No. 13699 INTHE SUPFEMF,COUIiT OF THE STATE OF

## ~~~ 1978

SORNSINCONsTRUCTIONCaMPANY, a North Dakota corporation, Plaintiff and Respondent,

THE STATE OFM3NTANA; and THE DEPOF NATURAL RESOURCESAND CONS~TION an adrinistrative agency of the Stateof Montana, Defendants andAppellants.

Appeal frm: DistrictCourt of the FirstJudicialDistrict, HonorableGordon R. Bennett, Judgepresiding. Counselof Record: ForAppellants: Hon. MikeGreely, Attorney General, Helena, Pbntana Allen B. Chronister argued, AssistantAttorney General,

Helena, Wntana Garrityand Keegan, Helena, E.lontana Donald A. Garrityargued, Helena, Pbntana TedDoney

## ,Helena, Pbntana For Respondent: Scribnerand Huss, Helena, Wntana Walker andGrover, Denver, Colorado Philip E. Riedesel argued, Denver, Colorado

S-tted: October 19, 1978 Decided:

## DEc2 !j 

## 1978 Filed: 

# DEc, J 

### lQ78Mr. Justice John Conway Harrison delivered the Opinion of the Court. Plaintiff, Sornsin Construction Company, brought this action inthe ~istrict Court of the FirstJudicial District torecover damages for the alleged breach of a contract for the construction of an irrigationpump system on the YellowstoneRiver near Sidney, Montana. From a judgment for plaintiff, defendant Stateof Montana appeals. On July 28, 1970, theMontana Water Resources Board (MWRB) (now the Department of Natural Resources and Conservation) issued an invitation forbids on a contract for the construction of an irrigationpump system project. The project entailed constructing threeriver pump units topump water from theYellowstone River and four reliftpump stations topump thewater from the river units intovarious irrigation canals. The project was designed by the Portland, Oregon, designunitof the United StatesDepartment of Agriculture SoilConservation Service. Plaintiff received a number of plans, specifications and drawings from the MWRB which it used inpreparing its bid. After the contract had been awarded toplaintiff and work had begun, it became apparent that a number of specificationswere only approximations. Specifically, the listed elevations for theriver bed, inthe neighborhood of 1880 feet, varied from the actual elevations asmuch as 15 feet. These discrepancies resulted inincreased costs to plaintiff. In addition, a number of other claims developed through the course of performance of the contractwhich defendant refused tocompensate. Plaintiff sued, and a jury trial commenced on April 12, 1976, continuing through May 6, 1976. The jury awarded damages toplaintiff inthe amountof $335,328 plus $6,751.05 incosts. The originalbid submitted by plaintiff and accepted by defendant had been $962,108.40. The issues raised by appellant on appeal are: 1. Did Sornsin Construction Company assume the risk of failureof itsproposed cofferdam designs? 2. Did Sornsin Construction Company assume the risk that thematerial tobe excavated atPump Unit 3might not stand on a vertical cut? 3. Was the giving of Instruction No. 22 error? 4. Under the terms of this contract, was the contractor responsible for damage prior to acceptance? 5. Is a contractor who bids on an item, knowing that the quantity listed for that itemiswrong, entitled to

