MISS. TRANSP. COM'N v. RONALD ADAMS CONT.

• Decision Date: 17 February 2000
• Docket Number: No. 98-CA-00040-SCT.,98-CA-00040-SCT.
• Citation: 753 So.2d 1077
• Parties: MISSISSIPPI TRANSPORTATION COMMISSION v. RONALD ADAMS CONTRACTOR, INC.
• Court: Mississippi Supreme Court

753 So.2d 1077

MISSISSIPPI TRANSPORTATION COMMISSION v. RONALD ADAMS CONTRACTOR, INC.

No. 98-CA-00040-SCT.

Supreme Court of Mississippi.

February 17, 2000.

Terry R. Levy, James J. Crongeyer, John Marshall Lusk, Jr., Jackson, Richard E. Wilbourn, II, Meridian, John L. Gadow, Jackson, Attorneys for Appellant.

Phil B. Abernethy, Jackson, Richard M. Dye, Ridgeland, Attorneys for Appellee.

BEFORE SULLIVAN, P.J., SMITH AND MILLS, JJ.

SMITH, Justice, for the Court:

STATEMENT OF THE CASE

¶ 1. In February of 1995, Ronald Adams Contractor, Inc. ("Adams") was awarded a contract by the Mississippi Transportation Commission ("the Commission") for a highway improvement construction project on Mississippi Highway 16 in Neshoba County, Mississippi. The contract documents prepared by the Commission contained a date by which the Commission was to issue the Notice to Proceed.¹ The Commission did not issue the Notice to Proceed until eighty-six days after the date indicated in the contract. On May 20, 1996, Adams instituted this suit in the Circuit Court of the First Judicial District of Hinds County, Mississippi, against the Commission for damages allegedly incurred as a result of the delay. The Commission filed a motion for summary judgment on the grounds that the contract was unambiguous and a matter for determination by the court rather than the jury. The Commission argued in its motion for summary judgment that the date specified for the issuance of the Notice to Proceed was merely an anticipated date and that "no damage for delay" clauses prevent Adams from receiving anything more than an extension of the completion date. The circuit court judge, the Honorable Robert L. Gibbs, denied the motion on the grounds that the contract was ambiguous and therefore a matter of determination for the jury.

¶ 2. The case proceeded to a trial on the merits. At the close of Adams's case-in-chief, the Commission moved for a directed verdict, again arguing that, as a matter of law, the Commission did not breach the contract because the date specified for the issuance of the Notice to Proceed was merely an anticipated date and that "no damage for delay" clauses prevent Adams from receiving monetary damages. The trial judge denied the motion on the grounds that the contract was ambiguous.

¶ 3. At the close of all evidence, the jury awarded a judgment against the Commission in the amount of $387,923. On November 6, 1997, the circuit court entered final judgment in favor of Adams. The Commission filed motions for judgment notwithstanding the verdict and, alternatively, for a new trial, both of which were denied by the circuit court on November 24, 1997. Adams filed a motion for pre-judgment interest, which was also denied by the circuit court.

¶ 4. The Commission timely filed a notice of appeal with this Court on December 19, 1997, assigning error to the trial court's refusal to grant the Commission's motion for summary judgment, motion for directed verdict, motion for judgment notwithstanding the verdict, and motion for new trial. The Commission also argues that the jury's verdict is contrary to the law and contrary to the evidence. Adams filed a notice of cross-appeal from the circuit court's order denying its motion for pre-judgment interest on January 2, 1998, but withdrew the request in light of this Court's recent holding in City of Jackson v. Williamson, 740 So.2d 818 (Miss.1999). Adams now requests post-judgment interest and the statutory appeal penalty.

STATEMENT OF FACTS

¶ 5. In February of 1995, the Commission published advertisements for bids on a highway improvement construction project on Mississippi Highway 16 in Neshoba County, Mississippi ("the project"). Generally, the project entailed expanding a 1.5 mile stretch of two-lane highway into a four-lane highway.

¶ 6. Adams submitted its bid proposal on the project and was awarded the contract on February 28, 1995. By letter from Billy Key, contract administration engineer for the Commission, dated March 1, 1995, the Commission notified Adams that it had submitted the low bid and was chosen to be the contractor for the project. The letter instructed Adams that it should complete the proposal and contract documents, which Adams had received from the Commission prior to submitting its bid, by March 20, 1995. On March 15, 1995, Adams signed the proposal and contract documents and forwarded them to the Commission.

