Murphy v. Hartford Accident & Indemnity Co.

HERNDON, J.

Appellant Murphy, a licensed engineer and contractor, was awarded a contract to construct a diversion dam for the United States Bureau of Reclamation. He brought this action against Hartford Accident and Indemnity Company, a bonding company, which furnished the bid, performance, and payment bonds required in connection with the government contract.

The amended complaint upon which the case was tried is not a model of pleading. Entitled “Breach of Contract, Damages,” it contains four nondescript causes of action. The first cause of action might be classified either as one for breach of an oral agreement or as an action ex delicto for unlawful interference with contractual relations. The second cause of action incorporates by reference substantially all of the allegations of the first, and, if liberally construed, might be considered sufficient to plead the elements of an actionable fraud. A demurrer to the first cause of action was sustained without leave to amend, and the third and fourth causes of action were dismissed on Murphy’s motion during the trial.

For reasons which will shortly appear, it is wholly unnecessary to burden the reports with a detailed analysis of the lengthy complaint. The gist of it appears to be that Hartford committed certain intentional and wrongful acts and made certain fraudulent misrepresentations in order to secure control of monies belonging to Murphy, and to cause him to breach his contract with the government. He claimed damages in the amount of $435,000 for loss of profits and other items.

Hartford cross-complained on the indemnity agreement

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which Murphy had executed in connection with his application for the payment and performance bonds. Hartford alleged that Murphy had defaulted in the performance of the government contract, and that as a consequence it had been required to complete the project pursuant to its agreement under the terms of the performance bond. The damages claimed by the cross-complaint represented the amount by which Hartford’s expenditures in the completion of the project exceeded the payments which it received from the government. It also sought recovery of attorneys’ fees and costs.

The trial court made complete and detailed findings of fact which, in substance, were to the following effect: that all of appellant’s allegations charging Hartford with wrongful acts and fraudulent misrepresentations were untrue; that appellant had defaulted under his contract with the government; that Hartford had been required to complete the project pursuant to its obligations under the performance bond; and that the sums expended by Hartford exceeded the amounts received by it under the contract to the extent of $60,687.18. Judgment was entered that Murphy take nothing by his action and that Hartford recover a total of $89,388.04 on its cross-complaint, plus costs. Hartford’s judgment included interest in the sum of $21,100.86 and attorneys’ fees in the sum of $7,600.