Source: https://casetext.com/case/international-erectors-v-wilhoit-steel
Timestamp: 2019-05-21 04:54:28
Document Index: 9362867

Matched Legal Cases: ['§ 26', '§ 356', '§ 12', '§ 133', '§ 774', '§ 356', '§ 356', '§ 361', '§ 364']

International Erectors v. Wilhoit Steel, 400 F.2d 465 | Casetext
International Erectors v. Wilhoit Steel
400 F.2d 465 (5th Cir. 1968)
International Erectorsv.Wilhoit Steel
United States Court of Appeals, Fifth CircuitOct 18, 1968
No. 24867.
September 4, 1968. Rehearing Denied October 18, 1968.
Richard E. Reckson, Eugene C. Heiman, of Heiman Crary, Miami, Fla., for appellant.
Melvin T. Boyd, James E. Tribble, Miami, Fla., Blackwell, Walker Gray, Miami, Fla., for appellee, Wilhoit Steel Erectors Rental Service.
John H. Moore, II, Edward J. Marko, Fort Lauderdale, Fla., Mendez, Shaw Moore, Fort Lauderdale, Fla., for appellee, Southern Engineering Co.
This is a case of frustration arising out of unilateral and unarticulated contract expectations. The two questions presented here are (1) whether the contract between International Erectors, Inc., and Wilhoit Steel Erectors Rental Service which subcontracted the work to International imposed any duty upon Wilhoit to supply materials according to certain specifications and in a particular sequence, and (2) whether International, a sub-sub-sub-contractor may recover upon a third party beneficiary theory against Southern Engineering which had a contract with the general contractor, not a party to this suit, to fabricate and erect the steel.
This diversity action for breach of contract was brought by International against Wilhoit. The respective disputes arise out of contracts dealing with the construction of a plant for Sunbeam Electronics Company in Fort Lauderdale, Florida. The responsibility for construction of the plant was given to a general contractor who subcontracted to Southern the work of fabricating and erecting the structural steel portion of the job. Southern, while retaining the responsibility as to the general contractor for providing the steel for the construction job, sub-sub-contracted the erection of the steel to Wilhoit. Wilhoit sub-sub-sub-contracted the job of erecting the steel to International, but retained a duty to Southern to supervise and assist the erection.
International is a Florida corporation; Southern is a North Carolina corporation; and Wilhoit is a South Carolina corporation. Thus the requirement of "complete diversity" is met. See 1 Barron Holtzoff, Federal Practice and Procedure § 26 [Wright rev.]
International can recover from these defendants only if one or both had a contractual obligation to furnish the steel to International. The district court, sitting without a jury, held that Wilhoit was under no contractual obligation to supply steel to International. As to Southern the court, after four amended complaints, dismissed the suit with prejudice, holding that International had failed to allege any breach of duty. From these determinations International appeals.
It is not questioned that Southern had a contractual duty to the general contractor to supply the steel. The pertinent questions are whether Southern's obligation to the general contractor was for the benefit of International and could be enforced by International, and whether Wilhoit had any obligation to International to assure that the steel be delivered to International in proper form and in proper sequence.
II. International v. Wilhoit
Since this is a diversity action, we interpret this contract according to the substantive law of Florida. Erie R.R. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188; Starling v. Gulf Life Ins. Co., 5 Cir. 1967, 382 F.2d 701, 705. We have not, however, found any Florida case directly in point under the facts presented here. We therefore must decide this case as we believe the Florida courts would decide if confronted with these facts. Stevens Industries, Inc. v. Maryland Casualty Co., 5 Cir. 1968, 391 F.2d 411, 413, and cases therein cited. Certain general principles of Florida contract law are clarion and we construe the contract between Wilhoit and International in the light of those principles.
See also Gendzier v. Bielecki, Fla. 1957, 97 So.2d 604; Hamilton Const. Co. v. Board of Public Instruction, Fla. 1953, 65 So.2d 729, 731; Lyng v. Bugbee Distributing Co., 1938, 133 Fla. 419, 182 So. 801, 802; Hurley v. Werley, Fla.Dist.Ct. App. 1957, 203 So.2d 530, 537-538; Azalea Park Utilities v. Knox-Florida Develop. Corp., Fla.Dist.Ct.App. 1961, 127 So.2d 121, 122-123. In construing such contractual language courts should attempt to give words and phrases the natural meaning or the meaning most commonly understood when considered in reference to the subject matter and the circumstances. Rupp Hotel Operating Co. v. Donn, 1947, 158 Fla. 541, 29 So.2d 441, 445; Florida Boca Ratan Housing Assoc. v. Marqusee Assoc., Fla.Dist.Ct. App. 1965, 177 So.2d 370, 373; Miami National Bank v. Fink, Fla.Dist.Ct.App. 1965, 174 So.2d 38, 40.
" NONE." (Emphasis added.)
