Western Utility Contractors, Inc. v. City of Casper
| Decision Date | 31 December 1986 |
| Docket Number | 86-27,Nos. 86-26,s. 86-26 |
| Citation | 731 P.2d 24 |
| Parties | WESTERN UTILITY CONTRACTORS, INC., Appellant (Plaintiff), v. The CITY OF CASPER, Wyoming, Appellee (Defendant and Third-Party Plaintiff), v. C.E.I., INC., (Third-Party Defendant). C.E.I., INC., Appellant (Third-Party Defendant), v. The CITY OF CASPER, Wyoming, Appellee (Defendant and Third-Party Plaintiff), Western Utility Contractors, Inc. (Plaintiff). |
| Court | Wyoming Supreme Court |
B.J. Baker, of Brown, Drew, Apostolos, Massey & Sullivan, Casper, for Western Utility Contractors, Inc.
G.G. Greenlee, of Murane & Bostwick, Casper, for The City of Casper.
Cameron Walker, of Schwartz, Bon, McCrary & Walker, Casper, for C.E.I., Inc.
Before THOMAS, C.J., and BROWN, CARDINE, URBIGKIT and MACY, JJ.
This City of Casper, 3,000-foot, $1.5 million, storm-sewer construction project came to litigation for a ten-day trial from a dispute among the contractor, the city, and the engineer as supervisor-designer, about contract specification terminology and claimed inaccuracies in a soils report creating a contractor "extra" claim of $213,933, first disapproved by the engineer, next by the city, and then denied by the trial court, and now affirmed.
Appellant (Western Utilities Contractors, Inc., the contractor):
2. The trial Court's Finding No. 1, which states: "There was no evidence that the report was incorrect," is totally contrary to the evidence because all the substantial evidence disclosed that the soils report was incorrect insofar as it indicated where ground water would be encountered. Further, the legal conclusion implied in Finding No. 1 that the plaintiff could not rely on the report but had some duty to obtain more information is contrary to law.
Appellee (City of Casper):
1. "Did the District Court err in its findings and judgment below that Appellee did not breach the terms of its contract with Appellant?"
2. The failure of the contractor to comply with provisions of the contract requiring notice of claim constituted waiver.
3. The decision of the trial court was correct in holding, in addition to lack of contractual breach, that the contractor as plaintiff failed to prove damages.
Cross-appellant (C.E.I., Inc., the engineer):
The district court erred in its failure to enter judgment in favor of third-party defendant C.E.I., Inc. on the third-party complaint of the city requesting indemnity when judgment for the city was granted.
The City of Casper (city) entered into a contract with C.E.I., Inc. (engineer), a municipal facilities engineering firm under which C.E.I. was to design and supervise the construction of a $1.5 million, 3,000-foot storm sewer project. After completing the planning and design, C.E.I. managed the project's public bidding at which Western Utilities Contractors, Inc. (contractor) was the successful low bidder. The bidders relied in part on a soils report prepared for the engineer, which indicated ground water conditions from test borings.
Following completion of the project and receipt of payment under the contract, the contractor filed an additional compensation claim against the city for $213,933. The city impleaded the engineer, claiming indemnity for any damage award which might result from the contractor's complaint. The trial court denied the contractor's claim against the city, and refused to enter judgment on the city's third-party claim against the engineer, ruling that its decision in the first claim rendered the third-party claim moot. The contractor appeals the trial court's denial of its claim in favor of the city, and the engineer appeals the trial court's refusal to rule in its favor on the city's claim for indemnity.
Initial litigation was based on both negligence and contract, but, following the adverse trial court decision, appeal has been taken only on a contractual theory.
Explicit answers in oral argument refined the contested issues which succinctly are whether § 703.16(b) or § 603.14 of a reference-incorporated Specifications for Road & Bridge Construction, Wyoming Highway Department, 1980 ed., apply to the bedding material required in the trench for the large 6' 6"' and 7' 6"' concrete drain tile underground installation. The contractor complains that the engineer, and consequently the city, applied the wrong requirement, causing substantial time loss and consequent damage in delayed installation, constituting the amount claimed for recovery.
The problem was not material cost, since what the contractor wanted to use, sized gravel (drain rock), was more expensive by the expressed amount of perhaps three times than the sand actually utilized. The claim theory was that the installation was significantly delayed in using the finer sand material in areas where the work was "in the wet," meaning below underground water levels.
Ancillary to the specification controversy was a dispute about how much "in the wet" should have been expected from information supplied by a soils test report obtained pre-bid by the engineer from a third-party testing service that provided a test boring profile. The contractor claimed an indicated total footage of an expected approximate 500 feet, compared to an actual 1,500 footage. Interpretation of the soils report was also conflicting in trial evidence, as was the water trench footage actually encountered in work construction.
Originally, the pleadings and trial posture raised a separate claim about this wet trench as a compensable "unanticipated condition," but oral appellate argument made clear, as did the trial evidence on proof of damages, that the contended erroneous soils report served only as a factor of the total damage arising from the improper material requirement devolving from the owner's misinterpretation of the job specifications.
Those specifications were designated by the construction contract as incorporated by reference from Specifications for Road & Bridge Construction, supra. The contractor argued that it could use drain rock for the bedding material, and the engineer disagreed and established smaller sized material, including variable substance, as its standard. Additionally, the engineer contended as contract performance requirements that it had agreed to permit the contractor to use material included within the normal criteria of the Casper Board of Public Utilities as "equal or better," which was slightly more coarse but generally about the same as the asserted requirement provided by the Highway specification; and, furthermore, that the contractor was never required to use sand.
The two provisions (differentiated sections) which came to the trial court for review as being the proper contractual criteria are, by the contractor: § 703.16(b):
(Drain rock) Specifications for Road & Bridge Construction, supra, at 637;
by the city and also the engineer: § 603.04:
(Soil bedding material) Id. at 447.
Those specifications were part of the agreement for the purpose of ascertaining what kind of bedding was to be used because "reference in a contract to extraneous writings renders them part of the agreement for indicated purposes." Busch Development, Inc. v. City of Cheyenne, Wyo., 645 P.2d 65, 70 (1982).
The essential operational claim of the contractor was that drain rock would have expedited dewatering and pipe laying. Responsively, the engineer contended that drain bed coarse material was unsatisfactory unless diked as potentially causing future street settling and pipe damage problems. Extensive testimony on both operational disputes during work progress and contract specification criteria was introduced. 1 The claim in issue is derived from alleged work-progress delay in inability to use drain rock.
This appeal decision requires a determination whether the trial court was right in accepting the engineer's explanation of applicable specifications for the bedding material. Each litigant produced extensive evidence on his view of which section of the Highway specification applied.
Was this "bed course material" for sewer lines and water lines under § 703.16(b) (drain rock), or "bedding material" under § 603.04 (amorphous mixed material)?
It would be inane for this court to fail to discern the ten-day trial dispute in interpretation or to resolve that dispute now as additional storm sewer installation experts. If the applicable section is clearly determinable from the written document as a matter of law, we find no basis to make that decision differently than did the trial court. If, however, as we anticipate, there really was an...
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