Mahoney, Inc. v. Galokee Corporation

The opinion of the court was delivered by The appellant Jim Mahoney, Inc., contracted to build a 64-bed
nursing home at Galena, Kansas, under a standard form contract
with the appellee, The Galokee Corporation. The contract sum for
completion of the project was $179,500.00. The appellant
Mid-Continent Casualty Co. furnished the performance bond for the
contractor. Construction of the building was begun in February
and continued to mid-November, 1969. The building was occupied by
The Galokee Corporation in December, 1969, and received approval
from the state of Kansas for use as a nursing home. The building
has been so used continuously since that time. A dispute arose
between Jim Mahoney, Inc., which we will call the contractor, and
The Galokee Corporation, which we will call the owner, over
failure to complete and construct the building according to the
plans and specifications. Suit was filed by the contractor to recover a balance remaining
due under the contract. The owner answered and filed a
cross-petition claiming the contractor had defaulted by failing
to complete construction, by using inferior materials, by
providing poor workmanship and by failing to comply with the
plans and specifications of the contract. The case was tried to
the court and the court made specific findings of fact on which a
final judgment was entered after offsetting a $16,215.48 balance
found due the contractor against the sum of $58,960.00, which was
the amount of repairs found necessary to bring the facilities up
to contract specifications. A net judgment of $42,744.52 was
entered in favor of the owner and against the contractor. From
this judgment the contractor and its bonding company appeal.