suit) against St. Paul on a performance bond as surety for Rush naming the State of Alabama Department of Conservation as obligee and against Rush on contract No. 28-P-19. Defendants, Rush and St. Paul, denied any breach of contract or bond, and pleaded that the actions were barred by the running of the statute of limitations, laches, estoppel, failure to give proper and timely notice of defects; that the suit was not timely brought, acceptance and waiver. Defendant St. Paul further defended on the grounds that the final payment, including retainage, to Rush, without notice to it, discharged it as surety. Franklin had originally been a defendant in this latter suit and had filed a third party complaint against Ladd Environmental Engineers, Inc., Ladd Environmental Consultants, Inc., Ladd Engineering Associates, Inc., E.J. Ladd, F.H. Landstreet and C.M. Landstreet; however, prior to trial, on motion of plaintiff and order of the trial court and on motion of Franklin and order of the trial court, the complaint against Franklin and the third party complaint against Ladd were dismissed.
A trial on the merits was held from 25 May to 29 May 1981. The cases, as tried, consisted of:
(1) Suit by the State of Alabama against Rush and St. Paul based upon the State's contentions that there were deficiencies in the work performed by Rush on contract No. 28-P-19, the utilities contract.
(2) Suit by the State of Alabama against Rush, St. Paul and Franklin based upon the State's contention that there were deficiencies in the work performed by Rush and Franklin under contract No. 28-P-20, building contract.
(3) Third party complaint of defendant Rush claiming monies owed by the State of Alabama to Rush for extra work performed by Rush during Rush's performance of contract No. 28-P-20, building contract.
The cases were consolidated for trial by agreement, and tried and submitted for determination by the trial court on the pleadings, testimony ore tenus, briefs and exhibits introduced at trial. After a thorough review of the record and briefs in this case, this court is well-satisfied with the trial court's findings of fact and conclusions of law as set forth in its order of 3 September 1981. The pertinent part of that order is as follows:
A strong presumption as to the correctness of the trial court's findings of fact exists on appeal, and these findings will be set aside only if unsupported by credible evidence or if found to be plainly and palpably wrong. Shepherd Realty v. Winn-Dixie Montgomery, 418 So. 2d 871 (Ala.1982); Reliance Ins. Co. v. Substation Products Corp., 404 So. 2d 598 (Ala.1981). The trial court's conclusions are amply supported by the evidence of record and we cannot find that its decision was palpably wrong. Therefore, the judgment of the trial court is due to be and is hereby affirmed.
AFFIRMED.
FAULKNER, JONES, SHORES, BEATTY and ADAMS, JJ., concur.
TORBERT, C.J., and MADDOX and ALMON, JJ., dissent.
TORBERT, Chief Justice (dissenting).
I dissent from the majority's holding that mandamus was proper to force the State to pay Rush Building Company $28,028.22 for the access roads it cut through to the building sites.
There are two contract provisions which specify how this transaction should have been handled. Articles 4.04(a) and (b) provide:
The trial court found:
Under the language of the contract, the State could be bound to pay for the proposed work only by the execution of a supplemental agreement or by letter from the engineer directing the work, followed by a supplemental agreement or force account work order. Neither of these procedures was followed. In fact, the project engineer, on February 5, 1971, by letter to J.R. Franklin, the architect, specifically stated, "We cannot authorize Rush to cut any trees or do any other type of clearing in the area without approval from the Department of Conservation."
The contract also provided in Article 4.04(b):
*1241 Article 9.08 provides a procedure for securing extra compensation where the contractor is required to do work not covered in the contract and not approved by the engineer:
Article 9.08(b) of the contract provides that the contractor may also pursue his claim with an advisory board:
The trial court was of the opinion that "[t]here were sufficient letters and memoranda concerning the extra work to satisfy the requirements that authorization be in writing," as provided in Article 4.04. I disagree.
The letter of February 5, 1971, written before the roads were cleared, states that Rush was not authorized to cut the roads. On September 7, 1972, John Cain, Chief Engineer for the Department of Conservation, stated that the State was unable to pay for the road work under a change order and suggested that Rush file a claim with the State Board of Adjustments. I find virtually no support for the trial court's statement that these were "sufficient letters and memoranda" to constitute an authorization.
The trial court went on to state, "[E]ven in the absence of written authorization, the state waived such a requirement in this case by its subsequent course of conduct." Again, I disagree. If no order had been secured from the engineer for the work as provided in Article 4.04, then the contractor was required to follow the procedures set forth in Article 9.08. If the contractor fails to secure the engineer's authorization, then Article 9.08 provides: "the Contractor thereby agrees to waive the claim for extra compensation for such work." See, Rainer v. Tillett Brothers Construction Co., 381 So. 2d 36 (Ala.1980).
I am further persuaded to this result because of my belief that Code 1975, *1242 § 9-2-43, requires that any agreement between the Department of Conservation and Natural Resources and a contractor which is arrived at in a manner other than that described in Articles 4.04 and 9.08 would be void unless approved in writing by the governor. Kimbrell v. State, 272 Ala. 419, 132 So. 2d 132 (1961). In effect, this would constitute a new contract between the parties rather than the anticipated supplemental agreement or force account order described in the original contract. Thus, I am of the opinion that any alleged agreement between the parties for extra work arrived at in a manner other than that set out in the original contract would have been void.
For these reasons, I would hold that mandamus was improper in this case and that that portion of the trial court's order granting mandamus is due to be reversed.
MADDOX and ALMON, JJ., concur.