Bernard McMenamy Contractors, Inc. v. Missouri State Highway Com'n

• Decision Date: 30 April 1979
• Docket Number: No. 29687,29687
• Citation: 582 S.W.2d 305
• Parties: BERNARD McMENAMY CONTRACTORS, INC., a Missouri Corporation, Plaintiff-Respondent, v. MISSOURI STATE HIGHWAY COMMISSION, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 305

582 S.W.2d 305

BERNARD McMENAMY CONTRACTORS, INC., a Missouri Corporation Plaintiff-Respondent, v. MISSOURI STATE HIGHWAY COMMISSION, Defendant-Appellant.

No. 29687.

Missouri Court of Appeals, Western District.

April 30, 1979.

Motion for Rehearing and/or Transfer to Supreme Court Denied

June 11, 1979.

Application to Transfer Denied July 17, 1979.

Bruce A. Ring, Richard L. Tiemeyer, Jefferson City, for defendant-appellant.

Robert L. Hyder, Hyder & McHenry, William A. Spencer, Jefferson City, for plaintiff-respondent.

Before HIGGINS, Special Judge, Presiding, PRITCHARD, J., and WELBORN, Special Judge.

ROBERT R. WELBORN, Special Judge.

Action by contractor on highway construction project to recover damages for breach of warranty of plans and for breach of contract. On a trial to the court, judgment was entered for plaintiff for an aggregate amount of $418,904.41, with interest at the rate of 6% From the date of filing of plaintiff's petition.

In August, 1969, the Missouri State Highway Commission sought bids for the construction of 7.506 miles of Interstate Route 55, in Cape Girardeau County. The low bid of $6,757,715.45 was submitted by Bernard McMenamy Contractors, Inc., and on September 25, 1969, the commission entered into a contract with McMenamy on the basis of its bid. The project was finally accepted as completed in September, 1973. McMenamy was paid $6,753,847.53 by the commission. In November, 1974, McMenamy filed a claim for adjudgment with the commission seeking additional payment under the contract and the remission of $60,000 liquidated damages charged by the commission for failure to complete the project within agreed time. The commission rejected the claim except for the remission of $1,500 liquidated damages and McMenamy brought this action.

McMenamy's petition was in two counts. The first count was for various items, the major portion being based upon the claim that underground conditions encountered at the site differed from those represented by the commission's plans and proposals, resulting in additional costs to plaintiff. Count II of the petition alleged that the commission knew that the underground conditions were not as represented by the plans and that by reason of the failure of defendant to represent the true conditions existing in the area of the project, plaintiff had been obligated to construct a project not contemplated on submission of its bid for which plaintiff was entitled to receive $600,000.00.

At the conclusion of the trial, the court's findings, largely in favor of plaintiff, were all based upon Count I. The court, in its judgment, concluded that Count II had been abandoned and it was dismissed.

Respondent's bid and the contract based upon it were on a unit basis. Two of the items were for 1,712,948 cubic yards of "Class A" excavation at 71 cents per cubic yard and 100,357 cubic yards of "Class C" excavation at $2.60 per cubic yard.

Section 203.1.1, Missouri Standard Specifications for Highway Construction (1968), incorporated in the contract, defined Class A Excavation as "all roadway and drainage excavation not classified as Class C, Sandstone or Igneous Rock." Class C Excavation was defined as "the removal of stone in ledges six inches or more in thickness * * *."

The plans for the project indicated that rock could be encountered at ten locations. The design cross-sections for rock areas indicated back slopes of 1/4:1 in rock cuts, or almost vertical back slopes in such cuts.

Mr. William R. Wallace, a graduate engineer, was respondent's chief engineer. He had been employed by the appellant as an engineer from 1928 until 1940. During the war, he was employed by the Corps of Engineers and he became a Corps officer. After the war, he worked in private engineering jobs until 1955, when he was again employed by appellant. From 1962 to 1964, he was General Inspector of Construction for appellant. He resigned in 1964 to accept private employment and in 1965 he was employed by respondent as General Superintendent, a position he held until 1972. Wallace was respondent's principal witness at the trial.

