S.J. Groves & Sons Company v. Warner Company

576 F.2d 524 (3rd Cir. 1978)

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Nature of the Case

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Facts

Groves (P) was awarded a subcontract for the placement of a bridge's concrete decks and parapets. P contracted with Warner (D) for the delivery of ready-mix concrete. The contract called for the delivery of 35,000 cubic yards at a rate of 40 cubic yards per hour. The agreement was executed in March 1970. The first concrete was delivered to the site in July of that year. Progress was hindered by three lengthy strikes in the spring and summer of 70, 71, and 72 which postponed the completion of the contract from July 1972 to October 1972. Work was also delayed by rejection of concrete that did not meet state specifications. The total number of rejections was well within those contemplated by the contract. The general plan was to make pours in the morning and then to construct parapets in the afternoon. This was frustrated by D's failure to make deliveries in compliance with P's instructions. As a result, deck pours were extended into the afternoons and evenings, and this created overtime labor expenses. P was desperate and tried to find other sources but could not as the only other company was not certified to do state work and had limited production capabilities. D continued to assure P that deliveries would improve. Work was even stopped because of the poor quality of D's performance. Based on that work stoppage and assurances from D, deliveries improved significantly although they still failed to meet P's instructions. Eventually, another supplier was certified, but P declined to use them despite their assurances that they could meet P's schedule. P filed a suit for its heavy losses for D's failure to deliver adequate supplies at the scheduled times. The court found that D had acted in bad faith by deliberately over committing its ability to manufacture and delivery enough concrete. The court also ruled that P, as of July 12, 1972, had an obligation to use the new qualified supplier in order to mitigate the effects of D's poor performance. As a result, the court did not award all the overtime pay after July 12, 1972. P got the judgment for $35,401.38. P appealed as a large part of its claims were denied; P only got 25%of the cost of removing an unacceptable deck panel and no overtime after July 12, 1972.