Walter D. Giertsen Co. v. State

• Decision Date: 28 February 1967
• Citation: 148 N.W.2d 741,34 Wis.2d 114
• Parties: WALTER D. GIERTSEN CO., a corp., et al., d/b/a Groves-Giertsen, Appellants, v. STATE of Wisconsin, Respondent.
• Court: Wisconsin Supreme Court

Page 741

148 N.W.2d 741

34 Wis.2d 114

WALTER D. GIERTSEN CO., a corp., et al., d/b/a Groves-Giertsen, Appellants, v. STATE of Wisconsin, Respondent.

Supreme Court of Wisconsin.

Feb. 28, 1967.

Jasper, Winner, Perina & Rouse, Madison, Carlsen, Greiner & Law, Minneapolis, Minn., of counsel, for appellants.

Bronson C. La Follette, Atty. Gen., Richard E. Barrett and E. Gordon Young, Asst. Attys. Gen., Madison, for respondent.

GORDON, Justice.

The plaintiffs are contractors who had agreed with the state to build certain bridges which, during construction, were flooded by high water. The damages resulting from that flooding are the subject of this lawsuit. The trial court found that the state withheld material information from the appellants; we must determine whether this fact entitles the plaintiffs to recover in this action.

At the time that bids were being prepared, the contractors conducted their own investigation as to the circumstances involved at the site where the bridges were to be built. Notwithstanding their investigation, the plaintiffs contend that they would have used different techniques if they had had the information which the state of Wisconsin possessed.

There was an express contractual obligation on the part of the bidding contractors to make an investigation. They did not learn of the report of the United States Geological Survey until after the flooding had taken place. The federal agency's report contained predictions as to the frequency of floods on the river and indicated that there was a 50 percent chance in any given year that the river would reach an elevation of 778 feet. As a matter of fact, there was testimony indicating that such high water mark was reached in 1950 and not again until September, 1959, when the unfinished construction work performed by the plaintiffs was flooded.

We believe that the contract entered into between the parties was an arm's length one; it required the contractors to make their own study as to the 'conditions to be encountered.' We believe that the risk of high water was one of the precise hazards that the parties had in mind when they formally imposed an investigative duty upon the builders. The written agreement expressly provided that 'it is mutually agreed that submission of a proposal shall be considered conclusive evidence that the bidder has made such examination.' In light of this clause, it is difficult to accept the appellants' present claim that the damages suffered by the flooding should be borne by the state of Wisconsin.

We distinguish those cases wherein the builder claimed to have been misled by affirmative false statements on the part of the agency. Thomsen-Abbott Construction Co. v. Wausau (1960), 9 Wis.2d 225, 100 N.W.2d 921; Wussow v. State (1936), 222 Wis. 118, 267 N.W. 56; McDonald v. State (1931), 203 Wis. 649, 235 N.W. 1; Furton v. City of Menasha (D.C.Wis.1947), 71 F.Supp. 568.

We also distinguish those cases in which concrete facts known to the governmental agency are not disclosed by it to the contractor. An example of this is the situation in which the governmental agency has information relating to subsoil conditions at the situs. Walla Walla Port District v. Palmberg (9th Cir. 1960), 280 F.2d 237; Eastover Stores, Inc. v. Minnix (1959), 219 Md. 658, 150 A.2d 884; Valentini v. City of Adrian (1956), 347 Mich. 530, 79 N.W.2d 885.

In the case at bar, there were no affirmative misrepresentations by the state, and in addition the nondisclosure related only to estimates and predictions, as opposed to firm facts. The chief bridge engineer for the state testified that the information...