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August 3, 1972

AMERICAN STEEL BUILDING COMPANY, Inc. and Reliance Insurance Company

Masterson, District Judge.

The opinion of the court was delivered by: MASTERSON


MASTERSON, District Judge.

 This complaint and counterclaim involve a dispute arising out of the written contract between Precision Steel Decking & Erection Company, Inc. and American Steel Building Company, Inc. The case has been submitted to us for decision upon a comprehensive set of agreed stipulated facts and upon the depositions of several key witnesses. After thoroughly considering this record and counsels' briefs and oral argument we make the following:


 1. Plaintiff, Precision Steel Decking & Erection Company, Inc. (herein called "Precision"), is a New Jersey corporation, having at the time this action commenced its principal place of business in Westville, New Jersey.

 2. At such time Precision was engaged in the erection of steel buildings and other structures.

 3. Defendant, American Steel Building Company, Inc. (herein called "American"), is a Texas corporation having its principal office in Houston, Texas.

 4. American is engaged, inter alia, in the fabrication, sale and erection of metal structures.

 5. Defendant, Reliance Insurance Company, is a Pennsylvania corporation, having its principal office in Philadelphia, Pennsylvania.

 6. Berkeley Construction Company (herein called "Berkeley"), on or about April 29, 1968 entered into a contract with the City of Philadelphia to complete general construction of a service hangar and three "T" hangars at the North Philadelphia Airport, for a price of $513,000.00.

 7. On or about August 20, 1968 Berkeley entered into a subcontract with American whereby American was to furnish all labor and material for the erection of said hangars, for a price of $284,000.00.

 8. Approximately three months later, American entered into a written contract, dated November 7, 1968, wherein Precision was to furnish "all labor and equipment" to erect the four hangars. Said "sub-subcontract" was in the amount of $72,900.00; American was to "advance funds weekly" to cover Precision's "payroll, crane rental and other charges." The work was to commence on or about November 8, 1968 and be completed within "10 to 12 weeks." Exhibits D-17 and D-17a are copies of American's records relating to its contract with Berkeley and Precision.

 9. The circumstances under which the provision "to advance funds weekly to cover payroll, crane rental, and other charges" in the contract between American and Precision came into being was that Precision advised American that it was not in a financial position to wait for monthly payments but would need payments at more frequent intervals. It was then agreed that American would advance weekly enough funds to cover Precision's payroll and crane rental and then would pay the difference, if any, owed to Precision at the end of each month.

 10. Precision began work on Monday, November 11, 1968. However, the material failed to arrive until 7 or 8 days later.

 11. Precision encountered numerous problems in erecting the materials as they arrived, such as holes which were not properly aligned and beams which were the wrong size.

 12. Materials arrived haphazardly so that some items needed to begin construction arrived after some items which were to be used to finish the project.

 13. The actual erection process could not be commenced until three weeks after the scheduled date of November 11, 1968.

 14. The delays complained of by American were due at least in part to these various problems with the materials which American was responsible for manufacturing and delivering.

 15. Despite the fact that no materials were available at the site on November 11, 1968, at the request and with approval of American, the men and equipment were kept on the job, and this became a back charge to a certain extent.

 16. Precision first submitted a bill for charges on November 12, 1968 for work not included within the contract. The amount of the bill was $1,643.37 and it was paid by American by check dated the following day, November 13, 1968. 17. Precision then submitted the following bills, all of which were paid: PERIOD COVERED DATE OF AMER- DATE AMOUNT WEEK BEGINNING ICAN'S DRAFT 11-20-68 $ 2,225.60 11-10-68 11-20-68 11-24-68 3,137.20 11-17-68 11-26-68 12-3-68 1,826.00 11-24-68 12-6-68 12-10-68 2,418.00 12-1-68 12-13-68 12-18-68 1,149.89 12-8-68 12-23-68 12-26-68 1,313.24 12-15-68 1-3-69 1-1-69 1,582.56 12-22-68 1-7-69 1-8-69 2,424.13 12-29-68 1-13-69 1-17-69 2,761.45 1-5-69 1-23-69 1-22-69 2,956.02 1-12-69 1-30-69 $21,794.09


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