Condon-Cunningham, Inc. v. Day, CONDON-CUNNINGHA

• Citation: 51 O.O.2d 144,22 Ohio Misc. 71,258 N.E.2d 264
• Decision Date: 15 December 1969
• Docket Number: No. 853345,INC,CONDON-CUNNINGHA,853345
• Parties: , 51 O.O.2d 144 , et al. v. DAY et al.
• Court: Court of Common Pleas of Ohio

Page 71

22 Ohio Misc. 71

258 N.E.2d 264, 51 O.O.2d 144

CONDON-CUNNINGHAM, INC., et al. v. DAY et al.

No. 853345.

Court of Common Pleas of Ohio, Cuyahoga County.

Dec. 15, 1969.

Syllabus by the Court

1. Where plans or specifications utilized by a public body in seeking bids for a public improvement lead the successful bidder reasonably to believe that certain conditions stated therein actually exist and may be relief upon in making his bid, he will be entitled to extra compensation for expenses made necessary by conditions being other than so represented, despite disclaimers of liability of the public body for such errors in the contract or related documents.

2. Since the expenses of public contractor incurred by reason of being misled by the plans and specifications for such project constitute damages resulting from a breach of the contract, the contractor was not required to comply with the procedures for approval of 'extra work' prescribed by the contract.

Malcolm D. Young, Kitchen, Messner & Mays and Charles E. Merchant, Cleveland, for plaintiffs.

John T. Corrigan, Prosecuting Atty., and John L. Dowling, Cleveland, for defendants.

McMAHON, Judge.

On March 29, 1962, Condon-Cunningham, Inc., and M. F. Velotta & Sons, Inc., a joint venture (hereinafter referred to as plaintiffs), entered into a contract with William P. Day, Henry W. Speeth and Frank M. Gorman, constituting the Board of County Commissioners (hereinafter referred to as defendant), to make certain highway improvements in Cuyahoga County, involving among other things the construction, improvement and partial relocation of Rockside Road from Brecksville Road to Turney Road.

The Agreement, Proposal and Contract Bond for this project (Plffs' Ex. 1) states what was incorporated by reference into the Contract (at Notice Sheet No. 2):

'The approved plans (Plffs' Exs. 2, 2A, 2B) together with any special specifications for this project (Plffs' Ex. 1) as well as the construction and material specifications (Plffs' Ex. 3) together with the general clause and covenants in effect at the time the contract is entered into will also be incorporated by reference as fully and completely as if bound in the contract and made a part thereof.' (Parentheses and contents thereof added.)

In addition to the above referred to items specifically made a part of the contract, Soil and Foundation Investigation Reports (Jewell Report) for this project were made available as a source of supplementary information. These reports are summarized as Soils-General Notes (Plffs' Ex. 1 between the proposal and special specifications) with said summary containing the following statements:

'In addition to the soil profile there are on file * * * copies of Soil and Foundation Investigation Reports for this project.

'The S. & F. I. R. were prepared as a guide for design features incorporated in the project.

'The information contained in these reports is available for review by the contractor. The reports are not a part of the contract but are available as a source of supplementary information.'

Soil profiles (Plffs' Exs. 4 and 5) were also made available to plaintiffs. Plffs' Ex. 5 contains the following note.

'The information shown by this subgrade profile was secured for the use of the County of Cuyagoha and is not to be construed as a part of the plans governing the construction of the project.'

Plaintiffs state in their first cause of action that they prepared and submitted their bid for this project in reliance upon facts as set forth in the Proposals, Plans and Specifications prepared or caused to be prepared by the defendant and made available to prospective bidders for the purpose of preparing and influencing their bids. Plaintiffs further state that during the progress of the work required by the contract plaintiffs discovered certain misstatements of facts in the Proposals, Plans and Specifications, all of which were either known or should have been known by defendant: i. e. (1) as to the quality and quantity of materials to be excavated within the right-of-way; (2) that defendant had not made reasonable and sufficient soil tests and geological studies of the right-of-way areas. As a result of the material misstatements of fact plaintiffs were required to waste certain material as unsuitable, shown as suitable, and to replace said wasted material. Defendant admits the preparing of the Proposals, Plans and Specifications but denies all other material allegations.