recover lostprofits on the excess quantity? 6. Did Sornsin Construction Company prove thatmaterial suitablefor compacted granular earth fillwas not available atthe siteof Pump Unit l-A? 7. May the contractor recover for extra work not covered by a change order? 8. Did the DistrictCourt err by admitting plaintiff's Exhibit Nos. 119, 131and 141inevidence? 9. Did the District Court err by refusing to admit defendant's Exhibit No. 555 inevidence? 10. Is the verdict and judgment supported by the evidence? The parties agree only on the statement of Issue Nos. 3, 8, 9, and 10. As a result, inthe discussion of all issues, the issueswillbe presented inpairs to emphasize the alternativepositions of the parties.Issue 1 Prior todiscussion of IssueNo. 1, we set forth the general principle as stated inBig Sky Livestock, Inc. v. Herzog (1976), 171Mont. 409, 558 P.2d 1107, 1110, 33 St.Rep. 1232, 1236, that theroleof the reviewing court is to limit itsreview towhether there is substantial credible evidence to support the verdict. In sodoing, it willreview the evidence inthe lightmost favorable tothe prevailing party. See Davis v. Davis (1972), 159 Mont. 355, 497 P.2d 315, and StateHighway Commission v. Vaughan (1970), 155 Mont. 277, 470 P.2d 967. D-1. Did Sornsin Construction Company assume the risk of failureof itsproposed cofferdam designs? P-1. Did the Statebreach itswarranty of accuracy and sufficiency of itsplans and specifications; were there "differing site conditions"; if so, did the Statebreach the contract by failing topay therefor? Defendant argues thatplaintiff assumed the risk that its original cofferdamplans would notwork. Plaintiff responds by asserting thatdefendant breached itswarranty regarding plans and specifications; there were "differing site conditions", and defendant is estopped from

so denying. This issue involves the three river pump units. To construct these units, it was necessary to firstremove the water from the area using cofferdams. The river bed turned outtobe lower than plaintiff anticipated resulting in having toutilize larger and more expensive cofferdams. The State admits the plans from which plaintiff drew its estimates were not consistentwith respect tothe eleva-tion of the river bed. The Stategoes on to argue, however, that thisdiscrepancy intheplans should have put plaintiff

on notice tomake further inquiry, pursuant toClause 12 of thegeneral provisions of the contract: "12. CONDITIONS AFFECTING THE WORK. The Contractor shallbe responsible for having taken stepsreasonably necessary to ascertain the nature and location of the work, and the general and local conditions which can affect the work or the cost thereof. Any failure by the Contractor todo sowillnot relieve him from responsibility for successfullyperforming thework without additional expense tothe ContractingLocal Organization. The Contracting Local Organization assumes no responsibility for any understanding orrepresentations concerning conditionsmade by any of itsofficers or agentsprior tothe execution of this contract, unless such understanding or representation areexpressly stated inthe contract." The other clausepointed outby the State along this same line is Clause 2: "2. SPECIFICATIONS AND DRAWINGS The Contractor shallkeep on the work a copy of the drawings and specifications and shall atalltimesgive the Contracting Officer access thereto. Anything mentioned in the specifications and not shown on the drawings, or shown on the drawings and notmentioned inthe specifications, shallbe of likeeffect as if shown ormentioned inboth. Incase of difference between drawing and specifications, the specifications shallgovern. In case of discrepancy either inthe figures, inthe drawings, or inthe specifications, thematter shallbe promptly submitted tothe Contracting Officer, who shallpromptly make a determination in writing. Any adjustment by the Contractor without such a determination shallbe athis own risk and expense. The ContractingOfficer shall furnish from timetotimesuch detaildrawings and other information as he may consider necessary, unless otherwise provided." Finally, the State's argument turns tothe competitive element involved inthebidding process and the attendant assumption of riskwhere one balances the risk involved in predicting what something willactually cost against the risk of losing the contract if one minimizes the risk inthe firstpart too greatly.The State, citing Haggart Construction Company v. State Highway Commission (1967), 149Mont. 422, 427 P.2d 686, asserts that the crucial question of the contractor's right to recover for misrepresentations in the plans is one of "justified reliance." Plaintiff argues that there were portions of the plans which expressly misstated certain elevations on which the cofferdams were to sit. Furthermore,construction experts at trial seemed to agree that plaintiff's reliance on the plans without the further investigations suggested by the Statewas reasonable. Plaintiff feels Clause 4 of the contract ismost applicable to this issue: "4. DIFFERING SITE CONDITIONS (a)The Contractor shall promptly, and before such conditions are disturbed, notify the Contracting Officer inwriting of: (1) subsurface or latent physical conditions at the site differing materially from those indicated in this contract, or (2)unknown physical conditions at the site,of an unusual nature,differing materially from those ordinarily encountered and generally recognized as inhering inwork of the character provided for in this contract. The Contracting Officer shall promptly investigate the conditions, and if he finds that such conditionsdo materially so differ and cause an increase or decrease in the Contractor's cost of, or the time required for,performance of any part of the work under this contract,whether or not changed as a result of such conditions,an equitable adjustment shall be made and the contractmodified in writing accordingly." Plaintiff gave proper notice, and the Contracting Officer for the State responded by letter on December 30, 1970. Among other things, he stated: "After investigation,it is agreed that,while some change in the river bed level and configuration could be normally expected, the existing depth as compared to that indicated on the drawings ismaterially different so as to constitute a differing site condition under the terms of Clause 4 of General Provisions 

