Gardner-Zemke Co. v. State

• Decision Date: 10 April 1990
• Docket Number: No. 18517,GARDNER-ZEMKE,18517
• Citation: 109 N.M. 729,1990 NMSC 34,790 P.2d 1010
• Parties: COMPANY, Plaintiff-Appellant, v. STATE of New Mexico, Fox & Associates, Inc., Morrison-Knudson Company, Inc. and W.C. Kruger & Associates, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 1010

790 P.2d 1010

109 N.M. 729

GARDNER-ZEMKE COMPANY, Plaintiff-Appellant, v. STATE of New Mexico, Fox & Associates, Inc. Morrison-Knudson Company, Inc. and W.C. Kruger &amp Associates, Defendants-Appellees.

No. 18517.

Supreme Court of New Mexico.

April 10, 1990.

Rehearing Denied May 23, 1990.

[109 NM 730] Linda Zemke, Sullivan, Villella, Skarsgard & Noya, Charles J. Noya, Albuquerque, for plaintiff-appellant.

Hal Stratton, Atty. Gen., Bruce Charles and Nann Houliston, Asst. Attys. Gen., Santa Fe, for defendant-appellee State of N.M.

Harl D. Byrd, Santa Fe, for defendant-appellee Morrison.

Montgomery & Andrews, P.A., John B. Pound, Ann B. Hemenway, Santa Fe, for defendant-appellee Kruger.

Watrous & Reardon, Thomas S. Watrous, Albuquerque, for defendant-appellee Fox & Associates.

OPINION

BACA, Justice.

This case is before us on an appeal of the grant of defendants-appellees' motion for summary judgment in an action for breach of contract and negligence. We find that no material issues of fact exist, that summary judgment was appropriately granted, and we affirm the judgment below.

FACTS

This case arises out of a construction project to build the Las Cruces Medium Security Facility. Multiple parties are involved: Gardner-Zemke Company (Gardner-Zemke), plaintiff below, which was the prime electrical contractor for the project, sued the State of New Mexico, Morrison-Knudson, the construction manager for the project, W.C. Kruger (Kruger), the architect, and Fox & Associates, Inc. (Fox), the firm that prepared the soil reports.

To secure contractors for the various aspects of the project, the state solicited bids. Included in the bid document package was a soil report, prepared by Fox, describing subsoil conditions at the site. The report consisted of several sections, including a narrative section summarizing the subsoil conditions and a technical section describing the data summarized in the narrative section. The technical section contained graphs detailing blow counts--the amount of feet a 140-pound hammer drove a two-inch sampler after a number of blows--and a legend explaining their significance. Kruger and Morrison-Knudson were contractually bound to prepare bidding documents, and they decided to include the Fox report with the pre-bid documents.

Gardner-Zemke, relying in part on the Fox soil report that it received in the bid package, was the successful bidder for the electrical work. The parties dispute the meaning of the report, but Gardner-Zemke maintains that the report meant to it that the soil consisted primarily of sand. This was relevant to their bid because the electrical work required trenching through the surface. Gardner-Zemke submitted affidavits below indicating that other electrical contractors would interpret the report as it did, relying primarily on the narrative portion and interpreting the term "calcareous sand" to mean sand consisting of limestone, rather than hard subsurface soil. The affidavits also indicate that electrical contractors do not know what "blow count" means, and appellant submits that it was acting reasonably when it relied on the narrative portion of the report rather than the technical sections detailing the blow counts.

Portions of the subsurface soil consisted, however, not of sand but of hard limestone rock and caliche. This was more expensive to trench through than Gardner-Zemke had anticipated, and appellant brought this suit under the contract's changed conditions clause to recover its excess costs.

The contract contained a clause pertaining to concealed conditions allowing the contract to be equitably adjusted if subsurface conditions differed materially from what the contractor could reasonably expect.

Several issues are raised on appeal. Appellant contends that the trial court failed to interpret the report as would a reasonable contractor, asserting that the proper standard for the trial court to use in reviewing the Fox report is from the perspective of a reasonable electrical contractor interpreting the report. It maintains that the trial court improperly ignored the affidavit evidence presented, which indicated that other electrical contractors would interpret the report as did Gardner-Zemke, and that this disputed interpretation of the report made summary judgment inappropriate. Appellant further contends that the trial court erred by relying on an unpublished opinion of the court of appeals, Mesilla Valley Construction Co. v. Morrison-Knudson Co., No. 9404 (N.M.Ct.App., filed March 3, 1988), a case involving different parties but similar issues and that involved an interpretation of the Fox soil report. Appellant also argues that Morrison-Knudson, Fox, and Kruger all owed a duty to Gardner-Zemke to ensure that the report was accurate, and that exculpatory language in the contract was ineffective to defeat the claim based on the changed conditions clause. The essence of appellant's argument is that a reasonable electrical contractor, such as itself, would not read the technical information in the report to indicate the presence of limestone rock and would not consider that the technical information was relevant to its bid. It would read the narrative portion to indicate sand, and therefore the meaning to be assigned to the report was an issue of fact, making summary judgment inappropriate.

