Republic Contracting Corp. v. SCDHPT

Decision Date29 June 1998
Docket NumberNo. 2864.,2864.
Citation503 S.E.2d 761,332 S.C. 197
CourtSouth Carolina Court of Appeals
PartiesREPUBLIC CONTRACTING CORPORATION, Appellant, v. SOUTH CAROLINA DEPARTMENT OF HIGHWAYS AND PUBLIC TRANSPORTATION, an Agency of the State of South Carolina, and Wilbur Smith & Associates, Inc., Respondents.

Henry W. Brown, of Nexsen, Pruet, Jacobs, Pollard & Robinson, Charleston; and W. Henry Parkman, of Griffin, Cochrane & Marshall, Atlanta, GA, for appellant.

Charles E. Carpenter, Jr., Franklin J. Smith, Jr., and Nina Reid Mack, all of Richardson, Plowden, Carpenter & Robinson, Columbia, for Respondent SCDHPT.

Benjamin E. Nicholson, V, Charles Porter and Robert L. Widener, all of McNair Law Firm, Columbia for Respondent Wilbur Smith & Associates.

T.S. Stern, Jr., and Thomas E. Dudley, III, both of Covington, Patrick, Hagins, Stern & Lewis, Greenville, for Amicus Curiae Carolinas AGC.

Edwin Russell Jeter, of Jeter & Williams, Columbia, for Amicus Curiae Consulting Engineers of South Carolina.

GOOLSBY, Judge:

Republic Contracting Corporation (Republic) sued the South Carolina Department of Highways and Public Transportation (SCDHPT) and Wilbur Smith & Associates, Inc., (WSA) for damages resulting from allegedly defective construction plans for a bridge. This action involves breach of contract and breach of implied warranty claims. The trial court granted partial summary judgment to both defendants, holding Republic's claims were untimely. Republic appeals. We affirm in part, reverse in part, and remand.

FACTS

Viewing the facts in the light most favorable to Republic, we find as follows: In 1976, SCDHPT contracted with WSA to design the James Island Expressway, a bridge to run from Charleston across the Ashley River to James Island. WSA designed the bridge in several segments. As required by statute, WSA placed its professional engineer's seal and endorsement on the plans.

On October 1, 1987, SCDHPT awarded Republic the contract to build the first part of the project in accordance with WSA's plans. The intended completion date was May 31, 1991. In addition to its role as designer, WSA served as the project engineer and supervised the construction.

Republic was to construct two sections of "mainline" expressway, plus three ramps to lead cars on and off the mainline. The mainline portion consisted of elevated concrete slabs supported by columns on concrete footings. The columns were to be capped with structures called "column capitals" flaring outward to help support the weight of the concrete slabs. On top of the column capitals Republic built hollow concrete boxes called "box girders." The box girders contained reinforcing steel, or "rebar," inside the concrete and flared structures called "blisters" that were designed to accommodate the stress of the post-tensioning system, that is, the network of anchors holding the box girders together.

WSA divided the mainline expressway and box girders into two separate parts. The two parts were to join at concrete joints, called "hinges," with huge amounts of rebar inside. The hinges were designed to allow for thermal expansion and contraction of the two separate parts.

The phase of the bridge that Republic was to construct contained nine hinges. The contract required Republic to subcontract a certain amount of the work to disadvantaged business enterprises. Republic initially hired one such enterprise, Performance Steel Erectors, as its rebar subcontractor.

Republic began work on January 28, 1988. Early in the project, however, Performance Steel experienced problems in installing the rebar in the hinges, column capitals, and blisters. The problems caused delays and cost overruns.

On September 19, 1989, Performance Steel wrote a letter to Republic's project manager, John Brodie, identifying three factors that caused the delays in installing the rebar. As evident in the following excerpts from the letter, Performance Steel attributed two of the problems to faulty work by WSA.

B. The bridge drawings are a very poor set of drawings to have to work with. They are complicated and put together in a confusing way. The main problems are basically on the lay out of the Blisters and Hinges on the box spans. They fail to give clear detail of dimensions, spacing, and clearances. There needs to be better detail sheets!!
C. There is also a problem with the Engineers from [WSA] agreeing with each other on what the blueprints show. They are always making continuous changes due to the unclearness of the bridge drawings.

