Opinion ID: 1102726
Heading Depth: 1
Heading Rank: 4

Heading: whether the trial court erred in granting the commission's motion for partial summary judgment.

Text: ¶ 10. The circuit court's grant of summary judgment is reviewed by this Court de novo. Hernandez v. Vickery Chevrolet-Oldsmobile Co., 652 So.2d 179, 181 (Miss.1995). The Court's review is governed by the same standard used by the circuit court under Rule 56(c) of the Mississippi Rules of Civil Procedure. Brown v. Credit Ctr., Inc., 444 So.2d 358, 362 (Miss.1983). The evidence must be viewed in the light most favorable to the party against whom the motion is made. Id. ¶ 11. The burden of demonstrating that no genuine issue of material fact exists is on the moving party. Id. at 368. To defeat a motion for summary judgment, the nonmoving party must make a showing sufficient to establish the existence of the elements essential to his case. Id. at 362. ¶ 12. That part of the contract most at issue in this dispute is the Differing Site Conditions clause found in Special Provision No. 907-104-10. That clause states, in pertinent part: Differing site conditions. During the progress of the work, if subsurface or latent physical conditions are encountered at the site differing materially from those indicated in the contract or if unknown physical conditions of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in the work provided for in the contract, are encountered at the site, the party discovering such conditions shall promptly notify the other party in writing of the specific differing conditions before they are disturbed and before the affected work is performed. Upon written notification by the Contractor, the Engineer will investigate the conditions, and if he/she determines that the conditions materially differ and cause an increase or decrease in the cost or time required for the performance of any work under the contract, an adjustment, excluding loss of anticipated profits, will be made and the contract modified in writing accordingly, the Engineer will notify the Contractor of his/he determination whether or not an adjustment of the contract is warranted. No contract adjustment which results in a benefit to the Contractor will be allowed unless the Contractor has provided the required written notice. ¶ 13. The determinative issues in this case are whether there is a genuine issue of material fact as to (1) whether Adams encountered a differing site condition, as defined in the contract, thereby triggering Special Provision No. 907-104-10, and (2) whether that provision allows for additional compensation without giving written notice of the differing site conditions to the Commission's engineer where actual notice already exists, and without first securing a written supplemental agreement from the full Commission. ¶ 14. Adams asserts that the circuit court erred in granting the Commission's motion for partial summary judgment since there was a genuine issue of material fact as to whether a differing site condition was encountered on the project. Adams concedes that in order for it to prevail on its claims for additional compensation, it must show that Adams encountered a differing site condition, as defined by the contract, requiring extra work not contemplated by the original contract. As delineated above, a differing site condition is encountered where there are subsurface or latent physical conditions... encountered at the site differing materially from those indicated in the contract, or where there are unknown physical conditions of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in the work provided for in the contract. Adams contends that a genuine issue of material fact exists as to whether the undercutting and backfilling of unsuitable material below the grade line it performed was caused by a latent physical condition which differed materially from those indicated in the contract, thereby constituting a differing site condition. ¶ 15. In support of its argument that there is no genuine issue of material fact as to whether a differing site condition was encountered on the project, the Commission introduced the affidavits of William Ricky May, Assistant District Construction Engineer of Operations for the Commission, and Sonny Vance, Assistant District Engineer of Construction for the MDOT. Both men stated that the plans and specifications were adequate for the construction work. Vance also stated that on each project, undercut is normal, usual, and customary and is inherent in dirt or grading work. The Commission concedes that the plans do not indicate that there may be a need to undercut and backfill at the established grade line, but argues that due to the inability to predict the exact areas where unstable material found at the grade line will require undercutting, no undercutting was shown on the plans. ¶ 16. Although the uncontradicted testimony and affidavits put forth by the Commission established that the necessity for undercutting and backfilling at the grade line is ordinarily encountered and generally recognized as inherent in grading or dirt work, there remains a question of fact as to whether the necessity for undercutting and backfilling on this project was caused by a subsurface of latent physical condition encountered at the site differing materially from those indicated in the contract. Restated, the fact issue is clear: whether the conditions which required undercutting and backfilling were materially different from those indicated on the contract plans and specifications. Such an issue can be decided only by a jury. ¶ 17. If a jury were to find that the undercutting and backfilling below the grade line were caused by a differing site condition, the question then becomes, what does the Differing Site Conditions clause require in order for Adams to be compensated for extra work. ¶ 18. The fact that Adams failed to give written notice of a differing site condition to the project engineer or the full Commission is irrelevant, because the clause specifically states that upon the occurrence of a differing site condition, the party discovering such conditions shall promptly notify the other party in writing of the specific differing site conditions before they are disturbed and before the affected work is performed. The