Murphy v. City of Springfield

• Decision Date: 27 August 1987
• Docket Number: No. 14839,14839
• Citation: 738 S.W.2d 521
• Parties: Clifford W. MURPHY, Trustee, American Drilling Service Company Liquidating Trust, Plaintiff-Respondent, v. CITY OF SPRINGFIELD, Missouri, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 521

738 S.W.2d 521

Clifford W. MURPHY, Trustee, American Drilling Service Company Liquidating Trust, Plaintiff-Respondent, v. CITY OF SPRINGFIELD, Missouri, Defendant-Appellant.

No. 14839.

Missouri Court of Appeals,

Southern District,

Division Two.

Aug. 27, 1987.

Motion for Rehearing and/or Transfer

to Supreme Court Denied Sept. 21, 1987.

Application to Transfer Denied Nov. 17, 1987.

Sharon F. Daily, Greensfelder, Hemker, Wiese, Gale & Chappelow, P.C., St. Louis, for plaintiff-respondent.

Robert H. Handley, Asst. City Atty., Springfield, for defendant-appellant.

PREWITT, Presiding Judge.

Defendant City of Springfield appeals from a judgment, following jury trial, in favor of plaintiff for $30,137.71. Defendant presents five points alleging trial error.

After taking competitive bids, defendant contracted with Ted Wilkerson, Inc. (Wilkerson) for Wilkerson to reconstruct a bridge known as the Benton Avenue Viaduct. American Drilling Service Company (American), a corporation, entered into a "Subcontractor Subcontract" dated May 24, 1977 with Wilkerson. Under that agreement American was to "provide labor, material, equipment, supervision, knowhow and others to construct approximately twenty-eight (28) straight shaft foundation caissons" on which piers to support the viaduct would be placed, in accordance with plans and specifications prepared by defendant. The caissons were to be of three different diameters, 42 inches, 48 inches, and 54 inches. They were to be set on a six inch minimum "seat" into "solid bedrock". Apparently in the Springfield area the bedrock is limestone. American agreed to perform the caisson work for $59,655, subject to certain "unit quantity additions or deductions".

Previous to entering into the subcontract, American submitted a bid for the caisson construction to Wilkerson and other general contractors who were contemplating bidding on the project. In preparing its bid American used information shown on a sheet denominated "Boring Logs" which was a part of the specifications prepared by defendant and available for the use of bidders on the project. That sheet purported to show the materials found as a result of subsurface drilling of 13 holes at or near where the caissons were to be constructed. The borings were 4 inches in diameter. Twelve of the thirteen drillings went into "limestone", apparently indicating bedrock, three of those into "weathered" limestone. The "NOTES" on the sheet showing the results of the boring stated:

Subsurface information shown on this drawing was obtained solely for use in establishing design control for the project. The accuracy of this information is not guaranteed and it is not to be construed as part of the plans governing construction of the project. It is the bidder's responsibility to inquire of the engineer if additional information is available, to make arrangements to review same prior to bidding, and make his own determinations as to all subsurface conditions. ¹

Plaintiff presented evidence that notwithstanding such language as just above quoted, it was customary in the construction industry for drilling contractors to rely on the information from boring logs in determining the subsurface materials anticipated and ultimately the price that they would quote for such work. A former employee of American and an expert who testified for plaintiff both testified that such information was routinely relied on and that it would be impractical for bidders to seek their own subsurface information. The expert witness also stated that there were better methods of drilling and other tests which would provide more accurate information than the method used by the City here.

A consulting engineer for the City testified that the borings went down "to about where the rock [apparently bedrock] is and usually a few feet into that rock to make sure that we're into rock and not necessarily a boulder or something like this." He said that the Springfield area had "karse" ² topography, an irregular rock formation under the surface that is "just up and down" with crevices. The witness said this is apparent as you drive through highway cuts in the area. He said that the information you get by such a drilling is only for the 4 inches as to get fully accurate information you would have to do all the excavation. The engineer said that the purpose of the drillings was to determine how far down the bedrock was. He said that because of the irregular rock in the area, "you just cannot rely" upon the borings. The gist of his testimony was that a contractor should not rely upon those borings in determining what materials would be encountered on the way to bedrock.

