SPANG INDUSTRIES, INC. V. AETNA CASUALTY & SURETY CO. 512 F.2d 365 (2d Cir. 1975). CASE BRIEF

SPANG INDUSTRIES, INC. V. AETNA CASUALTY & SURETY CO.

512 F.2d 365 (2d Cir. 1975)

NATURE OF THE CASE: This was an appeal for the balance due on a subcontract for unforeseeable damages. Spang (P), challenged a judgment that awarded damages for excess expenses in favor of Aetna (the surety) (D1) for breach of contract and denying P's request for interest on D's unpaid obligation, contending that they were special damages not within contemplation of the parties at the time of contract.

FACTS: Torrington Construction Co. (D) was a successful bidder with the New York State Department of Transportation on a highway reconstruction job. Spang Industries (P) successfully bid to supply steel for the bridge. The unit price was to be 27.5 cents per pound. The steel was to be used to construct a double span bridge over a river as part of the highway construction. The quote was confirmed by a letter from D with a statement that delivery was to be mutually agreed upon. On November 3, 1969, D advised P that it would need the steel in June 1970. On November 12, 1969, P confirmed the date. D requested confirmation again on January 7, 1970 and it was given but on January 29, 1970, P wrote that it could not meet that date because of unforeseen delays due weather, and deliveries from suppliers. P wrote on February 2nd requesting a delivery date and got no response. D wrote again on May 12th requesting a written confirmation and threatening to cancel if the date was not close to the original schedule date. On May 20, 1970, P promised to ship the steel in August, 1970, but the steel did not arrive until September. P also neglected to advise its unloading company of the dates of arrival and the railroad demanded immediate unloading. D was compelled to unload the steel itself. Eventually by September 16th there was enough steel at the site to commence erection. The work was completed on October 8th and the pouring of the concrete deck had to wait until the end of October. The possibility of freezing temperatures required that the concrete had to be poured in a single day and this cost D additional monies. D withheld payment from P for the late delivery of the steel. P sued Aetna Casualty (D1), the surety for D, for the unpaid balance of the price which was $72,247.37. D made further payments of $48,983.92. The action was transferred to federal court and in the interim D sued P seeking damages of $23,290.81 for the delay. P removed the case and the two cases were consolidated. The judge held that P had breached its contract by delayed delivery and that D was entitled to $7,653.37 and that P was entitled to $23,290.12 which was the balance due on its contract price. Judgment was directed for P against Ds for $15,636.55. P appealed; it could not reasonably have anticipated that D would expedite the work, and thus these unforeseeable damages are not recoverable, as they were special damages not within the contemplation of the parties when they entered into the contract. D claimed that at the time the contract was entered into, it was evident that direct damages were likely to result.

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