S. J. Groves & Sons and Co. v. State

• Decision Date: 16 December 1980
• Docket Number: No. 8010SC60,8010SC60
• Citation: 273 S.E.2d 465,50 N.C.App. 1
• Parties: S. J. GROVES & SONS AND COMPANY v. STATE of North Carolina and the North Carolina Board of Transportation.
• Court: North Carolina Court of Appeals

Page 465

273 S.E.2d 465

50 N.C.App. 1

S. J. GROVES & SONS AND COMPANY v. STATE of North Carolina and the North Carolina Board of Transportation.

No. 8010SC60.

Court of Appeals of North Carolina.

Dec. 16, 1980.

[50 N.C.App. 2] This action was brought under the provisions of G.S. 136-29 for the recovery of additional compensation arising out of a highway construction contract. The following facts are either admitted in the pleadings or appear from uncontroverted evidence.

On 2 May 1972 defendant, the North Carolina Board of Transportation, began advertising for bids for a highway construction project of a length of 5.369 miles, consisting of the relocation of U.S. 64 from the Clay-Macon County line east toward Franklin to a point approximately one and one quarter miles east of Winding Stair Gap. The work was to be done in two segments. The western segment, approximately two miles in length was to be completed by 1 October 1973, and liquidated damages were to be in the amount of $100 per day beyond the completion date. The first segment ran easterly from Station 1026 to Station 1119 and then easterly from Station 0 to Station 30, stations being at 100 feet intervals. The remaining three-mile segment ran easterly from Station 30 through Winding Stair Gap to Station 194. Completion date for this segment was 1 July 1975, and liquidated damages were set at $300 per day for failure to complete by the date set.

The project called for the construction of only two lanes. Defendant, however, acquired sufficient right-of-way to accommodate four lanes. The plans indicated that there would be an excess of material over and above that required to construct the embankments for the two lanes. With respect to the excess material, the contract required that the contractor place the suitable excess material in embankments which might be used at some later date in the construction of an additional two lanes of U.S. 64. Pertinent contract provisions are set out in the court's findings of fact, infra.

Prior to bidding on the project, plaintiff requested and received the subsurface information used by defendant in designing the project. This report contained the following:

No soils are encountered along the project which are unsuitable for reasons of high plasticity, and only a limited amount of organic soils are encountered. By far the dominant soil types are A-4 and A-5 soils; these are approximately equal in importance. Small local areas contained A-7-5 and A-7-6 soils, but all samples indicate low plastic properties and satisfactory material.

Soils should pose no great problems on this project except for perhaps requiring some stabilization in the elastic A-5 soils.

Local areas on this project contain colluvial deposits (concentrations of loose wet boulders and clay silt) that have concentrated from higher elevations. This material is very unstable if disturbed, since it possesses relatively little cohesion and is usually wet. Many sections on this project undercut colluvial material. We anticipate problems with slope stability in these areas and have designed slopes to alleviate the problem as much as possible. Some problems will be encountered in this areas (sic), regardless of recommendations.

The contract was awarded plaintiff as low bidder on 23 May 1972, three weeks after the project was advertised for bids, and work was begun on 12 July 1972. The work progressed satisfactorily for a while and then plaintiff began having serious problems with the excessive wetness of the soil and, because proper compactness could not be obtained, had to begin sandwiching with rock to construct the embankments. Defendant refused to allow the unsuitable material to be wasted so that plaintiff could borrow suitable material. Early in June 1973, the first segment was 90% complete, leaving approximately 100,000 to 150,000 cubic yards of unclassified excavation work to be done on this first segment. This work consisted of excavating the material from Black Gap cut and the placement and compaction of it in the future eastbound lane. Plaintiff had used all available rock within the construction limits of this segment in its sandwiching operations. The only cut remaining within the construction limits from which plaintiff could get earth material to complete the embankment fills was Black Gap cut, but this material was too wet for use without rock. Plaintiff called defendant's attention to the problem and asked to be allowed to waste this unsuitable material rather than having to place and compact it in the future lanes. Defendant denied the request contending the material was suitable under the contract. Plaintiff moved equipment to Winding Stair Gap a large cut full of rock. However, the same excessive wetness was discovered, and plaintiff was forced to put the earth material aside and waste it in order to get to the rock underneath, which it had to blast and haul approximately one and one-half miles back in a westerly direction to complete the sandwiching operation.

