Fondedile, S.A. v. C.E. Maguire, Inc.
| Decision Date | 15 May 1992 |
| Docket Number | No. 90-444-A,90-444-A |
| Citation | 610 A.2d 87 |
| Parties | FONDEDILE, S.A. v. C.E. MAGUIRE, INC. a/k/a Maguire Group, Inc., et al. ppeal. |
| Court | Rhode Island Supreme Court |
This is an appeal by the plaintiff Fondedile, S.A., from a Superior Court judgment entered in favor of the defendants, the city of Providence and C.E. Maguire, Inc. This case concerns a major public works project undertaken by the city of Providence (city) to revitalize its port facilities. In the early 1970s the city hired C.E. Maguire, Inc. (Maguire), to design and supervise a plan to upgrade the municipal wharf at Fields Point in the Port of Providence. At the project's inception berth 3 in the municipal wharf consisted of an unrepaired gravity seawall built at the turn of the century. The original wall was constructed by stacking individual granite blocks on top of each other. No mortar or cement was used to keep the blocks sealed together; instead, the wall's stability was maintained by the considerable weight, irregular external surface, and manner of placement of the individual blocks. Information concerning the wall's design is limited, and the most reliable data is a cross-section drawing dated February 9, 1939, representing a "typical" section of the seawall. The cross-section indicates that the toe at the base of the wall extends to 32.5 feet below mean low water (-32.5 M.L.W.) and that the top rises to approximately +10 M.L.W.
Part of the rehabilitation project required dredging the port to a depth of -35 M.L.W. in front of berth 3. Dredging to this depth, however, threatened the wall's stability because -35 M.L.W. was 2 1/2 feet beneath the base of the wall. If uncorrected, this gap would have caused downward vertical movement of the wall and caused erosion beneath the wall. To prevent movement and erosion, Maguire consulted plaintiff Fondedile, S.A. (Fondedile), an international construction business specializing in soils and grouting, to design a stabilization plan. Based on this consultation, the city adopted a stabilization design using small-diameter cast-in-place root piles to underpin the seawall to the river's subsurface.
A simplified explanation of this design follows. First, the contractor drills a shaft from ground level through the wall, through the underlying soil, and into the supporting subsurface. The shaft is kept open by reinforcing metal casings inserted into the drill hole at prespecified lengths and configurations. Concrete or grout is then poured into the shaft under pressure, and the casings are withdrawn. As the casings are removed, pressure forces grout into openings in the material surrounding the shaft. The grout subsequently adheres to the surrounding material and hardens to form a pile.
The amount of grout required to fill a shaft varies depending on the volume of the shaft and the number of openings in the material surrounding the drillhole. The larger the number and size of these openings, the greater the amount of grout required to fill these spaces. Consequently, knowledge of site conditions is critical to an accurate estimate of grout requirements. To determine site conditions at berth 3, Maguire hired Guild Drilling Company (Guild) to make test borings of the wall and subsurface soil. Guild bored test holes in April and June 1977 including three borings drilled vertically through the seawall.
On May 3, 1979, the city invited bids on a contract to install pressure-grounded concrete piles to support the existing granite-block gravity seawall at berth 3. Prospective bidders received a packet containing a notice to bidders, a proposal and contract, contract bonds, general and special contract provisions, technical specifications, the Guild boring logs, compression testing results, soil test results, and a set of engineering drawings. A prebid conference was held on May 15, 1979, at which the participants discussed the payment schedule proposed in the contract. One prospective bidder asked whether the city would consider compensating the contractor on a basis of cubic yards of grout consumed instead of the proposed terms of payment for linear foot of root pile installed. The city would not agree to modify the method of payment, and the contract was bid at fixed rates per linear foot of root pile installed.
