Samuel Kraus Co. v. Kansas City
| Decision Date | 14 July 1958 |
| Docket Number | No. 46018,No. 2,46018,2 |
| Citation | 315 S.W.2d 758 |
| Parties | SAMUEL KRAUS COMPANY, a Corporation, Plaintiff-Appellant, v. KANSAS CITY, Missouri, a Municipal Corporation, Defendant-Appellant |
| Court | Missouri Supreme Court |
Benj. M. Powers, City Counselor, John J. Cosgrove, Herbert C. Hoffman, Associate City Counselors, Robert A. Meyers, Asst. City Counselor, Kansas City, for defendant-appellant.
Clay C. Rogers, Charles L. Carr, James W. Benjamin, Robert S. Burns, Kansas City, for plaintiff-respondent (appellant), Thompson, Mitchell, Thompson & Douglas, St. Louis, of counsel.
BARRETT, Commissioner.
Upon these assigned claims (Samuel Kraus and Alma Kraus doing business as Samuel Kraus Company to Samuel Kraus Company) relating to or arising out of a contract with Kansas City a jury returned a verdict in favor of the plaintiff on count two of its claim in the sum of $265,508.22, the principal sum of $191,013.22 and $74,495 interest, and the city has appealed from the judgment entered upon the verdict. At the conclusion of the evidence the trial court sustained the city's motion to dismiss count one of the claim and the plaintiff, Kraus Company, has appealed from the judgment entered upon the motion.
In December 1947, Kraus, a general contractor with more than thirty years' experience, was the successful bidder on a contract to construct a water main from the city's Turkey Creek pumping station at 23rd and Allen Streets to a reservoir at 75th and Holmes Streets. The contract provided for a water main 39,473.73 feet in length, in excess of seven miles, of 48, 42 and 36 inch concrete pipe which the city purchased and furnished under a separate contract with the Lock Joint Pipe Company. In general, Kraus was to excavate the trench or ditch, lay the pipe, and refill the trench. Kraus completed the contract in August 1949. His total or lump sum bid to construct the water main was $1,423,956.87. The parties to not agree as to the precise figures but according to Kraus he has been paid $1,313,000.94, $1,228,691.15 on the contract price and other sums not necessary to be enumerated here, leaving the claimed balance of $191,013.22. The proposal and contract, consisting of 134 pages which Kraus calls 'the book,' in addition to providing for the lump sum bid and figure of $1,423,956.87, provided for unit price bids on a list of estimated items, 'List Of Variable Quantities,' furnished by the city's engineer. These items were unclassified excavation, excavation of solid rock, excavation of paving, three classes of concrete, bituminous paving, reinforcing steel and jacket pipe. Given the length of the ditch and other necessary data it was possible to rather accurately compute the total amount of all material to be excavated, nevertheless, certain of these estimated items 'underran' the estimates and there was not as much solid rock and there excavate as estimated, $191,013.22 worth, consequently the city deducted those items from the lump sum bid and paid the contractor for the actual work done in excavating the ditch. It is this sum and for these items, the 'underruns' of solid rock, paving and other material, that the plaintiff sought recovery on the first count of the petition which, in brief, is simply an action for damages for breach of the contract.
The theory of the action on this count is that the contract is a lump sum contract and the plaintiff having performed the contract the city is obligated in any and all events to pay the stipulated lump sum price of $1,423,956.87. Whether he is so entitled to recover or whether the court properly sustained the motion to dismiss count one hinges on the interpretation to be placed upon Article II of the contract:
'That the City will pay the Contractor for the performance of this contract and that the Contractor will accept in full compensation therefor (except as adjustments are made in quantities at the unit prices given in the proposal And as a result of additional, omitted, or changed work) the sum of * * * ($1,423,956.87) * * * with payments made in the manner prescribed in the specifications.'
