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03/27/79 Majestic Builders v. Patricia Roberts Harris

March 27, 1979

MAJESTIC BUILDERS CORPORATION, A MARYLAND CORPORATION

v.

PATRICIA ROBERTS HARRIS, (SUCCESSOR TO GEORGE ROMNEY), SECRETARY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, ET

MAJESTIC BUILDERS CORPORATION, A MARYLAND CORPORATION

v.

PATRICIA ROBERTS HARRIS, (SUCCESSOR TO GEORGE ROMNEY), SECRETARY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, W.



Before BAZELON and TAMM, Circuit Judges, and GERHARD A. GESELL* , United States District Judge for the United States District Court for the District of Columbia.

UNITED STATES COURT OF APPEALS, DISTRICT OF COLUMBIA CIRCUIT

al., MT. AIRY BAPTIST CHURCH HOUSING CORPORATION, INC., a

District of Columbia Nonprofit Corporation, APPELLANT;

T. SYPHAX COMPANY, APPELLANT

Nos. 77-1802, 78-1238 1979.CDC.50

Date Decided: March 27, 1979; As Amended April 9, 1979.

Appeals from the United States District Court for the District of Columbia (D.C. Civil 1933-71).

APPELLATE PANEL:

PER CURIAM DECISION

These two cases arise out of the construction of a low-income housing project in the District of Columbia. One action, No. 77-1802, was brought by the contractor to recover for work performed pursuant to a construction agreement change order. The other, No. 78-1238, relates to the contractor's subsequent and successful attempts, as victor in the first case, to collect upon its judgment. We affirm the judgments below in favor of the contractor in both cases.

A. No. 77-1802

Mount Airy Baptist Church Housing Corporation ("Mt. Airy"), sponsored a low-income housing project known as Tyler House, under Section 236 of the National Housing Act, 12 U.S.C. ยง 1715z-1. On March 13, 1969, Majestic Building Corporation ("Majestic"), undertook by contract with Mt. Airy to act as general contractor and complete the project. A mortgage covering the maximum possible contract price was obtained by Mt. Airy; this in turn was guaranteed, and the contract price approved, by the Federal Housing Administration .

Shortly after construction commenced it became necessary to redesign a portion of the project's foundation. This alteration, which entailed additional costs, was memorialized in Change Order No. 11 executed by Majestic and Mt. Airy on March 1, 1971. This change order was submitted to and approved by the mortgagee and FHA, as required under the terms of Article I-E of the original contract. Subsequently, though, FHA refused to increase the mortgage guarantee by the entire amount of the cost increase covered by the change order. The difference between the approved cost rise and the permitted increase in the loan guarantee had as a result to be paid directly by Mt. Airy under the change order and when Mt. Airy refused to pay, Majestic sued in the District Court.

Mt. Airy contends that the change order was not supported by adequate consideration, and that Mt. Airy's signature on the change order was induced by overreaching or fraud on the part of Lawson, an attorney who then represented Mt. Airy, but who for certain purposes also ...


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