Ace Construction Company v. United States

• Decision Date: 18 October 1968
• Docket Number: No. 3-67.,3-67.
• Citation: 401 F.2d 816,185 Ct. Cl. 487
• Parties: ACE CONSTRUCTION COMPANY, a corporation v. The UNITED STATES.
• Court: U.S. Claims Court

185 Ct. Cl. 487, 401 F.2d 816 (1968)

ACE CONSTRUCTION COMPANY, a corporation v. The UNITED STATES.

No. 3-67.

United States Court of Claims.

October 18, 1968.

James F. Kasher, Omaha, Neb., for plaintiff; William G. Campbell, Omaha, Neb., attorney of record.

J. Michael Gottesman, Washington, D. C., with whom was Asst. Atty. Gen., Edwin L. Weisl, Jr., for defendant.

Before COWEN, Chief Judge, LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges.

COLLINS, Judge.

This case is before the court on cross-motions for summary judgment.

Ace Construction Company, the plaintiff, entered into a contract with the United States Corps of Army Engineers on August 6, 1959, for the construction of a channel, levees, and appurtenances on Soldier Creek near Topeka, Kansas. The Government was to establish base lines and bench marks; in addition, it was to make original and final surveys and compilations to determine the quantities of work performed or finally in place. Plaintiff was responsible for the layout of the work and, under the supervision and direction of the contracting officer's representative, was to make quantity surveys for purposes of partial progress payments.¹

Under the terms of the contract, excavated materials not used for purposes of construction were to be placed in "waste areas" designated by the Government. These waste areas were of two types: "Required Waste Areas" were to be filled with excavated materials in accordance with the grades and limits specified. Additional areas, termed "Available Waste Areas," were provided for the disposal of excavated materials in excess of the requirements of construction and the required waste areas. The filling of waste areas was not a separate pay factor; the unit price per cubic yard of excavation included fill expense.

Work began at the eastern end of the site in August 1959. Because of the dense foliage, surveying operations generally had to follow the clearing crews. Most of the time, both the Government and the contractor had survey teams at the site, and they worked together.

Plaintiff soon discovered that there would be an excess of material at the eastern end of the job. At its request, an additional available waste area (No. 59) was designated by means of a contract modification. This modification, executed by plaintiff's vice president, contained the qualification that "No part of required waste areas shown on the contract drawings shall be unused in order to place waste excavation in No. 59."

The controversy in this case centers upon Required Waste Area No. 34, at the westernmost end of the site. At an informal meeting in June 1960, the excavation-fill balance for the western end of the job was discussed.² The conclusion reached at the meeting concerning Required Waste Area No. 34 and the basis therefor are disputed. Plaintiff's version is that a joint Government-contractor survey of the area was completed shortly before the meeting, and the consensus at the meeting was that the quantity of fill needed for No. 34 was 20,000 cubic yards. The Government takes the position that no surveys of waste areas were ever taken by its agents, since waste-area fill involved no separate pay factor. Furthermore, one of the Government's witnesses testified that the conclusion reached at the meeting was that area No. 34 might require between 20,000 and 60,000 cubic yards. No formal findings were made by the Board regarding either of these matters.

Subsequent to the meeting, plaintiff proceeded to dispose of several thousand cubic yards of material in Available Waste Area No. 38, upon the apparent assumption that a sufficient quantity of fill remained to meet the requirements of No. 34. Plaintiff thereafter hauled 30,000 cubic yards into Waste Area No. 34, but it still was not filled.

In January 1961, plaintiff notified the Government of the shortage of fill and inquired if the Government had access to material for filling purposes. The Government responded that balancing excavation and fill was a problem for plaintiff under the contract. Plaintiff proceeded under protest to acquire the necessary fill elsewhere and completed the job to the Government's satisfaction.

The shortage of fill for Required Waste Area No. 34 was in excess of 50,000 cubic yards. The reason for the unexpected requirements of the area, apparently a surprise to both parties, has not been determined. One of plaintiff's witnesses suggested, however, that the presence of an old riverbed underlying the area made the shrinkage allowance used inadequate. There is no dispute that there was no shortage of fill material if the job is considered as a whole.

