KINGSBURY v. ARCADIA UNIFIED SCHOOL DIST

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District Court of Appeal, Second District, Division 2, California.

KINGSBURY et al. v. ARCADIA UNIFIED SCHOOL DIST.*

Civ. 19718.

Decided: November 25, 1953

Harold W. Kennedy, County Counsel, and William E. Lamoreaux, Deputy County Counsel, Los Angeles, for appellant. Harold B. Pool, Los Angeles, for respondent.

From a judgment in favor of plaintiff after trial before the court without a jury in an action to recover damages for the failure of defendant to comply with the terms of two contracts whereby plaintiff's decedent was to render architectural services to defendant's predecessors in interest, defendant appeals.

Facts: December 1, 1943, defendant's predecessor in interest entered into a contract to pay plaintiff's decedent for architectural services rendered in connection with the proposed construction of an intermediate school. The architect was paid a total of $33,000 for his services and judgment was entered in the present action in favor of his estate for an additional $39,000. This contract will hereinafter be referred to as the 1943 contract.

Under a separate contract for the construction of classroom additions to the Santa Anita school entered into on August 25, 1948, the district paid decedent $1,400 for preliminary plans, and judgment was entered in favor of his estate for an additional $875. This contract will hereinafter be referred to as the 1948 contract.

The 1943 contract called for the payment of ‘an amount equal to eight percent (8%) of the construction cost * * * when services as hereinafter stipulated have been rendered.’ This contract did not contain any estimate of the cost of construction. Article 3 provided as follows:

‘Article 3. Payments. Payments to the Architect on account of his fee shall be made as follows:

‘a) Upon completion of the preliminary drawings and specifications, together with a quantitative survey and a preliminary cost estimate, if possible, and amount of Four Thousand Dollars ($4,000.00).

‘b) Upon completion of a formal application to the proper governmental authorities in such form as may be required, on the basis of preliminary sketches and specifications, an additional amount of One Thousand Dollars ($1,000.00).

‘Note:—Above payment shall not be due and payable in case that the above application is executed under paragraph ‘d’ of Article 1.

‘c) Upon completion of the working drawings and specifications, and their acceptance by the District and readiness for presentation to the State Division of Architecture, an amount sufficient to increase the payments to a total of Nineteen Thousand Six Hundred Dollars ($19,600.00).

‘d) Upon the completion of a formal application to the proper governmental authorities in such form as may be required, an amount sufficient to increase the payments to a total of Twenty-One Thousand Dollars ($21,000.00).

‘Note:—Above payment shall not be due and payable in case that the payment under paragraph ‘b’ of Article 1 has already been made.

‘e) Upon the acceptance of the working drawings and specifications by the State Division of Architecture, an amount sufficient to increase the payments to a total of Twenty-Two Thousand Four Hundred Dollars ($22,400.00).

‘f) Upon completion of fifty per cent (50%) of the construction work, an amount sufficicient to increase the payments to ninety per cent (90%) of the fee based upon the contract cost of the work.

‘g) Upon completion of the construction work and its acceptance by the District and the State Division of Architecture, an amount sufficient to increase the payments to one hundred per cent (100%) of the fee based upon the total completed construction cost of the work.

‘h) Should the work, as agreed upon, terminate with the services as stipulated under paragraph ‘a’ of Article 1, then the payments as provided for under paragraph ‘a’ of Article 3 shall constitute the complete reimbursement to the Architect except as provided for under Article 2 of this Agreement.

‘If, at any future time, the District desires to resume the work as stipulated under paragraphs ‘b’, ‘c’, ‘d’, ‘e’, ‘f’ and ‘g’ of Article 1 of this agreement, then the amount of the payments made under paragraph ‘a’ of Article 3 shall be applied against the payments becoming due for the above services as stipulated in paragraphs ‘b’, ‘c’, ‘d’, ‘e’, ‘f’ and ‘g’ of Article 3.'

Article 9 provided:

‘Article 9. Abandonment of Project and Cancellation of Agreement. If the District determines at any time, not to proceed with the construction of the ‘building’, or after the beginning of the construction work, to suspend indefinitely and/or abandon the construction work and shall require the Architect to suspend the performance of his services, or for reasons stipulated in Article 8 decides to cancel or terminate this Agreement, there shall be due and payable within thirty (30) days after notice has been given in writing to the Architect of said suspension and/or abandonment or decision upon the part of the District to terminate or cancel this Agreement, a sum of money sufficient to increase the total amount paid to the said Architect on the fee to an amount which shall bear the same proportion to the fee as the amount of services performed and/or provided by the architect prior to the time of such suspension and/or abandonment or termination of this Agreement shall bear to the entire services the Architect is required to perform and/or provide, plus the amounts, if any, still due the Architect under the provisions of Articles 2 and 4. Upon payment to the Architect of the amount or amounts provided under this Article the District may terminate and cancel this Agreement.'

In February, 1944, the Board accepted the preliminary drawings and specifications prepared by the architect and paid him the sum of $4,000 specified in subparagraph (a) of Article 3.

