Full opinion text
MEMORANDUM OPINION AND JUDGMENT ROSS T. ROBERTS, District Judge. Plaintiff Havens Steel Company (“Havens”) seeks damages allegedly incurred as the result of defective or deviate work performed under a construction subcontract between it and defendant Randolph Engineering Company (“Randolph”). Randolph counterclaims for various damages it believes it suffered by reason of job interference, work delays and uncompensated extra work. Jurisdiction is based upon diversity of citizenship. The matter has been tried to the court. For the reasons which follow I render judgment in Randolph’s favor on both claims, the amount thereof with respect to its counterclaim being in the sum of $364,-790.93, exclusive of the pre-judgment interest allowed on its claim under Count VII. I. GENERAL BACKGROUND Havens is a Missouri corporation having its principal place of business in Kansas City, Missouri. Randolph is a Pennsylvania corporation with its principal place of business in Pittsburgh, Pennsylvania. The dispute between the parties concerns a large cement plant located in Charlevoix, Michigan, owned by Medusa Cement Company (“Medusa”). Prior to the year 1979, that plant had produced cement by means of a “wet” manufacturing process. For various reasons Medusa decided to convert the plant to a “dry” system of production and in that connection, sometime in the year 1978, employed Kaiser Engineers of Michigan (“Kaiser”) to design and supervise construction of the necessary facilities. The project involved at least 25-30 “prime” contracts, many more subcontracts, and a total cost in excess of $50,000,000. One of the contracts related to the fabrication and erection of an “electrostatic precipitator” — work which was ultimately the subject of a subcontract between American Air Filter Company (“AAF”) (the prime contractor for that segment of the project) and Randolph, under which Randolph was responsible for erection of the precipitator. This subcontract is important here only insofar as reference to it is necessary in dealing with the dispute between Randolph and Havens, which concerns another part of the project. The part of the project which actually gives rise to the present claims involved the fabrication, insulation and erection of the ductwork necessary to the plant conversion. That ductwork was composed of pieces of k inch carbon steel duct, most of which were 10 to 12 feet in diameter and weighed hundreds of tons, with some rising to a height in excess of 180 feet when fully erected. Havens was to fabricate those pieces of duct (uninsulated), deliver them to the site, and act as the prime contractor in connection with their insulation and erection. The actual erection effort, however, was carried out by Randolph, with the insulation work being performed by Mechanical Insulation Services, Inc. (“M.I.S.”) under a subcontract between it and Randolph. In essence, Havens claims that Randolph and M.I.S. deviated from contract specifications in applying the “cladding” (the exteri- or metal sheath — also called “lagging” or “jacketing” — which covered the insulation) to the ductwork, which in turn ultimately necessitated the repair or replacement of much of that cladding and the underlying insulation. The cost incurred in that repair and replacement is said to have been $499,-479.91, toward which Havens alleges it paid the sum of $192,799.69. The claims for the remainder of that $499,479.91 are not in issue here. For its part, Randolph asserts that Havens was approximately four months late in delivering the pieces of fabricated duct-work to the site, with a consequent delay in Randolph’s ability to begin insulation and erection of the ductwork. Because of that delay, Randolph claims, the buildings on the site were in a far more advanced stage of construction than would otherwise have been the case, all of which led to difficulties and delay in the performance of its work, with associated costs and expenses. In addition, Randolph asserts it was caused to perform extra work, outside its contract requirements, by reason of certain defective materials furnished by Havens or Medusa or both. For all its various sorts of alleged damage Randolph seeks an amount of $464,303.06, together with prejudgment interest on one claim and its “cost of capital” (calculated at 15% per annum) on the others. II. THE CONTRACT A central issue; touching both the original claim and the counterclaim, is whether an actual contract between Havens and Randolph was ever achieved, and if so what its terms may have been. The issue is made particularly difficult by reason of the method of proof employed. In contrast to the situation usually encountered with this sort of question, here neither party offered any step-by-step explanation of their negotiations, or even any general overview of their course of dealing. Compare, e.g., United States ex rel. United States Steel Corporation v. Construction Aggregates Corporation, 559 F.Supp. 414 (E.D.Mich.1983), aff'd in part, rev’d in part (without opinion) 738 F.2d 440 (6th Cir.1984). Instead, the record is limited to scattered pieces of documentary evidence, largely unaided by the explanatory or unifying testimony of any witness. The result, while allowing the court to rule the point, leaves one with a distinct feeling of having dealt with matters in a vacuum. In sequential form, the available evidence reflects the following: (a) On September 25, 1978, Randolph sent two letters to Havens. The longer of these (Def.Ex. # 24, offered by plaintiff) undertook to “confirm” Randolph’s prices for erection and installation of the duct-work' and related items ($392,535 for erection, $335,280 for insulation); made reference to an earlier letter (not included in the record) in which the above prices were “broken down and transmitted” to Havens; and continued on to note certain “clarifications” to the “specifications” which had been “discussed previously.” The shorter letter (Def. Ex. #184, first page) simply “confirmed,” again, the prices quoted above. There is no other information concerning the parties’ discussions prior to September 25, 1978, or indicating what precise point those discussions had reached as of that date. Neither is it entirely clear what information and documents Randolph had in hand as of that point in time. (b) On October 18, 1978, Randolph directed another letter to Havens (Def.Ex. # 184, second page), referencing a “previous telephone conversation” and confirming a reduction of $15,000 in the overall price stated in Randolph’s letters of September 25. (c) On October 23, 1978, Havens executed a formal contract with Medusa in connection with the project. By the terms of that contract Havens was to be responsible for the fabrication, delivery, erection and insulation of the ductwork specified in the contract. See Plt.Ex. # 1 (the contract); Plt.Ex. # 2 (a “change order” to the contract, also dated October 23, 1978); and Plt.Ex. # 3 (pp. 15-37 and 40-89, both inclusive). There is no information as to the time frame or nature of the negotiations which preceded this contract. (d) On November 2, 1978, Randolph directed another letter to Havens (Def.Ex. # 184, third page). In that letter Randolph acknowledged receipt and acceptance of your letter of intent dated October 27, 1978, and for your purchase of our firm for the erection and installation, complete per plans and specifications dated August 8, 1978, addendum number 1 dated September 27, 1978, and