Lane Const. Corp. v. State, 81-69

• Decision Date: 07 April 1970
• Docket Number: No. 81-69,81-69
• Citation: 128 Vt. 421,265 A.2d 441
• Court: Vermont Supreme Court
• Parties: The LANE CONSTRUCTION CORPORATION v. The STATE of Vermont and Highway Board.

Page 441

265 A.2d 441

128 Vt. 421

The LANE CONSTRUCTION CORPORATION v. The STATE of Vermont and Highway Board.

No. 81-69.

Supreme Court of Vermont.

April 7, 1970.

Wick, Dinse & Allen, Burlington, for plaintiff.

James M. Jeffords, Atty. Gen., and Louis P. Peck, Asst. Atty. Gen., for the State.

Before HOLDEN, C. J., and SHANGRAW, BARNEY, SMITH and KEYSER, JJ.

SHANGRAW, Justice.

The subject matter of this litigation was initially involved in two separate actions bearing docket numbers in the Washington County Court, 12175 and 12363. The defendant filed motions to dismiss, which were granted. On appeal to this Court the action of the trial court was reversed and causes remanded. Lane Construction Corporation v. State of Vermont and Highway Board, Vt., 248 A.2d 508.

We are now only concerned with case numbered 12363, in that the earlier docket case, docket No. 12175 was discontinued immediately prior to the introduction of evidence on March 24, 1969 in case No. 12363.

Plaintiff, The Lane Construction Corporation, will hereinafter be referred to as the Contractor. The defendant, the State of Vermont, acting by and through its Highway Board, will be referred to as the State.

This is an action in contract. Plaintiff seeks to recover the sum of $9,545,00. Certain facts were agreed to by the parties. Following a hearing, findings of fact were made by the trial court and judgment later entered in favor of the defendant. Plaintiff has appealed to this Court for review.

The Contractor and the State entered into a contract dated April 13, 1961 and by its terms the Contractor was to construct for the State a portion of the Interstate Highway system in the Town of Williston, Vermont, which project is designated Highway Project Richmond-Williston I 89-2(9) Contract 3. The bid submitted by the Contractor and accepted by the State for the proposed construction was $997,241.20.

The Contractor, in due course, completed the work called for in the contract to the satisfaction of the State, outside of the Contractor's refusal to assume liability for damage done to the water supply of Harold J. and Margaret Lyon.

Mr. & Mrs. Lyon owned a water reservoir which was located approximately 55 feet northerly of the north side line of the right-of-way of the State. The terrain southerly of the Lyon reservoir, including the area within the right-of-way and beyond to the south, was wet and sloped northerly towards the reservoir.

The reservoir was supplied by an underground source of water that flowed in a northerly direction underground from the lands of higher elevation located to the south, and then passed through land within the right-of-way and to the Lyon reservoir. The reservoir supplied the Lyons with their drinking water and other domestic use.

The area of Contract 3 adjacent to the Lyon reservoir called for a fill, that is, a building up or raising the elevation of the surface on the completed highway above the natural level of the ground, as distinguished from a cut. The excavating in the area of the Lyon reservoir consisted of so-called stripping and grubbing, i. e. removing topsoil, stumps, roots and brush.

During the time the Contractor was stripping and grubbing in this area, the Lyon water supply became silted and interrupted to the point of destruction as a result of the Contractor's operations. At no time during the construction of the highway, including those periods while excavation, stripping and grubbing was in progress, were any springs, wells or underground pipes discovered in the right-of-way adjacent to the Lyon reservoir.

The underground source of water that supplied the reservoir was not indicated on the plan submitted to the plaintiff prior to the time it bid on the project. There were no water springs, wells, or underground water pipes of any kind shown on the plans for the contract.

When the damage to the Lyon water supply was first discovered, the Contractor was authorized by the State to construct a drainage ditch. The excavated dirt was to be bermed on the north side of the ditch and around the Lyon reservoir. This work was done by the Contractor and paid for by the State. The ditch was located inside the right-of-way. The attempt to remedy the situation proved ineffective.

The Contractor was directed to correct the damage to the Lyon water supply in accordance with Section 7.11 of the Standard Specifications for Highway and Bridge Construction.

A dispute arose between the State and the Contractor as to the responsibility of the Contractor, under the provisions of the contract, to remedy the alleged damage to the Lyon water supply. The Contractor took the position that under the contract it had no obligation to remedy the alleged damage without reasonable reimbursement. The State took a contrary position.

The Contractor agreed to remedy the situation if a supplementary agreement providing reasonable compensation therefor was entered into. This, the State declined to do.

Finally, the State entered into an agreement with J. A. Feeley & Son, Incorporated, to remedy the alleged damage to the Lyons' water supply. This work was done and the drilling company was paid $9,545.00 by the State for its work. This amount was charged against the money which would otherwise have been payable to the Contractor. This sum is the subject matter of this suit.

A Mr. Rance Banner was the Contractor's supervisor of construction on the construction contract involved here. Mr. John R. Hughes was the State's resident engineer on the project.

The duties of a resident engineer on projects of this nature is to make certain the Contractor performs the labor and furnishes the materials in accordance with the terms and conditions of the contract and specifications, or in other words, to make certain insofar as it is possible that the Contractor does not deviate from the plans and specifications of the contract.

Prior to the start of the road construction, Mr. Banner and Mr. Hughes 'cruised' the area of construction, and while in the vicinity of the Lyon reservoir, Mr. Hughes directed Mr. Banner's attention to it. The reservoir was shown on the plan.

The trial court concluded its findings by stating that the Lyon reservoir was an item within the contemplation of Paragraph 7.11 of the Standard Specifications, the plaintiff was bound to recognize and take into consideration in its bidding and subsequent construction operations in that area. The court below additionally found that the Contractor was obligated under its contract to use suitable precautions to prevent injury to, or destruction of, the Lyons' water supply.

The basis question to be resolved is whether the Contractor was obligated to restore, repair, or replace the damage done to the water supply under the facts of this case and the contract into which it entered with the State. The Standard Specifications for Highways and Bridge Construction are a part of the contract here considered. At this point we call attention to specifications 2.05 and 7.11 thereof. Specification 2.05 in part states:

'The bidder shall examine carefully the site of the work contemplated and the proposal, plans,...