Gogo v. Los Angeles County Flood Control District

Plaintiffs and defendant entered into a contract whereby plaintiffs agreed to do excavation and construction work for a dam. This action was commenced to recover a judgment for excavation work which they performed but which was not included in the contract. The action was tried without a jury and judgment was rendered in favor of plaintiffs for $59,590.80, from which judgment defendant has appealed.

Defendant published on April 6, 1937, a notice inviting bids for the construction of the spillway of San Gabriel Dam No. 1. Copies of the notice and of the plans and specifications were furnished to various contractors including plaintiffs. Item No. 6 of the bidding schedule called for: “General Excavation, Class F—52,000 eu. yds.” The material provisions of the specifications are as follows:

“41. The quantities in the schedule are for comparing bids and may vary from the actual final quantities. Some quantities may be increased and others may be decreased. J >

“63. Excavation shall consist of the removal and final disposal of all materials of any nature including rock, earth and gravel, incidental to the construction of the proposed work, to the lines and grades shown on the drawings. . . . It should be noted that the West Slope Construction Company, under contract with the District for the construction of San Gabriel Dam No. 1, is conducting quarrying opera

tions within the limits of the spillway site. In general, these operations will result in rough excavation to grade and cross section for a portion of the spillway and approach channel, but in no event will West Slope Construction Company excavate below the level of elevation 1400.” (Italics added.)

“67. General excavation, Class F, shall comprise all excavation for the floor and side slopes of the approach channel; for the ogee section, except cutoff excavation; for the floor of the spillway channel; for the counterfort retaining walls ... ; all excavation in Brown’s Gulch Channel, except cutoff excavation; and any excavation not specifically classified elsewhere. ... A portion of the spillway approach channel has already been excavated by the West Slope Construction Company. The excavation work required under this contract in the approach channel area shall consist of the removal of the remaining materials.”

After reading the specifications and before submitting their bid, plaintiffs proceeded to the site of the proposed work for the purpose of making an estimate of the type of material to be encountered in Class F excavation. They there met Mr. Stuvcr, the resident engineer employed by defendant, who accompanied them and pointed out the various places where excavation was to be done. Stuver stated that there would be very little excavation in the approach channel where the West Slope Construction Company was working at the time and that it would all be below the 1400 foot elevation. Later R. L. Basieh went to the site on behalf of plaintiffs and made an estimate of the proposed excavation work, taking into account in his estimates the amount of material in the approach channel and spillway site below the 1400 foot elevation only. The amount of solid rock which would have to be excavated in Brown’s Gulch was estimated by plaintiffs and Basieh as approximately 10,000 cubic yards. The balance of the 52,000 cubic yards was estimated to be composed of either soft or loose material. Based upon these figures plaintiffs submitted a bid of 60 cents per cubic yard for the Class F excavation. Before the bid was accepted plaintiff Gogo asked Mr. Howell, the chief engineer employed by defendant, if he could tell just where the Class F excavation was and of what it consisted. The chief engineer replied that he could not but stated that he would send plaintiff out to the site of the work with Mr. Ream, the engineer who pre

The contract for the work, providing for the excavation of approximately 52,000 cubic yards of Class F material was awarded to plaintiffs. During the prosecution of the work in accordance with the provisions of the contract plaintiffs discovered that the West Slope Construction Company had ceased their quarrying operations in Brown’s Gulch with the consent of defendant at a point which was more than five feet above grade. Despite plaintiffs’ protests that such work was not contemplated by the contract, they were required, because of defendant’s threats to cancel the contract and hold plaintiffs liable for damages, to excavate above the 1400 foot elevation a total of 40,587 cubic yards of material consisting mostly of solid rock. The total Class F excavation amounted to 112,777 cubic yards, for which plaintiffs were paid at the contract price of 60 cents per cubic yard.

Plaintiffs did not waive their right to recover damages for the misrepresentation by continuing the excavation work under protest after discovering the falsity of the representation. “A party induced by a false representation to enter into a contract may proceed to perform it and sue for damages for the misrepresentation.” (Palmberg v. City of Astoria, 101 Or. 224 [ 199 Pac. 630 , 632, 16 A. L. R. 1125 ].) The theory underlying this rule is clearly stated in Borough Const. Co. v. City of New York, 200 N. Y. 149 [ 93 N. E. 480 at 483, 140 Am. St. Rep. 633 ], where it is said: “The underlying justice of the principle is that where a municipal representative having authority to speak for it and supposed to be familiar with such matters in apparent good faith and with a show of reason requires a contractor to do certain things as covered by his contract, the contractor, although protesting against the requirement, ought not to be compelled to refuse obedience and incur the hazard of becoming a defaulter on his contract even though it shall subsequently turn out that he was right and the municipal representative wrong in the dispute.”

The contract between defendant and the West Slope Construction Company provided that the company was not to

The court found that of the 40,587 cubic yards of rock which plaintiffs excavated above the 1400 foot elevation, they were required by their contract to excavate only 6,915 cubic yards. Based upon the evidence as to cost, the court found that the reasonable cost of removing the additional 33,672 cubic yards of material was $67,344, of which plaintiffs had received $20,203.20 at the contract rate of 60 cents per cubic yard, leaving a balance of $47,140.80 which defendant owed to plaintiffs. It was further found that plaintiffs were entitled to the sum of $12,450 which defendant had withheld from plaintiffs in accordance with the provisions of the contract for liquidated damages because of plaintiffs’ failure to complete the work within the time limited by the contract.