our pricing and qualification letters dated September 25, 1978 and October 18, 1978. Unfortunately, Havens’ “letter of intent” is not a part of the record, and I have not the least idea what its terms might have been. Neither does the record reflect what the parties’ discussions or negotiations in connection with it might have been. Randolph’s letter does, however, reflect a further revision in the total price for the work, to $715,575. (e) At some point or points between November 2, 1978 and November 29, 1978, there were one or more telephone conversations between Havens’ and Randolph’s respective project managers. In those conversations Randolph was asked to state the “exceptions” it wished to take to the general terms and conditions “of the contract ... in the Kaiser documents.” This citation to the “Kaiser documents” is not entirely clear, but was apparently a reference to the prime contract between Kaiser and AAF for the AAF phase of the project (see item (h), below). Since Havens was never directly involved in the AAF phase of the project, however, it is obvious that the parties’ remarks with respect to “exceptions” were not meant to apply to the AAF contract itself or to any contract between AAF and Randolph, and instead address a concern that similar provisions might be included in Havens’ contract with Medusa and in turn be included in whatever “general terms and conditions” Havens might propose to Randolph. (f) On November 20, 1978, Randolph submitted to Havens a schedule for erection of the ductwork (March 19, 1979 to August 1, 1979) {see Def.Ex. # 20). On November 22, 1979 Havens forwarded, for Randolph’s “review and concurrence as a result of the Randolph letter of 11/20/78,” dates for shipment of the ductwork (extending from March 5, 1979 to June 4, 1979) (Def.Ex. # 189, third page). (g) . On November 29, 1978, Randolph again communicated with Havens by letter (Def.Ex. # 189). That letter enclosed another schedule for ductwork erection, revised to meet Havens’ earlier expressed concern over delivery time for the “stack.” The schedule was otherwise the same as provided for in Randolph’s November 20 communication. On the margin of the letter, Havens’ Vice President noted that “Randolph and Havens are in basic accord on the schedule.” (h) Randolph’s letter of November 29 also made reference to the “general terms and conditions” of the proposed formal contract between AAF and Kaiser, together with AAF’s “exceptions” thereto, and proceeded to set forth certain changes Randolph itself would like. The most important of these (for present purposes) would have insured Randolph’s ability to recover additional compensation for construction delays caused by the owner or other contractors at the site. According to Randolph’s project manager (Gene Vogan), this latter portion of Randolph’s letter was in response to the parties’ earlier telephone conversations on the subject {see item (e), above). (i) Randolph heard nothing further from Havens on the subject of “general terms and conditions” until receipt of Havens’ formal “purchase order” in May of 1979. (j) Randolph placed men and equipment on site for work under its AAF subcontract, and in fact began working under that subcontract, sometime in January, 1979. (k) On January 24, 1979 Randolph transmitted to Havens another schedule for ductwork delivery and erection (Def.Ex. # 1062). The dates in that schedule duplicate those set forth in Randolph’s earlier schedule of November 29, 1978. The reason for submission of this schedule was simply to utilize a format desired by Kaiser. {1) On February 7, 1979, Randolph forwarded a proposed formal contract to M.I.S. for the latter’s work as a subcontractor under Randolph “at [sic] Havens Steel Company, Charlevoix, Michigan” (Def.Ex. # 273, offered by plaintiff). The document refers to “[ijnsulation complete per plans and specification 77118-212 dated August 8, 1978 and Addendum No. 1 dated September 27, 1978, as well as to “Terms & Conditions of the prime contract (copy enclosed — 38 pages).” Although the exhibit in the record does not contain that “prime contract,” it seems clear that the reference is to Havens’ contract with Medusa, thus demonstrating that Randolph was by then in possession of that document. Also incorporated are four printed pages of “General Terms And Conditions.” These pages, however, were rather clearly originated by Randolph — as opposed to being derived from any “general terms and conditions” proposed by Havens — since the “Venue” section specifies that any action under the contract shall be brought in Allegheny County, Pennsylvania, a location which had no relationship to any of the participants in the project except Randolph. Additionally, a performance schedule was included. Although that schedule is not a part of the instant record, it appears to have been based upon the November 29, 1978 schedule sent by Randolph to Havens {see PltEx. # 8, fifth page). The contract was executed by both Randolph and M.I.S. sometime during February, 1979. (m) March 5, 1979 — the date for the first delivery of ductwork by Havens — came and passed without delivery of any ductwork. Havens communicated with Randolph periodically between that time and May, 1979, assuring Randolph that delivery would begin shortly. On May 8, Randolph provided a fourth schedule, based on then-current information from Havens, reflecting an erection period extending from May 21, 1979 to October 1, 1979. Randolph continued to use its men and equipment on the AAF phase of the project, which itself had begun experiencing delays. (n) In a communication dated March 22, 1979 but not received by Randolph until approximately May 9, 1979, Havens presented a “Purchase Order” for Randolph’s services (Plt.Ex. #4). That document was in all respects a formal, integrated written contract proposal, stating the scope and price of the work and incorporating by reference the work specifications, the contract between Havens and Medusa, the contract bid drawings and other operative documents. Included by virtue of these incorporations were two sets of “General Terms and Conditions,” one being “Exhibit C” to the specifications and the other being incorporated in the prime contract between Havens and Medusa. Also included were two printed pages of “Terms & Conditions Applying to Subcontractors And/Or Suppliers,” and 12 separately typed “special conditions.” Among those “special conditions” was No. 6, which specified: 6. Delays in Transportation Delays caused by factors beyond the reasonable control of Havens Steel Company will not be the basis for backcharges or delay costs unless they are recoverable from the source causing the delay. Havens will advise you of shipment schedules to the best of our ability. At the conclusion of the eight-page document a space was provided for signature by a Randolph officer, under the legend “ACCEPTED,” all of which was immediately preceded by the words, RANDOLPH ENGINEERING COMPANY Hereby indicates its satisfaction with all provision [sic], terms and conditions of the purchase order and hereby accepts the same as acknowledged by the signature of its authorized agent in the space below: Randolph had never before seen either the “Terms & Conditions Applying To Subcontractors And/Or Suppliers” or the 12 “Special Conditions,” nor had the parties ever discussed them except to the extent that their earlier communications dealt with a provision covering delay damages. In addition, the “purchase order” undertook to specify a “tentative start of erection ... in April 1979 with erection to be completed in August, 1979,” and further provided that “[a] detailed schedule will be incorporated ... as soon as it can be developed.” (o) On May 9,1979, Randolph responded to the “Purchase Order” by executing it in the space provided, and by adding immediately after the word “ACCEPTED” the words “See Randolph letter of 9 May 1979.” That letter (Plt.Ex. #5) — attached to the purchase order when it was returned to Havens — recited that the purchase order was “executed and accepted under the following conditions.” Among those conditions was a statement that Randolph’s November 29, 1978 performance schedule would govern, together with a paragraph calling for the deletion of paragraph 6 of the Special Conditions (quoted above) as well as all other provisions in the incorporated documents related to “No Damages for Delay,” and the substitution of language which would provide that if the work was delayed or postponed for any cause except that relating entirely to Randolph’s fault or negligence, Randolph would be reimbursed for all resulting added costs. The letter concluded by requesting Havens’ approval and provided a space therefor. (p) Havens responded by letter dated May 16, 1979 (Def.Ex. # 194). The most important part of that letter reads as follows: After you make the site visit you mentioned [the parties had communicated by telephone on May 15,1979, but there was no testimony as to the content or result of the conversation], I think we need to talk over this whole matter and try to determine just what delay factors you may be anticipating, the cost therefor and whether or not they could be attributable to Kaiser’s involvement with revisions and delays and approvals. (q) The record does not reflect any further communication by Havens on the matter. Havens’ deliveries of ductwork commenced in June of 1979, with concentrated deliveries in July. Both parties thereafter completed their respective performances. During the months of July, September and October, 1979, while work was still ongoing, Randolph communicated with Havens or Kaiser on a number of occasions (Def.Ex. # 18; Plt.Ex. # 33; Def.Ex. # 20; Def.Ex. # 23; Def.Ex. # 25; Def.Ex. # 36), stating its intent to make claim for damages from delay, and in October (with work still ongoing) submitted those claims to Havens (PltEx. # 7, PltEx. # 8). From the information just recited it seems clear that Havens and Randolph had, at some point before January, 1979, reached agreement with respect to the specific work to be done by Randolph, the scheduling thereof and the price to be paid therefor, with mutual manifestations of assent on those subjects.- That is not true, however, with respect to some of the more detailed or peripheral incidents of their relationship — specifically Havens’ proposed “Terms & Conditions Applying To Subcontractors And/Or Suppliers” and 12 “Special Conditions,” including the portions thereof dealing with delay damages. The first question presented is whether an enforceable contract of any sort existed prior to May, 1979; viz, whether, having reached agreement upon the details, price and schedule of the work itself, the parties intended (objectively) to be bound at least to that extent, even though other aspects of their relationship were left to future negotiation, and if so whether the agreement reached could be fairly enforced without reference to those remaining terms. See Restatement (Second) of Contracts, supra § 33; 1 Corbin On Contracts § 29 (1963), and cases cited; 1 Williston On Contracts § 48 (3d ed. 1937), and cases cited. As a technical matter, at least in the circumstances here, I believe the question should be answered affirmatively. Compare Mid-Continent Tel. Corp. v. Home Tel. Co., 319 F.Supp. 1176, 1188-95 (N.D.Miss.1970); Air Technology Corp. v. General Elec. Co., 347 Mass. 613, 199 N.E.2d 538, 548 (1964); Phillips & Easton Supply Co. v. Eleanor Int’l., Inc., 212 Kan. 730, 512 P.2d 379, 380 (Syllabus # 2, 3), 383-85 (1973); Henry C. Beck Co. v. Arcrete, Inc., 515 S.W.2d 712, 716 (Tex.Civ.App.1974). Given the subsequent course of events regarding Havens’ proposed formal purchase order, however, that finding becomes academic. By undertaking to change the parties’ performance schedules — a subject of material importance to Randolph — as well as by including the 12 “Special Conditions” and the “Terms & Conditions Applying To Subcontractors And/Or Suppliers,” Havens’ formal purchase order represents an offer of a substituted contract. See generally Twin River Const. Co. v. Public Water Dist., 653 S.W.2d 682, 690 (Mo.App.1983); Restatement (Second) of Contracts, supra § 279; 6 Corbin, supra §§ 1293, 1296. Randolph’s May 9 response is clearly a counteroffer. See Restatement (Second) of Contracts, supra § 59; 1 Cor-bin, supra §§ 82, 89; 1 Williston, supra § 77. Havens’ May 16 response is neither an acceptance, a rejection or a counteroffer; it is simply a request for further discussion, the effect of which was to leave Randolph’s counteroffer pending. See 1 Williston, supra § 51 at 166-67, § 79 at 262-63, and cases cited. The question then becomes whether the lack of any further discussion, coupled with both parties’ performance, can be taken as Havens’ acceptance of that counteroffer. There is no doubt that acceptance can be shown by the offeree’s acts or conduct, see Restatement (Second) of Contracts, supra § 19, and more specifically can, in appropriate circumstances, be found simply in the offeree’s performance or knowing acceptance of the offeror’s performance, see Moore v. Kuehn, 602 S.W.2d 713, 718 (Mo.App.1980); 1 Corbin, supra §§ 62, 75, and cases cited; 1 Williston, supra § 78A, and cases cited. If the parties’ overall relationship here had commenced with Havens’ formal contract proposal, I would have little difficulty applying that principle. The situation is complicated, however, by my belief that an enforceable contract relating to the work, albeit informal and lacking at least any agreement on a damages for delay provision or any other of Havens’ subsequently proposed special contract terms, had existed prior to May, 1979. In those circumstances the effect of the parties’ performances, vis a vis Randolph’s counteroffer, becomes more uncertain. Despite this qualifying feature, an appropriate analysis of the facts dictates a finding that in light of Havens’ equivocal response of May 16, its own subsequent performance (payment) and acceptance of Randolph’s performance in fact represent an acceptance of Randolph’s May 9 counteroffer. Neither party had begun performance as of May 9; indeed, Havens’ failure to deliver the ductwork had already rendered performance in accordance with the original schedule impossible. That fact in turn gave particular significance to the question of compensation for additional work caused by delay, a point understood by Havens as its May 16 letter makes clear. What the parties’ course of conduct might have been at that point had Havens clearly rejected Randolph’s demand is unknown; but given the above circumstances, together with the fact that a damages for delay provision as well as the other proposed special provisions were clearly of significance to both parties, Havens’ subsequent conduct must be viewed as a manifestation of its assent to Randolph’s counteroffer — that is, as conduct creating the appearance of assent, in