Opinion ID: 1954245
Heading Depth: 1
Heading Rank: 5

Heading: Contractor

Text: With respect to the negligence claim in this case, the question of law facing the trial court, and the question ultimately facing this Court, is what legal duty Gulf South, the project design professional, owed Magnolia, the project contractor. The trial court correctly concluded that since there was no contract between Magnolia and Gulf South, Gulf South owed no contractual duty to Magnolia. Next, the trial court considered whether or not Gulf South assumed any duty to Magnolia by its conduct on the job or in the City's respective contracts with either Magnolia or Gulf. It concluded that Gulf South did not assume any duties to supervise or inspect by its conduct on the job on which Magnolia could rely. The trial judge points to the deposition of Magnolia's foreman as evidence to support his finding. The record does not reflect conclusively, however, that the foreman or Magnolia did not rely on Gulf South's supervision and inspection. While the foreman acknowledged that laying the pipe according to grade was the responsibility of the contractor, he perceived that it was the engineer's field inspector's duty to inspect and certify the work as it progressed. In his own words, Engineers are getting paid by the City to do that [inspect]. If all we had to do is go by the specs [specifications] we wouldn't need to hire an engineering firm. The engineers might as well stay home. He also stated that Gulf South's field representative did check the pipe a couple of times a day, and when specific problems arose, the engineers were notified and they made the decisions to change the plans. These statements are corroborated by the affidavits of the president of Magnolia and a machine operator for Magnolia's crew. The president stated that at a preconstruction conference, Gulf South assured him that a resident field inspector would inspect and approve work as construction progressed because live sewage would be tied into the sewer lines as they were constructed. He further stated that before each major tie-in, his foreman informed him that approval of the work was obtained from the resident inspector. The machine operator stated that Gulf South's field representative acted in the capacity of an inspector on the job site, both supervising the crew when the foreman was at the other job site, and by authorizing deviations from the original plans between reference points [manholes]. Gulf South's own engineering assistant stated that he conducted on-site inspections and that when he shot his own elevations he immediately reported any problems to the contractor. He further stated that he checked behind the contractor to see if they were progressing as they should. The final inspector on the job stated that he did not perceive that his job was to tell the foreman whether or not his grade elevations conformed or not. Yet, he did check them at random and if there was a problem, he told the engineer, not the contractor, and the engineer sometimes relayed instructions through him to the contractor. Gulf South's project engineer explained in his deposition that during the course of construction, the engineer decides whether or not a change order should be entered depending on whether a change during construction adds to the final cost of the project. If no monetary change is involved, it becomes a verbal agreement between the engineer and the contractor, based on field conditions, as to whether or not a change should be made. For that reason, it seems that the field representative was to be on-site at all times the contractor worked. He further stated that he had no problems with Magnolia not doing the project according to the specifications. In his statements about the Periodic Pay Estimates, however, the project engineer claimed that the engineer did not make any inspection of the line prior to turning in the Periodic Pay Request. He also said that the field representative did not make any inspection because these payments were based on the quantity of work and not the quality. However, he admitted that the certificate attached to the Pay Request says work and materials have been inspected and comply with the standards of the contract. The certificate was signed by the field engineer and eventually signed by him. He did not interpret the certificate as meaning quality inspection, just quantity inspection. However, he then stated, I would not have signed it if I knew the work wasn't up to par, that's for sure. Obviously, there is much dispute as to whether or not Magnolia could reasonably rely upon Gulf South to inspect its work on a consistent basis because of the conduct of the engineer and the engineer's field representative on the job site. This dispute involves factual situations which should not have been decided by the trial court in granting summary judgment under M.R.C.P. 56. These factual determinations should be determined by the trier of fact at a trial on the merits. The trial judge in granting summary judgment next considered