White Oak Corp. v. State

• Decision Date: 23 March 1976
• Citation: 365 A.2d 1162,170 Conn. 434
• Court: Connecticut Supreme Court
• Parties: WHITE OAK CORPORATION v. STATE of Connecticut.

Page 1162

365 A.2d 1162

170 Conn. 434

WHITE OAK CORPORATION v. STATE of Connecticut.

Supreme Court of Connecticut.

March 23, 1976.

Edwin A. Lassman, Hartford, with whom was Steven D. Bartelstone, Hartford, for appellant (plaintiff).

William J. White, Asst. Atty. Gen., with whom were Edward T. Blair, Asst. Atty. Gen., and, on the brief, Carl R. Ajello, Atty. Gen., Hartford, for appellee (defendant).

Before HOUSE, C.J., and LOISELLE, BOGDANSKI, LONGO and MacDONALD, JJ.

MacDONALD, Associate Justice.

The plaintiff, a highway construction contractor, has appealed from a judgment rendered in favor of the defendant state of Connecticut in an action brought pursuant to the provisions of § 4-61 of the General Statutes ¹ for damages arising out of a contract for the construction of a state highway. The facts as set forth in the finding are undisputed. The plaintiff bid upon and was awarded by the state a contract in excess of six million dollars for the construction and relocation of a highway known as route 8. The contract, in general, called for building bridges, blasting, relocating utilities, excavating and filling and the plaintiff was required, among other things, to provide and incorporate into the work various building materials, including sand, stone, loam, gravel and bituminous material. In general, payment was to be for accepted work in place. In addition, the contract contained several special provisions including one entitled 'Escalator Clause Pertaining to Changes in Common Carrier Rates,' the interpretation of which constitutes the single issue raised by this appeal.

The special provision in question, which is set forth in full in the footnote, ² provides, where applicable, for an adjustment in payment to the contractor 'to compensate for increases or decreases in cost due to changes in common carrier rates becoming effective after the date of opening of bids and before the date stipulated for completion of the work, as adjusted because of authorized extensions of time.' The plaintiff, in addition to its construction activities, was also duly licensed by the public utilities commission as a common carrier and, at some time after the work called for by the contract began, an increase in the local tariffs charged by the plaintiff as a common carrier for hauling bulk materials by dump trucks was authorized by the commission. The hauling of most of the bulk materials for the highway project involved here, including sand, stone, gravel, loam and bituminous concrete, was performed by trucks owned by the plaintiff, although some also were hauled by trucks owned by Connecticut Sand and Stone Corporation, a closely related corporation which had the same main office and practically the same officers and directors as the plaintiff but which was not a common carrier.

Approximately two years after completion of the project, the plaintiff sent a letter to the defendant requesting an adjustment under the so-called escalator clause because of an increase in the hauling rates for common carriers effective June 7, 1965, which it claimed entitled it to additional sums with respect to the transportation of bulk materials in its own trucks as well as in the trucks of its affiliate corporation, Connecticut Sand and Stone Corporation. Accompanying this request, in addition to correspondence between the two corporations with respect to the rate increase, was a document appearing to be an invoice or bill from Connecticut Sand and Stone Corporation to the plaintiff for 'additional charge for hauling materials to the above project . . . due to increase in tariff rates.' Although that invoice or bill appeared to be marked 'paid,' no money actually changed hands between the two corporations; rather, mutual book entries were made. The trial court found that these mutual book entries were circuitous and would cancel each other and that the plaintiff did not actually incur an increase in cost due to changes in common carrier rates within the meaning of those words in the escalator clause, and this finding was not disputed.

Upon the foregoing facts, the trial court concluded that the plaintiff had failed to show that there was an increased cost to it due to changes in common carrier rates; that in hauling materials to the project in its own trucks the plaintiff was performing services for itself and not as a common carrier; that the hauling performed by Connecticut Sand and Stone Corporation does not qualify for additional compensation under the escalator clause because it was not a common carrier and a receipted bill from it, accordingly, was not a bill from a common carrier; that the escalator clause applies only to services performed for the plaintiff by another common carrier; and finally that the plaintiff was not entitled to the additional compensation claimed. The plaintiff's assignment of errors attacks only the validity of the foregoing conclusions and not that of the facts found, squarely raising as the issue to be determined by us whether the court arrived at a fair and reasonable interpretation of the escalator clause in the contract in concluding that it applied only to hauling services performed for the plaintiff contractor by another common carrier and not to such services performed by the plaintiff for itself nor to hauling services performed for it by another carrier which was not a common carrier.

'The court's conclusions which have been attacked are to be tested by the finding. . . . These conclusions must stand unless they are legally or logically inconsistent with the facts found or unless they involve the application of some erroneous rule of law material to the case.' Cecio Bros., Inc. v. Feldmann, 161 Conn. 265, 271, 287 A.2d 374, 377; Johnston Jewels, Ltd. v. Leonard, 156 Conn. 75, 79, 239 A.2d 500; Craig v. Dunleavy, 154 Conn. 100, 105, 221 A.2d 855; Maltbie, Conn.App.Proc. § 166. One of the rules applicable to the determination of a dispute over the meaning of a contract is that pertaining to determination of the intent of the parties. 'The oft-repeated rule is that the intent of the parties is to be ascertained by a fair and reasonable construction of the written words, in the light of the circumstances surrounding the execution of the...