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

S.J. Groves & Sons Co. (Groves) (plaintiff) was awarded a subcontract for the placement of a bridge’s concrete decks and parapets. The subcontract was a portion of a larger contract with the state of Pennsylvania for the construction of the bridge. Groves contracted with Warner Co. (Warner) (defendant) for the delivery of ready-mixed concrete. That contract required Warner to supply approximately 35,000 cubic yards of ready-mixed concrete at a specific rate at specific times designated by Groves. Warner frequently failed to make deliveries in compliance with the contract, which caused Groves to have to adjust the overall plan for construction. The adjustments made by Groves resulted in additional costs including overtime labor. In 1971, Groves considered alternative sources of concrete. The only other company in the area, Trap Rock Company (Trap Rock) was not yet certified to do work for the state. Trap Rock was also going to charge more than Warner for the same product. Warner continually gave assurances that it would deliver product in accordance with the contract. However, Warner’s performance of the contractual obligations continued to be erratic. In June 1972, the state halted construction to address Warner's performance issues. Construction was allowed to recommence based on renewed assurances from Warner that performance would improve. Warner did improve performance under the contract but only for about a month. In July 1972, Trap Rock became certified by the state and agreed to match Warner's price. Groves decided to continue contracting with Warner through completion of the contract in October 1972. Groves then sued Warner, seeking damages for the losses caused by Warner’s failure to perform as specified in the contract. The district court entered a judgment for Groves but limited the recovery to damages incurred up to July 11, 1972. The district court ruled that Groves should have mitigated the damages by contracting with Trap Rock by July 12, 1972. Groves appealed this judgment to the United States Court of Appeals for the Third Circuit.