In contending that the judgment is erroneous as a matter of law defendant relies upon the rule stated in Powell v. State, (Tex. Civ. App.) 118 S. W. (2d) 960 , 965, that “where one agrees to do, for a fixed sum, a thing possible to be performed, he will not be excused or become entitled to additional compensation, because unforeseen difficulties are encountered.” It is asserted that plaintiffs were obligated by the contract to make “all excavation” necessary to complete the job, re

The present case is very similar to Maney v. Oklahoma City, 150 Okl. 77 [ 300 Pac. 642 , 76 A. L. R. 258 ], wherein plaintiff was allowed to recover damages for the extra work. In that case the plaintiff, who was the successful bidder, submitted his bid in reliance upon the representation in the plans and specifications that the excavation work would consist principally of the removal of earth and that there would be not more than 407 cubic yards of rock. The engineers for

The authorities are divided concerning the theory upon which recovery is allowed in this type of case. Some cases, such as Faber v. City of New York, supra, permit the contractor to recover on the theory of breach of contract because he was compelled to perform work not contemplated by the contract. However, the correct basis of recovery is on the theory that the action is one to recover damages for the misrepresentation by which the contract was induced. (Hollerbach v. United States, supra; Maney v. Oklahoma City, supra, and Pitt Construction Co. v. City of Alliance, supra.) It would be inequitable to permit defendant to enforce the literal terms of the contract which called for the excavation of “all materials” necessary to complete the job when plaintiffs were induced by defendant’s misrepresentation to submit a bid which was much lower than was warranted by the true facts. If instead of stating in the specifications that West Slope Construction Company would excavate to rough grade, defendant had stated the true facts of which it had

The complaint in this action contained three separate counts, by each of which plaintiffs sought to recover damages for performing the additional excavation work. By the first count recovery was sought for the loss occasioned by defendant’s misrepresentation. The second count is a common count for the reasonable value of additional work performed at the instance and request of defendant. The third count proceeds upon the theory that defendant was obligated by contract to excavate the extra material above rough grade and seeks damages for breach of contract because of defendant’s failure to perform such obligation. Although it is true, as contended by defendant, that the causes of action are inconsistent, it is unnecessary to determine whether all counts are legally sufficient or whether the court erred in denying defendant’s motions for nonsuit as to the several counts. The judgment is supported by the cause of action set forth in count one, which we have decided is the correct theory of recovery, and that count is supported by substantial evidence. If a judgment is sustained by one of several counts in a complaint which is supported by substantial evidence, it will not be reversed because of the insufficiency of the evidence as to other counts of the complaint. (Martin v. Los Angeles Turf Club, Inc., 39 Cal. App. (2d) 338 [ 103 Pac. (2d) 188 ].)

It is unnecessary to pass upon the contention that defendant, being a political subdivision of the government, is not bound by the statements of its engineers, for the judgment is properly based upon the misrepresentation made in the specifications and in the contract by the duly authorized officers of defendant. Evidence of the conversations between plaintiffs and defendant’s engineers was properly received in any event, since such conversations tended to prove that plaintiffs were justified in relying upon the misrepresentation in the specifications and were not negligent in failing to discover the true facts.

By count four of the complaint plaintiffs sought to recover the amount of liquidated damages which had been withheld by defendant because of plaintiff’s failure to complete the work within the time limited by the contract. The contract provided that the work was to be completed within 120 days but plaintiffs actually required 369 days to finish the job. Under the contract provision for liquidated damages of $50 per day for every day of delay, defendant withheld $12,450 from the amount due plaintiffs as damages for the 249 day delay. The evidence shows that the first 40 day delajr was occasioned by defendant's failure to cause the West Slope Construction Company to remove from the site and thus permit plaintiffs to commence operations. An additional delay of at least 40 days was caused by the fact that plaintiffs were required to excavate 112,000 cubic yards instead of approximately 52,000 cubic yards of material of the character represented in the specifications and contract. Because of a severe storm plaintiffs were delayed another 37 days. The chief engineer employed by defendant concluded that for these reasons liquidated damages for at least 113 days ($5,650) should be waived, and recommended such action to defendant. His authority rests in the following provision in the specifications: “On all questions relating to . . .

It is finally asserted that in any. event plaintiffs are not entitled to recover the entire $12,450, because, discounting the total delay caused by defendant’s acts, plaintiffs still did not complete the job within 120 days. In making this contention defendant seeks to have this court apportion the amount of delay attributable to each and to fix damages accordingly. The correct rule is that where such delays are occasioned by the mutual fault of the parties the court will not attempt to apportion them but will refuse to enforce the provision for liquidated damages. (Jefferson Hotel Co. v. Brumbaugh, 168 Fed. 867 [ 94 C. C. A. 279 ] ; Champlain Construction Co. v. O’Brien, 117 Fed. 271 (Vt.).) It is stated in the Champlain case at page 277: “There is no way for summing up the defaults of each and apportioning the damages to them, but the whole must be allowed or none; and, as all cannot be, none must be. These deductions must therefore be restored.” By its own act defendant rendered performance within the time limited by the contract impossible and has therefore lost its right to claim the liquidated damages provided in the contract. (King Iron Bridge & Mfg. Co. v. City of St. Louis, 43 Fed. 768 [Mo.] [ 10 L. R A. 826 ].)

The judgment is affirmed.

Moore, P. J., and McComb, J., concurred.

A petition for a rehearing was denied by operation of law, and appellant’s petition for a hearing by the Supreme Court was denied August 11, 1941.