Western Engineers, Inc. v. State By and Through Road Commission
| Decision Date | 01 February 1968 |
| Docket Number | No. 10919,10919 |
| Parties | d 294 WESTERN ENGINEERS, INC., Edwards and Kelcey, Plaintiffs and Appellants, v. STATE of Utah, By and Through its ROAD COMMISSION, Defendant and Respondent. |
| Court | Utah Supreme Court |
Clyde, Mecham & Pratt, Allan E. Mecham, Salt Lake City, for appellants.
Phil L. Hansen, Atty. Gen., Bryce E. Roe, Ollie McCulloch, Salt Lake City, for respondent.
Plaintiffs entered into a contract with the State of Utah, by and through its Road Commission, wherein they agreed to perform engineering services in connection with a proposed section of an interstate highway. Under the terms of the contract, plaintiffs were to complete their performance within nine months from the date of notice to proceed. The contract was not completed until approximately three and one-half years had elapsed. Plaintiffs contend that the delay was the fault of the State and that they are entitled to damages therefor. The trial court, basing its decision upon a 'no damage' clause in the contract, granted the State's motion for summary judgment and plaintiffs appeal.
The contract contained provisions to the effect that all of the surveys, designs, plans, schedules, progress and supervision were subject to the approval of the Director of Highways; that the plans and designs must be approved by the Federal Bureau of Public Roads; and, that all of these matters submitted by plaintiffs would be given thorough consideration and they would be informed of the decision by the Road Commission 'within a reasonable time so as not to interrupt or delay the work of the consulting engineer' (plaintiffs). The contract proviso with which we are primarily concerned, and which the trial court found to be dispositive, reads as follows:
The consulting engineer agrees to prosecute the work continuously and diligently, and that no charges or claims for damages will be made by them for any delay or hindrances, of any cause whatsoever, during the progress of any portion of services specified in this agreement. Such delays or hindrances, if any, shall be compensated for by an extension of time for such reasonable periods as the Road Commission may decide.
Plaintiffs contend that the foregoing 'no damages' clause is ambiguous and that they are entitled to a trial to take evidence to ascertain the types of delay the parties intended the clause to cover. They assert that the cumulative delay which actually occurred was not contemplated by the parties, and, therefore, the 'no damages' clause is inapplicable, and they are entitled to damages for the unreasonable delay caused by the State.
The cumulative delay attributed to the State by plaintiffs was its failure to process various preliminary designs, plans and drawings within a reasonable time, its slowness in determining clearance of structures over railroad right of ways, and the inability to come to decisions. Specific instances are set forth to support these charges. For the purposes of this appeal we consider these charges to be true.
There are various exceptions which have been held to preclude application of 'no damages' provisions in construction contracts. 1 They can be broadly classified as: (1) A delay that is the result of fraud or active interference on the part of one seeking the benefit of the provision; 2 (2) A delay which has extended such an unreasonable length of time that the party delayed would have been justified in abandoning the contract; (3) A delay not within the specifically enumerated delays to which the no damage clause is to apply; (4) A delay which in light of the relationship of the parties and objectives and attendant circumstances was not intended or contemplated by the parties to be within the purview of the 'no damages' provision. It is within the last category that plaintiffs' claim must rest. 3
The 'no damages' provision, broad as it is in scope, is not ambiguous. Delays that could reasonably be foreseen, could have been specifically provided for in the contract. It was for the unforeseen delays that the clause was included to protect the State and compensate the plaintiffs for such delays. 4
While there may be cases to the contrary, 5 the better reasoned cases 6 hold that, in the instant case, the plaintiffs were not entitled to introduce parol evidence to indicate that the delay was unreasonable or was not contemplated by the parties at the time contract was executed.
The reasoning behind the foregoing conclusion is well expressed by the Rhode Island Supreme Court 7 in the...
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