Ideker, Inc. v. Missouri State Highway Com'n, WD
| Citation | 654 S.W.2d 617 |
| Decision Date | 12 April 1983 |
| Docket Number | No. WD,WD |
| Parties | IDEKER, INCORPORATED, a Missouri Corporation, Respondent, v. MISSOURI STATE HIGHWAY COMMISSION, Appellant. 32834. |
| Court | Court of Appeal of Missouri (US) |
Bruce A. King, Chief Counsel, Curtis F. Thompson, Dan Pritchard, Asst. Counsel, Missouri Highway and Transp. Com'n, Jefferson City, for appellant.
R.W. Miller, Kevin E. Glynn, Miller & Glynn, Kansas City, for respondent.
Before SOMERVILLE, C.J., and DIXON and SHANGLER, JJ.
The Missouri State Highway Commission (Commission) has appealed from a judgment returned against it in favor of Ideker Incorporated (Ideker) for damages in the sum of Two Hundred Eighty Seven Thousand Seven Hundred One Dollars ($287,701.00).
The nature of Ideker's cause of action and the points relied on by the Commission on appeal, for sake of clarity and comprehensibility, will be prefaced by a statement of the facts and a review of cases from which Ideker's cause of action is derived.
Ideker, a "highway contractor", was successful bidder on a construction project let by the Commission on I-35 in Harrison County, Missouri. Plans and specifications for the project were prepared by the Commission and relied on by Ideker in calculating and submitting its bid. The plans and specifications, along with the bid proposal, and Standard Specifications promulgated by the Commission, were incorporated by reference in the formal contract executed by the parties.
According to Ideker's president, the plans prepared by the Commission disclosed to those familiar with highway construction plans that the project was a "balanced" job in the sense that the profile of the grade of the highway to be constructed was designed so that excavated material removed from high spots ("cuts") in the right of way could be deposited and contained in low spots ("fills") in the right of way. Concomitantly, as a "balanced" project said plans reflected a "shrinkage" factor of 1.28. 1
"Cuts" and "fills" were segregated in twenty one (21) designated areas on the plans, each known and referred to as a "balance". The term "balanced" job connoted a project where all excavated material removed from the "cuts" in a "balance" could be accommodated in the "fills" in a "balance" to achieve the grade profile called for by the plans prepared by the Commission.
When excavated material removed from "cuts" exceeds that which can be accommodated by the "fills" in a balance, the excess material is referred to as "waste" and must be removed and disposed of, that is "wasted", at some site other than the "fills" in the balance. The plans prepared by the Commission did not provide for any "waste" disposal areas as the project was designed by the Commission as a "balanced" job. According to the Commission's own witnesses, the project was "designed" and "intended" to be a "balanced" job on the basis of a shrinkage factor of 1.28 used by the Commission in preparing the plans. Under all the evidence, both that of Ideker and the Commission, it stands undisputed that the plans prepared by the Commission were "designed" and "intended", and did, disclose that the project was a "balanced" job. As previously noted, Ideker, in reliance upon the plans prepared by the Commission, calculated and submitted its bid on the basis of a "balanced" job.
Shortly after commencing work on the project it became apparent that the "fills" would not hold the excavated material removed from the "cuts" and considerable "waste" was regularly encountered thereafter which had to be "wasted" at sites other than the "fills". The Commission's own witnesses testified that the abnormal amount of "waste" encountered after construction commenced, prompted the Commission to make several changes in grade to help alleviate the "waste" problem. Notwithstanding certain changes in grade made by the Commission, voluminous amounts of "waste" continued to plague the construction project. According to the Commission's own estimate, completion of the project resulted in 355,937 cubic yards of "waste" which had to be disposed of by Ideker. In retrospect, the shrinkage factor for the excavated material was 1.13 as opposed to 1.28, thus accounting for the vast amount of "waste" which confronted Ideker. Anomalously, no evidence was offered as to the composition of the excavated material to account for the discrepancy in the shrinkage factor utilized by the Commission in designing the project. Nor was there any evidence that Ideker, prior to starting work on the project, had knowledge of the composition of the material to be excavated or that the project was not a "balanced" job as reflected by the plans prepared by the Commission.