what common law duty Gulf South may have owed Magnolia. He determined that where the engineer does not have a direct contractual relationship with the contractor, the legal duty which forms the basis of the contractor's negligence claim still must arise from a contract-based obligation of the engineer to the City. Indeed, Mississippi law imposes on design professionals (architects/engineers) the duty to exercise ordinary professional skill and diligence. Board of Trustees Utica Junior College v. Lee Electric Co., 198 So.2d 231, 234 (Miss. 1967); Dickerson Construction Co., Inc. v. Process Engineering Co., Inc., 341 So.2d 646, 652 (Miss. 1977). Further, Mississippi law allows third parties to rely on a design professional's contractual obligation to the owner. In Mayor and City Council, etc. v. Clark-Dietz, Inc., 550 F. Supp. 610 (N.D. Miss. 1982), the Federal District Court, relying on Mississippi law, stated: Because of this contractual obligation to the owner, the architect owes a further duty, sounding in tort, to the contractor who relies upon the design to his economic detriment. Id. at 624. See Owen v. Dodd, 431 F. Supp. 1239 (N.D.Miss. 1977); Engle Acoustic Tile, Inc. v. Grenfell, 223 So.2d 613 (Miss. 1969); State v. Malvaney, 221 Miss. 190, 72 So.2d 424 (1954); Standard Construction Co. v. Brantley Granite Co., 90 Miss. 16, 43 So. 300 (1907). Mississippi law also recognizes an engineer's duty to inspect the contractor's work. City of Mound Bayou v. Roy Collins Construction, 499 So.2d 1354, 1359 (Miss. 1986); Newton Investment Co., Inc. v. Barnard & Burk, Inc., 220 So.2d 822, 824 (Miss. 1969). Prosser states the general principle, thus: By entering into a contract with A, the defendant may place himself in such a relation to B that the law will impose upon him an obligation, sounding in tort and not in contract, to act in such a way that B will not be injured. Prosser and Keeton on Torts, § 93 (W. Page Keeton, 5th Ed. 1984). Other jurisdictions have similarly held that a design professional owes a common law duty of due care to the general contractor, sub-contractor, or contractor's surety in the performance of his contract with the owner. See, e.g., Davidson and Jones v. County of New Hanover, 41 N.C. App. 661, 255 S.E.2d 580 (1979); Vonasek v. Hirsch and Stevens, Inc., 65 Wis.2d 1, 221 N.W.2d 815 (1974); Chastain v. Atlanta Gas Light Company, 122 Ga. App. 90, 176 S.E.2d 487 (1970); Quail Hollow East v. Donald J. Scholz Company, 47 N.C. App. 518, 268 S.E.2d 12 (1980); Lee County v. Southern Water Contractors, 298 So.2d 518 (Fla. App. 1974); American Fidelity Fire Insurance v. Pavia-Byrne Engineering, 393 So.2d 830 (La. App. 1981); A.R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla. 1973). Applying this principle of law to this case, the trial judge determined that under Gulf South's contract with the City, it had no contract-based obligation to check each invert elevation. He cites several contract provisions in support of his finding which indicate that the project engineer had the duty to inspect only periodically and that the field representative and engineer's approval of pay requests only certified that to the best of their information and belief the work was progressing according to plan. However, another aspect of the contract documents needs to be considered. In his deposition Magnolia's expert witness explained that the EPA Grant Condition documents had to be read as part of the entire package of contract documents in order to properly interpret the engineer's duties to the City. In order to get the 75% grant from EPA, the engineer and City must agree to special conditions of the grant offer. In that document, there is a clause requiring a full-time resident inspector. In his opinion, I don't think you can write yourself out of an EPA requirement by not putting it into the Project Manual. He also pointed out that this engineer's contract is unusual in that the engineer is undertaking, for a 15% override, additional duties that normally a City's Public Works Project Director would undertake to make sure that everything is in compliance with the Grant Conditions imposed on the City. He summarized that there are conflicts in what he considers to be the totality of the contract documents. Considering all of these documents, he offered the opinion that although the engineers are not responsible for the supervision of the construction crew, nor for the type of equipment it utilized to perform the contract, nevertheless, each 30 days the engineer should make enough checks on his own under his responsibilities to verify to his client that the contractor has laid the pipe according to the specifications and that his figures are correct for payment. He also stated that there is a difference between the contractor's liability for correcting defective work as it is caught by the engineer as the work progresses and his liability after the engineer has approved the work and then requires the contractor to go back and redo the defective work that should have been caught during