No. 13699 

IN THE SUPFEMF, COUIiT OF THE STATE OF ~~~ 

1978 

SORNSIN CONsTRUCTION CaMPANY, 

a North Dakota corporation, 

Plaintiff and Respondent, 

THE STATE OF M3NTANA; and THE DEPOF NATURAL RESOURCES AND CONS~TION 

an adrinistrative agency of the State of 

Montana, 

Defendants and Appellants. 

Appeal frm: District Court of the First Judicial District, 

Honorable Gordon R. Bennett, Judge presiding. 

Counsel of Record: 

For Appellants: 

Hon. Mike Greely, Attorney General, Helena, Pbntana 

Allen B. Chronister argued, Assistant Attorney General, 

Helena, Wntana 

Garrity and Keegan, Helena, E.lontana 

Donald A. Garrity argued, Helena, Pbntana 

Ted Doney , Helena, Pbntana 

For Respondent: 

Scribner and Huss, Helena, Wntana 

Walker and Grover, Denver, Colorado 

Philip E. Riedesel argued, Denver, Colorado 

S-tted: October 19, 1978 

Decided : 

DEc 2 !j 1978 

Filed: DEc, J lQ78 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

Plaintiff, Sornsin Construction Company, brought this 

action in the ~istrict Court of the First Judicial District 

to recover damages for the alleged breach of a contract for 

the construction of an irrigation pump system on the Yellowstone River near Sidney, Montana. From a judgment for 

plaintiff, defendant State of Montana appeals. 

On July 28, 1970, the Montana Water Resources Board 

(MWRB) (now the Department of Natural Resources and Conservation) issued an invitation for bids on a contract for the 

construction of an irrigation pump system project. The 

project entailed constructing three river pump units to pump 

water from the Yellowstone River and four relift pump stations to pump the water from the river units into various 

irrigation canals. The project was designed by the Portland, 

Oregon, design unit of the United States Department of 

Agriculture Soil Conservation Service. 

Plaintiff received a number of plans, specifications 

and drawings from the MWRB which it used in preparing its 

bid. After the contract had been awarded to plaintiff and 

work had begun, it became apparent that a number of specifications were only approximations. Specifically, the 

listed elevations for the river bed, in the neighborhood of 

1880 feet, varied from the actual elevations as much as 15 

feet. These discrepancies resulted in increased costs to 

plaintiff. In addition, a number of other claims developed 

through the course of performance of the contract which 

defendant refused to compensate. Plaintiff sued, and a jury 

trial commenced on April 12, 1976, continuing through May 6, 

1976. The jury awarded damages to plaintiff in the amount 
of $335,328 plus $6,751.05 in costs. The original bid 

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 

failure of its proposed cofferdam designs? 

2. Did Sornsin Construction Company assume the risk 

that the material to be excavated at Pump Unit 3 might 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 item is wrong, entitled to 

recover lost profits on the excess quantity? 

6. Did Sornsin Construction Company prove that material suitable for compacted granular earth fill was not 

available at the site of Pump Unit l-A? 

7. May the contractor recover for extra work not 

covered by a change order? 

8. Did the District Court err by admitting plaintiff's 

Exhibit Nos. 119, 131 and 141 in evidence? 

9. Did the District Court err by refusing to admit 

defendant's Exhibit No. 555 in evidence? 

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, in the discussion of all 

issues, the issues will be presented in pairs to emphasize 

the alternative positions of the parties. 
Issue 1 

Prior to discussion of Issue No. 1, we set forth the 

general principle as stated in Big Sky Livestock, Inc. v. 

Herzog (1976), 171 Mont. 409, 558 P.2d 1107, 1110, 33 St.Rep. 

1232, 1236, that the role of the reviewing court is to limit 

its review to whether there is substantial credible evidence 

to support the verdict. In so doing, it will review the 

evidence in the light most favorable to the prevailing 

party. See Davis v. Davis (1972), 159 Mont. 355, 497 P.2d 

315, and State Highway Commission v. Vaughan (1970), 155 

Mont. 277, 470 P. 2d 967. 