The various appellees dispute Gardner-Zemke's assertions. They all argue that the soil report was unambiguous; that the court applied the proper standard in reviewing the report; that no material issues of fact exist regarding the report--the court properly interpreted the report as a matter of law; and that the court made an independent interpretation of the Fox report and did not rely exclusively on Mesilla Valley. Fox, Kruger, and Morrison-Knudson also contend that each owed no duty to Gardner-Zemke that was breached. Kruger and Morrison-Knudson contend that the contract's exculpatory provisions effectively preclude Gardner-Zemke's claims, and Fox contends that certain issues raised by the appellant are not included in the docketing statement and may not be raised on appeal.

We consider the following issues to determine whether summary judgment was appropriate: (1) Whether the court applied the proper standard of review in examining the Fox report; and (2) whether the court properly determined that the report was unambiguous as a matter of law. Our disposition of these issues resolves the dispute, and we do not find it necessary to consider the other issues raised.

Preliminarily, we dispose of Fox's contention that certain issues raised on appeal were not included in the docketing statement and therefore may not be raised on appeal. In Gallegos v. Citizens Insurance Agency, 108 N.M. 722, 731, 779 P.2d 99, 108 (1989), we determined that for this court the docketing statement, although mandatory to perfect appeals, is not jurisdictional, and we may in our discretion consider error properly preserved below but omitted from the docketing statement.

Summary judgment is appropriate if no genuine issue as to any material fact exists, so that the movant is entitled to judgment as a matter of law. State v. Intigon Indem. Corp., 105 N.M. 611, 612, 735 P.2d 528, 529 (1987); SCRA 1986, 1-056(C). In considering a motion for summary judgment, the trial court must view the pleadings, affidavits, and depositions in the light most favorable to the opposing party. Intigon, 105 N.M. at 612, 735 P.2d at 529. The movant bears the initial burden of demonstrating he is entitled to summary judgment; once the movant makes out a prima facie showing, the burden shifts to the opposing party to show at least a reasonable doubt that a genuine issue exists. Koenig v. Perez, 104 N.M. 664, 666, 726 P.2d 341, 343 (1986). A summary judgment motion is not an opportunity to resolve factual issues, but should be employed to determine whether a factual dispute exists. Pharmaseal Laboratories, Inc. v. Goffe, 90 N.M. 753, 568 P.2d 589 (1977). If genuine controversy as to the facts exists, a motion for summary judgment should be denied and the factual issues should proceed to trial. Great W. Constr. Co. v. N.C. Ribble Co., 77 N.M. 725, 729, 427 P.2d 246, 249 (1967). On review the court must consider the whole record for evidence that puts a material fact at issue. If the facts are not disputed, and only the legal effect of the facts remains to be determined, summary judgment is appropriate. Id.

The trial court, in granting the defendants' motion for summary judgment, determined that, as a matter of law, the soil report unambiguously indicated the presence of rock.

Gardner-Zemke contends that the trial court erred when it failed to interpret the soil report from the perspective of a reasonable electrical contractor, and that a reasonable electrical contractor would not have understood the significance of the blow-count analysis in the report. Accordingly, it argues that summary judgment was inappropriate--that the pre-bid documents incorporated in the bid package were ambiguous to it because the soil report misled the contractor as to subsoil conditions, and therefore a material issue of fact was before the court to decide. Alternatively, Gardner-Zemke contends that we should find the report ambiguous as a matter of law and construe the report in its favor, relying on the principle of contra proferentum. It maintains that appellees presented no evidence that a reasonable contractor would interpret the soil report as unambiguously indicating rock, and that the only evidence presented was appellant's affidavits. Thus, it contends, appellees did not rebut Gardner-Zemke's prima facie showing of ambiguity. Appellant also contends that the trial court inappropriately relied on Mesilla Valley to collaterally estop the issue of whether the soil report was ambiguous as a matter of law, basing this argument on the absence of identity of parties, see State v. Rogers, 90 N.M. 604, 566...