Opinion ID: 2743534
Heading Depth: 2
Heading Rank: 1

Heading: Otis’ Duty to Clarify

Text: Otis’ breach-of-contract claim relies on the premise that Drawing A180 was ambiguous as to whether the project called for 32-inch-step or 40-inch-step escalators, and that Otis had reasonably interpreted the contract by picking one of the two reasonable interpretations and installing 32-inch steps. See United States v. Spearin, 248 U.S. 132, 136–37, 39 S.Ct. 59, 61 (1918); Robins Maint., Inc. v. 12 Case: 13-14067 Date Filed: 10/17/2014 Page: 13 of 19 United States, 265 F.3d 1254, 1257 (Fed. Cir. 2001) (citing Spearin for the proposition that a contractor may recover “based on inaccurate specifications” if “the contractor was misled by the[] errors in the specifications”). A subcontractor cannot recover based on its reasonable but unilateral resolution of an ambiguity, however, if the subcontractor is subjectively aware of that ambiguity when bidding on the construction contract and fails to clarify that ambiguity by inquiring of the contractor. See James A. Mann, Inc. v. United States, 535 F.2d 51, 61 (Ct. Cl. 1976) (holding that, where “the alleged ambiguity was known to the plaintiff before it submitted its bid,” the “plaintiff was required to seek clarification from the contracting officer”); Blount Bros. Constr. Co. v. United States, 346 F.2d 962, 973 (Ct. Cl. 1965) (“[Subcontractors] are obligated to bring to the Government’s attention major discrepancies or errors which they detect in the specifications or drawings, or else fail to do so at their peril.”). 5 Otis failed to do that in this case and must suffer the peril. Trey Steber, the Otis employee who prepared its bid on the escalator project, testified at his deposition (which was admitted into evidence at the bench trial) that 5 The Blount Brothers and James A. Mann decisions are part of the so-called Spearin doctrine. See 3 Bruner and O’Connor on Construction Law §§ 9:64, 9:78 (2014), available at Westlaw Bruner & O’Connor Construction Law. Alabama courts have adopted Spearin’s approach to implied warranties in construction contracts. See Broyles v. Brown Eng’g Co., 151 So. 2d 767, 772 (Ala. 1963) (endorsing Spearin). We therefore apply Spearin’s progeny here. See State Farm Mut. Auto. Ins. Co. v. Duckworth, 648 F.3d 1216, 1224 (11th Cir. 2011) (explaining that, in diversity cases where the forum state’s supreme court has not spoken directly on an issue, “we must anticipate how the [state] [s]upreme [c]ourt would decide th[e] case”). 13 Case: 13-14067 Date Filed: 10/17/2014 Page: 14 of 19 he noticed the step-width dimensions were “unclear” when he was preparing Otis’ bid. So there is no question that Otis was subjectively aware of the ambiguity in Drawing A180. Furthermore, nothing in the record indicates that Steber or another Otis employee asked Chapman Sisson or Yates to clarify the meaning of the 39.5- inch measurements in Drawing A180. If Steber had, he could have testified to it. Otis points to Steber’s testimony that he called Chapman Sisson “to discuss the escalators” before Otis submitted its bid. But Steber’s testimony shows that the only detail discussed during that call was “how many people per hour [the escalators] needed to move.” When questioned by Yates’ attorney, Steber confirmed that he “did not discuss dimensions with the architect,” nor did he specifically ask Chapman Sisson about step width or what Drawing A180’s tick marks were supposed to indicate. Under Blount Brothers, Otis had a duty to ask specific questions about what step width was called for in Drawing A180 because that was the ambiguity that its employee noticed before submitting Otis’ bid.6 See 346 F.2d at 973. Otis’ failure to ask for a clarification means that it bore the risk that Yates would adopt a different, reasonable interpretation. And Yates’ different 6 Because Steber was authorized to prepare Otis’ bid, his knowledge of the ambiguity is imputed to Otis. See Stone v. Mellon Mortg. Co., 771 So. 2d 451, 457 (Ala. 2000) (“An agent’s knowledge can bind the principal if the agent acquired the knowledge while acting within the line and scope of his authority and the knowledge relates to the very matter coming within his authority.”). 14 Case: 13-14067 Date Filed: 10/17/2014 Page: 15 of 19 interpretation was reasonable. For this reason, the district court erred in granting judgment to Otis instead of Yates on that claim. There is also another reason.