# . .

# ." The Statewithdrew this determination sixmonths later,and

no price adjustmentwasmade.The law is established that a contractor can rely on the plans and specifications and need not, as alleged by the Statehere, verify them. It has long been recognized that the owner, here the State,warrants and is responsible for the accuracy of the descriptions in the plans and specifications of the contract that are issued. See Haggart Construction Company 

### v. StateHighway Commission, supra;Halvorson

v. United States (Ct-C1.1972), 461 F.2d 1337. Section 4(a) of the Differing Site Conditions clause of this contracthereinbefore cited, formerly known as the Changed Conditions clause in government contracts, is the most applicable to this situation. In Farnsworth & Chambers

v. United States (Ct.Cl. 1965), 346 F.2d 577, 580-81, the court said: "The contractual requirement that plaintiff make its own investigation of the site does not obliterate the Changed Conditions clause nor did this requirement obligatebidders to discover, at their peril, subsurface conditions hidden by the river's water and thus unavailable to any reasonablepre-award inspection." The exculpatory clauses in the contract relied upon by the State do not, as a matter of law,waive, eliminate, or modify the contractor's right to rely on the representations made in the plans or specifications nor its right to rely on the Differing Site Conditions clause. Haggart Construction Company 

### v. StateHighway Commission, supra;Morrison-Knudsen

v. United States (Ct.Cl. 1965), 345 F.2d 535; Fehlhaber Corp. v. United States (Ct.Cl. 1957), 151F.Supp. 817; and Farnsworthv. United States, supra. In Haggart Construction, 149Mont. at 687, 688,case cited above, this Court recognized that the owner cannot be allowed to rely on the exculpatory provisions, citing Sandkay Const. Co. v. State (1965), 145Mont. 180, 399 P.2d 1002, and said:"Or to state itwith a more particularity, where plans and estimates or specifications are used as the basis for bids, [it] is a contractorwho has been led to believe that the conditions indicated in such plans exist, [and is] able to rely on them and recover for expenses necessary by conditions being other than as represented in such plans." The reason for the Differing Site Conditions clause of

a contract is to eliminate the contractor's risk of an unanticipated subsurface condition and still allow the government to avoid the unnecessary expense of the contractor including a contingency amount in his bid for possible unanticipated subsurface conditions. See Foster Construction Company v. United States (Ct.Cl. 1970), 435 F.2d 873,

The State in its citation of authority relied upon the

cases of Austin Company v. United States (Ct.Cl. 1963), 314 F.2d 518, and Beacon Construction of Massachusetts v. United States (Ct.Cl. 1963), 314 F.2d 501. Neither of these

cases are factually similar to the situation in this case on the point of the assumed risk by the contractor. InAustin the contractor, not the owner (the state as here), prepared the plans and specifications and promised to perform under those specifications--those are not the facts in this case. InBeacon the evidence indicated that the contractor was

aware of the ambiguities prior to bidding-that is not the

case here. The State argues that Sornsin could not "justifiably rely" on the plans because it alleges that the plans do not show elevations in the areas where the cofferdams were to be placed and the plans had significant discrepancies. As previously set forth, the evidence simply does not support those allegations. Therewas justifiable reliance on theriver bed elevations as shown on the proper sheets of the plans submitted.