Pursuant to the Disputes clause of the contract, plaintiff filed notice of its claim for damages in the amount of $131,065.23 with the contracting officer on November 17, 1961. The claim was formally denied on June 26, 1964. An appeal was filed with the Corps of Engineers Board of Contract Appeals, by whom the claim was also denied, after a hearing, on April 19, 1966. A petition was then filed in this court, and the motions presently before the court were timely filed thereafter.

In the brief in support of its motion for summary judgment, plaintiff assigns as error (1) the Board's finding that the Government was not required to survey waste areas; (2) its determination that the Government did not have the contractual obligation to balance excavation and fill; (3) its failure to resolve the issues of whether a joint survey of area No. 34 was made and whether the consensus at the meeting was that 20,000 cubic yards were needed therefor; and (4) its failure to render judgment for the plaintiff when it made an effective finding of changed conditions. It is our considered opinion that plaintiff's contentions are without merit. We will examine each of these points separately.

I.

Plaintiff contends that the Board erred in finding that the Government did not have the contractual obligation to make original field surveys of the construction site, including waste areas. Plaintiff's allegations that the Government had the duty to balance excavation and fill and that the Government misrepresented the capacity of area No. 34 — at the meeting and through the joint survey — also rest heavily upon the determination of this issue. From reading the entire contract, as is appropriate (Trans Int'l Airlines, Inc. v. United States, 351 F.2d 1001, 173 Ct.Cl. 312 (1965)), we determine that the only reasonable interpretation of its provisions is that the Government was not responsible for making surveys to include waste areas.

Plaintiff relies upon paragraph SC-13 of the contract to support its position. This paragraph has two basic subdivisions. The first of these, "Layout of Work," requires the Government to establish the base lines and bench marks³ at the site and obligates the contractor to lay out the work and take all measurements necessary for performance in accordance with the specifications set. It seems clear from the contract language that the contractor was to have complete responsibility for all engineering or surveying work necessary to complete performance within this geographic framework.

The second subdivision of paragraph SC-13 is entitled "Quantity Surveys." It is observed that the type of surveys described here is intended by the syntax to be distinct from the type of surveys necessarily involved in the subdivision "Layout of Work." Again, the structure of this subdivision parallels an obligation of the Government with a corresponding and complementary duty of the contractor.

It is important in considering this section to note that paragraph 3-12 of the Technical Provisions expressly provided that the filling of waste areas would not involve a separate pay factor. Instead, as that paragraph and paragraph 2-09 of the Technical Provisions provided, payment for excavation, which included the cost of filling operations, was by unit price per cubic yard.

Plaintiff, stressing the use of the conjunction "and," argues that subparagraph (1) of "Quantity Surveys" places two separate obligations upon the Government: (1) to "make original and final surveys"; (2) to "make compilations to determine the quantities of work performed or finally in place." The first of these obligations, plaintiff states, requires the Government to make surveys of the entire site, including waste areas.

This interpretation ignores the sense of the whole subdivision. Clearly, the phrase in subparagraph (1) beginning with the word "compilations" would be out of context if it had no relation to the surveys mentioned in the first part of the subparagraph and in the subdivision title. Moreover, the same parallel, between "surveys" and "computations" for pay purposes, is contained in subparagraph (2), referring to the contractor's obligations. The surveys described in the second subparagraph are undoubtedly "quantity surveys," as indicated by the last sentence in the subparagraph. Also, it is clear from this subparagraph that the term "quantity surveys" refers to surveys for pay purposes, as distinguished from surveys for job layout and planning.

When the language of subparagraph (1) is considered in the light of this analysis, and when that subparagraph is read in contradistinction to the first subdivision, "Layout of Work," and in conjunction with paragraphs 3-12 and 2-09, plaintiff's interpretation becomes unduly strained. We therefore find no ambiguity in paragraph SC-13b. Even should this paragraph be considered ambiguous, however, plaintiff still cannot prevail. Before an ambiguous provision can be construed against its drafter, the ambiguity must be a substantial and reasonable one. Southern Constr. Co. v. United States, 364 F.2d 439, 176 Ct.Cl. 1339 (1966); Keco Indus., Inc. v. United States, 364 F.2d 838, 176 Ct.Cl. 983 (1966), cert. denied, 386 U.S. 958, 87 S.Ct. 1027, 18 L.Ed.2d 105 (1967).

On the other hand, plaintiff's interpretation tends to create...