According to Wallace, all of the slopes shown in rock cuts by the plans were 1/4 to 1. " * * * (Y)ou go up one foot and over 1/4 of a foot; in other words, almost vertical." This " * * * indicates that this rock is of a very stable ledge formation, otherwise it could not be placed on a 1/4 to 1 slope, if it was sloughed very much under the weather conditions and all, if it's put in a flat slope." However, there was no cut on the project as built that was classified as 100% Ledge rock, or Class "C" excavation. Instead respondent found pinnacles of rock with plastic clay crevices and formations of boulders embedded in plastic clay. There was no place where only Class "C" excavation was encountered and all of the Class "C" was in percentage material in which, according to the specifications, the contractor and the highway commission representatives agree on the percentage of rock and earth in the material excavated. In only a few areas could vertical slopes be constructed. Most slopes were variable, "anywhere from a half to 1 up to 2 to 1 backslope."

Respondent encountered rock in 23 separate locations rather than the 10 indicated on the plans. Respondent was paid at the unit price for the excavation of 146,508 cubic yards of Class C excavation.

In August, 1968, the Soils and Geology Section of Division 6 of the highway department made a report of its Soil Survey of 13.5 miles of Route I-55 in Cape Girardeau County, including the area covered by the contract. The report stated that " * * * the subsoil throughout the project will consist of a waxy reddish to yellowish clay with a Group Index of 20 and a Plasticity Index of 40 to 50." The report further stated that limestone found to have been present was "quite broken." One formation was described as "a series of unconnected pinnacles." This report was not a part of the bid papers furnished to prospective bidders. Wallace stated that he did not know that the report of the geologist would be available if he asked to see it.

Although respondent's brief is in some respects couched in terms of recovery on the basis of misrepresentation, it does accept appellant's categorization of Count I of its petition below upon which the court found for respondent as "one for breach of warranty." Missouri cases have refused to find an implied warranty of sufficiency of the plans and specifications in cases involving State Highway Commission Construction contracts. Sandy Hites Co. v. State Highway Commission, 347 Mo. 954, 149 S.W.2d 828, 833-835(3-5) (1941); Cameron, Joyce & Co. v. State Highway Commission, 350 Mo. 389, 166 S.W.2d 458 (1942); Webb-Boone Paving Co. v. State Highway Commission, 351 Mo. 922, 173 S.W.2d 580, 584-585(6)(7) (1943). Those cases point to the requirement of an affirmative misrepresentation as essential to recovery based upon breach of warranty. In Schmelig Construction Co. v. Missouri State Highway Commission, 543 S.W.2d 265 (Mo.App.1976), this court refused to find a breach of implied warranty, absent affirmative misrepresentation, even though the condition there involved had been known to the highway commission and unknown to the contractor. In the case of Denton Construction Co. v. Missouri State Highway Commission, 454 S.W.2d 44 (Mo.1970), the court held that the furnishing by the commission to a contractor of plans for the previously constructed roadbed upon which the contractor was to lay pavement "constituted a representation by the Commission to plaintiff that the roadbed had been constructed according to those plans, or at least within the generally accepted tolerances." 454 S.W.2d 49(4).

For its first point on this appeal, appellant contends that the court "erroneously applied the law" in concluding that appellant breached an implied or express warranty in the contract. Specifically appellant contends that the trial court erred in finding that the plans indicated that the contractor would encounter 100,357 cubic yards of solid ledge rock at approximately ten locations because the contract quantities were only estimates and 1/4:1 back slopes on commission cross-sections did not represent only solid ledge rock. Inasmuch as this position is stated as a subpoint of the charge that the court erroneously applied the law, it must be understood as meaning that, as a matter of law, the trial court could not have found as it did, not that under the evidence the court should have made a contrary finding. Thus, although appellant argues at length on this point on the basis of the commission's evidence, such evidence is really not for consideration in passing upon the trial court's ruling as a matter of law.

Unquestionably, respondent's claim of positive representation of ledge rock must depend upon the 1/4:1 back slopes on the commission's original cross-sections as explicated by Wallace. This case does not deal with words, for which resort to a dictionary may ordinarily assist in interpreting the terms of an agreement. It deals with lines on plans, lines the significance of which would be apparent only to engineers, contractors or others familiar with highway construction plans.

Appellant asserts that "McMenamy relied and rested on the * * * bald assertions of its chief engineer, William R. Wallace." Appellant cites no authority which purports to hold that Wallace's testimony per se, was lacking in probative value. Therefore, this possibility is not required to be pursued.

Essentially, appellant's position is that the terms of the contract negatived any warranty regarding underground conditions on the job and therefore McMenamy's basic claim must fail.

Appellant relies upon the following provisions of the proposal, contract and specifications:

1. The fact that the contract unit price for rock was expressed in terms of Class C Excavation per cubic yard.

2. The definition of Class C in ...