Issue 2 D-2. id Sornsin Construction Company assume the risk thatthematerial tobe excavated atPump Unit 3 might not stand on a vertical cut? P-2. Did the Statebreach itswarranty of accuracy and sufficiency of itsplans and specifications; were there "differing site conditions"; if so, did the Statebreach the contract by failing topay therefor? This issue involves the necessary excavation atPump Unit 3. The design for thisunit called for excavation of a trench from the river intothebank topermit installation of the pipe and pumping apparatus of the unit. The plans for Pump Unit 3 indicated an excavation pay line (an "excavation pay line" establishes the area of excavation for which the contractorwillbe paid) on a 1.1 slope for the firsttwenty feetof the excavation and a vertical pay line for the remaining twenty-two feetof the excavation. Rock

was not encountered until some fourteen or fifteen feet below the levelwhere the drawings indicated the vertical pay linewas tobegin. Plaintiff sought damages for the costs of its excavation beyond theverticalpay lineon the theory thatdrawing such a pay lineconstituted a warranty that the earth inthat area was rock capable of being excavated on a 90° angle. Plaintiff's argument with respect to this issueparallels the argument regarding the cofferdams inIssue 1. The additional element inthis situation seems tobe Clause 17of the general conditions of the contract. Defendant relies heavily on thisclause:"17. RECORDS OF TEST PITS AND BORINGS The ContractingLocal Organization does notrepresent that the availablerecords show completely the existingconditions and does not guarantee any interpretation of these records. The Contractor assumes allresponsibility for deductions and conclusions asto the nature of rock and othermaterials tobe excavated, the difficulties of making and maintaining the required excavations and of doing other work affectedby the geology of the siteof the work, and for the finalpreparation of the foundations for the spillway, dikes, and other structures." Plaintiff argues that this clause is not referring to interpretationsmade by the owner's designers, but merely contractor interpretations. Moreover, plaintiff argues that the Differing SiteConditions clause supersedes this clause. In support of this assertion, plaintiff citesFoster Construction C.A., et al. v. United States (Ct.Cl. 1970)

## , 435

"Even unmistakable contract language inwhich the Government seeks todisclaim responsibility for drillhole data does not lessen the right of reliance. The decisions reject, as inconflictwith the changed conditions clause, a 'standard mandatory clause of broad application,' the variety of such disclaimers of responsibility --that the logs arenot guaranteed, not representations, thatthe bidder is urged todraw his own conclusions." (Citationsomitted.) The Statedoes not address this authority nor any of the other arguments made by plaintiff in itsreply brief. Wehold that the State failed tooverturn the finding with respect tothis issue.

Issue 3 We next directour attention to Issue No. 3 wherein the State alleges error by the giving of Instruction No. 22 which reads: "One of the plaintiff's claims is for damages for the increased costs of placing riprap atPump Unit No. 1, alleged tohave been incurred because of the owner's alleged delay inconsenting totheremoval of the old pump house at that location. In your consideration of this claim, you should take into account the provisions of paragraph 7(a)2 of the Specifications for Structure Removal reading in part as follows: 

### "

### '7 (a) 2 Except for the existing transformer base at Pump Unit No. 1, the existing pumping plants shallbe left intact and kept in operation until the replacementpumping plants are installed and operable. The time for removal and salvaging or disposal of existing facilities shall be as directed by the Contracting Officer. The concrete transformer base can be removal [sic] at any time after the transformers are relocated. Relocating the transformers is not a part of this contract.' "You are instructed that provisions such as this one,prohibiting a contractor from performing certain work without the owner's consent, do not permit the owner to withhold consent unreasonably, or to delay giving consent for an unreasonable period of time. Therefore, if you find that such consent was unreasonably withheld or delayed by the owner in this case,youmay consider whether the withholding or delay in giving such consent caused damage to the contractor,and if so, the amount of the damages sustained thereby." Defendant argues that the court altered the clear meaning of this provision of the contractby suggesting, through this instruction, that the existing pumping plants could be removed if such removal would be "reasonable",in which event the owner had a duty to promptly consent. Plaintiff emphasizes the sentence in the contract stating the time for removal shall be "asdirected by the Contracting Officer". The consentwas finally given before the replacementpump was operable lending credence to plaintiff's assertion that the Contracting Officer's understanding of this contractual provision was the same as plaintiff's. Again, defendantdid not respond to plaintiff's arguments. We find no error.

