Case Title: Northern Improvement Co. v. Wyoming State Highway Com'n

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1990-12-14T00:00:00Z

Document:
Northern Improvement Co. v. Wyoming State Highway Com'n1990 WY 147802 P.2d 889Case Number: 89-287Decided: 12/14/1990Supreme Court of Wyoming
NORTHERN IMPROVEMENT 
COMPANY, 

Appellant 
(Plaintiff),

v.

WYOMING STATE HIGHWAY 
COMMISSION, 

Appellee 
(Defendant).

Appeal from the District 
Court, Laramie County, Harold Joffe, J.

Raymond W. 
Martin of Godfrey & Sundahl, Cheyenne, for appellant.

James L. 
Applegate and John J. Metzke of Hirst & Applegate, Cheyenne, for 
appellee.

Before 
URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.

MACY, Justice.

[¶1]      Appellant 
Northern Improvement Company appeals from a judgment in favor of Appellee 
Wyoming State Highway Commission, denying Appellant's claim for costs of 
grinding a portion of Interstate 80, which Appellant paved pursuant to a 
contract with Appellee.

[¶2]      We 
affirm.

[¶3]      Appellant 
presents the following issues:

1. Were the contract 
specifications adequate to insure the quality of ride demanded by the 
Appellee?

2. Did reasonable 
conformity with grade, as imposed by Appellee, become arbitrarily and 
capriciously identified and measured by a subjective ride test, such that 
excessive remedial costs were incurred by Appellant?

3. Did the contract plans 
and specifications grant Appellee unlimited discretion to determine the 
satisfactory and acceptable fulfillment of the contract?

4. Was the evidence 
sufficient to support the trial court's finding that public policy safety 
considerations were a component of Appellee's decision to direct Appellant to 
grind the pavement surface?

[¶4]      In 1985, 
Appellant and Appellee entered into a contract for the repavement of a portion 
of Interstate 80 near Rock Springs, Wyoming. The contract was subject to 
specifications articulated in the Highway Department's Specifications for Road 
& Bridge Construction (1980 ed.) and certain supplementary specifications. 
The specifications described, inter alia, the procedure for determining the 
quality and acceptability of the completed project. Section 105.01 of the 
Specifications for Road & Bridge Construction stated in pertinent 
part:

     The Engineer will 
decide all questions which may arise as to: The quality and acceptability of 
materials furnished and work performed; the rate of progress of the work; 
cooperation between Contractors; the interpretation of the plans and 
specifications; and the acceptable fulfillment of the contract on the part of 
the Contractor.

Section 105.03 
provided:

     All work performed and 
all materials furnished shall be in reasonably close conformity with the lines, 
grades, cross sections, dimensions, and material requirements, including 
tolerances, shown on the plans or indicated in the specifications.

* * * * * *

     If the Engineer finds 
that the materials or the finished product in which the materials are used or 
the work performed are not in reasonably close conformity with the plans and 
specifications and have resulted in an inferior or unsatisfactory product, the 
work or materials shall be removed and replaced or otherwise corrected by and at 
the expense of the Contractor.

Section 105.08 
stated in pertinent part:

     The Engineer will set 
construction stakes establishing lines, slopes, and continuous profile grade in 
road work, and centerline and bench marks for bridge work, culvert work, 
protective and accessory structures, and appurtenances as he may deem necessary, 
and will furnish the Contractor with all necessary information relating to 
lines, slopes, and grades. These stakes and marks shall constitute the field 
control by and in accordance with which the Contractor shall establish other 
necessary controls and perform the work.

The 
specifications also stated:

     As soon as the 
concrete has hardened sufficiently, the pavement surface shall be tested with a 
ten-foot (3 m) straightedge or other specified devices. Areas showing high spots 
of more than 1/8 inch (3 mm), but not exceeding 1/2 inch (13 mm) in ten feet (3 
m) shall be marked and immediately ground down with an approved grinding tool to 
an elevation where the area or spot will not show surface deviations in excess 
of 1/8 inch (3 mm) when tested with a ten-foot (3 m) straightedge.

Section 414.16. 
Section 414.15F provided in pertinent part:

Straightedge testing and 
surface corrections shall continue until the entire surface is found to be free 
from observable departures from the straightedge and the slab conforms to the 
required grade and cross section.

[¶5]      Appellant 
completed the project in two phases. After Appellant completed phase I, 
Appellee's district engineer drove a vehicle over the pavement and approved the 
quality of the surface.1 When Appellant completed phase II, 
Appellee's district engineer again drove a vehicle over the paved surface. He 
discovered that the surface had a series of flaws described at trial as a 
"harmonic wave." He advised Appellant that the quality of the surface was 
unacceptable and that the surface would have to be ground to remove the wave. A 
straightedge test revealed that the surface deviated from the straightedge 
requirement in more than 200 places. The grade of the pavement was also compared 
to the grade requirements as designated by stakes which had been placed at 
fifty-foot intervals along the course of the interstate.2 The pavement did not deviate from 
the grade requirements on those stakes at the location of the stakes, but a 
string test indicated that deviations as great as three-fourths of an inch 
existed at points between the stakes.

