18 N.W.2d 688 | Minn. | 1945
Plaintiff contracted with defendants to erect for the contract price of $83,585 a warehouse and office building according to plans and specifications. These, so far as here material, provided for a one-story building 149 feet by 280 feet in size, with concrete slab floors and roof and brick walls. One of the first-floor slabs rested upon the ground. The other was over a basement 149 feet by 100 feet. The latter was to be eight and one-half inches thick. The specifications provided: (1) That the topping of the floors should be screeded to "a true and even surface," floated "to close all voids *596 and hollows"; that they should be steel-trowelled so as to be "free from depressions and trowel marks"; and that the ramps and sidewalks should be wood-trowelled so as to be "free from depressions"; (2) that the roof slab should be screeded and top surface should be "level" and "free from depressions"; that the "roof slab shall be pitched to elevations shown and leader heads shall be depressed into slab to prevent water pockets standing on roof surfaces"; and "concrete slab shall be depressed in area approximately four feet square 2 to permit good drainage around leader heads"; that the roof slab should be covered with felt and pitch roofing material; and (3) that the floor slabs in the basement "shall be sloped to floor drains where drains occur."
The building was intended, as the contractor well knew, to be used by defendants in operating a wholesale linoleum and carpet business. It was important to them to have it erected according to the plans and specifications in order to serve its intended purpose.
Defendants claimed that in numerous respects plaintiff had caused defects in the building by faulty construction. They claimed that the floors were uneven and had depressions in them. There was evidence to show that there were seven or eight depressions in the showroom caused by planks two inches thick and eight inches wide. In the cutting room, there were additional plank depressions, and the floor was so uneven in places that rolls of linoleum could not be stood on end without danger of their falling. There was considerable cracking and pitting all over the suspended slab. Plaintiff attempted to remove some of the uneven places by grinding the floor surface level with a carborundum machine. In some places the floor was ground down to the coarse aggregate below, with the result that when the floor was used there was considerable dusting. There were over 80 places where workmen had chipped the floor in removing the scaffolding and forms.
The roof did not drain, because of a large depression in the roof slab. Water stood in the depression, which plaintiff testified was 32 by 81 feet and which, according to defendants' evidence, was *597 50 by 100 feet in area and two and one-half inches in depth. Defendants claimed that in order to make the job comply with the specifications it was necessary to remove several squares of the roof and to put on a new cover over the part rebuilt. Plaintiff claimed that the water was beneficial to the roof, but that it could be made to drain by applying two or three layers of felt and pitch.
The boiler-room floor, instead of having a pitch that would cause it to drain toward the drain opening, had a slope which caused the water to stand in front of the boiler. Plaintiff claimed that the defect, if any, could be removed by cutting out a part of the surface of the floor between the boiler and the drain openings. Defendants contended that the only way to make the job workmanlike was to take out the entire floor and put in a new one with proper pitch.
There were other defects in the installation of doors, the front entrance, and windows, amounting to $132. No point is made concerning the allowance of this item.
The trial court found that the floor slabs were so faultily constructed that the defects were irremediable and that defendants should be allowed the sum of $2,700 as the difference between the value of the building as it would have been if plaintiff's work had been according to the contract and its value as actually constructed; that defendants were entitled to $532 as the reasonable cost of reconstructing and repairing the defective parts of the roof; $200 for the reasonable cost of reconstructing the boiler-room floor; and $132 for the undisputed items mentioned. The court held that plaintiff was entitled to recover $83,585, the contract price, and the following items: $1,750.51 for extras; $400 for attorney's fees; $194.75 for disbursements; $167.80 for attorney's fees and disbursements in connection with the abortive arbitration, making a total of $86,098.06; that defendants were entitled to credit for the progress payments, amounting to $74,391.30, and to deductions for defective construction as follows: $2,700 for concrete slab; $532 for roof; $200 for boiler-room floor; $132 for cost of other repairs, making a total of $77,955.30; and that the balance due plaintiff *598 was $8,142.76, for which he was awarded a mechanic's lien, which was ordered foreclosed in the manner provided by law.
No interest was allowed on the balance found to be due plaintiff, for the reason given by the trial court "that the building contract * * * expressly provides that final payment thereunder shall not be due until thirty (30) days after completion of the contract in accordance with the terms thereof, and until the architects employed shall have certified to the propriety of such payment."
The general conditions of the contract provided that the owners should be liable for payments upon certification by the architect that plaintiff had duly performed the contract; that the architect should have general supervision and direction of the work; that in the first instance he should be the interpreter of the conditions of the contract and the judge of its performance; and that in case of dispute the architect's decisions should be subject to arbitration. The contract further provided that final payment should be due 30 days after full and complete performance of the contract and certification by the architect to that effect.
The architect refused to issue a certificate of final performance. The contractor claimed that there was then due him the sum of $10,981.71. Upon the architect's refusal to issue the certificate mentioned, plaintiff demanded arbitration under the contract. The general conditions, made a part of the contract, provide for the arbitration of disputes "at the choice of either party," and that the arbitrators' decision shall be a condition precedent to any right of legal action. A board of arbitrators was selected by the parties in the manner provided by the contract. On December 14, 1942, the arbitrators convened. The parties and their counsel appeared. In order to enable the arbitrators to view the premises, the hearing was adjourned with the consent of the parties to December 16, 1942. At the opening of the adjourned meeting, after plaintiff was sworn to testify in his behalf, defendants served notice in writing upon the arbitrators and plaintiff that they had revoked the agreement for a submission to arbitration and that they refused to proceed further thereunder. Thereupon defendants withdrew from the *599 arbitration, and no further proceedings thereunder were had. Two days afterward, on December 18, 1942, plaintiff commenced this action to foreclose the mechanic's lien claimed by him, for which he had filed a lien statement on December 1, 1942.
