Pat J. Murphy, Inc., Plaintiff Appellee, v. Drummond Dolomite, Inc., Defendant-appellant, v. American Employers Insurance Company, a Corporation, Cross-defendant-appellee, 346 F.2d 382 (7th Cir. 1965)

Plaintiff-appellee, Pat J. Murphy, Inc., brought action to recover damages claimed by it as contractor against the owner, Drummond Dolomite, Inc., defendant-appellant, in connection with their contract to construct a private haul road.

Drummond Dolomite, Inc., counter-claimed for damages sustained in completing the road. On defendant's motion, the District Court ordered that American Employers Insurance Company, surety on plaintiff's performance bond, be joined as a cross-defendant. Jurisdiction was based on diversity of citizenship.

The case was tried by the District Court without a jury and the Court rendered judgment for the plaintiff, from which the defendant has appealed.

During pretrial proceedings, the parties stipulated certain legal issues and the facts on which such issues might be determined. The District Judge rendered his decision on these severed legal issues, which was reported at 214 F. Supp. 496. His final decision is reported at 232 F. Supp. 509.

In his final decision, the District Judge made findings of fact and alternative conditional findings which represent a praiseworthy attempt to cover all possible contingencies.

A major issue in this case concerned the nature of the hard material unexpectedly encountered by the plaintiff in excavating the haul road. The District Court found that this material constituted an extraordinary subsoil condition of which defendant had knowledge which it failed to disclose to plaintiff. Further, defendant made misrepresentations to the plaintiff, on which plaintiff, in the circumstances of this case, reasonably relied.

After close study of the record in the case, in the light of the briefs and argument of counsel, we have arrived at the same conclusions as those reached by the District Court. We hereby adopt as our own his opinions reported on March 7, 1963, at 214 F. Supp. 496, and on August 13, 1964, at 232 F. Supp. 509, with the exception of the alternative conditional findings and conclusions based on the quantum meruit claim.

The judgment of the District Court is affirmed.

Affirmed.