D-1. Did Sornsin Construction Company assume the risk 

of failure of its proposed cofferdam designs? 

P-1. Did the State breach its warranty of accuracy and 

sufficiency of its plans and specifications; were there 

"differing site conditions"; if so, did the State breach the 

contract by failing to pay therefor? 

Defendant argues that plaintiff assumed the risk that 

its original cofferdam plans would not work. 

Plaintiff responds by asserting that defendant breached 

its warranty 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 first remove the 

water from the area using cofferdams. The river bed turned 

out to be lower than plaintiff anticipated resulting in 

having to utilize larger and more expensive cofferdams. 

The State admits the plans from which plaintiff drew 

its estimates were not consistent with respect to the eleva- 
tion of the river bed. The State goes on to argue, however, 

that this discrepancy in the plans should have put plaintiff 

on notice to make further inquiry, pursuant to Clause 12 of 

the general provisions of the contract: 

"12. CONDITIONS AFFECTING THE WORK. 

The Contractor shall be responsible 

for having taken steps reasonably 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 to do so will not relieve him 

from responsibility for successfully performing 

the work without additional expense to the Contracting Local Organization. The Contracting 

Local Organization assumes no responsibility 

for any understanding or representations concerning conditions made by any of its officers 

or agents prior to the execution of this contract, unless such understanding or representation are expressly stated in the contract." 

The other clause pointed out by the State along this same 

line is Clause 2: 

"2. SPECIFICATIONS AND DRAWINGS 

The Contractor shall keep on the 

work a copy of the drawings and specifications 

and shall at all times give the Contracting 

Officer access thereto. Anything mentioned in 

the specifications and not shown on the drawings, 

or shown on the drawings and not mentioned in the 

specifications, shall be of like effect as if 

shown or mentioned in both. In case of difference between drawing and specifications, the 

specifications shall govern. In case of discrepancy either in the figures, in the drawings, 

or in the specifications, the matter shall be 

promptly submitted to the Contracting Officer, 

who shall promptly make a determination in 

writing. Any adjustment by the Contractor without such a determination shall be at his own 

risk and expense. The Contracting Officer shall 

furnish from time to time such detail drawings 

and other information as he may consider necessary, unless otherwise provided." 

Finally, the State's argument turns to the competitive 

element involved in the bidding process and the attendant 

assumption of risk where one balances the risk involved in 

predicting what something will actually cost against the 

risk of losing the contract if one minimizes the risk in the 

first part too greatly. 
The State, citing Haggart Construction Company v. State 

Highway Commission (1967), 149 Mont. 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 

State was reasonable. Plaintiff feels Clause 4 of the 

contract is most applicable to this issue: 

"4. DIFFERING SITE CONDITIONS 

(a) The Contractor shall promptly, and 

before such conditions are disturbed, notify the 

Contracting Officer in writing 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 in work of the character 

provided for in this contract. The Contracting 

Officer shall promptly investigate the conditions, 

and if he finds that such conditions do 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 contract modified 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 is materially different so as to constitute 

a differing site condition under the terms of 

Clause 4 of General Provisions . . ." 

The State withdrew this determination six months later, and 

no price adjustment was made. 
The law is established that a contractor can rely on 

the plans and specifications and need not, as alleged by the 

State here, 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. State Highway Commission, supra; Halvorson 

v. United States (Ct-C1. 1972), 461 F.2d 1337. 

Section 4(a) of the Differing Site Conditions clause of 

this contract hereinbefore 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 obligate bidders to 

discover, at their peril, subsurface conditions hidden by the river's water and thus 

unavailable to any reasonable pre-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. State Highway Commission, supra; Morrison-Knudsen 

v. United States (Ct.Cl. 1965), 345 F. 2d 535; Fehlhaber 

Corp. v. United States (Ct.Cl. 1957), 151 F.Supp. 817; and 

Farnsworth v. United States, supra. In Haggart Construction, 

149 Mont. 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), 

145 Mont. 180, 399 P.2d 1002, and said: 
"Or to state it with a more particularity, where 

plans and estimates or specifications are used 

as the basis for bids, [it] is a contractor who 

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. In Austin 

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. 

