Candee Const. Co., Inc. v. South Dakota Dept. of Transp., s. 16552
| Citation | 447 N.W.2d 339 |
| Decision Date | 17 November 1989 |
| Docket Number | Nos. 16552,16553 and 16558,s. 16552 |
| Parties | CANDEE CONSTRUCTION COMPANY, INC., a North Dakota Corporation, Plaintiff and Appellant, v. SOUTH DAKOTA DEPARTMENT OF TRANSPORTATION, et al., Defendants and Appellees. |
| Court | Supreme Court of South Dakota |
Joseph M. Butler, Terry L. Hofer of Bangs, McCullen, Butler, Foye & Simmons, Rapid City, David D. Beaudoin, David C. Roland of LeFevere, Lefler, Kennedy O'Brien & Drawz, Minneapolis, Minn., for plaintiff and appellant.
Franklin J. Wallahan, Debra D. Watson of Wallahan & Watson, Rapid City, for individual defendants.
Thomas R. Lehnert, Ronald W. Banks of Banks, Johnson, Johnson, Colbath & Huffman, P.C., Rapid City, Carl W. Quist, Asst. Atty. Gen., Pierre, for state defendants.
Candee Construction Company (Candee) served and filed a complaint against the South Dakota Department of Transportation (DOT) as well as James Myers (Myers), former South Dakota Secretary of Transportation, and present DOT employees Charles Piper, regional engineer; Dennis Landguth, area engineer; Gary Engel, project engineer; and Glenn Bintliff, project inspector (individual defendants). Candee alleges several causes of action arising from highway construction projects on Highway 16 in the Black Hills during 1984 and 1985. The circuit court granted DOT's and individual defendants' motions to dismiss certain causes of action and partial summary judgment for other causes of action. Both Candee and DOT appeal the circuit court's decisions.
Summarized below is the circuit court's disposition of Candee's causes of action and our decision.
1. The circuit court entered an order granting partial summary judgment which denied Candee's claims seeking additional compensation for rock removed and water applied during construction under the terms and provisions of the contracts. We affirm this order.
2. The circuit court preserved Candee's claim for additional compensation for water used in excess of that required by a reasonable construction standard. We affirm the circuit court's refusal to dismiss this claim.
3. The circuit court dismissed, for failure to state a cause of action, Candee's claims for additional compensation based on alleged breach of contract and implied contract, and equitable claims of unjust enrichment and defective plans. We reverse the circuit court's dismissal of these claims.
4. The circuit court entered summary judgment, dismissing the civil rights claim of Candee against individual defendants and denying Candee's punitive damage claim. We affirm the circuit court's judgment and order.
5. The circuit court entered an order taxing costs against Candee, including the travel and living expenses of the court reporter who attended the taking of depositions in discovery of this case. We reverse the circuit court's order.
In 1984 Candee was the low bidder on projects 48 and 45, two construction contracts in the Black Hills. Candee was required to apply water for compaction and to excavate rock in excess of DOT's plan estimates which materially changed its cost to complete the contracts. Completion of the projects was delayed. In its bid specifications, DOT combined rock and earth removal into one category, unclassified excavation, and stated it would pay the same price per cubic yard for both earth and rock removal. For the 48 and 45 projects combined, DOT plans called for 975,841 cubic yards of excavation. Of that total, DOT estimated that 324,187 cubic yards would be rock. Candee claims it excavated a total of 1,187,000 cubic yards and at least 503,952 cubic yards were of rock. DOT has paid the unit price for the total amount of cubic yards excavated by Candee except for 50,000 cubic yards which are disputed.
Candee also encountered overruns for water applied to the projects to assist in compacting the roadbed. Approximately 9,200,000 gallons of water were required in addition to the amount of water estimated by DOT. DOT paid Candee for the excess amount of water at the contract price established by DOT, $6.00 per thousand gallons of water.
Prior to completion of the 48 and 45 projects, Candee prepared to bid on project 41, another road construction project in the Black Hills. James Myers, then secretary of DOT, refused to issue bidding documents to Candee on the 41 project, citing Candee's failure to complete the 48 and 45 projects in a timely fashion.
