Associated Engineers & Contractors, Inc. v. State

• Citation: 58 Haw. 187,567 P.2d 397
• Decision Date: 07 July 1977
• Docket Number: No. 5595,5595
• Court: Supreme Court of Hawai'i
• Parties: ASSOCIATED ENGINEERS & CONTRACTORS, INC., and Chris Berg Inc., Plaintiffs- Appellees, Cross-Appellants, v. STATE of Hawaii, Defendant-Appellant, Cross-Appellee.

Page 397

567 P.2d 397

58 Haw. 187

ASSOCIATED ENGINEERS & CONTRACTORS, INC., and Chris Berg Inc., Plaintiffs- Appellees, Cross-Appellants, v. STATE of Hawaii, Defendant-Appellant, Cross-Appellee.

No. 5595.

Supreme Court of Hawai'i.

July 7, 1977.

Rehearing Denied Sept. 9, 1977.

Jack C. Morse, Special Deputy Atty. Gen., State of Hawaii, Honolulu, for defendant-appellant.

Dennis E. W. O'Connor and Richard K. Quinn, Honolulu (Anthony, Hoddick, Reinwald & O'Connor, Honolulu, of counsel), for plaintiffs-appellees.

1. Where the trial court, sitting without a jury, has made its factual determinations, its findings of fact will not be set aside unless clearly erroneous, which requires that under the record of the case we are left with a definite and firm conviction that a mistake has been committed by the trial court.

2. To prevail upon its claims that the State breached an affirmative duty to disclose weather data in its possession independently of that supplied to bidders and that a duty to disclose arose from the fact that such weather data materially qualified the information supplied to bidders, the contractor bears the burden of proving that such additional information would have made a material difference in the forecast which the contractor should have made from otherwise available information.

3. The State's provision of partial weather data to bidders, inclusion in the contract of certain minimum temperature requirements, and failure to include in the contract any "cold weather specifications" does not amount to a representation of the weather conditions which would be encountered at the jobsite.

4. The risk of abnormal weather conditions is borne by the contractor and a warranty that the progress of construction will not be impeded by abnormal weather conditions will not easily be implied.

5. A requirement in the contract that some portions of work be performed only under certain weather conditions is not, without more, a warranty that such weather conditions will exist.

6. Where the contract expressly provides that no extensions of time will be granted for the completion of the project and/or its phases, the State is under no obligation to suspend work on days of adverse weather and the contractor is not entitled to relief from the State's refusal to suspend work.

7. Where it is not shown that adverse weather conditions which made timely performance impossible should have been forecast from weather data in the possession of the State when a construction contract was entered into, the contractor is not thereby relieved from liability for liquidated damages for delayed performance, absent a provision in the contract adjusting the performance date to reflect weather delays.

8. Contract provision which liquidates damages from contractor's failure to complete contract within specified time does not liquidate damages from failure of contractor to complete a preliminary phase of the work at agreed time.

9. Where the contract between the State and the contractor makes appropriate reference to a contract between the State and a third party, the contractor is on notice that its failure to complete a phase of the project at the specified time may result in the breach by the State of its contract with the third person and the damages incurred by the State are natural consequences of the contractor's breach which are or should be foreseeable by the contractor.

10. An appellate court will not reverse a judgment in a non-jury case because of the admission of incompetent evidence, unless all of the competent evidence is insufficient to support the judgment or unless it affirmatively appears that the incompetent evidence induced the court to make an essential finding which would not otherwise have been made.

11. Upon a challenge to a finding of fact for alleged insufficiency of the evidence, this Court will not search the record to discover what evidence supports that finding and the party seeking to overthrow the finding bears the burden of presenting an analysis of the evidence which demonstrates its insufficiency.

12. Grounds of objection to evidence not raised and preserved at trial will not be considered on appeal.

13. Amendment of pleadings to conform answer to the evidence under HRCP Rule 15(b) is permissible only when an issue not raised in the pleadings has been tried by express or implied consent of the parties or when evidence is objected to at trial as not within the issues made by the pleadings.

14. The grant or denial of leave to amend an answer under HRCP Rule 15(a) is within the discretion of the trial court and is subject to reversal on appeal only for an abuse of discretion.