¶ 7. Prior to Adams's submitting its bid for the project, the Commission provided Adams with a copy of bid documents, which contained the plans and specifications for the project as well as the contract documents (hereinafter "proposal and contract documents"). The proposal and contract documents state that the Notice to Proceed would be issued by May 8, 1995. The documents also contain a document entitled "Utility Certification," which states that all arrangements had been made for the removal of all utilities from the right-of-way and, specifically, that the water line which traversed the project would be relocated by May 6, 1995, two days prior to the date the Notice to Proceed was to be issued.

¶ 8. Incorporated by reference into the proposal and contract documents is the 1990 edition of the Mississippi Standard Specifications for Road and Bridge Construction ("the Red Book"). The Red Book contains a series of standard clauses and conditions that apply to all Commission contracts. The Commission has the right to modify for a particular project anything that is in the Red Book by placing the modification in the bid documents. The document entitled "Governing Specifications" states that the Red Book is made a part of the contract "except where superseded by special provisions ..." in the proposal and contract documents. It is undisputed that the contract between the parties consists of the proposal and contract documents, the Red Book, and the project plans.

¶ 9. On April 13, 1995, the Commission informed Adams's contract administrator that there were some problems with the right-of-ways. Though there were several utilities involved, the delay was caused by a water line located over sixty percent of the right lane of the highway project, which prevented the excavation and movement of dirt necessary to construct the highway. Nevertheless, Billy Key, contract administrator for the Commission, told Adams he was still optimistic the full Notice to Proceed could issue by May 8, 1995. However, on May 8, 1995, at the preconstruction conference, the Commission informed Adams that the right-of-way would not be cleared by the date stated in the Utility Certification and that it would be the end of June, 1995, before the Adams could have access to the entire project. The Commission offered to allow Adams to proceed on a Restricted Notice to Proceed basis.² Adams declined this option and indicated it wished to proceed with the contract as originally agreed.

¶ 10. Ronald Adams testified that his company decided against proceeding upon a Restricted Notice to Proceed due to the increased costs and lack of practicality attendant in doing so. Thomas Hymel, bid estimator and project manager for Adams, testified that it was not economical to proceed on a Restricted Notice because of the loss in efficiency which would be incurred by working on only forty-five percent of the right lane and the attendant increase in costs, which would have to be absorbed by Adams. Ronald Adams testified that by the time his company had notice of the possible delay, the manpower and equipment required for the job were already mobilized and committed, and some equipment was already on site. Furthermore, Ronald Adams testified that because the delay was only "possible" and because Adams was required to begin construction promptly upon receiving the Notice to Proceed, Adams had to keep its crews and equipment ready and mobilized, rather than committing them to other jobs in the meantime. Adams placed crews and equipment on standby during the delay. Adams informed the Commission by letter dated June 1, 1995, that it was incurring costs due to the delay for which it expected to be compensated and requested an extension of time to complete the project as well as compensation for additional costs incurred.³

¶ 11. The Notice to Proceed was not issued until August 2, 1995, eighty-six days after the date indicated in the contract. Adams began construction on August 9, 1995. Because of the delay in the issuance of the Notice to Proceed, the Commission extended the completion date for the project to April 24, 1997. The letter from the Commission to Adams, which constituted the Notice to Proceed and which extended the completion date, states, "If the time revision does not meet with your approval, please notify this office immediately so that we can start procedures necessary to rescind the award and release your [sic] from this contract." Ronald Adams testified that he did not request that Adams be released from the contract because the time revision was adequate and because the company had already committed equipment and personnel for the job. Ronald Adams testified that the 86-day delay in issuing the Notice to Proceed extended the contract 222 days at the end of the job because the revised schedule added a second winter to the job and because of the different time frames posed by the new schedule. On May 20, 1996, Adams brought suit for damages allegedly sustained by the delay in the Circuit Court of the First Judicial District of Hinds County, Mississippi.

¶ 12. The Commission filed a motion for summary judgment with the circuit court, arguing that the date specified in the contract for issuance of the Notice to Proceed was merely anticipated and its failure to issue the Notice to Proceed on that date was thus not, as a matter of law, a breach of contract. The Commission also argued that, even if the Commission's failure to meet the specified date were a breach, Adams is not entitled to...