All bids were submitted by May 29, 1979, and the city accepted Fondedile's bid of $3,489,477.60 on April 25, 1980. On May 11, 1980, the city gave Fondedile formal notice to proceed with the work, and shortly thereafter plaintiff encountered difficulties. On May 20, 1980, Fondedile received a daily work-progress report from its surveyors stating that the seawall had shifted from the position represented in the bid documents. The report detailed movement of approximately twelve inches at the center of the wall and approximately six inches at each end of the wall. Although plaintiff became aware of the movement, it continued to work on the project without formally notifying defendants or making a request to modify the contract due to changed conditions. The plaintiff subsequently encountered problems drilling through and behind the seawall and discovered that the few drillholes filled with grout required considerably more grout than its bid estimate. In a letter dated October 2, 1980, plaintiff requested permission from defendants to pour grout into the drillholes by hydrostatic pressure instead of pneumatic pressure and to grout piles to a height of two feet below the ground surface. In the letter plaintiff explained that these design changes would reduce the amount of grout used to fill openings surrounding the drill holes.
On October 20, 1980, plaintiff and Maguire met to discuss plaintiff's request (October 20 meeting). The plaintiff expressed concern about excess grout consumed and the corresponding cost. Unrebutted testimony introduced at trial shows that the parties also discussed modifying the contract to provide an alternative method of compensation; specifically that plaintiff requested additional payment for grout consumed in excess of the formula upon which plaintiff made its bid. Although the nature and extent of this discussion was disputed, the trial justice found that no oral agreement regarding payment for excess grout was reached. On November 13, 1980, Maguire gave plaintiff permission to grout all piles up to two feet below the ground surface by hydrostatic pressure.
By February 1981 the parties recognized that plaintiff could not meet the projected completion date. In a letter dated February 10, 1981, plaintiff requested a new completion date of October 31, 1981. This extension was granted on June 9, 1981, as part of a change order authorizing diver operations to seal the face of the seawall. Nowhere, however, in correspondence or negotiations discussing this extension did plaintiff express an expectation to be compensated for extra drilling and grout expenses. Thereafter, in a letter to Maguire dated July 28, 1981, plaintiff claimed that site conditions had worsened considerably since the 1977 drilling tests. In the letter plaintiff alleged a two-foot movement in the wall that caused the backfill to weaken and the configuration of the wall to change. Based on this movement plaintiff requested permission to stabilize the backfill and to fill all voids by grouting piles to ground elevation. In a letter dated September 24, 1981, defendant disputed the amount of movement and reiterated its consent for plaintiff to grout to two feet below ground surface.
The plaintiff continued to fall behind schedule, and on October 14, 1981, requested another time extension to complete the project. In its written request plaintiff cited greater wall depth, greater grout consumption, drilling problems, diver operations, and a workers' strike as grounds for the extension. The request again contained no demand for additional payment, and on November 13, 1981, a change order was executed giving plaintiff an additional nine months to complete the project.
On December 18, 1981, plaintiff filed a claim for extra costs totalling $2,663,749.83. The detailed statement accompanying the request divided the costs among piles drilled below twenty-nine feet, excess grout consumed by the wall and backfill, drilling difficulties caused by the relaxation of the backfill, changed design in row C piles, and the use of a diver crew. Two weeks later Maguire summarily denied the claim. Maguire and the city's construction manager subsequently met with plaintiff on March 8, 1982. At this meeting plaintiff renewed its claim, and Maguire explained its corresponding reasons for rejecting the claim. On May 6, 1982, the city formally denied plaintiff's claim. The plaintiff completed work on September 1, 1982, and the city paid plaintiff the full contract price.
On September 9, 1983, plaintiff filed suit against defendants to recover the extra costs denied by the city. The plaintiff claimed damages for extra costs under theories of (1) express and implied warranty, (2) oral modification to the contract, and (3) quasi-contract. The Superior Court trial commenced on January 9, 1989, and the presentation of evidence concluded on February 7, 1989. The following day the court granted defendants' motion to dismiss plaintiff's claim of oral modification to the contract. After reviewing posttrial memoranda the trial justice issued a decision on September 7, 1989, containing detailed findings of fact and entering judgment for both defendants. In his decision the trial justice found Maguire negligent for its failure to disclose movement of the seawall in contract documents. Nevertheless, the trial justice determined that plaintiff was unable to recover because it failed to...
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