February 6, 1946, decedent appeared in a meeting of the Board of Trustees of the district and requested an amendment to the contract ‘to allow for and increase of payment since the original contract was estimated on a very low building cost basis.’ Pursuant to this request the agreement was amended on that date by which amendment the amount set forth in subparagraph (c) was increased from $19,600 to $33,000, and that set forth in subparagraph (e) was increased from $22,400 to $35,750.

June 5, 1946, the final plans and specifications were presented to and accepted by the Board and on June 19, 1946, the school district's warrant in the sum of $29,000 was delivered to decedent. Nothing further was done by the architect under the contract.

On January 14, 1949, the architect, Mr. Paul Kingsbury died.

In its answer defendant pleaded the statute of limitations, Code of Civil Procedure, § 337, subdivision 1, as a bar to the cause of action based on the 1943 contract. In response to this defense the court found that subsequent to the year 1947, the exact date not having been proved at the trial, the defendant abandoned or suspended indefinitely the construction of the building but that the defendant did not notify plaintiff in writing of such action; that plaintiff's complaint was filed on the 29th day of May, 1951, and each of a contract in writing signed by the parties a contract in writing signed by the parties thereto and that the money found due thereunder became due and payable within four years prior to the 29th day of May, 1951; that the third cause of action was not barred by the statute of limitations.

Relative to the 1948 contract which provided for a fee of 6 1/212% of the construction cost, this contract fixed an agreed estimated construction cost of $140,000 for the project and provided a payment in the amount equal to 1% of the estimate cost when preliminary plans were completed and accepted. The ‘abandonment’ clause was identical with that in the contract of December 1, 1943, set forth above.

The architect completed the preliminary plans and upon acceptance by the Board of Trustees of the district was paid $1,400. The court found the district thereafter ‘abandoned said construction and work and notified the said Paul Kingsbury of such abandonment.’ The court further found: ‘The court finds that $2,275.00 is the amount which would bear the same proportion to the full fee as the amount of services performed by the said Paul Kingsbury prior to such abandonment would bear to the entire services to be performed under said contract as computed in accordance with the preceding paragraph, and said sum is the reasonable value of the services as rendered.’

Questions: First: Do the provisions of Article 9, supra, in the contract of 1943 and Article 10 (which is identical with the provisions of Article 9, supra) in the contract of 1948, entitle the plaintiff to any compensation in addition to the compensation paid the architect at the time he ceased performance under the contracts?

Yes. Defendant contends that under the contract of 1943, since it did not contain an estimate of the total cost of construction of the building, the architect was not entitled to any fee based upon such amount until a contract to construct the building had been entered into. This was never done.

Defendant further contends that each payment made to the architect as he rendered services pursuant to the contract constituted a payment for services to date; that the services were thus severable, and that the architect having been paid as the work progressed was thus fully compensated and paid for all of the services which he rendered under the terms of the contract.

With reference to the contract of 1948, defendant concedes that the contract contained an estimate of the cost of construction of the building, but urges that he was fully compensated for the services rendered since he was paid by instalments on the contract as it progressed, and therefore there is nothing further due plaintiff.

Defendant's interpretation of the contract is erroneous and the correct interpretation is the one adopted by the trial court, which was that the progress payments were only payments on account and upon the abandonment of the projects the provisions of the two contracts under the heading ‘abandonment,’ in Article 9 of the contract of 1943 and Article 10 of the contract of 1948, are applicable.

In Article 3 of the contract of 1943, the parties set forth progress payment to be made and started the paragraph with the use of the following words: ‘Payments to the architect on account of his fee shall be made as follows:’ following which the parties set forth the progress payments. In Article 4 of the contract of 1948, which related to the progress payments in such contract, the parties open the paragraph with the same words as those just set forth. In each instance the words ‘on account’ were used. Each contract contains a clause determining the fee in case of the abandonment of the contract. This clause is the same in both contracts and is set forth supra in detail as Article 9 of the contract of 1943. It is thus seen that if defendant's contention that the progress payments constituted full payment when the work had progressed to a certain point were true, there would be no reason for the parties to use the words, ‘on account’ in each contract when referring to the progress payments.

The contract of 1943 in Article 3, paragraph (h) contained this provision: ‘Should the work, as agreed upon, terminate with the services as stipulated under paragraph (a) of article 1, then the payments as provided for under the provisions of paragraph (a) of article 3 shall constitute the complete reimbursement to the architect except as provided for under article 2 of this agreement.’

This is the only instance in which the parties expressly agreed that the progress payments constituted full payment, and that progress payments only related to the services under the provisions of paragraph (a); that is, the preparation of the preliminary drawings and specifications, preliminary quantity survey and cost estimates, if possible, to serve as a basis for the preparation of final working drawings and specifications.

In the instant case the services rendered by the architect went far beyond the work set forth in paragraph (a). It is thus evident that the parties did not intend that the other progress payments constituted full payment. Had they so intended they would not have added the provisions of paragraph (h) of Article 3. In this case the trial court gave judgment in accordance with the provisions of the contracts as found under the ‘abandonment’ clauses. The court followed the formula as set forth by the respective contracts by first finding what the cost of construction of the entire project would have been and then finding the percentage of work that had been done under the contract, thus determining the earned fee according to the agreement of the parties.