[¶6]      Appellee directed 
Appellant to grind the surface of the pavement until the harmonic wave was 
removed. Appellant asked Appellee to provide an objective standard for grinding 
the pavement. In response, Appellee demanded that Appellant grind the surface to 
meet a standard measured by a profilograph, which profiles the surface of the 
road. Neither the contract nor the specifications mandated the use of the 
profilograph or a ride test as a method for testing the quality of the surface. 
The grinding required to meet Appellee's profilograph standard was more 
extensive than the grinding required to meet the straightedge test. Appellant 
ground the pavement to the district engineer's satisfaction and filed a claim 
with Appellee, seeking reimbursement for the additional cost of grinding the 
surface in phase II to the profilograph standard.

[¶7]      Appellee's chief 
executive staff reviewed and denied Appellant's claim. Appellant subsequently 
filed a petition for review with the district court. The district court viewed 
the petition as an original complaint.3 Appellant alleged that Appellee 
used standards not specified in their contract to require excessive grinding of 
the entire phase II surface and sought recovery for grinding work not 
attributable to its failure to meet the straightedge test. The district court 
conducted a bench trial and ruled in favor of Appellee. The court found that the 
specifications gave Appellee's district engineer sufficient authority to require 
Appellant to remove a defect which was unsafe and unacceptable.

[¶8]      The disposition 
of this case depends upon the answers to two questions:

     1. Did the terms of 
the highway construction contract between Appellant and Appellee permit Appellee 
to require that Appellant remove a flaw in the pavement even though the surface 
satisfied a standard incorporated into the contract? 

     2. Is the district 
court's decision supported by sufficient evidence?

The answer to 
the first question is dependent upon our interpretation of the parties' 
contract.

The determination of the 
parties' intent is our prime focus in construing or interpreting a contract. "If 
an agreement is in writing and the language is clear and unambiguous, the 
intention is to be secured from the words of the agreement." Nelson v. Nelson, 
740 P.2d 939, 940 (Wyo. 1987). When the language is clear and unambiguous, the 
writing as a whole should be considered, taking into account relationships 
between various parts. Contract construction and interpretation are done by the 
court as a matter of law.

True Oil Company 
v. Sinclair Oil Corporation, 771 P.2d 781, 790 (Wyo. 1989) (citations omitted). 
See also St. Paul Fire and Marine Insurance Co. v. Albany County School District 
No. 1, 763 P.2d 1255 (Wyo. 1988). We have stated our standard of review of 
factual issues many times. We must decide if sufficient evidence supports the 
findings of the trial court.

"[W]here the sufficiency 
of evidence is an issue we uphold the judgment if there is evidence to support 
it, and in so doing we look only to the evidence submitted by the prevailing 
party and give to it every favorable inference which may be drawn therefrom, 
without considering any contrary evidence."

True Oil 
Company, 771 P.2d  at 788 (quoting Hance v. Straatsma, 721 P.2d 575, 578 (Wyo. 
1986)).

[¶9]      Appellant does 
not dispute that the surface of phase II failed to meet the straightedge 
specification in more than 200 places, nor does it dispute that a wave existed 
in the surface of the pavement which could be detected by a driving test, a 
profilograph test, or a string line test. Instead, Appellant argues that it was 
required to grind only the spots which did not meet the straightedge 
specification because that was the only specification contained in the contract 
which dealt with conformity of the grade.

[¶10]   Appellee counters by arguing that 
the terms of the contract were broad enough to allow the district engineer to 
require Appellant's removal of a wave which could not be detected by the 
straightedge test. Appellee maintains that it employed the profilograph test to 
satisfy Appellant's request for guidance on how much to grind. Appellee also 
asserts that the district engineer's demand was reasonable because the wave 
posed a safety threat to motorists.

[¶11]   Applying our standard for the 
interpretation of a contract, we hold that the district court's interpretation 
is correct as a matter of law. While Appellant's position that it was required 
to comply with the straightedge specification set out in § 414.16 of the 
Specifications for Road & Bridge Construction is correct, Appellant was also 
required to satisfy the grade requirements of the plans and specifications. 
Section 105.03 and the supplementary specifications clearly stated that all work 
must be in conformity with the grades on the plans.4 In addition, § 105.01 provided that 
the district engineer would determine whether the work was acceptable according 
to his interpretation of the plans and specifications.

[¶12]   We also hold that the court's 
factual conclusions are supported by sufficient evidence. After listening to 
testimony for three days and reviewing almost fifty documents, the district 
court found that the preground surface of phase II did not meet the contract's 
grade requirements. The court emphasized the fact that the grade of the pavement 
deviated between the stakes which were set at fifty-foot spacings. Appellant has 
failed to demonstrate that the district court's finding was not supported by 
sufficient evidence. Since Appellant's work did not conform to the requirements 
of the contract, Appellant was financially responsible for the curative remedy. 
Sections 414.15 and 105.03.

[¶13]   Affirmed.

URBIGKIT, Chief Justice, 
dissenting.

