Opinion ID: 2606174
Heading Depth: 2
Heading Rank: 2

Heading: breach of the warranty of plans and specifications

Text: The Borough argues that the superior court erred in refusing to instruct the jury that Kandik & Associates must have reasonably relied on the plans and specifications in preparing its bid. Kandik & Associates claims that the reliance requirement was adequately addressed in the jury instructions. The legal sufficiency of a jury instruction is a question of law upon which we will exercise our independent judgment. See Guin v. Ha, 591 P.2d 1281, 1284 n. 6 (Alaska 1979). The Borough relies on the decision in Souza & McCue Construction Co. v. Superior Court, 57 Cal.2d 508, 20 Cal. Rptr. 634, 635-36, 370 P.2d 338, 339-40 (Cal. 1962), in which the California Supreme Court ruled that a public works contractor who reasonably relies on faulty plans and specifications and submits a bid lower than he would have submitted had the plans been adequate may recover for extra work or expenses incurred as a result of its reliance on the faulty plans. The Borough asserts that Kandik & Associates may not recover its increased expenses because it presented no evidence that, had the plans been adequate, it would have submitted a higher bid. We disagree. A project owner which furnishes plans and specifications to a contractor impliedly warrants their sufficiency. Northern Corp. v. Chugach Elec. Ass'n, 523 P.2d 1243, 1246 (Alaska 1974); appeal after remand, 562 P.2d 1053 (Alaska 1977), aff'd on reh'g, 563 P.2d 883 (Alaska 1977). When the contractor incurs additional expenses attempting to perform a contract pursuant to defective specifications, the contractor is entitled to recover its extra costs thereafter incurred by reason of the breach of [the] implied warranty. Id. at 1247. It is, of course, necessary that a contractor's reliance on the defective plans be reasonable. See Northern Corp., 523 P.2d at 1246-47 (no damages recoverable from the time the contractor knew or should have known that performance was impossible). In this case, the jury was properly instructed that the Borough impliedly warranted the sufficiency of Roen's design plans. The instruction continued (emphasis added): In order for Kandik to recover on its claim that the Borough provided it with inadequate plans and specifications, Kandik must prove by a preponderance of the evidence each of the following propositions: First, that acting reasonably Kandik was misled by incorrect or inadequate contract documents issued by the Borough. Second, that due to this inadequacy, Kandik's work was disrupted or delayed. Third, that due to the disruption or delay, Kandik has been monetarily damaged. If you find from your consideration of all the evidence that each of the above propositions ha[s] been proved, your verdict should be for Kandik on its claim, even if you find that errors or mistakes of the Borough's engineer were the cause of Kandik's problems. On the other hand, if you find that any of the above propositions have not been proved, your verdict should be for the Borough on the claim. By its terms, this instruction informed the jury that Kandik & Associates could recover for additional expenses incurred as a result of defects in Roen's design plans. The jury was specifically told that Kandik & Associates, acting reasonably, must have been misled by the inaccurate plans to its detriment. We conclude that this is a correct statement of the law which adequately conveyed the reliance requirement to the jury; therefore, we refuse to set aside the verdict on this basis.