In Beacon 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. There was justifiable reliance on the 
river bed elevations as shown on the proper sheets of the 

plans submitted. 

Issue 2 

D-2. id Sornsin Construction Company assume the risk 

that the material to be excavated at Pump Unit 3 might not 

stand on a vertical cut? 

P-2. Did the State breach its warranty of accuracy and 

sufficiency of its plans and specifications; were there 

"differing site conditions"; if so, did the State breach the 

contract by failing to pay therefor? 

This issue involves the necessary excavation at Pump 

Unit 3. The design for this unit called for excavation of a 

trench from the river into the bank to permit 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 contractor will be paid) on a 1.1 slope for the 

first twenty feet of the excavation and a vertical pay line 

for the remaining twenty-two feet of the excavation. Rock 

was not encountered until some fourteen or fifteen feet 

below the level where the drawings indicated the vertical 

pay line was to begin. Plaintiff sought damages for the 

costs of its excavation beyond the vertical pay line on the 

theory that drawing such a pay line constituted a warranty 

that the earth in that area was rock capable of being excavated on a 90° angle. Plaintiff's argument with respect to 

this issue parallels the argument regarding the cofferdams 

in Issue 1. The additional element in this situation seems 

to be Clause 17 of the general conditions of the contract. 

Defendant relies heavily on this clause: 
"17. RECORDS OF TEST PITS AND BORINGS 

The Contracting Local Organization does 

not represent that the available records show 

completely the existing conditions and does not 

guarantee any interpretation of these records. 

The Contractor assumes all responsibility for 

deductions and conclusions as to the nature of 

rock and other materials to be excavated, the 

difficulties of making and maintaining the required excavations and of doing other work affected by the geology of the site of the work, 

and for the final preparation of the foundations 

for the spillway, dikes, and other structures." 

Plaintiff argues that this clause is not referring to 

interpretations made by the owner's designers, but merely 

contractor interpretations. Moreover, plaintiff argues that 

the Differing Site Conditions clause supersedes this clause. 

In support of this assertion, plaintiff cites Foster Construction C.A., et al. v. United States (Ct.Cl. 1970) , 435 

"Even unmistakable contract language in which 

the Government seeks to disclaim responsibility 

for drill hole data does not lessen the right 

of reliance. The decisions reject, as in conflict with the changed conditions clause, a 

'standard mandatory clause of broad application,' 

the variety of such disclaimers of responsibility 

--that the logs are not guaranteed, not representations, that the bidder is urged to draw his 

own conclusions." (Citations omitted.) 

The State does not address this authority nor any of 

the other arguments made by plaintiff in its reply brief. 

We hold that the State failed to overturn the finding with 

respect to this issue. 

Issue 3 

We next direct our 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 at Pump 

Unit No. 1, alleged to have been incurred because 

of the owner's alleged delay in consenting to the 
removal 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 shall be left intact and kept in operation 

until the replacement pumping 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, you may 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 contract by 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 "as directed by the 

Contracting Officer". The consent was finally given before 

the replacement pump 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, defendant did 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 specifications and paid 

for prior to the damage. 

The State relies on two provisions of the contract. 

The first is Clause 11: 

"11. PERMITS AND 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 connection with the prosecution 

of the work. He shall be similarly responsible 

for all damages to persons or property that occur 

as a result of his fault or 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) All material and work covered by progress 

payments made shall thereupon become the sole 

property of the Contracting Local Organization, 

but this provision shall not be construed as 

relieving the Contractor from the sole responsibility for all material and work upon which payments have been made or the restoration of any 

damaged work, or as waiving the right of the 

Contracting Local Organization to require the 

fulfillment of all of the terms of the contract." 

Plaintiff's argument is that the State warranted the 

adequacy of its plans and specifications. The fact that the 

riprap was 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 also be responsible for 

all materials delivered and the work performed until the 

completion and acceptance of the entire construction work, 

except for any completed unit which theretofore may have 

been accepted." No unit of the project, including the 

riprap at Pump Unit 1, was accepted before November 2, 1972. 

