Eickhof Const. Co. v. City of Grafton

• Decision Date: 20 September 1963
• Docket Number: No. 8072,8072
• Citation: 123 N.W.2d 580
• Parties: EICKHOF CONSTRUCTION COMPANY, a Corporation, Plaintiff and Respondent, v. CITY OF GRAFTON, a Municipal Corporation, Defendant and Appellant.
• Court: North Dakota Supreme Court

Page 580

123 N.W.2d 580

EICKHOF CONSTRUCTION COMPANY, a Corporation, Plaintiff and Respondent, v. CITY OF GRAFTON, a Municipal Corporation, Defendant and Appellant.

No. 8072.

Supreme Court of North Dakota.

Sept. 20, 1963.

Syllabus by the Court.

1. Where the city engineer, under a provision in a construction contract which gave the engineer the authority to define the intent and meaning of the specifications and made his decision final, decided that the city need not pay for gravel not approved by him, he exceeded his authority. As the question of payment involved a construction of the contract, rather than a definition of the intent and meaning of the specifications, it was a matter for the court, not the engineer, to construe.

2. Where the trial court was the trier of the facts, on appeal the appellant was entitled to demand a trial de novo of all the issues; and where this demand has been made, it is the duty of the Supreme Court to review the entire record and to make its findings thereon. Although the trial court's findings are entitled to appreciable weight, the Supreme Court is not bound thereby.

Dahl, Dahl & Greenagel, Grafton, for defendant and appellant.

Degnan, Hager, McElroy & Lamb, Grand Forks, for plaintiff and respondent.

ERICKSTAD, Judge.

In this case the plaintiff, Eickhof Construction Company, sued the defendant City of Grafton, basing its action on the terms of a written construction contract with the City, alleging that $11,435.50, plus interest, was due and owing it for pit run gravel which it had furnished the City in connection with the construction of a water treatment and water distribution plant. The defendant interposed an answer denying this obligation, asserting it had paid the contract in full, that $518.00 of this payment was for pit run gravel furnished in the project which its engineer had approved, and that it was liable only for the gravel which its engineer had approved.

As a second defense, the defendant denied any obligation to pay for additional pit run gravel but asserted that if it were obligated to pay for any more gravel, the maximum it would be obligated for would be 551 cubic yards, based on a certain formula.

The Honorable Albert Lundberg, District Judge of Walsh County, took oral testimony in the case on July 14, 1958, the parties having stipulated to try the case before the court without a jury. Affidavits were subsequently filed with the court by both parties. On June 5, 1961, the judge rendered his memorandum decision, which was a holding in favor of the plaintiff, awarding it the sum of $7,000, plus interest.

The defendant has appealed from the judgment rendered on June 21, 1961, which was pursuant to findings of fact, conclusions of law, and order for judgment dated June 19, 1961, all being consistent with the said decision. A trial de novo is demanded in the Supreme Court.

As for the facts, the trial court, in the memorandum decision, had this to say:

'But, after spending days--and many nights--attempting to clarify the facts and the issues, they still lack clarity, and we are forced to the conclusion that it is vain to hope that order and clarity will emerge from a muddle in which there never was clarity or order.'

This court may order a new trial of an action, even where a trial de novo in this court is demanded, if it deems such course necessary to the accomplishment of justice. Sec. 28-27-32, N.D.C.C.

At the close of the hearing on July 14, 1958, the trial court invited the parties to submit additional evidence in affidavit form. The parties thereafter did submit affidavits, but this apparently did not materially aid the trial court. As the parties were given the opportunity to present their evidence without restriction or limitation before the trial court, it would not appear likely that they could make a better record if a new trial were now granted. We have concluded, therefore, that to return the case for a new trial would result only in added delay.

As this case was commenced by summons and complaint dated October 25, 1956, was presented to the trial court on July 14, 1958, was decided by the trial court on June 5, 1961, and was argued in the Supreme Court in the April term for 1963, it seems imperative that a concluding decision be rendered on the basis of the record that is before us, without further delay.

In this case the trial court had before it certain stipulated facts, certain affidavits, and the testimony taken at the hearing.

Stipulated are the facts that the petitioner furnished 3,415.3 cubic yards of pit run gravel and that if the petitioner is entitled to recover for more gravel than that for which it has already been paid, the recovery shall be on the basis of $3.50 per cubic yard.

One of the defendant's major specifications of error is that 'The Trial Court erred in finding that the plaintiff had proved in an adequate manner the proper use of gravel in accordance with the specifications.'

A review of the evidence indicates that neither the contractor nor the City kept accurate records of the amount of pit run gravel used in each phase of the contract. Only the total amount furnished is certain. This total is certain only because it is stipulated to be in the amount of 3,415.3 cubic yards.

Section 10 of that part of Exhibit 1 entitled 'Information for Bidders,' reads:

'Approximate Quantities: In cases where any part or all of the bidding is to be received on a unit price basis, the quantities are approximate only and each bidder will be required to make his own estimates of amounts and to calculate his unit price bid accordingly. Proposal quantities will be used to determine low bid.' Sec. 10, Information for Bidders, Exhibit 1, p. 21.

It is argued that the latter provision gives notice to the bidders that the estimates are not binding and that the City intends to exercise control over the materials used during the course of construction.

This control, it is argued, was given the city in Section 8 of that part of Exhibit 1 which is entitled 'Miscellaneous Stipulations' and which reads:

'Interpretation of Specifications: Should any question arise as to the intent and meaning of the specifications herein contained, the Engineer shall define the same and his decision shall be final.' Sec. 8, Miscellaneous Stipulations, Exhibit 1, p. 28.

Section 3 of said 'Miscellaneous Stipulations' reads:

'Disputes: Any difference or disputes between the inspectors and the Contractor shall be immediately referred to the Engineer whose decision shall be final.' Sec. 3, Miscellaneous Stipulations, Exhibit 1, p. 28.

The City contends that under the aforesaid Section 8, it is liable only for as much gravel as its engineer approved; and, in this respect, it states that the engineer approved only 148 cubic yards of gravel.

The contractor, however, contends that the engineer approved all 3,415.3 cubic yards of gravel. This is denied by the engineer, and his testimony is supported by the fact that he, as engineer, consistently refused during the course of construction to approve the claims for payment for gravel used.

Although the contractor alleges that approval was given, he contends that if this is not proven, approval was not necessary. His argument is that the specifications indicate that gravel used as a bed for pipe was not to be included in the cost of the pipe. Here he refers us to that part of a note in Exhibit 1 under the title 'Water Distribution System,' which reads as follows:

'In every proposal item containing cast iron pipe, or alternate asbestos cement pipe, in Schedules 1, 2 and 3, the unit price bid shall include the cost of placing backfill material, except that the cost of pit run gravel in place is included under the Item Number in each Proposal entitled, Pit Run Gravel Fill.' Water Distribution System, Exhibit 1, p. 124.

The contractor believes that this clause required him to include his labor costs in figuring the cost of the pipe in place, but that it provides for extra payment at the bid price of gravel for whatever pit run gravel was required.

His further argument is that if the terms of the contract are ambiguous, the trial court was permitted to adopt the interpretation of the contract most favorable to the party who did not draft the contract. He cites Ring v. Minnesota, 263 Minn. 391, 116 N.W.2d 582.

The trial court in the instant case apparently concluded that the contract was ambiguous and, following the reasoning of the aforesaid Minnesota case, adopted the interpretation most favorable to the contractor, who was the party who did not draft the instrument.

The City, on the other hand, refers us to other sections of the contract which, it contends, indicate that the gravel for the bed of the...