On 15 August 1973, plaintiff notified defendant in writing of its claim of a changed condition as follows:

Our contract with you provides all suitable material removed from the excavation shall be used in the formation of embankments.

The special provisions calls the contractor's attention to the fact that the surplus material will be used to construct embankments for the future eastbound lane and any overusage for the eastbound lane will require contractor to supply material at his cost.

Our contract is based upon payment for unclassified excavation only, with the cost of placing an embankment to be included in the unit price bid. The specification provides that the embankment materials shall be compacted to a density equal to at least 95 percent of A.A.S.H.O. T99-57 or standard proctor. Copies of the procedure for taking the tests and determining when the contractor was obtaining 95 percent standard proctor was available upon request.

This procedures states: "If the soil is too wet, it cannot be compacted to the required degree and it will be necessary to let it dry out."

Such statement recognizes the impossibility of compaction if the soil is too wet.

As you are well aware, the contract with you provides a stringent completion schedule, with the contractor being required to construct the project from Station 1029 k 04 to Station 30 k 00 by October 1, 1973, including the -Y- lines and driveways, to the extent that payment is placed.

If the project is not completed from Station 1029 k 04 to Station 30 k 00 by October 1, 1973, such that two-way traffic could be placed and maintained on the highway, the contractor is to be charged with $100 per day liquidated damages. The entire project is to be completed by July 1, 1975.

Furthermore, statements were made by the Highway Commission in noncontractural documents prior to bid that, "Soils should pose no great problems on this project, except for perhaps requiring some stabilization in the elastic A-5 soils."

We have, since starting construction in August of 1972, experienced extremely high moisture conditions in the soil due to a number of factors, particularly excessive rain. The soil is unsuitable, particularly when wet, and we have not obtained any drying weather.

Because of the rain, lack of drying conditions, ground water, physical site drainage conditions and particularly the density requirements which are a part of this contract, compaction of soil has been throughout performance and is at this time strictly impossible.

Moreover, the Highway Commission has orally refused to recognize the impossibility of any alternative, such as recognizing that the soils on this project are unsuitable for compaction. A particular example of the alternative is the area of Black Gap, where the A-5 soils, according to pre-bid data, exist. These soils should be stabilized or designated unsuitable.

Our contract with you has a changed condition clause. With the schedule demanded and the superior knowledge of the Highway Commission and its design engineers, the contract was based on the fact that the soils could be compacted. We believe that the excessive moisture in the soils of the project created by excessive rain and other reasons, the drainage characteristics and soil conditions constitute a changed condition requiring that the Highway Commission grant us equitable adjustment and extension of time.

We have been advised, based on the history of this project and the facts we know to date, there are several alternate contract doctrines to changed conditions supporting an equitable adjustment and an extension of time.

Pursuant to the specifications and in order to further protect our position in this matter, we hereby notify the Commission in writing that we are now having and have had since the beginning of this project a changed condition of which employees of the Commission have had knowledge.

We have previously orally notified you of the soil compaction problems. Further, we request a meeting to see if the contractor and Commission can reach an agreement concerning an equitable adjustment and time extension for a changed condition and for other reasons.

On 18 September 1973, defendant notified plaintiff that it took the position that no changed condition existed. In that letter defendant advised plaintiff that "If S. J. Groves & Sons Company desires to pursue this matter further it will be necessary that you notify by letter Mr. Ray Spangler, Resident Engineer, of this fact. Prior to writing this letter, please review Article 4.3A and the Supplement of Standard Specification. It will be your responsibility to keep an accurate and detail (sic) cost record of the affected work. These cost records are to be kept with the same care as Force Account Records and Mr. Ray Spangler must be given opportunity to supervise and check all records pertaining to your request."

In response to that letter plaintiff on 25 September wrote to defenda...