Candee claims that it is entitled to additional compensation under the contract for rock excavated in excess of DOT's plan estimates and water applied for compaction in excess of plan estimates. Candee bases its claim on specifications 4.2 and 4.3.
We first examine Candee's claim for additional compensation for rock excavation under Section 4.2 which provides in pertinent part:
ALTERATIONS OF PLANS--The Department reserves the right to make at any time during the progress of the work such increases or decreases in quantities and such alterations in the work within the general scope of the contract, including alterations in the grade or alignment of the road or structure or both as may be found necessary or desirable. Such increases or decreases and alterations shall not invalidate the contract nor release the surety, and the contractor agrees to accept the work as altered, the same as if it had been a part of the original contract.
. . . . .
Unless alterations in plans or increases or decreases in contract quantities materially changes [sic] the cost of performing a contract item or items, such item or items shall be performed as a part of the contract and will be paid for at the contract price or prices.
When alterations in plans or increases or decreases in contract quantities materially changes [sic] the cost of performing a contract or items, an allowance will be made on such basis as may have been agreed to in advance of performance of the work involved.
Prices for items which are predetermined by the Department and set forth in the specifications and/or the proposal form, will not be subject to negotiation because of alterations in plans or quantity changes.
Section 4.2 applies only if DOT alters the plans or otherwise increases or decreases the contract quantities. The quantities set forth in the bid documents are clearly and repeatedly identified as estimates only. Contractors were warned that the actual amount might be greater. DOT placed the burden on contractors to accurately determine the amount of rock to be excavated. Therefore, the fact that Candee encountered rock in excess of DOT estimates was not a change in quantities by DOT.
We next examine Candee's additional compensation claim for water under section 4.2. DOT vastly increased the amount of water Candee had to apply over the 5 gallons of water per cubic yard estimated by DOT in the plans. The rate of compensation for water, $6.00 per thousand gallons, was predetermined by DOT. DOT contends that the last paragraph of section 4.2 precludes Candee from receiving compensation greater than the predetermined rate. This paragraph provides: "Prices for items which are predetermined by the Department and set forth in the specifications and/or the proposal form, will not be subject to negotiation because of alterations in plans or quantity changes." The plain meaning of this paragraph excludes renegotiation of predetermined prices for items such as water. The circuit court properly held that Candee was not entitled to additional compensation for water under section 4.2.
Candee also urges that it is entitled to additional compensation for rock excavation and water under section 4.3. Section 4.3 provides:
EXTRA WORK--The Contractor shall perform authorized work, for which there is no price included in the contract, whenever it is deemed necessary or desirable in order to complete fully the work as contemplated. Such work shall be performed in accordance with the specifications and as directed, and will be paid for as provided under Section 9.5.
Extra work is defined in clause 1.27 of the Specifications Book as: "An item of work not provided for in the contract as awarded but found by the Engineer essential to the satisfactory completion of the contract within its intended scope." The court defined the term "extras" as used in connection with construction contracts in Sweetman Const. Co., Inc. v. State, 293 N.W.2d 457 (S.D.1980). We held that "extras" "means work or costs arising outside of and entirely independent of the contract; that is, something not required in its performance, not contemplated by the parties, and not controlled by the contract." 293 N.W.2d at 460.
Both rock excavation and water for compaction were a material aspect of each project.
Candee's excavation bid included rock excavation, and DOT set out in its bid specifications that water would be used for compaction. These items were provided for in the contract and were not work subsequently found by the engineer to be essential for the satisfactory completion of the project. Rock excavation and water for compaction were items required for the performance of the contracts, contemplated by the parties and controlled by the contract. These items cannot be properly considered as extra work.
Candee made further claim that it was entitled to additional compensation because the water necessitated by DOT exceeded that required by a reasonable construction standard. The circuit court preserved this claim, refusing to dismiss the claim, relying on Northern Imp. Co. v S.D. State Highway Com'n, 314 N.W.2d 857 (S.D.1982). We agree. A reasonable construction standard applies to this case and if the water required by DOT exceeded that required by a reasonable construction standard, Candee is entitled to compensation for such excess.
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