construction, especially here where the lines had to go into use before final inspection. In conclusion, he stated that the supervision responsibilities of Gulf South were improperly performed under these contract documents. Gulf South has adamantly denied throughout the proceedings in the lower court that the EPA documents are part of its contract agreement with the City. Therefore, Gulf South's expert witness did not rely on the EPA Grant Conditions to form his expert opinion. His deposition, nevertheless, points out some conflicts in interpretation of what Gulf South deems to be the contract documents. He stated that, under these documents, it is a matter of engineering judgment whether or not a particular project requires day-to-day, periodic, or only final inspection. However, in the literal interpretation of these contract documents, he found that the engineer had no responsibility to the contractor to inspect during the progress of the work because this duty was clearly assigned to the contractor. He also makes a distinction between a field representative's duties and a field inspector's duties. A field inspector has the added duty to perform his own inspections on top of his responsibilities as a field representative. The dispute seems to boil down to whether Gulf South provided a field representative or a field inspector for this project. The contract documents speak of a field representative; yet, Gulf South submitted bills to the City for a resident inspector totalling $75,000. Gulf South's expert even conceded that in this case a representative and inspector may mean the same thing. In the Pay Request Certificates, the words inspect and inspector appear. Gulf South's expert stated that if the pay certificate says the engineer inspected, he would have no reason to doubt that, indeed, the work was inspected. Both Magnolia's and Gulf South's experts agree that the contractor cannot get paid unless the engineer signs the Periodic Payment. It seems, then, that there is much factual dispute between these two parties as to Gulf South's obligations in performing job site inspections. The trial judge was correct in trying to determine the intent of the parties to the contract from the four corners of the document. Early on, this Court stated the principle that in construing a contract, the instrument as a whole will be looked to and its meaning determined for the entire agreement as written in order to ascertain the intentions of the parties from the contract. Mitchell v. Eagle Motor Lines, 228 Miss. 214, 87 So.2d 466, 469 (1956). See also, Pfisterer v. Noble, 320 So.2d 383, 384 (Miss. 1975) (in construing a written instrument, the task of the courts is to ascertain the intent of the parties from the four corners); Robinson v. Martel Enterprises, Inc., 337 So.2d 698, 701 (Miss. 1976) ([T]he Court will look only to the four corners of the instrument to ascertain and give effect to the intention of the parties). However, in this case it is not clear exactly what documents Gulf South and the City included in their contractual agreement; it is equally unclear in the record exactly what documents the trial judge relied on when he found that Gulf South had no contract-based obligation to check invert elevations. There is also much conflict in the evidence as to whether Gulf South was obligated to supply a field representative or a field inspector for this project, and exactly what duties this field representative should have undertaken or, indeed, did undertake at the job site. Because this contract is ambiguous and its meaning uncertain, there are questions of fact presented which are to be resolved by the trier of facts after plenary trial on the merits and [t]he interpretation of an unclear contract generally involves questions of fact sufficient so that our summary judgment procedure will be an inappropriate vehicle for final decision. Dennis v. Searle, 457 So.2d 941, 945 (Miss. 1984). Therefore, the court was clearly in error in granting summary judgment. Because we find that summary judgment was an inappropriate vehicle for final decision in this case, and that the court was clearly in error in granting summary judgment, we reverse. It should also be noted that Magnolia, in its pleadings, claimed that Gulf South negligently designed and planned this project. The trial judge made no findings on this issue when he granted Gulf South's motion for summary judgment. There is conflicting evidence on this issue as well. Magnolia's expert stated that one of the reasons he thought the pipe was laid off-grade was because the plans were designed on a minimum grade  the very minimum grade that would allow flow at the proper velocity. Gulf South's engineer stated in his deposition that during the course of construction, the data for the designs turned out to be correct. He and Gulf South's engineering assistant were involved in the original planning of the design and specifications for this project. This seems to be a key issue in the case, and would require findings of fact to be made at a trial on the merits.