which Havens intended to engage and as to which Havens knew or had reason to know that Randolph might infer assent. Compare Gateway Company, Inc. v. Charlotte Theatres, Inc., 297 F.2d 483, 485-86 (1st Cir.1961); and see Restatement (Second) of Contracts, supra § 19(2); 1 Corbin, supra § 74 at 314. The fact that Havens’ actual, subjective intent might have been otherwise is immaterial, at least where (as here) it has raised no claim of mistake or other basis for avoidance. Restatement (Second) of Contracts, supra § 19, comment d, § 2, comment b. I conclude that Havens’ proposed contract of May, 1979, as modified by the terms of Randolph’s letter of May 9, 1979, became a complete, substituted contract with reference to the ductwork project, defining the extent of the parties’ rights and duties in connection with that project. III. HAVENS’ CLAIM In January and February of 1980, following Randolph’s tender of its completed work and Medusa’s equipment “start-up,” Kaiser performed its “punch list” inspection of the project. As a result of that inspection certain defects in the insulation work were identified and corrected. That process was completed by early April, 1980. On March 31, 1980, Randolph submitted to Havens its billing for the final contract retainage amount. On April 10, 1980, Havens communicated with Kaiser (Def.Ex. # 147), noting completion of the contract and the lack of notice of any further uncompleted or unsatisfactory work. Some five months later, on September 20, 1980, storms from Lake Michigan swept through the plant area. An “almost ... catastrophic failure” of the cladding occurred with respect to some of the ducts, together with a similar failure of the cladding on the plant’s conditioning towers (installed by another contractor). Further deterioration of the damaged ductwork cladding occurred over the next several months, accompanied by deterioration or destruction of the underlying insulation. Havens, having settled its dispute with Kaiser and Medusa over responsibility for the partial failure of the ductwork cladding and insulation — as well as other, unrelated claims asserted against it by those parties — now seeks damages from Randolph, asserting that Randolph (via M.I.S.) deviated from contract specifications in applying the ductwork cladding. The pertinent facts, as I find them, are these: (a) Contract specifications called for cladding material made from “alelad 5005-H16” (a smooth aluminum material), .016 inches thick. Mr. Len Bernardi, job superintendent for M.I.S., felt this material was too thin; recommended to Mr. Foster Sis-sons, Kaiser’s construction manager, that the material be doubled in thickness (to .032 inches) or that a dimpled or corrugated metal (which is stronger) be used; and thereafter proceeded to use, on one or more but not all ducts, a cladding metal of corrugated configuration. At least some of that cladding sustained damage in the storms of September 20 (or thereafter), as did the specified cladding material on a number of other ducts. The expert testimony establishes that the corrugated metal used by M.I.S. was in fact stronger than the material specified, and that the specified material was in fact too thin for the function required of it. (b) Contract specifications required the use of “pop rivets or approved alternates,” spaced not more than six inches apart on longitudinal laps of the cladding and spaced not more than four inches apart on circumferential joints. Instead of “pop rivets,” M.I.S. used sheet metal screws. Further, on the circumferential joints the screws were spaced six to eight feet apart, rather than the required four inches. It appears, however, that this latter deviation was a feature which accompanied the addition of metal retaining bands (not required by the specifications) around the outside of the cladding, with those bands being fastened to the cladding by means of the screws. The screws themselves were preferable to “pop rivets,” and the metal retaining bands would have added strength to the system. (c) According to the contract, the cladding material was to be “lapped” on both longitudinal and circumferential joints. The longitudinal laps were to be “crimped” and the circumferential laps were to be made so that each higher piece of cladding fitted over the lower adjoining piece, thus giving a shingled effect. As applied, the longitudinal laps were not “crimped,” and the circumferential laps were occasionally inverted (the number of instances of this being unstated). (d) The deviations described in items (a) through (c) were identified by Mr. Richard Jenkins, a design engineer, during an inspection he conducted in March of 1981. Because of the damage then existing, Mr. Jenkins found it “virtually impossible” to determine — “in some instances” — how the materials had originally been installed. This qualification does not detract from the finding that, in those instances where observed, the deviations mentioned in items (a) through (c) in fact reflect the original installation process; but it does cause me to reject two other items as deviations: the fact that on some circumferential laps (the number being unstated) the lap was variously one-half to one and one-half inches instead of the required three inches; and the fact that only one “Z clip” was “observed” (that being of stainless steel rather than aluminum, as specified). As to the former matter, Jenkins agreed that the “shortened” laps he measured might have been the product of shifting which occurred after the storm damage. With respect to the latter item, I note that “Z clips” were required only on vertical ducts (“one or two at each circumferential joint,” according to the specifications); that the only photographs I can clearly identify as portraying a vertical duct show such extensive damage that few “Z clips” could have been observed by Jenkins, unless they were on the ground; and that I have no way of knowing how many other vertical ducts were in a condition which would permit a determination of the number of “Z clips” used. In short, I am uncertain of the real significance of the fact that only one “Z clip” was found. (e) The contract specifications were themselves defective with regard to the type of cladding material required and the lack of any “subgirt” system for attaching .the cladding to the duct. (f) The insulation and cladding were installed with the ducts on the ground, prior to erection. Mr. Sissons and his subordinates, Mr. Waggoner and Mr. Whims (all thoroughly familiar with the specifications, and charged with insuring compliance), inspected that work frequently as it was in progress, and were well aware of the method of installation and of the deviations covered by items (a) through (c) (with the possible exception of whatever inverted circumferential laps might have existed). In addition, Medusa’s individual contract representative (again, a person fully knowledgeable of the specifications) was on the job site on a full time basis. No objections were ever voiced by any of these persons with regard to any of the deviations covered by items (a) through (c). (g) Following erection of the ducts, Mr. Sissons and others performed Kaiser’s “punch list” inspection of the completed ductwork. Certain defects in the insulation and cladding were discovered and corrected. As that was done Kaiser “signed off” the punch list, signifying its approval of and satisfaction with the work. No comments were made during this process