Issue 4 This issue is directed to the responsibility of either plaintiff or the State for damage to the project prior to acceptance:D-4. Under the terms of this contract,was the contractor responsible for damage prior to acceptance? P-4. Did the State breach its warranty of adequacy of design for the riprap work, and did the risk of loss pass to the State once this work had been accepted as fulfilling the State's specifications? In the winter of 1971-1972, a massive ice breakup: on the Yellowstone River dislodged some 150 cubic yards of the rock riprap which had been installed at Pump Unit 1. (Riprap is a foundation or sustaining wall of stones thrown together without order, as in deep water or on an embankment slope to prevent erosion.) Plaintiff alleged in its amended complaint that the damage resulted because of the State's defective design but apparently offered no proof of that allegation. Instead plaintiff relied on the fact that this work was completed to the State's specificationsand paid for prior to the damage. The State relies on two provisions of the contract. The first is Clause 11: "11. PERMITSAND RESPONSIBILITIES The Contractor shall,without additional expense to the Contracting Local Organization, be responsible for obtaining any necessary license and permits, and for complying with any applicable Federal, State, and municipal laws, codes, and regulations, in connectionwith the prosecution of the work. He shall be similarly responsible for all damages to persons or property that occur as a result of his faultor negligence. He shall take proper safety and health precautions to protect the property of others. 

### - He shall 

### -- also be responsible for all materials delivered and work performed until 

### -- and acceptance of -- the for any completed h theretofore phasisaddedl) The other provision of the contract cited by the State is Clause 7,part (d):"7. PAYMENTS TO CONTRACTOR

"(d)Allmaterial and work covered by progress payments made shall thereupon become the sole property of the Contracting Local Organization, but thisprovision shall not be construed as relieving the Contractor from the soleresponsibility for allmaterial and work upon which payments have been made or the restoration of any damaged work, or aswaiving the right of the Contracting Local Organization torequire the fulfillment of allof the terms of the contract." Plaintiff's argument is that the Statewarranted the adequacy of itsplans and specifications. The factthat the riprapwas damaged by the force it was designed to sustain is the extent of the proof offered by plaintiff that the design was defective. Plaintiff further argues that the riprap was a "completed unit" which had been accepted. Clause 11 of the general provisions of the contract provided that the contractor "shall alsobe responsible for allmaterials delivered and the work performed until the completion and acceptance of the entire constructionwork, except for any completed unitwhich theretofore may have been accepted." No unit of the project, including the riprap atPump Unit 1, was accepted before November 2, 1972. Clause 7 of the general provisions of the contract care for this issue and these provisions fairlyplace the risk of damage prior to acceptance of the work upon the contractor. DeArmis v. United States (Ct.Cl. 1947), 70 F.Supp. 605, is a

case where a storm damaged the contractor's partially completed jetty atthe mouth of theMississippi River. The contractor filed a claim for additional compensation for thiswork in repairing the damage. The Court of Claims denied recovery stating:"Thequestion then, is,who must bear the loss from a destruction of a part of the work which the plaintiff had contracted to do,while that work was in an unfinished stage 