The view we take of this contention does not require us to determine whether Southern promised Wilhoit that it would supply the steel as required in the plans, specifications, and delivery schedules. We find that the phrase "except as herein modified and changed," which appears in the above quoted contract provisions, refers to the clause which says that Wilhoit undertakes to provide "NONE" materials, and that the "NONE" materials clause unequivocally negates any obligation to supply steel which might otherwise have been incorporated by reference.
For a consistent construction of related contracts, see J.T. Majors Son, Inc. v. Lipperd Bros., Inc., 10 Cir. 1958, 263 F.2d 650, 653 at [1].
The words "except as herein modified and changed" must be presumed to have been used for a specific purpose. They can neither be struck from the contract nor ignored. Their apparent purpose was to limit the otherwise broad provisions of the incorporation-by-reference clause by excluding from its scope certain express provisions of this contract, including the "NONE" materials clause. See Hardin Bag Burlap Co. v. Fidelity Guaranty Fire Corp., 1943, 203 La. 778, 14 So.2d 634, 635; cf. Gatliff Coal Co. v. Cox, 6 Cir. 1944, 142 F.2d 876, 882 ("herein"); Saulsberry v. Maddix, 6 Cir. 1944, 125 F.2d 430, 433 ("herein"); 39 C.J.S. Herein p. 892 (1944).
International's alternative contention is that the contract when read as a whole is ambiguous because the incorporation-by-reference clause conflicts with the "NONE" materials clause, and therefore that we must go outside the written contract to determine the intent of the parties. International is correct in its statement that the contract must be read as a whole. Triple E. Development Corp. v. Floridagold Citrus Corporation, Fla. 1951, 51 So.2d 435, 438; Union Central Life Ins. Co. v. Neuhoff, 1946, 157 Fla. 98, 24 So.2d 906, 907. When reading the contract as a whole, however, we must interpret and construe clauses which appear to be repugnant to each other in a manner which will reconcile them, if such is possible. Quinerly v. Dundee Corp., 1947, 159 Fla. 219, 31 So.2d 533; Florida Power Corp. v. City of Tallahassee, 1944, 154 Fla. 638, 18 So.2d 671, 674; Paddock Bay Concrete Industries, Inc., Fla.Dist.Ct.App. 1963, 154 So.2d 313. The "except as herein modified and changed" proviso makes reconciliation of the contract provisions in question not only possible but necessary. Read together the above two provisions are subject to only one construction and interpretation. There are, moreover, no patent ambiguities either by expression or omission. Expectations may have been extant, but expectations do not make contracts. No ambiguity exists and we will not create one so that we may add by construction terms which the parties have expressly omitted. See Friedman v. Virginia Metal Products Corp., Fla. 1952, 56 So.2d 515, 33 A.L.R.2d 956.
The appellant's final argument is that it is inconceivable that an experienced steel erector would enter into an agreement whereby it was to erect the steel for a large, complicated building within thirty-five working days without obtaining from the party with whom it contracted an understanding that the steel would be fabricated in accordance with the plans and specifications and delivered to the jobsite at the times and in the sequence required by a delivery schedule which is attached to the contract. Prudence and perhaps foresight might have insisted that a provision creating such an obligation be included in the written contract, but the written memorial of the parties' intention expressly and unequivocally negated any such obligation. This was an arms-length transaction between contractors of considerable experience in such matters and we cannot rewrite the contract just because one of the parties would in retrospection have written it differently. The Supreme Court of Florida has frequently and strongly stated that courts are not to rewrite contracts so as to include terms which they think the parties should have included. In Home Development Co. of St. Petersburg v. Bursani, Fla. 1965, 178 So.2d 113, 117, the Supreme Court of Florida wrote:
"By reconstructing the contract of the parties to accord with what he deemed to be the equities of the situation, the Master (and the courts which adopted and affirmed his recommendations) ignored the well settled rule that `courts may not rewrite a contract or interfere with the freedom of contract or substitute their judgment for that of the parties thereto in order to relieve one of the parties from the apparent hardship of an improvident bargain.' Beach Resort Hotel Corporation v. Wieder, Fla. 1955, 79 So.2d 659. To like effect are the decisions of this court in Sapienza v. Bass, Fla.App., 1962, 144 So.2d 520; Gendzier v. Bielecki, Fla. 1957, 97 So.2d 604; and Pierce v. Isaac, 1938, 134 Fla. 666, 184 So. 509. See also Zapetis v. Wills, Fla. App. 1963, 156 So.2d 33; and Stemmler v. Moon Jewelry Co., Fla.App. 1962, 139 So.2d 150."
See also Jefferson Ins. Co. v. Fischer, Fla. 1964, 166 So.2d 129, 130; Haenal v. United States Fidelity Guaranty Co., Fla. 1956, 88 So.2d 888, 890; Voelker v. Combined Ins. Co. of America, Fla. 1954, 73 So.2d 403, 408. Our court has also adhered to that rule. Aetna Casualty Surety Co. v. Crawford, 5 Cir. 1967, 370 F.2d 917, 918.