with respect to any of the deviations covered by items (a) through (c), although those deviations would have been open and obvious— in fact impossible to miss. (h) Medusa had already begun its use of the facility prior to the punch list inspection. It continued its use of the facility thereafter. The deviations mentioned in items (a) through (c) were open and obvious to Medusa — in fact, again, impossible to miss (with the possible exception of any inverted laps located high on the ducts). No complaint or objection was ever made until after Mr. Jenkins’ report of March, 1981. (i) There is no testimony, expert or otherwise, as to the causal relationship, if any, between the deviations mentioned above and the ultimate failure of the cladding and insulation system which followed the storms of September 20. I note, however, that the deviation described in item (a) (cladding material) resulted in a feature of the system that was stronger than the specifications provided for. The same is potentially true of the deviation mentioned in item (b) (screws and banding). (j) The cladding and insulation on some ducts did not require repair. That which did was ultimately repaired or replaced at a total cost of $499,479.91. The repair cost was increased by the fact that the ducts were of course already erected, and much of the work had to be carried out high in the air. (k) As repaired and replaced, the new cladding and insulation system included features not provided for in the original specifications, as follows: (l) The insulation material was changed from a two-inch thick spun glass blanket to a “semi-rigid board type” insulation, thus providing a stronger element for the system. The additional cost for this item, if any, is unknown. (2) Bands were used on the outside of the cladding. Since this appears to be essentially the same system used by M.I.S. originally, it is a fair inference that the basic cost was no greater than that incurred with the original system. (3) The cladding material itself was “3003-H14” aluminum, .032 inches thick (double that of the material originally specified). In addition, corrugated metal was to be used on rectangular or flat ducts. The added cost was $3,750. (I) Of the $499,479.91 repair and replacement cost, Kaiser contributed $80,000 by way of its cost in preparing new specifications, and $196,500 in cash. Of the remaining amount, $192,799.67 was contributed by Havens (part of this as retainage already held by Medusa) and $30,180.22 was paid by Medusa. After deduction of the cost of new material items not included in the original specifications, Havens’ proportionate share of the balance ($495,729.91) was $191,351.74. (m) The above sums of’money were paid by Havens, Kaiser and Medusa under a settlement agreement which, among other things, disposed of (1) Havens’ $150,000 claim against Medusa and Kaiser for contract retainage; (2) Kaiser’s separate Michigan suit (under an assignment of Medusa’s claims) against Havens for damages arising from the cladding and insulation failure; and (c), Medusa’s $2,649,149 counterclaim against Havens for construction delays and the cladding and insulation failure. A. BASIS OF CLAIM At least as pleaded and argued, Havens apparently conceives its claim to be one simply for breach of contract, upon a theory that deviations from specifications or defective workmanship (or both) represent breaches of the subcontract between it and Randolph; that those breaches caused the partial cladding and insulation failure which occurred on and after September 20, 1980; and that Havens itself has somehow sustained damage as a.result. At no time has an indemnification theory, contractual or otherwise, been argued. However, although I am reluctant to raise and decide, sua sponte, an issue which Havens itself has either overlooked or chosen to ignore, fairness compels me to note both that the real basis for the claim, as it reaches me, would in fact appear to be that of indemnification for the sums paid by Havens under its settlement agreement with Medusa and Kaiser, and that paragraph 15. of the “Terms & Conditions Applying to Subcontractors And/Or Suppliers” provides a contractual basis for its assertion. Before proceeding to the merits of the claim, under whatever theory addressed, I thus pause briefly to determine what impact those facts may have. The Missouri law (which must govern here, under the subcontract’s choice of law provision) with regard to indemnification for amounts paid in settlement of a claim has not been ruled by the state’s supreme court. One older decision by a court of appeals followed the rule generally in vogue at that time, requiring that one who seeks indemnity — contractual or otherwise — upon any claim which has been settled must prove both the facts upon which his liability to the claimant would depend (actual liability) as well as the reasonableness of the settlement amount. Wilson v. Massachusetts Bonding & Ins. Co., 238 Mo.App. 882, 190 S.W.2d 944, 947 (1945); and see generally 41 Am.Jur.2d, Indemnity § 33 (1968). On the other hand, a more recent ruling by another court of appeals has squarely adopted the view announced by the Eighth Circuit and several other federal courts: that where (as here) a contract provides that the indemnitor will defend against claims as well as indemnify against liability or loss, and where the indemnitor refuses to assume the defense and denies liability, the indemnitee need only prove that its settlement was reasonable, prudent and made in good faith. See Missouri Pacific R. Co. v. Rental Storage & T. Co., 524 S.W.2d 898, 908-09 (Mo.App.1975), and cases cited. However, even if the latter view represents the position the Missouri Supreme Court would take (and I think it does), I do not believe it can be applied here. There is no proof that Randolph refused the defense of any claims asserted against Havens in the Michigan suit; and Havens effectively pre-empted the matter as far as this case is concerned by initiating its own declaratory judgment suit against all parties, apparently in an effort to litigate in a forum more convenient to it. The resulting plethora of counterclaims and cross claims included actions against Havens for matters having nothing to do with the cladding and insulation damage, as to which Havens had a potential direct exposure for its own acts and for which (to that extent) Randolph had no duty either to defend or indemnify. See, e.g., Missouri Pacific Rail road Co. v. Arkansas Oak Flooring Co., 434 F.2d 575, 579 (8th Cir.1970). How Randolph might even have attempted to “assume the defense” in these circumstances is unknown. Further, in settling with Medusa and Kaiser — a settlement reached, so far as the record shows, without any notice or tender to Randolph — Havens also disposed of those other claims against it, with no attempt to segregate the cladding and insulation claim and in fact with more apparent concern for its ability to assert all such claims back against Randolph than with the prudence of any settlement of the cladding and insulation matter itself. Given all this I think it appropriate to require that Havens establish its actual liability to Medusa in connection with any indemnification claim it might assert here. For the reasons which follow I conclude that it has not done so; nor, for the same reasons, has it established its right to damages under the breach of contract theory it actually pursues. B. DEVIATIONS; ACCEPTANCE