The questions raised here are: (1) Whether the defendants' refusal to proceed with the arbitration barred them from asserting any claim to deductions for faulty performance of the contract by plaintiff; (2) whether the evidence sustains the finding that there were defects due to faulty performance of the contract by plaintiff; and (3) whether plaintiff should have been awarded interest upon the unpaid balance due him.
1. Plaintiff's contention that defendants are not entitled to set off against the amount due him the amount of damages sustained by them as a result of defects caused by faulty performance rests upon the proposition that, under the contract, decision by arbitration is a condition precedent to asserting a legal right of action; that the agreement to arbitrate is irrevocable; and that defendants' claimed right of setoff is the assertion of a cause of action by way of counterclaim, which is barred by reason of defendants' refusal to arbitrate. Defendants' answer to this contention is that plaintiff and they waived the arbitration provisions of the contract. This they claim they did by withdrawing from the arbitration proceedings and refusing to proceed and that plaintiff did so by bringing this action to enforce a mechanic's lien and prosecuting it to decision.
In passing, it should be observed, although it makes no difference here, that the right to such deductions is one of recoupment, not counterclaim. Peterson v. Mayer,
An agreement to submit disputes which may arise between parties to arbitration is irrevocable in the sense that one of them cannot revoke it over the objection of the other. Independent School Dist. v. A. Hedenberg Co. Inc.
By withdrawing from the arbitration proceedings and refusing to proceed further thereunder, defendants waived and abandoned the right to arbitrate. Anderson v. M. Burg Sons, Inc.
Where, however, the agreement to arbitrate is irrevocable, the rule is different. In such cases, the party who has not breached the agreement has an election to proceed with the arbitration and to take an award or to bring an action in the courts. The rule is settled that, where an arbitration agreement is irrevocable and one of the parties withdraws or refuses to participate in the arbitration proceedings, the arbitrators may proceed ex parte at the instance of the other party and make a valid award. Glidden Co. v. Retail Hardware Mut. F. Ins. Co.
Instead of proceeding before the arbitrators and taking an award, as he had a right to do, plaintiff brought and prosecuted this action to enforce a mechanic's lien. The bringing of the action was an election to abandon and waive his right to arbitration and to have a judicial remedy instead — a remedy of an entirely different kind from an award by the arbitrators. French v. Lindh-Gustafson-Klopfer Co. Inc.
2. In passing on the question whether the evidence sustains the findings with respect to defects caused by plaintiff's alleged faulty performance and the damages sustained by defendants as a consequence thereof, we shall not review the evidence in detail to demonstrate the correctness of the findings — it is not incumbent upon an appellate court to do so. Anderson v. Farwell, Ozmun, Kirk Co.
We think that the trial court's findings of defects and resulting damage to defendants must be sustained under the familiar rule that findings having reasonable support in the evidence, even though it is conflicting, will not be disturbed on appeal. Kaehler v. Kaehler,
The finding that $2,700 should be allowed for defects in the floor slab is sustained by the testimony of one of the owners, Floyd E. Lasher, and an architect, Dale R. McEnary. Lasher's testimony was that, if the building had been constructed according to contract, its value would have been $83,000, and that as actually constructed it was from $72,000 to $73,000, and that defendants' damages were from $10,000 to $11,000. Mr. McEnary placed the respective values at $83,000 and $80,000 and the damages at $3,000. The trial court found the damages to be $2,700. The owner of property (Floyd E. Lasher was an owner) is competent to testify as to the value of the building as it would have been if constructed according to contract, its value as actually constructed, and the *604
damages occasioned by faulty performance of the contract. Carl Lindquist Carlson, Inc. v. Johanson,
The argument concerning the allowance to defendants for remedying the defects in the roof was principally to the effect that the amount allowed was excessive. Here, again, it suffices to say that we have examined the evidence and have concluded that it sustains the finding. In this connection, plaintiff contends for a rule which we think is as mischievous as it is untenable. He argues that water standing in the depression on the roof, even if it was the result of failure to construct the roof according to contract, is no cause for complaint on the part of the owners, because it made the roof as built better than it would have been if built according to contract. The doctrine of substantial performance, under which plaintiff claims he is entitled to recover, does not confer on a contractor any right to deviate from the contract or to substitute what he may think is just as good as what the contract calls for. Where the deviation is wilful, the contractor is not entitled to recover at all. It is only where the deviations and defects are unintentional and not so extensive as to prevent the owner from getting substantially what he bargained for that the contractor is entitled to recover under the doctrine mentioned. After all, the owner has the right to specify what he wants and to obligate himself by contract to pay only for what he specifies. Ylijarvi v. Brockphaler,
Plaintiff does not press the other items. In view of that fact, we shall refrain from discussing them. The court's findings with respect to them are sustained by the evidence.
3. A further fact should be stated in connection with plaintiff's claim for interest. The general conditions, made part of the contract, provide that if the owners shall fail to pay the sum named in any certificate of the architect or award by arbitration, upon demand when due, the contractor shall be entitled to interest on the sum named at the legal rate thereof. It seems to us that the intention was that interest should not be due prior to an award by arbitration and that it should be afterward. Absent contractual provision as to the time from which interest shall be payable, the rule is that, where parties agree to submit the amount of a demand to the decision of others or a court, interest is not allowable prior to the date of the decision. Easterbrook v. Farquharson,
Modified in accordance with the opinion. *607