# . 

# . . The specifications as to final examination and acceptance certainly contemplated that the work should stand in place in a useful condition when the contractwas completed. We think, therefore, that its being damaged by forces of nature and without anyone's fault before it was completed and accepted as complete, was the plaintiff's misfortune and loss." 70 F.Supp. at 606. See also JohnMcShain, Inc. v. United States (Ct.Cl. 1967), 375 F.2d 829;Amino Brothers Co. v. United States (Ct.Cl. 1967), 372 F.2d 485;Carman v. United States (Ct.Cl. 19581,

We find that the work being damaged by forces of nature and without anyone's faultbefore it was completed and even though accepted as complete, was the plaintiff's misfortune and it must suffer the loss. This is in accord with the general rule, applicable to both private and public building contracts, that one who contracts to erect a structuremust bear the loss occasioned by an accidental destruction or damage before completion. See 13Am.Jur.2d Building and Construction Contracts 964,and 64Arn.Jur.2d Public Works and Contracts S115.

Issue 5 D-5. Is a contractor who bids on an item,knowing that the quantity listed for that item iswrong, entitled to

recover lostprofits on the excess quantity? P-5. Whether the Contracting Officer paid plaintiff an equitable price adjustment for the quantity of miscellaneous metal? Clause 28 appears to be the controlling clause in this issue. Itprovides for 

### a variation of 25 percent which theplaintiff's estimatorwas aware of at the time of the bid and a quantity that he set forthwas only an estimate subject to quantity variations. Itwould appear he logically did not believe this difference of his estimate and that of the State's was of any significance. We note that perhaps the real point at issue here is whether or not the Contracting Officer paid plaintiff an equitableprice adjustment. The Contracting Officer agreed that was the only issue in his letter dated November 22, 1971, in which he responded to Sornsin's rejection of the 63 cents per pound for the steel. Part of that letter provided: "As provided in the terms of the contract,would you please furnish us a detailed breakdown describing your costs information in support of your suggested price unit of $1.10 a pound. We will need this information in order to make a decision on the unit price." At trial plaintiff presented testimony that the actual cost

was set forth in the final cost report and submitted data in support thereof. The Supreme Court in United Statesv. CallahanWalker Construction Co. (1942), 317 U.S. 56, 61, 63 S.Ct. 113, 115, 87 L Ed 2d 49, 53, stated that "[aln 'equitableadjustment' of the respondent's additionalpayment for extra work involved merely the ascertainmentof the cost of digging,moving, and placing earth, and the addition to that cost of a reasonable and customary allowance for profit." In Bruce Construction

v. United States (Ct.Cl. 1963), 324 F.2d 516, the courtheld that a proper measure is the "reasonable cost" and declared that to be "there is a presumption that the actual costs paid are reasonable." That presumptionmust be overcome by whichever party alleges its unreasonableness. Here, plaintiff proved that the claim was reasonably incurred and that they were prima facie reasonable costs. Thus, the State, having failed in its burden of proving these costs unreasonable, must fail at this issue.Issue 6 D-6. Did Sornsin Construction Company prove that material suitable for compacted granular earth fillwas not available at the site of Pump Unit 1-A? P-6. Was evidence introduced at trial fromwhich the jury could find that therewas not sufficientgranular earth fillmaterial at the site? Both a letter of Sornsin dated December 24, 1970, and testimony given at the time of trial indicated that the material at the sitewas not suitable for compaction. In the December 24 letter the Contracting Officer of the State

was advised that "thereappears to be a question that the available dry granular material is too fine for compacted granular fill. We also noted considerable amount of coal while drilling the test hole a week from the lastWednesday. This coal appeared with the coarser gravel underneath the gravel bed." In his testimony at trial Sornsin confirmed the unsuitable conditions when he testified: "Well, the site, the topsoil, the top section of the soil above the river level was just like a blow sand. There was a noncompactable material and then,when we got down deeper we got into the coarse gravel and that gravel had a lot of lignite coal--you know what lignite coal is--particles throughout it. During a conversation out on the job site on December 16th,Mr. Fisher told me that the material could not be used for granular backfill at this site, as so stated on the plan." With this testimony and the reference to the letter of December 24, 1970, there was sufficient evidence that the jury could weigh as to the sufficiency of the granular earth fillmaterial and make a decision. We find no error.