Specifically this phase of the case turns upon the meaning of the parenthetical clause in which the italics have been supplied and, after the manner of Kraus, the word 'and' has been capitalized, because that is the crux of his claim. It is his contention, in short, that the contract is a lump sum contract 'subject only to adjustment for requested and authorized additional, omitted or changed work,' or, to state the matter another way, that the contract was not subject to adjustment in accordance with the 'underrun' estimates and unit prices for work actually done,--meaning that the city had no right to deduct the sum of $191,013.22 for work he did not in point of fact do, that is, remove the estimated quantities of solid rock, pavement and other materials, because they were not there.
To substantiate this construction of the contract Kraus seizes upon the word 'and' in the parenthetical clause and invokes the conjunctive-disjunctive rules employed in the submission of tort cases and says, by reason of these rules, 'the exception requires conjunctively that both conditions exist to authorize a variation from the lump sum contract price.' The word 'and' is defined and cases are cited to demonstrate that the word may not be changed or construed to mean 'or,' and therefore it is urged, before there could be any adjustment in the lump sum price or before the unit prices for estimated quantities became effective or into operation, they must have come about only as the result of additional, omitted or changed work as elsewhere defined and set forth in the contract. It is said that the contract is ambiguous and in support of the plaintiff's interpretation the auxiliary rules of construction are invoked (Paisley v. Lucas, 346 Mo. 827, 143 S.W.2d 262) and extrinsic evidence is resorted to and, finally, it is urged that the proof, particularly certain documentary evidence, is so plain as to admit of no doubt and established the plaintiff's eight to recover on count one as a matter of law.
In considering this count and the case in its entirety, for that matter, it may be interpolated that it is not necessary to precisely detail and examine every one of the plaintiff's numerous arguments in support of its basic claims, neither is it necessary to set out fully a resume of the five volumes of record and more than eighty exhibits, it is sufficient to specifically consider so much of these materials as is necessary to illustrate and demonstrate, and to say that they have all been painstakingly examined and considered in the disposition of this appeal.
In the first place, only Kraus claims that 'and' must be and cannot be changed to 'or,' or that there is any ambiguity in the parenthetical clause. The sentence reads and plainly means that the city will pay and the contractor will accept in full compensation $1,423,956.87 'except as adjustments are made in quantities at the unit prices given in the proposal and as a result of additional, omitted, or changed work'; the word 'and' deals with two separate and distinct matters even though they may be related in some respects. In short, the lump sum price was subject to adjustment by reason of variations in the 'list of variable quantities' at their respective bid prices; as to those items the contract fairly provided and the parties plainly intended that the contractor's compensation and the city's obligation would be the unit prices for the precise amount of work actually necessary and done with respect to those items apt to very in a construction project of this type, a water main more than seven miles long through a large section of Kansas City.
Other provisions of the contract support this interpretation. To illustrate, one provision of the contract documents sets out 'the list of quantities,' by the four sections of the work to be done and the four combined, and says that 'Bidders shall bid a lump sum for each section or combination of sections of this contract as provided in the Proposal, but lump sums shall be adjusted in final settlement by the amount that actual quantities of these items differ from the following indicated amounts and at the unit prices stated in the Proposal.' At another point, as to payment, the contract says, 'Adjustments may be made in the lump sum bid for variations in certain items at the unit prices named in the Proposal. All other variations must be made as provided under Article FC-20, 'Additional, Omitted, or Changed Work," the latter provision plainly indicating that changed, omitted, or additional work are distinct matters to be dealt with separately from adjustments in 'quantities at the unit prices.' A provision as to 'Payment For Excavation' says, 'All excavation shall be divided into three classes for the purpose of measurement of actual quantities for the adjustment of the contract price.' As to payment for removing and replacing pavement (one of the variables) the contract recites, 'If the actual amount of pavement removed and replaced shall exceed that given in the (Throughout all quotations italics supplied.) There are other relevant provisions but again it is not necessary to set them out and demonstrate or analyze,--the noted illustrations are sufficient to demonstrate that the contract stated in as many ways as it could be repeatedly stated that as to those necessarily variable items the lump sum price was...
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