[¶14]   This case provides the broad 
perspective of what, if any, limitations the supervising highway engineer has in 
assessing extra or supplementary construction obligations on the contractor. In 
essential detail, the facts of this case are not in dispute. I dissent from the 
decision which interjects discretional authority for desired satisfaction of the 
engineer as the criteria for work acceptance where satisfaction is in no regard 
a term of the contract documents executed between the parties. It is my 
perspective that this majority adds a dimension to the supervising engineer's 
approval authority which was not, and never would have been, an anticipated 
condition of the contractor's performance responsibility when he bid and entered 
into the particular road construction contract.

[¶15]   Appellant contracted to install a 
concrete overlay on a segment of the interstate highway system near Rock 
Springs, Wyoming. Neither a road test criteria nor an engineer's satisfaction 
standard was included in the plans and specifications or contract documents. 
After the installation work had been completed, the engineer drove over the road 
and encountered what he described, in asserting his dissatisfaction, as a 
"harmonic wave." The contractor was directed to grind the concrete surface of 
the roadway until the wave effect on passing vehicles was removed.1 One thing is agreed between the 
litigants as recognized both in majority decision and this dissent. There 
were no contractual documents which established either a profilograph 
test to profile the road surface or a road test for work acceptance. The test 
addressed by contract was a straight-edge test which is conceded to be less 
difficult to achieve than either the objective test of the profilograph or the 
completely subjective decision of the engineer in assessing his individual 
dissatisfaction with the ride provided. However, the engineer, responding to his 
dissatisfaction, detailed that the contractor embarked upon a grinding process 
for the road surface to a profilograph standard in order to satisfy his interest 
in a proper ride.

[¶16]   I do not disagree with the 
authorities cited for decision by this majority. The problem is invalid 
application in addressing specific contract documents that either establish the 
subjective criteria of satisfaction or the objective criteria of profilograph 
for work obligation. It is clear from the record provided that a substantial 
part of the increased cost incurred in attempting to achieve satisfaction was 
the failure of the engineer to provide an objective standard of exactly how much 
grinding of the road surface would be required to achieve acceptability. 
Satisfaction by ride is not empirically determinable and no more, and perhaps 
less, than the obligation to coat the road surface with gold. Neither was agreed 
and neither should be required. The engineer's discretion and decision was 
confined to objective determinations from explicit plans and specifications and 
not to subjective dissatisfaction because the criteria for straight-edge 
analysis provided for in the contract did not satisfy his criteria for the 
anticipated final product.

[¶17]   It is my perspective that the State 
Highway Department writes the specifications and determines the cost ingredient 
for road construction. The engineer here asked for more than was provided or 
undertaken and, consequently, the contractor should be entitled to additional 
compensation.2 

[¶18]   This highway construction contract 
provided for a one-eighth inch in ten foot straight-edge specification as a 
deviation factor which is now generally recognized to be "an inadequate 
specification to insure the increasingly higher standards of riding comfort 
expected by the motoring public." In this case, the State Highway Department bid 
one requirement and then applied another more arduous and expensive one. This 
majority now justifies the additionally expensive requirement as obtainment of 
the "satisfaction" of the highway engineer. In doing this, we do not apply the 
intent of the litigants, but instead rewrite the contract to overlay its 
terminology with a new instrument, namely "satisfaction."

[¶19]   Consequently, I 
dissent.

FOOTNOTES

1 Section 101.21 of the 
Specifications for Road & Bridge Construction defined "engineer" as "[t]he 
Chief Engineer of the Department acting directly or through his duly authorized 
representatives, who is responsible for engineering supervision of the 
construction."

2 Section 101.36 of the 
Specifications for Road & Bridge Construction defined "profile grade" as 
"[t]he trace of a vertical plane intersecting any given roadway surface as shown 
on the plans. Profile grade means either elevation or gradient of such trace 
according to the context."

3 Since Appellee's 
enabling statute does not authorize the agency to adjudicate its contract 
disputes, an aggrieved party's remedy is a trial de novo in a court of 
law. State Highway Commission of Wyoming v. Brasel & Sims Construction Co., 
Inc., 688 P.2d 871 (Wyo. 1984).

4 Supplementary 
specification SS-400LA provided in pertinent part:

     This work shall 
consist of constructing a pavement * * * on an existing base in accordance with 
this special provision, the standard specifications and in conformity with the 
lines, grades and typical cross sections shown on the plans.

 

FOOTNOTES for the 
Dissent

1 As a matter of passing 
interest, a similar condition appears to exist in the northbound travel lanes of 
I-25 near the vicinity of the State Highway building located in Cheyenne, 
Wyoming.

2 This case provides more 
than just an academic exercise in contract analysis when applied to the 
characteristics and character of individual highway engineers. The record 
provides some intimation within a fact generally understood in the building 
industry that the fairness and professionalism of the highway engineer is a 
singular constituent of the cost analysis for totaling the final bid. To now add 
"satisfaction" as an intangible criteria can only add to the indeterminate 
elements for which an appropriate upward cost adjustment must be added if the 
contractor can be expected to survive very long in the contingent-filled world 
of road construction.