Issue 7 D-7. May the contractor recover for extra work not covered by a change order?P-7. Did the Statebreach itswarranty of accuracy and sufficiency of itsplans and specifications; were there "differing siteconditions"; if so, did the Statebreach the contract by failing topay therefor? Wenote firstthat it is amazing that thispoint is raised by the State, for here the evidence indicates that the Stateunreasonably delayed preparing modified plans for well over a year. The Contracting Officer admitted inhis testimony that it "wouldn't be unreasonable" for plaintiff tokeep trying tomake the effective plan work until it was given a written change order. With thisbackground, it is slightly amazing thatthe Stateraises the point atall. We note further that the State, in citing Diamond v. United States (1943), 98 Ct.Cl. 428, and Pope v. United States, 76 Ct.Cl. 64, 97, relies on old cases which do not involve contracts which have either the "constructive change" or "differing siteconditions" clauses inthem. The only other

case cited by the State in support of this issue is L.I. Waldrnan Co. v. State (1960), 202 N.Y.S.2d 764, and this case does not even involve the issue here which was a defective design situation. Here defendant State admits the evidence indicates that its original and revised design specifications were defective, similar tothe cases set forth inUnited Statesv. Spearin (1918), 248 U.S. 132, 136, 39 S.Ct. 59, 63 L.ed. 166, wherein the Court declared: 

# ".



# . . if a contractor isbound tobuild according to the plans and specifications prepared by .theowner, the contractor willnot be responsible for the consequences of defects in the plans or specifications 

# . 

# .. This responsibilityof the owner isnot overcome by the usual clauses requiring builders tovisit the site, tocheck the plans, and to inform themselves of the requirements of the work 

# . .." (Citations omitted.)We find sufficientevidence under any one of several theories to support the findingsof the jury for plaintiff

on this issue.

Issue 8 Did the ~istrict Court err by admitting plaintiff's ExhibitNos. 119, 131,and 141 in evidence? Principally the State argues that the exhibits were improperly admitted over the State's continuing objections, citing section 93-401-12, R.C.M. 1947,which provides: "There can be no evidence of the contents of a writing,other than the writing itself, except in the following cases:

"5. When the original consists of numerous accounts or other documents, which cannotbe examined in courtwithout great loss of time, and the evidence sought from them is only the general result of the whole." The State continues to argue that Rule 1006,Mont.R.Evid., has superseded this section since the date of trial. However, since that rule does not purport to change existing law, an examination of Rule 1006would provide some insight into section 93-401-12(5)

# . Rule 1006 provides: "The contents of voluminous writings, recordings, or photographs which cannot conveniently be examined in courtmay be presented in the form of a chart, summary,or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at a reasonable time and place. The courtmay order that they be produced in court

# ." Considering the above the State argues that it has always been recognized that summariesmay be based on documents which are themselves competent as evidence and which are made accessible to the opposing party so that the correctness of the summarymay be tested on cross-examination.~c~ollum v. 0'~eil(19541, 128Mont. 584, 281 P.2d 493; Statev. Keneally (1963), 142Mont. 256, 384 P.2d 

### 770; 29 Am.Jur.2d Evidence S458. The three exhibits objected to,Nos. 119, 131, and 141,

are preliminary and final cost reports setting forth the job costs of the project, including detailed unit costs of material, labor, and equipment attributable to each bid item

or work item for the project. Exhibit 131 was the 22nd edition of a book published by the Associated Equipment Distributors listing types of construction equipment and their respective average rental rates. This book is recognized by the construction industry as one of the standard works for equipment rental rates and is also accepted as a guide by federal and state agencies in showing the cost of various types of equipment. The evidence indicated that plaintiff maintained the records of all of the actual equipment ownership costs on the company-wide, annual construction basis. Such records and supporting documentationwere made available prior to and during trial for inspection and examination by defendant. Specific equipment, type of work performed, and the period of time each worked on the project