III. International v. Southern
Upon motion of Southern the District Court pursuant to Fed.R.Civ.P. 12(b)(6) dismissed with prejudice International's Fourth Amended Complaint as to Southern. Our guide is the rigorous rule given us by the Supreme Court in Conley v. Gibson, 1957, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80, 84: "[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See also Mizell v. N. Broward Hospital Dist., 5 Cir. 1968, 392 F.2d 580; Bobby Jones Garden Apts., Inc. v. Suleski, 5 Cir. 1968, 391 F.2d 172, 177; Sunbeam Corp. v. Masters of Miami, 5 Cir. 1955, 225 F.2d 191, 193. Dismissal of a claim on the basis of barebone pleadings is a precarious disposition with a high mortality rate. Barber v. Motor Vessel "Blue Cat", 5 Cir. 1967, 372 F.2d 626, 627; cf. Keating v. Jones Development of Missouri, Inc., 5 Cir. 1968, 398 F.2d 1011 (summary judgment). Nevertheless, we uphold the dismissal where it is certain that plaintiff cannot possibly be entitled to relief under any set of facts which could be proved in support of the allegations of the complaint. See Feinberg v. Leach, 5 Cir. 1957, 243 F.2d 64; Hilliard v. Brown, 5 Cir. 1948, 170 F.2d 397, 398; 1A Barron and Holtzoff, Federal Practice and Procedure § 356 (Wright rev.); 2A Moore, Federal Practice § 12.08.
"Florida courts have recognized three types of third party beneficiaries to a contract: (1) donee beneficiaries; (2) creditor beneficiaries; and (3) incidental beneficiaries. Third party beneficiaries in the first two classes have a right to sue. Fidelity Guaranty Co. of New York v. Plumbing Department Store, Inc., et al., 117 Fla. 119, 157 So. 506 (1934); Enns-Halbe Co. v. Templeton, 101 Fla. 609, 135 So. 135 (1931). On the other hand, third party beneficiaries recognized as incidental beneficiaries have no enforceable rights under a contract. East Coast Stores v. Cuthbert, 101 Fla. 25, 133 So. 863 (1931)." Barzda v. Quality Courts Motel, Inc., 5 Cir. 1967, 386 F.2d 417, 418.
See also Johnson Farm Equipment v. Cook, 8 Cir. 1956, 230 F.2d 119, 124; Donovan Const. Co. v. General Electric Co., D.Minn. 1955, 133 F. Supp. 870, 874-77; Restatement of Contracts § 133; 4 Corbin on Contracts, §§ 774, 779C; 2 Williston on Contracts § 356.
The Florida courts require that there must have been an intent to benefit the third party at the time the promisor and promisee entered into the contract in order for the third party to be classified as either a donee or a creditor beneficiary. If no such intention to benefit is found in the contract, the third party is an incidental beneficiary and has no rights enforceable against the promisor under the contract. See Marianna Lime Products Co. v. McKay, 1933, 109 Fla. 275, 147 So. 264, 265; East Coast Stores v. Cuthbert, 1931, 101 Fla. 25, 133 So. 863, 866; First National Bank v. Perkins, 1921, 81 Fla. 341, 87 So. 912, 916; McCann Plumbing Co. v. Plumbing Industry Program, Fla.Dist. Ct.App. 1958, 105 So.2d 26, 27. In Di Camillo v. Westinghouse Electric Corp., Fla.Dist.Ct.App. 1960, 122 So.2d 499, 500, a Florida appellate court stated:
See also Cedillo v. Standard Oil Co. of Texas, 5 Cir. 1961, 291 F.2d 246; Hess v. Factors Corp. of America, E.D.Pa. 1948, 80 F. Supp. 727, 728.
"`"Intent, in its legal sense, is quite distinct from motive. It is defined as the purpose to use a particular means to effect a certain result. Motive is the reason which leads the mind to desire that result."' See James Stewart Co. v. Law, 149 Tex. 392, 233 S.W.2d 558, 561, 22 A.L.R.2d 639. Moreover, Mr. Williston says, `There is no requirement of a mutual intent, as to right of enforcement, on the part of the contracting parties; instead, it is the intent or purpose of the promisee who pays for the promise that has been generally looked upon as governing * * * if an intent can legitimately be found to give a third party a right, the intent should be given effect.' Williston, § 356A. It has been said that so long as the contract necessarily and directly benefits the third party, he may enforce it. Byram Lbr. Supply Co. v. Page, 109 Conn. 256, 146 A. 293. Otherwise stated, if the `performance of the promise will satisfy an actual or supposed or asserted duty of the promisee to the beneficiary', he is a creditor beneficiary and may enforce the promise. See Sections 133(b) and 136(1)(a) Restatement Contracts; Williston, § 361. The beneficiary's right is of course limited by the terms of the promise. See Williston § 364A." (Emphasis added.)
IV. Retainage