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Triangle Air Conditioning Inc. v. Caswell County Board of Education

Filed: June 1, 1982.

TRIANGLE AIR CONDITIONING, INC.
v.
THE CASWELL COUNTY BOARD OF EDUCATION



Appeal by plaintiff from Long, Judge. Judgment entered 3 February 1981 in Superior Court, Caswell County. Heard in the Court of Appeals 8 December 1981.

Webb, Judge. Judges Vaughn and Hill concur.

Webb

The forecast of evidence in this case is that the plaintiff and the defendant entered into a written contract under the terms of which the plaintiff was to furnish material and perform certain work on the improvements to a school building. There was a substantial delay in the construction of the building which was not the fault of the plaintiff. This delay caused increased expense to the plaintiff. The plaintiff requested additional compensation by letters to the defendant and the architect. The plaintiff at one point threatened to stop work unless it received a promise for an adjustment in the contract price. Subparagraph 12.1.2 of the contract provides for a change in the time for the completion of the contract by written change order. The defendant did not follow the provisions of subparagraph 12.1.2 but through the architect and the plaintiff's bonding company insisted that the plaintiff complete its part of the contract at a greatly increased time and increased expense. The defendant contends the plaintiff is not entitled to additional compensation because it did not follow the contract provisions in pursuing its claim for additional compensation. The defendant says specifically that the plaintiff did not abide by the requirement of subparagraph 12.2.1 of the contract by presenting a claim for increased costs to the architect within twenty days of the occurrence of the event giving rise to the claim and a written change order authorizing the payment of additional compensation was not issued as required by this subparagraph. Under the evidence as forecast we cannot say the plaintiff did not present a claim for increased costs within 20 days of the occurrence of the event giving rise to the claim. The defendant contends the notice should have been given within 20 days of 1 October 1976 which was the completion date specified in the contract. The first written notice was given 49 days later on

18 November 1976. The event which gave rise to the plaintiff's demand was the delay in the construction. It did not occur on a specific date. We hold that under the forecast of evidence in this case that the plaintiff complied with the notice requirement of subparagraph 12.2.1.

Subparagraph 12.2.1 also requires that the plaintiff have a change order to get an increase in compensation. No change order was given. Parties to a contract may by their conduct waive the requirements of a contract. See General Specialties Co. v. Teer Co., 41 N.C. App. 273, 254 S.E.2d 658 (1979); Grading Co. v. Construction Co., 27 N.C. App. 725, 221 S.E.2d 512 (1975); and Graham and Son, Inc. v. Board of Education, 25 N.C. App. 163, 212 S.E.2d 542 (1975). In this case the forecast of evidence is that the defendant did not issue a change order when the plaintiff was required to extend its performance under the contract for a very substantial period of time. Thus, the defendant did not follow the provisions of subparagraph 12.1.2 in requiring a change in the time for performing the contract. The plaintiff made two written requests for additional compensation to which the defendant made no reply. The architect testified that he discussed the request for extra compensation with the defendant and the plaintiff's bonding company and was told by the bonding company they would handle it. The architect testified further that he did not make any recommendation to the defendant in regard to the plaintiff's request for extra compensation because the defendant did not request it but he told the plaintiff the bonding company would handle it. The plaintiff's president testified that the plaintiff completed the work after it received the letter from United States Fidelity and Guaranty Company because "he had no choice" but to do so or "suffer other damages beyond increased costs." We hold that if the plaintiff offers this testimony without contradiction at trial, it will be entitled to a jury instruction that the defendant waived the requirement of a change order for the plaintiff to receive additional compensation.

The defendant also contends the plaintiff cannot proceed in this action because under the contract they are bound to submit the claim to arbitration. Subparagraphs 2.2.10 and 7.10.1 and 7.10.2 of the contract deal with the arbitration of claims under the contract. Subparagraph 2.2.10 says there will be arbitration upon the demand of either party. Subparagraph 7.10.1 provides for the

procedure for arbitration and subparagraph 7.10.2 says the demand for arbitration must be made within the time limits specified in subparagraphs 2.2.10 and 2.2.11 and in all other cases within a reasonable time after the claim arose. We do not believe the contract requires arbitration unless one of the parties demands it. In this case neither party demanded arbitration. We hold the parties were not bound to arbitrate.

The defendant contends further that by accepting payment of $66,217.00 which was the original contract price, the plaintiff waived all other claims. Subparagraph 9.7.6 provides the acceptance of final payment shall constitute a waiver of all claims except those previously made in writing and still unsettled. All the evidence shows the plaintiff had previously made a claim in writing which was unsettled at the time it accepted the final payment of the original contract price. The plaintiff did not waive its claim by accepting this payment.

For the reasons stated in this opinion, we reverse the summary judgment in favor of the defendant and remand the case for trial.

Reversed and ...


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