BELTRAN, Francheska P. GAMO, Anatoly M. OLALO, Leonardo T. PABLO, Paul Ian N. WONG, Otto Hongsan T.

5CE-A

Spouses Roberto and Evelyn David and Coordinated Group, Inc.

PETITIONERS

Spouses Narciso and Aida Quiambao

RESPONDENTS

SUMMARY
Petitioner COORDINATED GROUP, INC. (CGI) is a corporation engaged in the construction business, with petitioner: spouses ROBERTO and EVELYN DAVID as its President and Treasurer, respectively. Respondents spouses NARCISO and AIDA QUIAMBAO engaged the services of petitioner CGI to design and construct a five-storey concrete office/residential building on their land in Tondo, Manila

 Design/Build Contract:
a) CGI shall prepare the working drawings for the construction project b) Respondents shall pay petitioner CGI the sum of P7,309,821.51 for the construction of the building, including the costs of labor, materials and equipment, and P200,000.00 for the cost of the design c) Construction of the building shall be completed within 9 months after securing the building permit

 Completion of construction: on or before July 16, 1998

extended to November 15, 1998 upon agreement of the parties

Petitioners ,CGI, failed to follow the specifications and plans Respondents demanded the correction of the errors but petitioners failed to act on their complaint
rescinded the contract on October 31, 1998 paying 74.84% of the cost of construction

 RRA and Associates

inspect the project and assess the actual accomplishment of petitioners in the construction of the building found that petitioners revised and deviated from the structural plan of the building without notice to or approval by the respondents

Respondents filed a case for breach of contract against petitioners before the Regional Trial Court (RTC) of Manila

 Pre-trial Conference
parties agreed to submit the case for arbitration to the CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (CIAC)

After conducting hearings and two (2) ocular inspections of the construction site, the arbitrator rendered judgment against Petitioners

 Awards (in favor of the Quiambaos)

Lost Rentals Cost to Complete, Rectification, etc Damages due to erroneous staking P 1,680,000 P 2,281,028.71 P 117,000

Professional fees for geodetic surveys, etc P 72,500 Professional fees for engineers P 118,642.50

Bills for water and electricity, PLDT

Attorneys fees Moral Damages Exemplary Damages TOTAL

P 15,247.68
P 100,000 P 250,000 P 250,000 P 4,884,418.89

 Awards (in favor of CGI)

Credited with 80% accomplishment having a total of P 5,847,857.20 Value of the materials and equipment left at the site for P 238,372.75

Summary of Awards
CGI ordered to pay P 4,073,229.94 with interest at 6% per annum from the date of the promulgation of this award

Payments already made to CGI

Amount awarded TOTAL

P 5,275,041
P 4,884,418.89 P 10,159,459.89

80% accomplishment
Costs of materials and equipment TOTAL

P 5,847,857.20
P 238,372.75 P 6,086,299.95

STATEMENT OF THE PROBLEM

There was no basis, in fact and in law, to allow respondents to unilaterally rescind the design/built contract, after petitioners have (sic) substantially performed their obligation under the said contract. The honorable court of appeals erred in finding petitioners jointly and severally liable with co-petitioner coordinated (group, inc.), In clear violation of the doctrine of separate juridical personality.

STATEMENT OF THE FACTS

Deviations from plan:
a) 2 concrete columns in the middle of the basement
obstructed the basement for the parking of vehicles

b) 3 additional concrete columns were constructed from the ground floor to the roof deck
affected the overall dimension of the building

 Building was constructed 1 m beyond the property line Construction of cistern

Capacity was less than the design capacity (10 000 gallons) No internal partition separating the cistern from the sump pit

 Defects (accdg to Mrs. Quiambao)

Building was not vertically plumbed provisions for many architectural members were not provided for such as:
recesses for window plant boxes are lacking provisions for precast molding are lacking canopies are also lacking misaligned walls, ugly discrepancies and gaps skewed walls to floors/landings low head clearances and truncated beams narrow and disproportionate stairs

1 instead of 2 windows at the fire exit absence of water-proofing along the basement wall and at roof deck use of smaller diagonal steel trusses at the penthouse

Site inspection
L-shaped kitchen counters instead of the required U-shaped counters failure to provide marble tops for the kitchen counters

 installation of single-tub sinks where the plans called for double-type stainless kitchen sinks installation of much smaller windows than those required misaligned window easements to wall floors were damaged by roof leaks

 Concrete samples
Basement, ground floor, mezzanine and 2nd floor Subjected to concrete core test 5 out of 9 samples failed the test

Deformed reinforcing steel bars

Subject to physical test : 8 out of 18 samples failed Cold bend test : all passed

 Defense and comment of CGI:

These were punch list items which could have been corrected prior to completion and turnover of the Building had the Contract not been terminated by the Claimants. CGI were already pin pointing these defects for punch listing before they were terminated illegally They are willing to undertake the appropriate corrective works

 Regarding the additional columns at the basement

Engr. Roberto David admitted that these represented a design change and implemented by CGI without the conformity of the owners Reason: reduction of cost

CGI admitted that no relocation survey was made.

The layout was based on the existing fence

 Question of Fact
It is contended that petitioner-spouses David cannot be held jointly and severally liable with petitioner CGI in the payment of the arbitral award as they are merely its corporate officers.

 Findings of CIAC are final and conclusive,except:

The award was procured by corruption, fraud or other undue means There was an evident partiality or corruption of the arbitrators or any of them The arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy

 The rights of any party have been materially prejudiced The arbitrators exceeded their powers or imperfectly executed them

CGI failed to show any of these exceptions.

The petition is dismissed for lack of merit. Costs against petitioners

ANALYSIS
The decision, favoring the Quiambaos, made by the Court of Appeals was right.
Breaching of contract
2 concrete in the middle of the basement 3 addtl column from the ground to roof deck 5 of 9 core samples failed 8 of 18 steel samples failed on physical test

Punchlist

ANALYSIS
No relocation survey Cistern issues
Actual capacity was less than the designed capacity No internal partition separating cistern from sump pit

RECOMMENDATIONS
Communication Regular inspection of the Owner to the construction Always document changes of the project