Where the owner accepts a structure without complaining, within a reasonable time, of defects or contract deviations which are known to him or which are open, obvious and apparent, he is precluded from seeking damages for those defects or deviations. Florida Ice Machine Corp. v. Branton Insulation, Inc., 290 So.2d 415, 418, 421-22 (La.App.1974); Thomas v. Duffield Drilling Co., 398 P.2d 852, 855 (Okl.1964); Barrie v. Abate, 209 Md. 578, 121 A.2d 862, 864 (Md.App.1956); Kandalis v. Paul Pet Construction Company, 210 Md. 319, 123 A.2d 345, 347 (Md.App.1956); Galvin v. Keen, 100 Ohio App. 100, 135 N.E.2d 769, 770 (Syllabus # 2), 772-73 (1954); 17 A C.J.S., Contracts § 514(2) (1963). The underlying principle may be viewed as that of acceptance, or as that of waiver, see Thomas v. Duffield Drilling Co., supra; Galvin v. Keen, supra; the result will be the same in either event. I believe the rule is applicable in this case. Here, the deviations were not only previously known to Kaiser — designated in the contract as the “Owner’s representative” — but were readily apparent during Kaiser’s punch list inspection, made after completion and tender of the work. Certain defects were noted and corrected at that time, all to Kaiser’s satisfaction; no mention was made of any of the deviations now at issue. Of most importance, however, is the fact that the deviations (with the possible exception of any inverted laps that might have been located high on a duct) were open, obvious and apparent to Medusa itself during all of the more than five months it operated the facility after Kaiser “signed off” the punch list (early April, 1980) and before the storms of September 20 — again with no complaint being made. In circumstances such as these a conclusion that the work — with those deviations — was in fact accepted, or that those deviations were effectively waived, is well-nigh irresistible. It is true that the record does not reflect the issuance — even yet for that matter — of a “Certificate of Completion and Acceptance” {see Section 28B of the “general terms and conditions”). A formal acceptance of that sort, however, can be waived, see Housing Auth. of Pittsburg v. Sanctis Const., 158 Pa.Super. 71, 43 A.2d 581, 583 (1945); 17 A C.J.S., supra § 492(2), at 698; and the same circumstances, noted above, which lead me to conclude that the work was in fact accepted lead me to a similar conclusion on this point. These conclusions also dispose of Havens’ theory that liability may be imposed under section 23A of the “general terms and conditions,” which in effect undertakes to place the risk of loss for damage to or destruction of the work upon the contractor, prior to completion and acceptance by the owner. See, e.g., Foley Co. v. L.G. Barcus & Sons, Inc., 660 S.W.2d 307, 309-11 (Mo.App.1983). In point of fact the work had been completed, and accepted, by Kaiser and Medusa long before September 20, 1980. Havens’ argument on the matter does, however, serve to underscore the fundamental weakness of its more general argument on the subject of acceptance, since the result — as applied here' — would be to suggest an intention by the parties that Medusa take possession of the completed and inspected work and utilize it indefinitely, all the while leaving the risk of loss for damage or destruction, from any cause, upon Havens and Randolph. Neither common sense nor the facts and circumstances of the parties’ conduct commends such an idea. Finally, I note Havens’ reference to section 28 of the “general terms and conditions,” which in effect provides that nothing done by Kaiser or Medusa “shall be considered ... an acceptance of defective material or workmanship or shall be an admission of the Contractor’s satisfactory performance of the work____” The answer to the present question, however, does not depend upon any “admission” by Kaiser or Medusa that Randolph’s work was “satisfactory;” it is concerned, instead, simply with whether that work and the deviations at issue were in fact accepted. Nor, as explained in Part C hereof, can those deviations properly be considered as something involving “defective material or workmanship,” except as to inverted circumferential laps; and as pointed out in Parts B and C, the occasional existence of those inverted laps does nothing to aid Havens’ claim. In short, in my judgment section 28 does not control the questions which must be resolved here. C. DEVIATIONS; CAUSATION Given the lack of evidence as to a causal relationship between any contract deviations and the ultimate damage to the ductwork cladding and insulation, Randolph asserts that a fundamental element of Havens’ proof is missing. I agree. It is true that an owner is entitled to have a structure built in keeping with contract specifications which govern the work, and that a departure from those specifications — absent the consent of the owner or his authorized agent, or a waiver — will render the contractor liable for the necessary cost of bringing the structure into compliance with the specifications. Whitfield Const. Co., Inc. v. Commercial Devel. Corp., 392 F.Supp. 982, 1001-02 (D.V.Is.1975); Thomas v. Ronald A. Edwards Const. Co., Inc., 163 Ga.App. 202, 293 S.E.2d 383, 386 (1982); Shimek v. Vogel, 105 N.W.2d 677, 684 (N.D.1960); and see generally 17A C.J.S., supra, § 509, at 817-20. This is so even though the specifications were defective, or the deviation otherwise results in a better or more valuable piece of work. Whitfield Const. Co., Inc. v. Commercial Devel. Corp., supra. That particular rule cannot be applied in the present case, however, even if I overlook the question of consent, for the simple reason that there is no evidence as to the reasonable cost which would have been associated with bringing the cladding into compliance with the specifications; viz, the cost of replacing the corrugated cladding material, removing the bands and inserting the appropriate number of “pop rivets,” crimping the longitudinal laps and correcting whatever inverted vertical laps may have existed. I do know, of course, the contract price for the entire insulation and cladding work ($295,000, as paid to M.I.S.), but this figure is of no aid since it includes a number of things of obviously substantial cost which would not have been involved in correcting any cladding deviations (e.g., the insulation, the cladding which did meet specifications, the wire mesh material, and the labor involved in applying all those things). I also know the total, ultimate cost of repair of the cladding and insulation, after the “almost ... catastrophic failure” of September 20, 1980, and after some six or seven months further deterioration ($495,729.91, with deductions for items not covered in the original specifications or work); but that figure is again of no help— for purposes of the instant rule — since it too includes items which would not have been required in simply correcting deviations with respect to the cladding (e.g., conforming cladding material, insulation, wire mesh, etc.). It is also true that in some states this same basic rule — or something closely related to it — has been extended to cover damages of a more consequential nature, such as those involved here. Actually, two variants of this theory exist: that apparently originated by the Illinois Supreme Court in Clark v. Pope, 70 Ill. 128 (1873), and see also Corbetta Const. Co. of Ill. v. Lake County Pub. Bldg. Com’n., 64 Ill. App.3d 313, 21 Ill.Dec. 431, 381 