The defendant's plans and specifications required that the contractor submit a unit price per lineal foot for the caisson shafts. If drilling the shafts resulted in more lineal feet, then a contractor would receive an additional amount and if it was less, then this same amount per foot would be deducted. American's vice president, who prepared their proposals to potential general contractors, felt that this method of payment was unfair because the same unit price would be used whether the caisson shafts were 42 inches in diameter, 48 inches in diameter, or 54 inches in diameter. In their proposal to general contractors, including Wilkerson, they set out separate unit prices for each of the three diameters instead of one for lineal feet. American's bid was based on cubic yards rather than lineal feet with a price set for "earth shaft excavation" and a much higher price for "rock shaft excavation".

In a letter to Wilkerson dated April 13, 1977, American set forth certain quantity unit prices per cubic yard and stated that it "must use these qualifications and revisions to the bid form due to the significant unknowns and inequities within the presently structured unit prices." In a later letter to Wilkerson, dated five days before the subcontract was entered into, which letter was to be "incorporated into any contractual agreement", certain unit prices per cubic yard were preceded by the statement that "[i]n the event subsurface conditions warrant changes in the caisson quantities, the following unit prices will apply."

Plaintiff's witnesses testified that the subsurface was substantially different from that indicated by the boring logs. There was testimony that American encountered more "ground water" and 104.6 cubic yards of rock more than could be contemplated from the subsurface information shown in the boring logs; that there was also extra casing and concrete costs which would not have been anticipated on the information furnished; resulting in additional costs of $91,326.40 to American. Defendant presented evidence indicating that American's costs over those contemplated were not as a result of subsurface conditions, but inexperience and poor construction techniques.

Plaintiff's claim was filed on a theory denominated here by plaintiff's counsel as "innocent misrepresentation", based on cases where public contractors were misled by plans and specifications. Plaintiff primarily relies on Clark v. City of Humansville, 348 S.W.2d 369 (Mo.App.1961). Other similar cases are Sanders Co. Plumbing and Heating v. City of Independence, 694 S.W.2d 841 (Mo.App.1985); Ideker, Inc. v. Missouri State Highway Commission, 654 S.W.2d 617 (Mo.App.1983); and Bernard McMenamy Contractors, Inc. v. Missouri State Highway Commission, 582 S.W.2d 305 (Mo.App.1979). But see Air Cooling & Energy v. Midwestern Const. Co., 602 S.W.2d 926 (Mo.App.1980). See also Annotation, Right of public contractor to allowance of extra expense over what would have been necessary if conditions had been as represented by the plans and specifications, 76 A.L.R. 268 (1932). See generally Alfred Hill, Damages For Innocent Misrepresentation, 73 Colum.L.Rev. 679 (1973), Samuel Williston, Liability For Honest Misrepresentation, 24 Harvard L.Rev. 415 (1911); 2 Harper, James and Gray, The Law of Torts, § 7.7 (2d ed. 1986).

Sanders, 694 S.W.2d at 846, denotes this type of action as "in the nature of a breach of warranty based on a positive misrepresentation of material fact by a government entity." If plaintiff has a cause of action, it would be based on the theory stated in Sanders, which we construe as the same theory set forth in Clark v. City of Humansville. The nature of plaintiff's claim and its necessary elements are considered further in discussing defendant's points.

The first point presented by defendant is that the trial court erred in not granting its motion for summary judgment, motion for directed verdict, and motion for judgment notwithstanding the verdict. It contends that because American was a subcontractor it could not bring suit against the owner for additional work and expenses "because the Missouri Constitution, Article 3, Section 39(.4) prohibits payment of claims for work and materials furnished where there is no authorized contract, and because American did not avail itself of its statutory remedy under Section 522.300, RSMo."

We first discuss the effect of the Missouri Constitutional provision cited. The portion of Mo. Const. Art. III, § 39 referred to by defendant states:

Section 39. Limitation of power of general assembly.

The general assembly shall not have power:

* * *

* * *

(4) To pay or to authorize the payment of any claim against the state or any county or municipal corporation of the state under any agreement or contract made without express authority of law; * * * *

Plaintiff's claim is not "under any agreement or contract", although it is incidentally related to the contract American made with Wilkerson. American did not have a contract with defendant. Plaintiff's claim is based upon misrepresentation by which it was induced to bid and enter into a contract with Wilkerson for a lower amount than it would have agreed to. See Clark v. City of Humansville, supra, 348 S.W.2d at 371-372. Such a claim is...