clause, therefore, does not place the burden upon Adams alone to discover the condition and to notify the Commission in writing. Instead, the clause places an equal burden on both parties to discover such conditions and notify the other party of the condition. This Court has addressed such a mutuality requirement: Where the state has lawfully entered into a business contract with an individual, the obligations and duties of the contract should be mutually binding and reciprocal. There is not mutuality or fairness where a state or county can enter into an advantageous contract and accept its benefits but refuse to perform its obligations. Churchill v. Pearl River Basin Development Dist., 619 So.2d 900, 903 (Miss.1993) (citations omitted)(emphasis added). Therefore, the trial court's holding that the provision is not mutually binding was erroneous because it is inconsistent with the Churchill rationale. ¶ 19. The evidence is undisputed that both the Commission's project engineer and Adams knew of the unsuitable material at the grade line each time the condition was encountered. In fact, it was the Commission which determined where the soil conditions at the grade line were acceptable or unacceptable, and it was the Commission which directed Adams to undercut and backfill below the grade line at certain locations along the roadway base. The Commission's field representative, Walter Lamar Johnson, testified that the Commission always examined each site before ordering undercutting, that the Commission made the decision on undercutting, and that the Commission recorded the quantity of undercutting for the purposes of measurement and payment. ¶ 20. The Differing Site Conditions clause specifically states that the purpose for giving written notice of this condition was so that, the engineer will investigate the conditions. It is therefore clear that the purpose for written notification by the contractor to the Commission is to trigger an investigation by the Commission of the physical conditions at the location. The Commission's engineer investigated the physical conditions at each undercutting location before any work was performed. Although S.P. No. 907-104-10 states that [n]o contract adjustment which results in a benefit to the Contractor will be allowed unless the Contractor has provided the required written notice, it would have been useless for Adams to give written notice to the Commission of that condition which the Commission was already investigating. In Mississippi, there is a well recognized rule that a person or entity is never required by law to proceed with a vain and useless act. See Shell Petroleum Corp. v. Yandell, 172 Miss. 55, 66, 158 So. 787, 790 (1935) (recognizing that a person is not required to do a vain and useless act, such as giving notice of a condition to another party who already had actual notice of the condition). Since the Commission had actual knowledge of the soil conditions, Adams is not barred from recovering damages in the event the jury finds that there was a differing site condition. ¶ 21. Once the Commission has received notice of the physical conditions and conducted its investigation, the Differing Site Conditions clause states that if the engineer determines that the conditions do materially differ from those shown in the contract, an adjustment, excluding loss of anticipated profits, will be made and the contract modified in writing accordingly. The section then states that the engineer will notify the contractor of his/her determination whether or not an adjustment of the contract is warranted. These two sentences create an ambiguity in the contract as to whether the Commission/engineer must adjust or simply may adjust the contract in the event that there are conditions which materially differ from the plans. This Court has recognized that [i]t is for the jury to determine what is the agreement of the parties, where there is uncertainty in a written contract because of ambiguity of doubtfulness. Baylot v. Habeeb, 245 Miss. 439, 445, 147 So.2d 490, 494 (1962). ¶ 22. The Commission argues that regardless of whether there was a differing site condition and whether the contract unequivocally provides for an adjustment of compensation in such a case, summary judgment of Adams's claims was still appropriate since the full Commission did not approve additional compensation or add a special pay item for undercutting and backfilling, and thus cannot be bound for additional compensation. ¶ 23. The Commission correctly notes that Miss.Code Ann. § 65-1-5 (Supp.2000) provides that the Commission shall speak only through its minutes. This statute is mandatory rather than merely directory. Mississippi State Highway Comm'n v. Sanders, 269 So.2d 350, 352 (Miss.1972). In support of its assertion that summary judgment was appropriately rendered, the Commission points to the affidavit of Linda Ferrell, secretary to the Commission. Her affidavit states in pertinent part: The minutes of the Commission do not reflect any action of the Commission approving any supplemental agreement to the contract between Ronald Adams, Contractor, Inc., and the Commission, commonly known as State Project No. 96-0002-03-061-10, adding any pay item for rock excavation or any additional item or compensation for extra work caused by the excavation, removal or backfilling of unsuitable sub-surface material or any additional payment for the removal of muck. ¶ 24. Although the Commission cites several cases in which this Court has held that an employee of the Commission, even acting in his official capacity, has no authority to bind the Commission absent the authority of the Commission appearing on its minutes, those cases are factually distinguishable from the instant case. Here, the contract could be interpreted as allowing the project engineer to authorize additional compensation upon determining that there is a differing site condition, without a prior written supplemental agreement entered into by the Commission and appearing on its minutes. Part of the Differing Site Conditions clause states that [t]he Engineer will notify the Contractor of his/her determination whether or not an adjustment of the contract is warranted. Unlike those cases where we have found that the Commission had not taken action by an appropriate