Opinion ID: 2606174
Heading Depth: 1
Heading Rank: 3

Heading: the superior court erred in permitting the jury to award equipment costs based on blue book rates rather than prevailing costs in the fairbanks area

Text: The Borough argues that the superior court erred in permitting the jury to consider Blue Book rates in determining equipment costs prevailing in the Fairbanks area. Kandik & Associates contends that Blue Book rates were relevant and admissible to prove the rates prevailing in Fairbanks. In State v. Northwestern Construction, 741 P.2d at 237-38, we approved an award of damages for equipment costs based on Blue Book equipment rates where the contract approved the use of Blue Book rates and the Blue Book was used to negotiate claims on behalf of the owner. Kandik & Associates contends that Northwestern compels the conclusion that the instruction in this case was correct. The provisions in the contract in the case at bar are materially different from those in the contract construed in Northwestern. Sections 11.3.1 and 11.3.3 of the construction contract provide that the value of any work covered by a claim for an increase in the contract price may be calculated by unit prices or the cost of the work. Section 11.4 defines cost of the work as the sum of all costs necessarily incurred and paid by the CONTRACTOR... . [S]uch costs shall be in amounts no higher than those prevailing in the locality of the Project.  (Emphasis added). The court instructed the jury that it may consider `Blue Book' or evidence of Fairbanks area rental rates for determining equipment ownership costs. We believe that this instruction was clearly erroneous. By permitting the jury to consider either Blue Book or prevailing rates, the court ignored sections 11.3.3 and 11.4 of the contract, which established the prevailing Fairbanks rates as the appropriate measure of damages. There was no evidence that Blue Book rates were the same as the prevailing equipment rental rates in Fairbanks. Thus, the Blue Book rates do not provide an alternative measure of damages under this contract.