It stands undisputed that Ideker was paid at the contract rate (40 1/2 cents per cubic yard) for all material excavated from the "cuts" on the project. Ideker's claim for damages, however, is predicated upon additional costs which it incurred in disposing of the "waste", that is the surplus material removed from the "cuts" which could not be accomodated in the "fills". It relied principally upon an expert witness to prove up its damages.
Bit by bit, piece by piece, as gleaned from Ideker's petition, the course of its evidence, its verdict director, and its brief on appeal, this court concludes that Ideker's cause of action was ex contractu--in the nature of breach of warranty (a positive representation by the Commission that the project was a "balanced" job). Unfortunately, from the very outset of this litigation both parties encountered considerable difficulty in perceiving the true nature and elements of such a cause of action. This bilateral difficulty injected considerable confusion at the trial level which, unfortunately, spilled over at the appellate level.
It is important throughout to bear in mind that the parties to the contract were a governmental entity on the one hand and a private contractor on the other hand, and that the project, reflected in detail on the plans prepared by the governmental entity and relied on by the private contractor in calculating its bid, was "designed" and "intended" to be a "balanced" job, a material fact which subsequently turned out to be false or incorrect. Although occupying a rather narrow niche in the vast body of case law, a cause of action ex contractu in the nature of breach of warranty under comparable circumstances has been recognized in an established line of cases. The following represent a random selection of cases from other jurisdictions espousing the theory of a cause of action ex contractu in the nature of a breach of warranty under facts analogous to those presented by the instant case. Christie v. United States, 237 U.S. 234, 35 S.Ct. 565, 59 L.Ed. 933 (1915); Hollerbach v. United States, 233 U.S. 165, 34 S.Ct. 553, 58 L.Ed. 898 (1914); Souza & McCue Construction Co. v. Superior Court, 57 Cal.2d 508, 370 P.2d 338, 20 Cal.Rptr. 634 (1962); Alpert v. Commonwealth, 357 Mass. 306, 258 N.E.2d 755 (1970); and Peter Salvucci & Sons, Inc. v. State, 110 N.Y. 136, 268 A.2d 899 (1970). Missouri falls in rank with these cases as evidenced by Bernard McMenamy, Etc. v. Missouri State Highway Commission, 582 S.W.2d 305 (Mo.App.1979).
The majority of cases heretofore cited address the general subject of a cause of action ex contractu in the nature of a breach of warranty in broad general terms with random emphasis on some but not necessarily all of the elements of such a cause of action. Nevertheless, as garnered from a composite reading of all of said cases, particularly Christie v. United States, supra, six elements are discerned as necessary to constitute a cause of action ex contractu in the nature of a breach of warranty by a contractor against a governmental entity premised on a positive representation of a material fact:
(5) Reliance by a contractor on the positive representation of a material fact made by the governmental entity, and
(6) Damages sustained by a contractor as a direct result of the positive representation of a material fact made by the governmental entity.
During its embryonic stage, two troublesome principles frequently surfaced which had to be reconciled by the courts. The first being that since damages were sought in connection with work performed on a public project under a contract with a governmental entity, the party sought to be held liable, the doctrine of sovereign immunity precluded a cause of action ex delicto (fraudulent misrepresentation). The second being a well established principle of contract law, finding clarity of expression in United States v. Spearin, 248 U.S. 132, 136, 39 S.Ct. 59, 61, 63 L.Ed. 166 (1918), that when one agrees to do a thing possible of performance "he will not be excused or become entitled to additional compensation because unforeseen difficulties are encountered."
Courts subscribing to the theory of a cause of action ex contractu in the nature of a breach of warranty apparently were motivated by concepts of fundamental fairness. To avoid an unjust result, they refused to be circumscribed by the harshness of the doctrine of sovereign immunity and the principle of contract law that if performance is possible one is not entitled to extra compensation for unforeseen difficulties encountered. Syllogistically, where a governmental entity makes a positive representation of a material fact relied upon by a contractor in calculating its bid, which turns out to be false or incorrect after work is commenced and occasions additional expense, the contractor finds himself in the position of one who undertakes one contract but is confronted with performance of another. The...
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