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Samuel J. Creswell Iron Works Inc. v. Housing Authority

decided: September 22, 1971.


Biggs and Van Dusen, Circuit Judges, and Kraft, District Judge.

Author: Biggs


BIGGS, Circuit Judge.

This is an appeal from a judgment entered May 8, 1969 dismissing Creswell's action based on alleged breach of contract by the Housing Authority and its agent, D'Anastasio.*fn1

The facts giving rise to this controversy follow: In 1964, the Authority advertised for bids for the erection of a senior citizens housing project known as John F. Kennedy Towers. On June 18, 1964, Creswell submitted a bid to the Authority for structural steel and miscellaneous metal work in consideration for the sum of $38,895. Creswell was the lowest bidder and on July 14, 1964, signed a contract to perform this work, which essentially required the erection and installation of stairwells in conformity with specifications set out in the contract. The specifications required platform decking made of 14 gauge material, wall stringers 8.4# per foot, platform headers with 5 foot channels 6.7#. On October 8, 1964 Creswell submitted a shop drawing to Ronald F. Liszewski, D'Anastasio's project captain, whose function was to approve from a design concept various shop drawings submitted by contractors.*fn2 Liszewski rejected Creswell's original shop drawing with the notation: "Wall bearing design not desirable under these conditions, submit different design." Creswell later submitted to Liszewski a new shop drawing, the design concept of which had been changed as requested by the notation on the previously rejected shop drawing. Creswell's modified shop drawing, which was not accompanied by a letter of transmittal to Liszewski detailing the discrepancies between the modified shop drawing and the original contract specifications, was approved and signed by Liszewski on November 3, 1964.

In early December 1964, the stairs were shop fabricated*fn3 and five flights were erected on the construction site. In early February 1965, Blizzard, a Public Housing Administration inspector, notified Osborn, executive director of the Authority, of a problem concerning the Creswell stairs. This prompted Osborn to notify the Authority and the architect. The Authority received a report from Liszewski to the effect that the stairs, as constructed in conformity with Creswell's new approved shop drawing, did not conform with the original specifications set forth in the contract documents. The report concluded:

"The discrepancies are (1) platform decking is 20 gauge material in lieu of 14 gauge as required; (2) wall stringers are 6.5# per foot in lieu of 8.4# per foot as required; (3) platform headers are 6 inches beam 4.4# in lieu of 5 inches channel 6.7# as required.

"These discrepancies exist on both stair Towers and extend for five flights, first through fifth floors. The remaining five flights have not been installed and I shall not permit the stairs to be installed unless they meet the requirements of the Contract.

"The Contractor * * * has been directed to correct these discrepancies. To date he has not taken any action.

"Payments for Creswell Iron Works have been stopped and shall remain so until satisfactory corrections are completed."

Thereafter, the Authority advised Creswell to remove the stairs and install new stairs in accordance with the original contract specifications.*fn4 Finally, the stairs were removed by Creswell on or about April 28, 1965 and new stairs, which were in compliance with the contract specifications, were installed during the period between April 28, 1965 and June 8, 1965.

Creswell seeks damages in the amount of $19,385 for shop time required to make the new stairs and railings, for necessary labor to remove the prefabricated stairs, for the erection of the new stairs and for the materials which went into the new stairs.*fn5

In the trial court and in this court, Creswell strenuously argues that the approval by Liszewski of its shop drawing constituted an approval not only of the design concept but of the change in specifications from the original contract and that this approval is binding on the Authority under the principle of respondeat superior.

Liszewski testified that he never discussed with William Raiguel, Jr., executive vice-president of Creswell, or any other Creswell employee or officer, deviations in the shop drawings from the original contract specifications. Thus, he testified that he never approved the changes in the specifications which appeared in the shop drawing. Liszewski also asserted that the only item discussed concerned the legality of installing shop-fabricated, as opposed to job-fabricated, stairs. Raiguel, on the other hand, testified that he orally discussed with Liszewski the discrepancies. This conflict in testimony was not resolved by the District Court, but we think that ...

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