Clause 7 of the general provisions of the contract care for 

this issue and these provisions fairly place 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 at the mouth of the Mississippi River. The contractor 

filed a claim for additional compensation for this work in 

repairing the damage. The Court of Claims denied recovery 

stating: 
"The question 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 contract was 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 John McShain, 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 fault before 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 structure must 

bear the loss occasioned by an accidental destruction or 

damage before completion. See 13 Am.Jur.2d Building and 

Construction Contracts 964, and 64 Arn.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 is wrong, entitled to 

recover lost profits 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. It provides for a variation of 25 percent which the 
plaintiff's estimator was aware of at the time of the bid 

and a quantity that he set forth was only an estimate subject to quantity variations. It would 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 

equitable price 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 States v. Callahan Walker 

Construction Co. (1942), 317 U.S. 56, 61, 63 S.Ct. 113, 115, 

87 L Ed 2d 49, 53, stated that "[aln 'equitable adjustment' of 

the respondent's additional payment for extra work involved 

merely the ascertainment of 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 court held 

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 presumption must 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 fill was not 

available at the site of Pump Unit 1-A? 

P-6. Was evidence introduced at trial from which the 

jury could find that there was not sufficient granular earth 

fill material 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 site was not suitable for compaction. In 

the December 24 letter the Contracting Officer of the State 

was advised that "there appears 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 last Wednesday. 

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 

fill material 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 State breach its warranty of accuracy and 

sufficiency of its plans and specifications; were there 

"differing site conditions"; if so, did the State breach the 

contract by failing to pay therefor? 

We note first that it is amazing that this point is 

raised by the State, for here the evidence indicates that 

the State unreasonably delayed preparing modified plans for 

well over a year. The Contracting Officer admitted in his 

testimony that it "wouldn't be unreasonable" for plaintiff 

to keep trying to make the effective plan work until it was 

given a written change order. With this background, it is 

slightly amazing that the State raises the point at all. 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 site conditions" clauses in them. 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 to the cases set forth in United States v. Spearin 

(1918), 248 U.S. 132, 136, 39 S.Ct. 59, 63 L.ed. 166, wherein 

the Court declared: 

". . . if a contractor is bound to build according to the plans and specifications prepared by .the owner, the contractor will not be 

responsible for the consequences of defects in 

the plans or specifications . . . This responsibility of the owner is not overcome by the 

usual clauses requiring builders to visit the 

site, to check the plans, and to inform themselves of the requirements of the work . . ." 

(Citations omitted. ) 
We find sufficient evidence under any one of several 

theories to support the findings of the jury for plaintiff 

on this issue. 

Issue 8 

Did the ~istrict Court err by admitting plaintiff's 

Exhibit Nos. 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 cannot be 

examined in court without 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 1006 would 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 court may 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 court may order that they be produced in 

court . " 

Considering the above the State argues that it has always 

been recognized that summaries may 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 summary may be tested on cross-examination. 
~c~ollum v. 0'~eil (19541, 128 Mont. 584, 281 P.2d 493; 

State v. Keneally (1963), 142 Mont. 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 documentation were 

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, it was indicated that it was not the company's 

policy to prepare individual records of the equipment ownership cost for each specific item of equipment because it was 

not economically feasible or 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, and 
Mr. lander, the cost accountant for plaintiff, determined 

that the proper equipment membership 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 80 percent 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 for many 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 

all plaintiff'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 Shechter v. 

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 claim was contradictory would 

depend upon (1) an interpretation of the 

Federal tax laws and regulations, and (2) 

the understanding placed upon those laws 

and regulations by 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 controversial matter 

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 it was unnecessary and would have been improper to have admitted Exhibit 

555 which would have brought controversial matters into the 

case and could have resulted in the confusion of issues and 

caused prejudice to the case. 
Issue 10 

This issue is directed to whether 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 all issues with the exception of the fourth issue which 

relates to the riprap, an item amounting to $21,295. 

The judgment of the trial court is affirmed with the 

one exception, and the matter is remanded to the trial court 

for correction and compliance with this opinion. Costs to 

plaintiff. 

We Concur: u