entry on its minutes, it is undisputed here that the full Commission did approve, by an appropriate entry on its minutes, the original contract with Adams which creates the ambiguous language as to whether the Commission delegated authority to the engineer to authorize additional compensation to Adams, if needed. Under Miss. Code Ann. § 65-1-8(1)(f) (Supp.2000), the Commission has general powers, duties, and responsibilities to receive and provide for the expenditure of any funds made available to it by the Legislature.... As there is no statutory provision prohibiting the Commission from delegating its authority to authorize additional compensation to the project engineer, the ambiguity in the contract over the engineer's authority should be resolved by a jury. ¶ 25. The Commission argues that it is Standard Specifications § 105.17 which applies in this case, and not the Differing Site Conditions clause of Special Provision No. 907-104-10. Standard Specification § 105.17 states, in pertinent part: Claims for Adjustments and Disputes. It is in the public interest that the Department have early or prior knowledge of an existing or impending claim of any nature by the Contractor so that the Department may appropriately consider modifying the details of the work or other actions of the Department which might result in mitigation or elimination of the effect of the act or conditions objected to by the Contractor and so that the Department may institute appropriate procedures, as required, to keep strict account of actual costs and to verify, at the time, facts upon which a claim for contract time adjustment is made. Therefore, if in any case the Contractor deems that additional compensation is due for work or materials not clearly covered in the contract or not ordered by the Engineer as Extra Work, of if the Contractor deems that adjustment in the contract time should be made because of any of the reasons provided for in the contract as a basis for an extension of time, the Contractor shall notify the Engineer in writing of an intention to make such claim for additional compensation before beginning the work on which he bases the claim or for such extension of time as soon as the facts first become known on which he bases the claim for adjustment. If such written notification is not given in accordance with these specifications and the Engineer is not afforded proper facilities by the Contractor for keeping strict account of actual costs or verification at the time of facts upon which a claim for contract time adjustment is made, the Contractor hereby agrees that failure to provide written notice has denied the Department the prerogative of making adjustments in the work which might remove or alleviate the conditions for which a claim might be made, and the Contractor further agrees that such failure on his part shall be a conclusive waiver of any claim, or part thereof. Mere oral notice or statement will not be sufficient, nor will an unnecessarily delayed notice or statement after the event. ¶ 26. Standard Specification § 105.17 differs from Special Provision 907-104-10 in that § 105.17 requires notice solely in the form of a writing from the contractor to the Commission's engineer prior to the contractor commencing additional work not contemplated by the contract, while there is language in Special Provision No. 907-104-10 which places an equal burden (mutuality requirement) on both parties to notify the other of conditions that would warrant an adjustment in the contract. ¶ 27. In granting the Commission's motion for partial summary judgment, the trial court relied upon § 105.17. However, this reliance ignores the fact that the special provisions drafted specifically for this contract supercede any conflicting standard specifications. The Differing Site Conditions clause of Special Provision No. 907-104-10 is a special provision of the contract which specifically governs the dispute at issue: whether Adams encountered soil conditions different from those indicated by the contract plans, warranting an adjustment in the contract. Standard Specification § 105.17 is a general provision, applicable to all Commission contracts and requests for additional compensation. The contract itself provides in the Notice to Bidders that [t]he current (1976) Edition of the Standard Specifications for Road and Bridge Construction adopted by the Mississippi State Highway Commission is made a part hereof fully and completely as if it were attached hereto, except where superceded by special provisions.... Furthermore, our law is clear on a relevant aspect of contract interpretation: special provisions inserted in a contract govern over boilerplate provisions. Estate of Parker v. Dorchak, 673 So.2d 1379, 1382 (Miss.1996) (citing Nicholas Acoustics & Specialty Co. v. H & M Constr. Co., 695 F.2d 839 (5th Cir.1983)); Forbes v. Columbia Pulp & Paper Co., 275 So.2d 92, 95 (Miss.1973). Additionally, this Court has also held that it is a well-known canon of contract construction that ambiguities in a contract are to be construed against the party who drafted the contract. Mississippi Transportation Comm'n v. Ronald Adams Contractor, Inc., 753 So.2d 1077, 1085 (Miss. 2000); Estate of Parker, 673 So.2d at 1381-82 (citing Pursue Energy Corp. v. Perkins, 558 So.2d 349 (Miss.1990)); see also Theobald v. Nosser, 752 So.2d 1036, 1041 (Miss.1999) ([A]mbiguous words and terms should be construed against the party who has drafted them; and we accept that, in a case where language of an otherwise enforceable contract is subject to more than one fair reading, we will give that language the reading most favorable to the non-drafting party. Leach v. Tingle, 586 So.2d 799, 801-02 (Miss.1991).). Therefore, we find that the trial court erroneously relied upon § 105.17 to bar Adams's claim for additional compensation. ¶ 28. In sum, this Court holds that the trial court erred in granting the Commission's motion for partial summary judgment in that there are genuine issues of material fact as to (1) whether Ronald Adams encountered a differing site condition, and (2) whether the contract allows the engineer to authorize additional compensation for extra work without written notice and execution of a supplemental agreement by the Commission with entry on its minutes.