15. Where the trial court refuses to allow amendment of the pleadings on the ground that the evidence upon which the defendant proposed to rely in support of his motion to amend was insufficient to sustain the defense of fraud under HRS § 661-7, this court will consider whether the evidence, if presented in the trial and viewed in a light most favorable to the defendant, would prima facie establish the defense.

16. Proof of fraud under HRS § 661-7 must be by clear and convincing evidence.

17. Inducing a witness to leave the jurisdiction with the purpose of making his testimony unavailable to the adverse party may constitute an attempt corruptly to practice fraud in the proof of a claim within the meaning of HRS § 661-7.

18. Reimbursement of deposition expenses under HRCP Rule 37(a) is conditioned on proof of the matter not admitted and reimbursement may be denied where the admission sought was of no substantial importance.

Before RICHARDSON, C. J., OGATA, MENOR and KIDWELL, JJ., and KATO, Circuit Judge, in place of KOBAYASHI, J., disqualified.

KIDWELL, Justice.

This case arises out of a contract made between Plaintiffs-Appellees, Cross-Appellants (Contractor) and Defendant-Appellant, Cross-Appellee (State) for the construction by the Contractor of an observatory building at the top of Mauna Kea. The contract was entered into on September 8, 1967 and required final completion of the work (after extensions granted by the State) on July 17, 1968. The work was substantially completed on December 19, 1969, and was finally inspected by the State on January 30, 1970. The contract price, as specified in the contract, was $2,049,500, and by agreed change orders was adjusted to $2,052,938.97. This action was brought by the Contractor for unpaid portions of the contract price, together with additional compensation claimed in the amount of $1,554,610.65. The State counterclaimed for liquidated damages and for additional costs incurred under a telescope installation contract and an engineering consultant contract by reason of the Contractor's delay. After an extended trial, judgment was entered as follows:

1. Defendant shall pay to Plaintiffs the following amounts:

(a) $32,797.09 as and for the increased cost of welding the dome skin joints;

(b) $17,584.28 as and for the deletion of "Alternate No. 2"

(c) $60,432.75 as and for the increased cost of welding the dome structural connections with double Vee welds instead of single Vee welds;

(d) $52,173.00 as and for reimbursement of all jobsite and other indirect expenses incurred by Plaintiffs during the extended period of 51 calendar days required to perform the work described in paragraphs 1(a), (b), and (c) above.

2. Plaintiffs shall pay to Defendant the following amounts:

(a) $154,000.00 as and for liquidated damages for tardy completion of the project;

(b) $48,229.00 as and for reimbursement for damages paid to Perkin-Elmer;

(c) $1,000.00 for deletion of the position encoders;

(d) $1,451.06 as and for reimbursement for expenses incurred by Defendant in locating Inspector Race.

The agreed performance period embraced the winter months and the Contractor encountered cold, winds, snow and ice. It was claimed that the State knew or should have known that completion of the work during the contract period would be impossible because of weather conditions, that relevant weather information was withheld from the Contractor, and that the State represented or warranted that the weather would be mild enough to permit completion during the contract period. These circumstances were relied on by the Contractor both as relieving it from liability for liquidated damages during the portion of the delay in performance attributable to weather conditions and as entitling it to reimbursement of its extra costs resulting from the same cause. The Contractor was required by the State to perform welding and other work in the construction of the observatory dome in accordance with interpretations of the specifications which the Contractor disputed, and claim was made for the cost of such work together with relief from liquidated damages during the period of delay so occasioned. The claim also included miscellaneous items in a relatively small amount, together with claim preparation costs and interest.

The trial court allowed a portion of the Contractor's claim for increased costs of dome construction resulting from the State's interpretation of the specifications and denied the claim in all other respects. The State's counterclaim for liquidated damages was allowed, except with respect to that part of the delay period attributable to dome construction for which the Contractor was awarded compensation. The State was allowed its increased costs of the telescope installation contract. Both parties have appealed. However, the Contractor has raised no question with respect to items 2(c) and (d) of the judgment.

On the Contractor's appeal, we affirm the judgment in favor of the State (Paragraphs 2(a) to 2(d), inclusive). On the State's appeal, we reverse the judgment in favor of the Contractor (Paragraphs 1(a) to 1(d), inclusive) and remand the case for further proceedings.

During the trial, the Contractor assisted a material witness for the State to obtain mainland employment and to...