Republic passed these complaints by Performance Steel on to WSA and SCDHPT; however, both WSA and SCDHPT denied the problems resulted from design flaws. Instead, WSA vigorously contended Performance Steel was incompetent and the manufacturer's fabrication of the rebar did not meet industry standards. To solve some of the problems, WSA agreed to issue large-scale views of existing drawings and to have the resident engineer meet with Republic and Performance Steel before the construction of each new blister or hinge. In addition, SCDHPT agreed to several contract modifications concerning relatively minor matters.

Performance Steel wrote to Republic again on March 7, 1990, about its concerns with the plans. In its letter, Performance Steel stated it considered a major contributing factor to the delays to be "the bridge plans being draw [sic] in such a manner that there was a lot of confused interpretation by everyone." Despite Performance Steel's complaints, Republic continued to believe Performance Steel was at fault and did not investigate the possibility of filing a claim against either WSA or SCDHPT. Instead, on June 25, 1990, Republic, with the concurrence of both WSA and SCDHPT, terminated Performance Steel and then assumed the work until it could hire another subcontractor.

Republic then contracted with Locklear Brothers, another disadvantaged business enterprise. Locklear quit the job after two days complaining it was "too complicated." After obtaining the permission from SCDHPT to perform the work itself, Republic then used its own crew to finish installing the rebar.

Performance Steel had completed two hinges and was working on the third when Republic canceled its subcontract. Republic began installing the rebar for the fourth hinge in December 1990. This hinge was the first hinge that Republic had worked on from start to finish without a rebar subcontractor. It was during the construction of the fourth hinge that Republic, the record suggests, realized for the first time that the difficulties in the installation of the rebar resulted from problems with WSA's design. As Brodie, Republic's project manager, stated in his affidavit:

[The fourth hinge] was an eye opener for Republic. For the first time in the Project, there was no Performance Steel to blame for rebar placement problems, and Republic had taken steps to ensure fabrication was not a problem. But instead of smooth sailing, Republic's own workers encountered enormous problems trying to install the steel. Essentially, they found it was like trying to put 10 pounds of steel into an 8 pound box. It just would not all fit, at least not without incredible amounts of bending, forcing and cramming. Republic had to use hammers and wrecking bars to force the steel in, which is not at all typical of this type of work. Republic began to realize for the first time that the problems with the hinges may not really have been due to Performance Steel or fabrication, as [WSA] had always maintained, but may have been actually due to the design by WSA. WSA's inspectors made things worse, by insisting that every bit of the steel be crammed into place, no matter what the conflicts.

The concrete for the fourth hinge was poured on April 22, 1991. Because the concrete could not be poured until the rebar was in place, Republic had to have completed the rebar work and had the hinge inspected and approved by the WSA before this date.

The difficulties Republic encountered led to another meeting on April 26, 1991, with representatives of WSA and SCDHPT. At this meeting, WSA admitted to design problems and attempted to rectify them by making certain changes. Republic claims WSA's admission at this meeting was its first notice of a potential claim against either WSA or SCDHPT.

In a letter dated July 19, 1991, Republic gave notice to SCDHPT of its intention to assert a claim for "delays and added costs caused by details in the contract drawings that are not constructable without modifications or changes." SCDHPT acknowledged Republic's claim and instructed Republic to keep certain cost records for later processing of the claim.

SCDHPT extended the completion date of the contract to May 17, 1992; however, Republic did not complete the project until August 29, 1992. After Republic concluded its work, SCDHPT assessed liquidated damages of about $153,000 against Republic based on its position that Republic was 102 days late in finishing the work. Republic submitted the final contract closeout documents to SCDHPT on July 26, 1994.

On April 25, 1994, Republic filed suit against both SCDHPT and WSA. The trial court granted partial summary judgment to both WSA and SCDHPT based on its determination that Republic knew or should have known of its claims no later than April 22, 1991, when the concrete was poured for the fourth hinge.1

DISCUSSION
I. The Applicable Statute of Limitations

Republic asserts the trial court erred in not applying S.C.Code Ann. § 15-3-520(b) (Supp.1997), which provides a twenty-year limitations period for "an action upon a sealed instrument." We disagree and affirm the trial court's decision to apply S.C.Code Ann. § 15-3-530(1) (Supp.1997), which provides a three-year statute of limitations.

Republic argues WSA's bridge plans are sealed instruments because WSA placed its professional engineer seal and endorsement on the plans pursuant to...

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