Court Opinion

ID: 9553815
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:35:41.284751+00
Date Added: 2024-06-11T15:32:18.331516
License: Public Domain

SHEPARD, Chief Justice
(dissenting).
The plaintiff-appellant brought this action on a number of theories, including negligence on the part of the defendant-respondent and that strict liability should be imposed upon the defendant-respondent. *801Such theories were only mentioned in passing by the majority opinion and will not be discussed herein. The only point of this dissent is my disagreement with the decision of the majority wherein it holds that the plaintiff-appellant herein was the third party beneficiary of the highway construction contract, and that liability under that contract flowed from defendant-respondent to plaintiff-appellant.
The majority opinion does not deal with the decision of this court in Davis v. Nelson-Deppe, Inc., 91 Idaho 463, 424 P.2d 733 (1967). That case also involved a person who asserted that he was the third party beneficiary of a highway construction contract between the defendant and the Department of Highways. The plaintiff therein relied upon failure to comply with the requirements of the same “standard specifications at issue herein” and the manual on “uniform traffic control devices.” The court said:
“Plaintiff’s paramount contention is that the trial court erred in denying his motion to amend his amended complaint to allege a claim for relief based on the theory that he was a third party beneficiary under the contract between the defendant and the Department of Highways and was thus entitled to maintain an action for damages based upon the breach of this contract.” 91 Idaho at 465, 424 P.2d at 735. (Emphasis supplied)
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“It would appear from the contention of the plaintiff that he would have this court impose an absolute duty of care on the part of the contractor gauged by the contract requirements, regardless of the requirement of causation between breach and damages and regardless of what would be the common law standard of reasonable care.” 91 Idaho at 465-466, 424 P.2d 735. (Emphasis supplied)
The court refused to accept the plaintiff’s theory of third party beneficiary and stated:
“Absent a manifested intent to the contrary, construction contracts between a contractor and a state or other public body for highway repair or construction of a new highway are generally not considered as being for the benefit of third persons, but are, on the one hand, for the benefit of the State in the performance of its duties to maintain highways on behalf of the public, and, on the other hand, for the benefit of the contractor by way of compensation to be paid.” 91 Idaho at 467, 424 P.2d at 737.
Assuming that Nelson-Deppe is distinguishable, or that Nelson-Deppe is erroneous and should be overruled, I nevertheless continue to disagree with the majority opinion herein.
Plaintiff-appellant attempted to prove at trial, and continues to argue in this court, that the defendant-respondent did not perform its work pursuant to the contract and the specifications. It contends that the river crossing constructed by defendant-respondent was placed at a different location than that specified in the contract. Defendant-respondent contends, however, that the resident engineer of the Highway Department had the right to modify provisions of the contract and did so, modifying the contract as to the location of the river crossing. Therefore defendant-respondent contended at trial, and argues here, that it did perform the contract in accordance with the specifications and therefore that there was no breach.
At this point in time, following a jury trial, we must assume that the change in the location of the river crossing was not a breach of the contract and was in accordance with the directions of the Highway Department. That was a question of fact submitted to, and presumably decided by, the jury in favor of the defendant-respondent.
I come then to what appears to be plaintiff-appellant’s principal argument, i.e., that it may recover as a third party beneficiary regardless of whether there is or is not a breach of the contract. The majority *802agrees with that contention of plaintiff-appellant.
I had always believed that the most fundamental law indicated that a cause of action on a contract accrued at the time 01 its breach or nonperformance. Reichert v. General Insurance Co. of America, 68 Cal.2d 822, 69 Cal.Rptr. 321, 442 P.2d 377 (1968); In re Talbott’s Estate, 184 Kan. 501, 337 P.2d 986 (1959); Davenport v. Cabell’s Inc., 239 S.W.2d 833 (Tex.Civ App., 1951). It is also fundamental that a breach is an unjustified failure to perform what is promised in a contract. State Automobile & Casualty Underwriters v. Salisbury, 27 Utah 2d 229, 494 P.2d 529 (1972); Restatement of Contracts, § 314; Simpson, Contracts § 187 (2d ed. 1965).
The same fundamental rules of law have been enunciated in State v. Clinger, 72 Idaho 222, 238 P.2d 1145 (1951) and Puget Sound Nat. Bank of Tacoma v. C. B. Lauch Const. Co., 73 Idaho 68, 245 P.2d 800 (1952). Admittedly those cases involved signatory principals to a contract rather than a third party beneficiary, but I see no difference in the law to be applied. The obvious converse of all of the preceding is that no action, for damages, for breach of contract can arise where a promisor has performed in accordance with his promise. Puget Sound Nat. Bank of Tacoma v. Lauch, supra.
Assuming as we must that the change in the river crossing did not constitute a breach of contract, then we are told by the majority that a party to a contract can and will sustain liability under the contract even though he does precisely, exactly and fully what is required of him by the contract. I suggest that such is a strange result. The majority’s interpretation of the contract herein places an insurer’s liability on all persons who execute a highway construction contract with the State of Idaho. In this case, that liability results not by reason of the operations of the contractor, but by reason of what the State required the contractor to do.
While the instructions complained of by the plaintiff-appellant, and criticized by the majority opinion, may have been erroneous, in my judgment they were all to the benefit of the plaintiff-appellant. Therefore I would affirm the judgment of the district court.
Lest one might believe that I am suggesting that a property owner might be damaged with impunity because of the sovereign immunity of the state to tort liability, I would make amply clear wherein liability could have been assigned in the case at bar. If we assume that the causative factor for the damage to plaintiff-appellant was under the control and direction of the State by and through its contract, then our previous decisions in Renninger v. State, 70 Idaho 170, 213 P.2d 911 (1950), and Hughes v. State, 80 Idaho 286, 328 P.2d 397 (1958) make it amply clear that there is liability for the action of the State. These cases make it difficult to understand the reason why the State was dismissed from the present action on the stipulation of plaintiff-appellant.
The majority herein attempts to distinguish the case of Gates v. Pickett & Nelson Construction Co., 91 Idaho 836, 432 P.2d 780 (1967). On a factual pattern substantially similar to that of the case at bar (albeit and Gates there was too little water, while here and in Renninger there was a surfeit) the court held the action sounded properly in tort and was one for inverse condemnation. The district court held in the case at bar that the action sounded in tort. In Gates the construction contractor was in privity with the same highway department and I would suppose the same specifications were in effect regarding the liability of the contractor to third parties. Nevertheless, the court there stated that the action sounded in tort.
The majority herein places reliance on the case of Pacific Northwest Bell Telephone Co. v. DeLong Corp., 246 Or. 369, 425 P.2d 498 (1967). That decision speaks not to whether the contractor followed the plan and specifications for construction or whether he was in breach of contract by failure to do so. Since the state was not named in DeLong, I would assume that the actions of the construction contractor *803which resulted in the damage were outside the provisions of the contract. In fairness, however, I must state that no indication one way or the other is contained in that decision.
I must finally reject any relevance attached by the majority opinion to the 1963 agreement be.tween the plaintiff-appellant herein and the Highway Department. There is no showing here or at trial that defendant-respondent was a party to that contract, was aware of its existence, or agreed to be bound by it. Absent some such showing, I am aware of no theory of law that so attempts to bind a non-contracting person to a “third party liability.” I would point out additionally that no theory of estoppel of any kind was pleaded or argued. That contract may have given some cause of action against the Department of Highways for a breach thereof because the Department was one of the contracting parties, but that action evidently was stipulated away.
I would affirm the decision of the trial court.
McFADDEN, J., concurring in dissent.