were included. Further, itwas indicated that it was not the company's policy to prepare individual records of the equipment ownership cost for each specific item of equipmentbecause it was not economically feasibleor practical to make such record. To determine the equipment ownership costs for each project, the company developed a certain procedure and criteria, based on its experience and knowledge, for properly allocating total equipment membership costs uniformly among each of its jobs. This procedure was used on the ~idney job, andMr. lander, the cost accountant for plaintiff,determined that the proper equipmentmembership costs for each item of equipment was equal to 80 percent of the A.E.D. rate listed in Exhibit 131. The above method, as testified to by Mr. Olander,was not represented nor used as the actual equipment ownership cost rates,but rather as a method to aid in analyzing the relative and comparative values of the various items of equipment. For instance, the A.E.D. book did not list trucks, and Mr. Olander calculated the fair rental rate based on his construction knowledge and experience and applied an 80percent factor to this rate to be consistent with the company's procedure and criteria. In determining the factor as 80 percent A.E.D. rate,Mr. Olander testified that he then applied this factor to the hours worked by each item of equipment on the Sidney project to obtain the proper allocations of equipment ownership costs to the project. This procedure and this criteria have been used by plaintiff

as a regular practice formany years prior to, during, and after the Sidney project and has proven satisfactory in the company's operation. As previously noted, the State argues that the cost reports are summaries reflecting total equipment hours on allplaintiff's projects, but the records of such total equipment hours were no longer available. However, the records show that these cost reports are summaries of the total equipment hours "on the Sidney project only",not on all projects, as argued by the State. The Sidney equipment time reports were available to the State. The jury accepted the testimony of Mr. Olander and gave credibility to the policy of the company and the procedures it used in allo-cating the equipment ownership costs. Therefore,we find defendant's argument and citations not applicable and the exhibits properly admitted.

Issue 9 Did the District Court err by refusing to admit defendant's exhibit 555 in evidence? In support of its position plaintiff cites Shechterv. Brewer (Mo. 1961), 344 S.W.2d 784, 789, where the court was faced with a very similar situation. There the court of appeals ruled that no error had been committed by the court in not allowing such an exhibit to be put in, noting: "Whether the claimwas contradictorywould depend upon (1) an interpretation of the Federal tax laws and regulations, and (2) the understanding placed upon those laws and regulationsby Nathan Shecter 

# .

# . . it is apparent that if the trial court had permitted the jury to be informed of the claim, an entire new controversy then arose 

# .

# .. "The law has wisely invested the trial court the discretion to deal with these situations. 'If evidence pertaining to collateral matters brings into the case a new controversialmatter which would result in confusion of the issues, constitute unfair surprise or cause prejudice wholly disproportionate to the value and usefulness of the offered evidence, it should be excluded.' Conley v. Kaney, Mo.Sup., 250 S.W.2d 350, 353; Jones v. Terminal Railroad Association of St. Louis,Mo.Sup., 242 S.W.2d 473; McComb v. Vaughan, 358 Mo. 915, 218 S.W.2d 548; Wigmore, Evidence,p. 458." Here, defendant State had the opportunity to review Sornsin's daily time sheets and payroll records for the project, and to cross-examine the plaintiff and its witnesses regarding these documents. We find itwas unnecessary and would have been improper to have admitted Exhibit 555which would have brought controversialmatters into the

case and could have resulted in the confusion of issues 

### and caused prejudice to the case.Issue 10 This issue is directed towhether the verdict and the judgment are supported by the evidence. As set forth in the discussion of the above nine issues considered by this Court, we sustain the findings of the jury and the judgment

on allissueswith the exception of the fourth issuewhich relates tothe riprap, an itemamounting to $21,295. The judgment of the trial court is affirmed with the

one exception, and thematter is remanded tothe trial court for correction and compliance with this opinion. Costs to plaintiff.

We Concur: 

# u