Second: Were the following findings of the trial court sustained by the evidence?

XY The Court finds that thereafter, but subsequent to the year 1947, the exact date of which was not proved at the trial, the defendant abandoned or suspended indefinitely the construction of said building. The Court further finds that the defendants did not notify plaintiff in writing of such action.

‘XX The Court further finds that plaintiff's complaint herein was filed in the above entitled court on the 29th day of May, 1951, and that each of the causes of action therein was based on a contract in writing signed by the parties thereto and that the money found due herein became due and payable within four years prior to the said 29th day of May, 1951.

‘XXI The Court finds that the third cause of action in plaintiff's complaint herein is not barred by the statute of limitations of the State of California.’

Yes. Plaintiff alleged in her complaint that the contract was entered into on the first day of December, 1943. This fact is conceded by defendant. The record discloses the complaint was filed on May 29, 1951. It was further alleged in the complaint, paragraph V of the third cause of action (pertaining to the contract of 1943): ‘That at a date thereafter, late in the year 1948, the exact date of which is not known to plaintiff herein, but is known to the defendant, the defendant abandoned the construction of said building and notified the said Paul Kingsbury of such abandonment.’

The foregoing allegation was admitted in the answer of defendant, wherein defendant alleges: ‘Answering paragraphs * * * V * * .* of said third cause of action, said defendant admits all the allegations therein contained.’

Clearly the above evidence and admissions of defendant sustain the foregoing findings of fact.

Third: Did the trial court err in excluding certain minutes of the school district for the purpose of clearing up claimed ambiguities in the contracts between the parties?

No. A reading of the contracts sustains the comment of Judge Jeffery during the trial as follows, ‘I don't think there is any ambiguity.’

Therefore the ruling on this point was correct.

Fourth: Are the following findings of the trial court sustained by the evidence?

(A) ‘XVII The Court finds that $72,000.00 is the amount which would bear the same proportion of the full fee as the amount of services performed by the said Paul Kingsbury prior to such abandonment would bear to the entire services to be performed under said last-mentioned contract as computed in accordance with the preceding paragraph and said sum is the reasonable value of the services rendered by Paul Kingsbury.’

Yes. It was stipulated by the parties that the cost of the building under the contract of 1943 would have been $1,200,000. There is no merit in defendant's contention that this stipulation was not received in evidence, for the record discloses that the court said with reference to the stipulation, ‘This stipulation is in the record.’ Therefore the foregoing finding is sustained.

(B) ‘XVIII It is true that the defendant has paid on account thereof the sum of $33,000.00 and the balance of said fee in the sum of $39,000.00 is past due, owing and unpaid. The said sum of $33,000.00 was not paid by the defendant nor accepted by Paul Kingsbury in full settlement of all services performed under said last-mentioned contract.’

Yes. John James Landon, a qualified architect, after testifying that he had examined the plans prepared by Mr. Paul Kingsbury pursuant to the contract of 1943, testified as follows:

‘Q. (Mr. Pool) All right. An architect, proceeding under a contract to draw the preliminary drawings and the final drawings and specifications, and including supervision of the construction of the building, what percentage of the architect's services are completed when he has completed the drawings, when he has completed the final drawings such as I have offered in evidence, here?

‘Mr. Lamoreaux: I object to the question on the ground it is incompetent, irrelevant and immaterial.

‘The Court: You may answer.

‘The Witness: Customarily 75% of the fee.

‘Mr. Pool: In your opinion is that a close estimate as to the percentage of the work completed up to that point? A. I would say so.’

This testimony showed that Mr. Kingsbury had completed 75% of his work under the contract. In addition Mr. Landon testified with reference to the contract of 1948 as follows:

‘Q. Now, Mr. Landon, let's assume that we had another architectural contract in which the architect had completed the preparation of the preliminary sketches, drawings and specifications, just the preliminary, what percentage, in your opinion, of the architect's services would have been completed up to that point. A. (The Witness): Well, it could be 20 or 25%. I mean, it varies that much. I would say, generally, 25%.’

Pursuant to the foregoing testimony and stipulation set forth above it is evident that the total cost of the building to be erected under the contract of 1943 would be $1,200,000. The contract provided that Mr. Kingsbury should receive as his compensation 8% of the construction cost which would be $96,000. Having completed 75% of his work, under the provisions of Article 9 of the contract, he was entitled to 75% of $96,000, or $72,000, and having been paid $33,000 on account there was a balance due his estate of $39,000.

With reference to the contract of 1948, such contract provided for a fee to Mr. Kingsbury of 6 1/212% of $140,000 or $9,100, but having completed only 25% of the work he was entitled to only 25% of $9,100 or $2,275. Having been paid $1,400 on account, his estate was entitled on this contract to the sum of $875.

The judgment is affirmed.

McCOMB, Justice.

MOORE, P. J., and FOX, J., concur.

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