N.E.2d 758, 769 (1978); Robert G. Regan Co. v. Fiocchi, 44 Ill.App.2d 336, 194 N.E.2d 665, 668 (1963), which renders a deviating contractor liable for whatever may subsequently happen to the structure, without resort to any formal proof of causation if the deviation was “material,” and in fact denies the contractor even the ability to offer an affirmative defense that the damage was caused by something other than his deviation, id. at 132-33; and that followed by the North Carolina Court of Appeals in Burke City Public Sch., etc. v. Juno Const, 50 N.C.App. 238, 273 S.E.2d 504 (1981), which recognizes the general rule that a plaintiff must prove causation of damages which are alleged to arise from a breach of contract, id. 273 S.E.2d at 507, in effect treats proof of a deviation as creating a prima facie case on that point, and allows the contractor to rebut by proving that the damage was not in fact caused by the deviation, id. at 507-08. Neither variant of the rule can be applied, however, if the deviations occurred with the “knowledge and consent” of the owner. See Clark v. Pope, supra; and see also Mann v. Clowser, 190 Va. 887, 59 S.E.2d 78, 85 (1950); Curtain v. Somerset, 140 Pa. 70, 21 A. 244 (1891). As mentioned under Part A, with the possible exception of inverted circumferential laps the present deviations were in fact fully known to Kaiser as the work was being done, with no objection being made; were obvious at the time of the punch list inspection (when other matters were noted and corrected), with no exception being taken; and were open and obvious during the five months Medusa— again without complaint — thereafter operated the facility prior to September 20. Clearly these deviations were “known” to both Kaiser and Medusa; and given the other circumstances listed it becomes difficult to avoid the conclusion that they were tacitly, if not formally, consented to as well. Havens refers again, in this connection, to section 28 of the “general terms and conditions.” For the reasons expressed under Parts A and C, I find that section 28 has no application to the instant point except as to inverted laps. In addition, however, I note that the rules under discussion here are burden of proof rules of the common law. They do not depend upon contract provisions for their existence, and in my judgment owe no allegiance to provisions such as section 28 in their application. As concerns any application of either the Illinois or the North Carolina rule, this leaves only the inverted circumferential laps, to whatever extent they existed. Stated shortly, I simply cannot find these to have been significant or “material” deviations with respect to the cladding failure and ultimate damage which occurred, particularly since I have no idea how widespread they may have been. I recognize this holding imports a sort of threshold “causation” element into Havens’ burden of proof under those rules; but some basic requirement of this nature is only logical and even the Illinois rule seems to recognize it (“material” deviation). Suppose, for example, that a contractor builds a house under specifications which call for light green paint and instead applies white paint, with the house collapsing after a storm. It makes no sense to suggest that he should, by reason of that deviation, be held responsible for all resulting damage and in fact be denied the ability to prove that paint colors had nothing to do with the collapse (the Illinois rule), or even that he should be required to go forward with that proof (the North Carolina rule). Instead, it seems to me, an application of either rule necessarily requires that the deviation in question be such as to permit a rational conclusion— even if based only on the fact finder’s common sense — that it was, more likely than not, at least a contributing cause of the damage. In my opinion the available facts regarding any inverted circumferential laps fall short of that standard. I conclude that neither the Illinois rule nor the North Carolina rule is of any assistance to Havens here. There is no other proof of the causal relationship between any contract deviations and the damages at issue. I believe those findings are fatal to Havens’ claim. D. BREACH OF WARRANTY Section 23C of the “general terms and conditions” provides that the Contractor hereby guarantees the Work to be performed hereunder against defects in material and workmanship ... for a period of one (1) year after the date of acceptance as set forth in the “Certificate of Completion and Acceptance____ Havens suggests that the deviations at issue here are in fact “defects in material and workmanship,” for which liability may be imposed under this provision. I believe the argument must be rejected. As Randolph correctly observes, a “deviation” (a departure from contract specifications) does not necessarily equate to a “defect” in either “material” or “workmanship.” As used here in connection with both the word “material” and the word “workmanship,” “defect” was rather clearly intended to take its ordinary, general meaning: an irregularity or departure from the norm which causes weakness, failure or a spoiled appearance. See generally Webster’s Third New International Dictionary 591 (1981); Black’s Law Dictionary 376 (5th ed. 1981). There is no indication that the corrugated cladding material which was applied to some ducts — or the bands and sheet metal screws — were themselves internally flawed in any manner. Nor is there a “defect” even in the sense that those items were generally weaker or less suitable than the materials called for by the specifications; to the contrary, they were stronger or at least equally as strong. And, of course, it seems clear that a “deviation” may in fact be accompanied by entirely satisfactory “workmanship” — that is, an application of that degree of skill ordinarily expected of persons learned in the trade. No “defect” in “workmanship” of that sort is established by this record, except with respect to the occasional inverted circumferential laps. I believe one can find, even without expert testimony, that those inverted laps do represent a “defect” in “workmanship.” That finding, however, is of no real significance here since I have no way of determining — even if I knew how many inverted laps there were — that they had any possible causal relationship to the cladding failure. As with any express warranty claim involving a loss which has several potential causes, some covered by the warranty and some not, the burden of proof is on the claimant to establish a causal relationship between the breach of warranty and the loss. Southern Illinois Stone Co. v. Universal Engineering Corp, 446 F.Supp. 900, 904 (E.D.Mo.1978); Turner v. Central Hardware Co., 353 Mo. 1182, 186 S.W.2d 603, 607 (1945). Such proof is absent here. IV. RANDOLPH’S COUNTERCLAIM Randolph’s counterclaim is divided between nine different counts. Stating them in their most logical order, Count V seeks compensation for additional work resulting from “unanticipated structural interferences and job disruptions;” Count VI seeks similar compensation for work relating to “C Duct;” Count IV requests recovery for additional work involved with a “misalignment of bolt holes in the duct work and expansion joints;” Count II claims reimbursement for “extended field overhead costs” resulting from being on the job longer than anticipated; Count I seeks a similar recovery for wage escalation costs; Count