Spang Industries, Inc. Fort Pitt Bridge Division v. Aetna Casualty & Surety Co.

Torrington Construction Co., Inc. (defendant) (plaintiff) was awarded a highway reconstruction contract in upstate New York, near the Vermont border. The total work on the contract was to be completed by December 1971. Torrington hired Spang Industries, Inc., Fort Pitt Bridge Division (Fort Pitt) (plaintiff) under a subcontract to supply steel and construct a bridge as part of the highway reconstruction contract. In November 1969, both parties agreed that Fort Pitt would deliver the steel and begin erection of the bridge in June 1970. In January 1970, Torrington requested confirmation of the June 1970 delivery date from Fort Pitt. Fort Pitt responded that due to unforeseen delays, it would not be able to make the June 1970 delivery date. Torrington requested Fort Pitt provide an alternate delivery date. Fort Pitt did not respond until May 1970, when it said that the steel would be shipped in early August 1970. Fort Pitt failed to meet this deadline, and the steel actually arrived onsite on September 8, 1970. Fort Pitt failed to arrange for a separate company to unload the steel. As a result, Torrington was forced to incur additional costs by unloading the steel itself. Erection of the steel bridge was completed on October 9, 1970 and the bridge was ready to receive its concrete deck on October 28, 1970. The contract specifications stated that concrete could not be poured at temperatures below 40 degrees Fahrenheit, and Torrington had to get special permission to pour concrete for the deck when outside temperatures were only 32 degrees Fahrenheit. Torrington knew that due to the location of the project in upstate New York, freezing temperatures were imminent in the coming weeks. Thus, Torrington worked until 1:00am one day and poured all the concrete for the deck. Torrington incurred significant extra expense performing all this work in one day. In July 1971, Fort Pitt brought suit in New York state court against Torrington and Torrington’s insurance company, Aetna Casualty and Surety Co. (defendant), seeking the balance due on its subcontract, or $72,247.37. Torrington later made two additional payments on the subcontract to Fort Pitt. In 1972, Torrington brought suit in another state court against For Pitt seeking damages of $23,290.81 which were allegedly caused by Fort Pitt’s delay in delivering steel. The cases were removed to and tried together in federal district court. The district court held Fort Pitt breached its contract and thus Torrington was entitled to $7,653.57. The district court also held Fort Pitt was entitled to $23,290.12 from Torrington based on the balance due on the subcontract. The district court reduced Fort Pitt’s award from Torrington based on the damages owed to Torrington, and entered judgment for Fort Pitt amounting to $13,636.55. Fort Pitt appealed on the ground that Torrington should not be able to recover damages because its increased expenses were special damages which were not reasonably contemplated by the parties at contract formation.