J. R. Graham & Son, Inc. v. Randolph County Board of Education

212 S.E.2d 542 (1975) 25 N.C. App. 163

J. R. GRAHAM AND SON, INC.
v.
The RANDOLPH COUNTY BOARD OF EDUCATION.

No. 7419SC1017.

Court of Appeals of North Carolina.

March 19, 1975.

Schoch, Schoch, Schoch & Schoch by Arch K. Schoch, High Point, for plaintiff appellee.

Miller, Beck, O'Briant and Glass by G. E. Miller, Asheboro, for defendant appellant.

ARNOLD, Judge.

Defendant contends that the contract documents, including the standard AIA contract, preclude plaintiff's recovering the relief granted by the trial court. Upon a voluminous record, the court made detailed findings of fact. It is for this Court to inquire whether these findings are supported by the evidence and whether they support the conclusions of law.

The North Carolina Supreme Court has said:

"Obviously, as an elementary general proposition, a contractor is not liable under a clause for liquidated damages based on a time limit if his failure to complete the contract within the specified time was wholly due to the act or omission of the other party in delaying the work, whether by omitting to provide the faculties [sic] or conditions contemplated in the contract to be provided by him, or by those for whom he is responsible, or by interfering with the work after the contractor has begun, or otherwise. Dunavant v. Caldwell & N. R. R., 122 N.C. 999, 29 S.E. 837; United States v. United Engineering & Contracting Co., 234 U.S. 236, 34 S. Ct. 843, 58 L. Ed. 1294; Anno. 152 A.L.R., p. 1350; 22 Am.Jur.2d, Damages § 233; 25 C.J.S. Damages § 115, p. 1096. The concept of justice back of the decisions appears to be that the other party should not be allowed to recover damages for what he himself has caused."

Reynolds Co. v. Highway Commission, 271 N.C. 40, 50, 155 S.E.2d 473, 482 (1967). See also Annot. 152 A.L.R. 1349 (1944); 5 A. Corbin, Contracts, § 1072 (1964).

Plaintiff's evidence tended to show and the trial court found that the delay in completing the project was caused by defendant's failure to pay plaintiff on time, defendant's failure to provide water for and a road to the job site, the failure of the heating contractor employed by defendant to install the heating system on time, and bad weather. The court further found that delay was caused by the "ineptness of the architect, Hammond, and his lack of cooperation with Graham and the other contractors." Defendant nevertheless contends that plaintiff's failure to request an extension of time under the terms of the contract constitutes a waiver of grounds for delay. While defendant's position is generally tenable, see e. g., Austin-Griffith, Inc. v. Goldberg, 224 S.C. 372, 79 S.E.2d 447 (1953), we believe the facts belie the reasoning behind it. The record shows that when plaintiff on 19 February 1968 requested a 60-day extension, it was ignored. Plaintiff had every reason to expect that additional requests would be futile. Defendant was well aware of the difficulties being encountered at the job site. Moreover, defendant did not execute the change order for the remainder of the contract price until 12 September 1968, more than a month after the 300-day construction period elapsed. Defendant clearly had waived any expectation of adherence to the original contract schedule. On the basis of these facts, plaintiff was not required to submit further requests for extension of time and defendant was not entitled to withhold liquidated damages.

As a general rule, when the contract so provides, the architect's certification is a condition precedent to the contractor's recovery of installment payments, absent a showing of bad faith or failure to exercise honest judgment. 13 Am.Jur.2d, Building and Construction Contracts, § 37. In the case at bar, the evidence tended to show and the trial court found that plaintiff submitted valid estimates and failure to approve them was an "intentional, arbitrary and capricious delay on the part of Hammond in an effort to delay the payments to Graham for the reason that defendant did not have funds available to pay Graham on said estimates." Defendant contends that plaintiff's remedy was to stop work under a contract provision until payment owed was received. If, as defendant also contends, Hammond's refusal to certify requests for payment was because the project was behind schedule, a work stoppage by the general contractor would only have compounded the problem. We do not read the contract to mean that plaintiff must jeopardize the entire project when defendant wrongfully refuses payment. The trial court's findings, based on plenary evidence, support the award of interest on late payments.

The trial court also concluded that plaintiff was entitled to recover the cost of additional work not called for in the contracts. Defendant contends that plaintiff failed to request additional sums through written change order as required by the contract. This was not necessary to effect the agreement:

"``The provisions of a written contract may be modified or waived by a subsequent parol agreement, or by conduct which naturally and justly leads the other party to believe the provisions of the contract are modified or waived. Mfg. Co. v. Lefkowitz, 204 N.C. 449, 168 S.E. 517; Bixler v. Britton, 192 N.C. 199, 134 S.E. 488. This principle has been sustained even where the instrument provides for any modification of the contract to be in writing. Allen v. Bank, 180 N.C. 608, 105 S.E. 401.' Whitehurst v. FCX Fruit and Vegetable Service, 224 N.C. 628, 32 S.E.2d 34, 39."

Childress v. Trading Post, 247 N.C. 150, 154, 100 S.E.2d 391, 394 (1957); accord, Fishel and Taylor v. Church, 9 N.C.App. 224, 175 S.E.2d 785 (1970).

The evidence tended to show and the court found that Hammond instructed plaintiff to do additional work on the disposal plant and to waterproof a wall beyond original specifications. Plaintiff complied. This constituted an oral modificaton of the contract for which plaintiff was entitled to recover.

With respect to the disputed portions of change order # 1, the trial court found that there had been a conditional delivery and ordered that plaintiff recover the amount of cost reductions to which Graham objected. While we agree with the result, we do not believe the facts show a conditional delivery. See 2 Stansbury, N.C. Evidence (Brandis rev.) § 257, pp. 253-56. Instead, we think Graham's testimony reveals the existence of a collateral agreement. Parol evidence is competent to establish a contemporaneous oral agreement not inconsistent with a written contract. Michael v. Foil, 100 N.C. 178, 6 S.E. 264 (1888); Sherrill v. Hagan, 92 N.C. 345 (1885). See Evans v. Freeman, 142 N.C. 61, 54 S.E.2d 847 (1906); cf. Hoots v. Calaway, 282 N.C. 477, 193 S.E.2d 709 (1973). See also 30 Am.Jur.2d, Evidence, § 1049. When the contract and change order were submitted for Graham's signature, J. R. Graham and the architect Hammond entered into an oral agreement which was ancillary to the original contract. They agreed to a subsequent and future change order which Hammond never executed. This parol modification of the contract is enforceable. See Childress v. Trading Post, supra; Fishel and Taylor v. Church, supra. Plaintiff was entitled to recover on the agreement.

Finally, defendant contends that the trial court erred in denying recovery on its counterclaim for roof repairs under plaintiff's two-year contractual guarantee. Plaintiff offered evidence tending to show that when the roof was being constructed the roofing subcontractor pointed out to Hammond that the specifications were defective and the roof would leak if they were followed exactly. Hammond ordered the subcontractor to follow the specifications, and the roof leaked. The court found that any resulting leaks were not caused by faulty construction on the part of the general contractor. The counterclaim therefore was properly rejected.

There is nothing in the record before us to suggest that the construction of Trinity High School was a happy experience for any of the parties concerned. Nevertheless, the trial court found on competent evidence that defendant Board and the architect Hammond were responsible for many of the problems that arose. We are bound by these findings of fact and hold that they support the conclusions of law. The judgment of the trial court is affirmed.

Affirmed.

BRITT and MORRIS, JJ., concur.