Bethlehem Steel Co. v. Turner Construction Company

141 N.E.2d 590 (1957)

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Nature of the Case

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Facts

P entered into a subcontract for a fixed fee with D to furnish, deliver and erect the structural steel for a 20-story office building Mutual Life. The contract contained a clause providing that in the event the 'prices for component materials' increased or decreased, there was to be a corresponding adjustment of the contract prices. Adjustment for increases in the price of steel was limited to $15 per ton. Mutual paid periodic bills without complaint other than the escalation portion of the price. Mutual asserted that the term 'prices for component materials' as used in the contract referenced changes in price to P for materials it used in progressing the work. To Mutual, this meant increases in the cost to P in the manufacture of raw steel at the mill, based on the basic elements employed such as iron ore, steel scrap, limestone, etc. P insisted that the words 'prices for component materials' included the price of steel being regularly charged to the trade which, in this instance, had been increased by $10 per ton for the aggregate of steel items known as steel shapes, plates, bars, sheets, rivets and bolts. P rendered bills aggregating $94,861.15. Eventually, P filed a mechanic's lien against Mutual's building and brought this action in foreclosure. P moved for summary judgment on the question of liability. The court denied the motion on the ground that an issue of fact was presented. The appeals court reversed and granted summary judgment in favor of P. D appealed.