Hagginwood Sanitary District v. Downer Corp.

California Court of Appeal Apr 14, 1960 No. Civ. 9757Published

Before: Schottky

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Holding. The court held that the district engineer's final acceptance of the construction work, in the absence of proven fraud or bad faith, is conclusive and binding on the parties, thereby barring the plaintiff's claims for breach of contract.

Issues

Whether the decision of a district engineer regarding the acceptability of work is final and binding on the parties under the contract.
Whether the evidence supported the trial court's finding that the contractor did not commit fraud or misrepresentation.
Whether the plaintiff's failure to report defects within the one-year period specified in the contract precludes recovery.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It is the rule in this state that the decision of an engineer or superintendent approving or disapproving the work as performed under a contract is in the absence of fraud, bad faith or mistake conclusive and binding on the parties”

“The failure of the district to point out any defects in the work within one year of the date following final acceptance precludes it from asserting improper performance except insofar as fraud or gross mistake is concerned.”

“Under such circumstances the acceptance of the work was a complete defense.”

SCHOTTKY, J.

Plaintiff has appealed from an adverse judgment in an action in which plaintiff sought to recover damages from defendant Downer Corporation and its surety, Pacific Indemnity Company, for alleged breach of contract. Plaintiff alleged in substance that the Downer Corporation had failed to conform to the plans and specifications set forth in its contract with plaintiff to build a sewer line; that Downer Corporation deliberately failed to make proper joints and falsely represented that all joints were properly made,- that the district engineer relied on the representations and was unable to discover their falsity; and that the falsity of the representations was not discovered until within three years before the filing of the complaint. Defendants’ answer denied the material allegations of the complaint and pleaded the statute of limitations and laches.

In 1948 the Hagginwood Sanitary District sought bids for the construction of sewer lines in the district. Downer Corporation submitted the accepted bid and thereafter entered into a contract with Clyde C. Kennedy as engineer of the Hagginwood Sanitary District to perform the work. The contract provided that Downer Corporation would do all the work in a good and workmanlike manner under the direction and to the

[758]

satisfaction of the district engineer and in accordance with the plans and specifications. The plans and specifications provided in part:

“1-12.

Materials and workmanship. . . .

All work shall be done and completed in a thoroughly workmanlike manner, . . .

“All defective work or materials shall be removed from the premises by the Contractor, . . . , and shall be replaced or renewed in such manner as the Engineer may direct. All material and workmanship of whatever description shall be subjected to the inspection of, and rejection by, the Engineer if not in conformance with the specifications.

“Any defective material or workmanship, or any unsatisfactory or imperfect work which may be discovered before the final acceptance of the work or within one (1) year thereafter, shall be. corrected immediately on the requirement of the Engineer, . . . , notwithstanding that it may have been overlooked in previous inspections. . . . Failure to inspect work shall not relieve the Contractor from any obligation to perform sound and reliable work as herein described.

Hagginwood Sanitary District v. Downer Corp.

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SCHOTTKY, J.

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