Delzer Const. Co. v. South Dakota State Bd. of Transp., 12229

Decision Date15 February 1979
Docket NumberNo. 12229,12229
PartiesDELZER CONSTRUCTION CO., Plaintiff and Respondent, v. SOUTH DAKOTA STATE BOARD OF TRANSPORTATION, Defendant and Appellant.
CourtSouth Dakota Supreme Court

Edward C. Carpenter of Costello, Porter, Hill, Nelson, Heisterkamp & Bushnell, Rapid City, for plaintiff and respondent.

David L. Zuercher, Asst. Atty. Gen., Pierre, for defendant and appellant; William J. Janklow, Atty. Gen., Pierre, on brief.

CHEEVER, Retired Circuit Judge. *

On January 13, 1973, plaintiff entered into a contract with defendant to perform certain construction work in connection with interstate 90 and Highway 14 east of Wall, South Dakota. The work to be performed was described in the contract document as "grading, R.C. box culvert and part surfacing." In connection with the grading, a portion of the dirt for the grade was to be obtained from the "Bloom" pit. The State had previously obtained a borrow pit agreement from Mr. Bloom, which provided that all topsoil on the pit should be removed, stockpiled, and replaced uniformly over the used borrow pit and the borrow area seeded. This agreement was assigned to plaintiff by the terms of the contract.

Incorporated in the contract was an amendment to the standard specifications for roads and bridges, which provided that Section 170 of the standard specifications be modified by the substitution of the following sections:

170.4 Basis of payment. Option borrow excavation, measured as provided above will be paid for at the contract unit price per cubic yard, which price shall be full compensation for furnishing the material on the project and for all materials (except topsoil), labor and incidentals required to restore the pit to the condition specified in the contract.

Also, the contract provided at Page 8 thereof as follows:

The Plan Note for Pits 3-4-5 on Sheet # 5 is replaced by the following:

'The following provisions cover the requirements for the removal and measurement and payment of materials from Pits 3-4-5 and the provisions of the Special Provisions for Optioned Borrow Excavation do not apply to these pits.'

The addendum was completely silent as to payment for pit restoration costs.

During the course of the work, it became apparent that there was a dispute between plaintiff and the State Board of Transportation as to whether or not the restoration of the Bloom pit was an included item with the terms of the contract or whether it was to be paid for extra. Apparently, plaintiff refused to do the restoration work for some time because of the fact that the Board insisted that it was not a paid item. However, under a threat of penalty, and after having given written notice of intent to claim payment, plaintiff did perform the work and made a claim for payment on its behalf in the amount of $9,201.90. The claim was denied and plaintiff brought suit to recover. Defendant answered, and plaintiff filed a demand for jury trial.

Defendant then filed a motion for summary judgment, which was denied by the court. The matter was tried to a jury, which returned a verdict in favor of plaintiff, and defendant has appealed. Twenty-three assignments of error form the basis of the appeal. We have reviewed the various assignments, and we affirm the judgment.

The assignments of error have been summarized by defendant in its brief into seven categories, which are as follows:

1. Whether the trial court erred by denying defendant's motion for summary judgment, based upon its consideration of parol evidence alleged by plaintiff to raise issues of fact, where the sole issue was whether additional payment was required by the written contract for work completed.

2. Whether the construction of a written contract presents an issue solely for the court or triable to a jury as a matter of right.

3. Whether Mr. Veal's testimony of statements allegedly made to him in a telephone conversation constituted hearsay and should have been excluded from the record.

4. Whether the interpretation of a written contract by a subcontractor, who is a stranger to the contract without privity, is relevant or material to the issue of the contractual intent thereof.

5. Whether the trial court erred by excluding testimony and striking testimony previously received into evidence without objection, solely on the grounds of an insufficient answer to a written interrogatory where the interrogatories had been answered and no order had been sought or made compelling an additional answer, pursuant to SDCL 15-6-37(a).

6. Whether the evidence consisted solely of parol evidence and a subcontractor's bill to the prime contractor is sufficient to support a verdict in the amount of the subcontractor's bill, against the State of South Dakota, where the contract requires the prime contractor to pay a subcontractor, and the subcontractor is not a party to the action.

7. Whether the trial court erred in its instructions to the jury, thereby allowing the jury to return a verdict contrary to the law regarding public highway construction contracts let to competitive bid.

Point 1

Defendant's motion for summary judgment had attached thereto three separate affidavits of the employees of the Department of Transportation, together with the construction contract. Plaintiff's resistance to the motion had attached thereto an affidavit of the subcontractor on the project, who had done the actual seeding of the borrow pit, and an affidavit of one of plaintiff's employees, and asserted that there was a material issue of fact. After a hearing on the motion, the court made and entered its order, which reads as follows:

The Court finds that there are additions and deletions to the Contract that create a confusing and muddled picture of the contractual obligations of these parties. The Court further finds that under these set of circumstances parol evidence may be introduced to evidence each parties intentions and dealings creating the contractual obligations. It therefore follows, and the Court finds, that there are questions of fact established by the showings of the parties; and it is therefore

ORDERED, that the Motion for Summary Judgment is in all things denied.

It is fundamental that summary judgment cannot be granted if there are questions of fact to be determined. Defendant contends that the court, in order to make such a determination, had to consider certain affidavits by the subcontractor and by plaintiff's employee which contained facts which were hearsay and not relevant. It appears that it was not necessary for the court to consider such affidavits to have arrived at its determination. The court determined that the contract was, in and of itself, ambiguous, and therefore created certain questions of fact.

Point 2

It is defendant's argument that the construction of a written contract presents an issue solely for the court, and that it is not triable to a jury as a matter of right.

At the time it entered its order denying the motion for summary judgment, the court determined that there was an ambiguous contract. The law is quite clear that the effects and terms of a contract are questions of law for the court to determine alone. However, while there is no South Dakota case on the question, the weight of authority is to the effect that when there is an ambiguous contract, evidence must be introduced to determine what the intentions of the parties were and that such evidence creates a question of fact, which must be resolved by the jury. Stetson v. Investors Oil, Inc., N.D., 140 N.W.2d 349 (1966); Ring v. Minnesota Road Builders, Inc., 263 Minn. 391, 116 N.W.2d 582 (...

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