Plaintiffs for their second cause of action restate the statements made under their first cause of action and ask for relief on the theory of breach of contract, in that:

(1) defendant failed to provide plaintiffs with suitable and sufficient material for placement within the embankment;

(2) defendant failed to provide plaintiffs with borrow area when defendant knew or should have known that the called for excavation was unsuitable and insufficient to complete the embankment;

(3) defendant made arbitrary, etc., demands upon plaintiffs during the performance of the work. Plaintiffs further state that they elected not to rescind the contract, but chose to complete their performance under protest. Defendant generally denies these allegations.

For their third cause of action plaintiffs state they were required to perform certain excavation work in addition to that contemplated by the parties and set forth in the contract, and that they have not been compensated for additional material furnished in connection therewith. Defendants admit that plaintiffs were in some instances instructed to remove soft subgrade and to replace the area so excavated with suitable material, but further state that plaintiff was fully compensated for all excavation and all replacement material furnished in connection therewith.

For their fourth cause of action plaintiffs state that subsequent to the execution of the contract but prior to the time plaintiffs were authorized to proceed, third parties removed over 15,000 cubic yards of material from the Kaiser-Nelson Cut. Plaintiffs further state that it was in the contemplation of the parties that the plaintiffs would have the right to use this material on the job. Plaintiffs claim they had to bring in material from outside the right-of-way sources to make up the amount removed.

Defendant admits the removal and that it took place prior to the time plaintiffs were authorized to proceed but state further that the plans did not guarantee the same conditions would be present when plaintiffs would be advised to proceed, that the plaintiffs at the time of commencing work knew said material had been removed but made no claim or protest, and that the removal of material was not essential to nor approved for completion of the contract.

Plaintiffs, as a fifth cause of action, state that they have fully performed and completed their part of the contract and that the defendant has accepted said work as being satisfactory; that a final estimate of the amount due plaintiffs was arrived at but that said amount is being withheld by the defendant until plaintiffs release defendant from any and all claims and demands arising out of the contract; that this demand is arbitrary, etc., and the refusal by defendant constitutes a breach of contract; that plaintiffs are entitled to said $35,000, plus interest. Defendant generally denies plaintiffs' claim under the fifth cause of action.

We will treat causes of action 1 and 2 as one cause of action as each one asks for the same damages and deals with the same matters.

The first cause of action seems to sound in tort and the second cause of action sounds in contract which is the one which seems more logical to the court.

The principal issue here in whether the contractors could rely upon information given to them and also other information made available to them concerning the moisture content of the soil found in the Kaiser-Nelson Cut. This information was gained through bornings made by a Columbus enginner by the name of Jewell, who made these borings for and on behalf of Cuyahoga County in connection with this project.

As to plaintiffs' first and second cause of action, the statement most directly in question is located under the first Rockside Road heading on page 4 of the 'Soils-General Notes':

'The stiff to very stiff silty clay deposits were generally at or just above the optimum moisture content. The material moisture content of the firm to stiff silty clay between Elevations 655 and 620, however, is 5 to 15 percent higher than the optimum values. This soil can not be used without first drying it.'

Plaintiffs stated in evidence at the trial that they relied on this information in preparation of their bid: that when they actually encountered the material referred to it was found to be much too wet to be easily dried, and in its present condition could not be used as fill. There is no question that the material encountered had a higher moisture content than anticipated after studying the Soils-General Notes, Jewell Report and Soil Profiles, and that extra expense was required for proper excavation and embankment of the area in question.

Defendant, in generally denying liability for any extra expense for additional borrow not contemplated in plaintiffs' bid, relies on the following provisions in the general specifications:

(1) Plaintiffs' Exhibit 3.

E-1.01 Method A

'This method provides for separate payment for Item E-1 Roadway Excavation and Item E-1 Embankment. The contractor shall control disposition of excavated waste material, wasting or using it in embankment as he desires. Payment for Item E-1 Embankment includes payment for furnishing material from sources other than excavation if needed to complete embankments, with no separate payment for borrow for planned embankments.'

(2) Plaintiffs' Exhibit 3. 6-2104.

'G-2.04. Examination of Plans, Specifications, Special Provisions and Site of Work.

'The bidder is required to...