VII prays for recovery of $70,557 in scheduled contract payments still retained by Havens; Count III seeks compensation for “costs of labor inefficiency incurred in performing on an extended overtime basis;” Count IX attempts to assert a claim for damages on behalf of M.I.S., Randolph’s subcontractor; and Count VIII asserts an alternative quantum meruit claim. A. COUNT V. Randolph’s claim under Count V is fully supported by the evidence. When' Randolph originally calculated its expenses and charges for the Havens’ work it worked from the specifications and drawings then available to it. Those documents indicated the location and support points for the duct work, but did not indicate the presence of additional structural steel. Custom in the industry, established both by expert testimony and by reference to the provisions of the American Institute of Steel Construction (AISC) manual (adherence to which was in fact required by the contract), made it reasonable for Randolph to rely upon the understanding that when it did perform its work there would be no additional structural steel in place which would interfere with that work. Because of the delay in delivery of the ductwork, however, by the time Randolph was able to commence performance entire frameworks of structural steel and even complete buildings had already been erected in areas where some of the ducts were to be installed. This problem created significant additional work and expense for Randolph. The costs of that additional work are detailed in Def.Ex. # 1043, a Rule 1006 summary based upon Randolph’s underlying personnel time records. As demonstrated by expert testimony, those records and the interpolations Randolph made from them provide an appropriate basis for determining both the additional man hours and additional equipment hours involved. Compare U.S. Industries, Inc. v. Blake Construction Co., 671 F.2d 539, 547 (D.C.Cir.1982); General Insurance Co. of America v. Hercules Construction Co., 385 F.2d 13, 20-1 (8th Cir.1967). The total, including wage differential for overtime work, is $121,050.65. Further, Randolph is entitled to recover the added amount of $11,463.50 backcharged to it by Havens for work accomplished by M.I.S. in repairing insulation and cladding on “C Duct” ($10,-585 backcharged, plus 10% markup). The damage to that insulation and cladding occurred as a direct result of having to install the duct through a hole — itself too small— in an already erected building (see discussion under Count IV, infra). The total of all such costs is thus $132,694.15. Havens argues that any such recovery is precluded both by the “no damages for delay” clause of its proposed formal contract and by the general rule that a contractor’s performance will not be excused, or made subject to additional compensation, by virtue of the occurrence of unforeseen difficulties. The short answer to both propositions is that the contract actually in effect between the parties, as found in Section II of this Opinion, did not contain a “no damages for delay” clause and in fact specifically made provision for Randolph’s recovery of such damages (see Randolph’s letter of May 9). Havens also suggests that Randolph “was in as good a position as anyone” to determine that there might or would be structural steel interference with its work, presumably suggesting some sort of waiver. The difficulty, again, is that the contract provisions effectively shifted that risk. Indeed, that would appear to be precisely what Randolph intended by its letter of May 9; and for good reason, given the fact that approximately two months’ delay had already occurred, with structural steel being erected to some extent in the interim. Finally, Havens urges that the problem was actually caused in part by Kaiser’s failure to coordinate job site activities; a proposition with which Randolph agrees. That does not, however, create any defense to the instant claim as asserted against Havens. While it is true (absent a contrary contractual provision) that a general contractor will ordinarily not be liable to its subcontractor for damages resulting from delay, unless the delay is in fact caused by the general contractor or some agency or circumstance under its control, McDaniel v. Ashton-Mardian Co., 357 F.2d 511, 514 n. 2 (9th Cir.1966); McGrath v. Electrical Constr. Co., 230 Or. 295, 364 P.2d 604, 607-08 (1961); Doyle & Russell, Inc. v. Welch Pile Driving Corp., 213 Va. 698, 194 S.E.2d 719, 721 (1973); Frank T. Hickey, Inc. v. Los Angeles Jewish Com. Coun., 128 Cal.App.2d 676, 276 P.2d 52, 58 (1954), that principle does not require, in cases of multiple causation involving the general contractor and others, that the subcontractor show the proportionate part played by the general contractor and segregate the loss accordingly. See 5 Corbin, supra § 999, at 24-25. The rule to be applied in that situation is instead the ordinary contracts rule applicable to damages involving multiple causes: that if the defendant’s breach or fault was a “substantial factor” in causing the injury, the defendant will bear full responsibility for it even though there were other, contributing causes. Id. Havens’ delays were clearly a “substantial factor” in causing the damages here. The fact that Kaiser or other parties may also have played some part in connection with the problem is immaterial. Quaker Empire Const. v. D.A. Collins Const., 88 App.Div.2d 1043, 452 N.Y.S.2d 692, 694 (1982). B. COUNT VI. As noted, the claim here is closely related to those asserted in Count V. It concerns, however, a specific set of problems encountered with “C Duct,” a large duct containing an “elbow” or bend. By the time Randolph was able to proceed with the installation of “C Duct,” the building it was to serve had already been erected; a condition Randolph could not reasonably have anticipated at the time it supplied its original cost figures to Havens. Although a hole had been left in the roof through which the duct was to be inserted, the hole proved too small to accomodate the “elbow” of the duct. After attempting to erect the duct Randolph had to lower it to the ground, cut off the “elbow,” thread the main portion of the duct through the hole and reweld the elbow in place. All this led to the expenditure of an additional $9,208.30 in labor and equipment costs, as documented by Def.Ex. # 1044, another Rule 1006 summary based upon the underlying work records. Havens advances, for the most part, the same arguments made with respect to Count V. Those arguments are subject to similar difficulties here and are rejected. In addition, however, Havens also asserts that Randolph “waived” its right to any compensation “by failing to comply with the contract provisions for extra or ‘changed’ work.” Presumably Havens’ reference is to paragraph 10. of the “Terms & Conditions Applying To Subcontractors And/Or Suppliers,” which provides, inter alia, that [n]o change shall be made in the Purchase Order and no claim of Supplier/Subcontractor for extra work will be allowed unless such extra work ... [is] ordered by Havens in writing and Havens agrees in writing to pay such extra, or to “Special Condition” 9, which required that [e]xtra work that Kaiser directs Randolph to do on site is to be authorized and time charges approved in writing by Kaiser. These authorizations should be approved prior to commitment to do the work with Havens handling it as a [change] order or add to the contract. Randolph responds i