Court Opinion

ID: 9570896
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:27:23.143781+00
Date Added: 2024-06-11T12:21:03.150897
License: Public Domain

Lewis, Chief Justice
(dissenting) :
I respectfully dissent. The conclusions of the trial judge that the respondents (contractors) had established their right to recover is supported by the record and the judgment should be affirmed.
The contractors, acting in a joint venture, successfully bid, in the amount of $3,777,470.48, a contract consisting primarily of excavation and fill work required for the construction of the last 3.515 miles of U. S. Highway 25 in Greenville County, ending at the North Carolina line. The road was to be built through a mountainous area and involved the excavation of a large amount of solid rock. This action resulted from disagreement between the parties over responsibility for the losses sustained by the contractors from the necessity to excavate a large amount of rock not anticipated by any of the parties.
The project has been satisfactorily completed and the appellant (Department) has paid the contractors $3,922,433-.20, which includes payments for additional work done. The contractors brought this action to collect over $3,000,000, plus interest, which was alleged to be due in addition to the *436amount already collected. The complaint alleged several causes of action, among them: (1) mutual mistake as to the amount of solid rock that had to be excavated and removed in order to construct the highway; and (2) a breach of an implied warranty by setting forth inaccurate information in the specifications, borings and data supplied to the contractors by the Department, upon which the contractors relied in making their bid on the project.
This is an action at law but, by agreement, was tried before the trial judge without a jury. After hearing voluminous testimony, the trial judge granted judgmeent to the contractors on their causes of action for mutual mistake and breach of implied warranty in the amount of $409,446.96, plus interest. This amount represented additional compensation for the excavation of 524,932 cubic yards of solid rock at the rate of $0.78 per cubic yard.
While the appeal presents several issues, the determinative one, in my opinion, is whether the lower court erred in granting judgment to the contractors on the cause of action for breach of implied warranty, i. e., was there any competent evidence to sustain the judgment. For, if there was any evidence to sustain the factual findings of the lower court, such findings are binding on appeal and judgment must be affirmed.
On August 26, 1968, the Department advertised for bids to be opened September 17, 1968. In response to this advertisement, the contractors requested and received the bid materials furnished by the Department, consisting of a bid proposal, detailed cross sections, and the boring roll. In addition, the contractors already had in their possession the Standard Specifications for Highway Construction, which are a part of any highway construction contract awarded by the Department. Most of the pertinent portions are set forth in the opinion of Justice Littlejohn and will not be reproduced here. All of the foregoing bid materials were prepared by the Department.
*437Included in the bid proposal was an estimate of quantities of various items of work under the contract. Importantly, bidders were informed that the Department anticipated removal of approximately 8,067,000 cubic yards of “unclassified excavation”. In the contract in issue, unclassified excavation constituted the largest single bid item. The contractors developed a composite bid price for that item, based upon an estimate that 547,000 cubic yards of the unclassified material was blasting or shooting rock and the remainder was common excavation, which could be removed with heavy equipment. Rock excavation was far more expensive than common excavation. Therefore, any alteration or change which materially increased the amount of the expensive rock excavation would change the character of the contract and would not be within the intent of the parties.
The trial judge found that the Department was liable to the contractors for “a breach of an implied warranty by setting forth inaccurate information in the specifications, borings and data supplied by the defendant (Department) upon which the plaintiffs (contractors) relied in making their bids on the project.”
The record supports the conclusion that the Department, in the bid materials furnished, made representations concerning rock quantities upon which the contractors were entitled to rely in computing their bids. Properly considered in determining this issue are design changes made by the Department, cross sections furnished of the proposed highway, and the boring roll which represented the Department’s investigation as to subsurface conditions on the project.
The boring log or roll furnished was prepared by the Department and reflected the work of its employees. A Department employee was sent to the project site prior to advertisement for bids to make borings because of the decision to use a rock excavation technique known as “pre-splitting” whenever feasible. He was required to locate the *438top of hard rock along the centerline in order that a preliminary decision could be made on the condition of the rock as it related to pre-splitting. In all, this employee made thirty-three (33) borings and removed three core samples; no boring was more than forty-five (45) feet from the centerline. The results of these borings were plotted on a centerline profile sheet and contained the notation that the borings were “for informational purposes only.”
The detailed cross sections furnished to the contractors showed the slope of the highway embankments at various intervals along the project. Special provision 17 (not included in the opinion of Justice Littlejohn) provided that: “The slope in earth cuts shall be 2:1 and the slope in rock cuts shall be 1/4:1.” The testimony for the contractors showed that they interpreted the grade of the slope, as shown on the cross sections, to indicate where rock would be encountered and that it lay on a level plane, a conclusion consistent with the documents. In other words, where the cross sections showed a 1/4:1 slope, the contractors concluded that the Department represented that rock would be encountered at that point and earth where a 2:1 slope was designated. This was in accordance with Special Provision 17.
The record clearly shows inaccuracies in the boring data and cross sections furnished by the Department. There was testimony that in one area the contractors hit rock at a depth of 38 feet where the boring of the Department showed rock at 74 feet. The contractors’ witnesses testified that 53,803 cubic yards of rock were excavated in this area where calculations using the Department’s documents revealed that only an estimated 8,666 cubic yards were involved. In another area, it was testified that rock was encountered at least 30 feet above where it was shown on the Department’s boring data, and that hard granite was found where the Department’s boring data referred to silty sand with clay, mica, and disintegrated rock. In this latter area, a witness testified *439that approximately 36,759 cubic yards of rock were excavated while the Department’s boring data showed that rock was below grade level.
A major portion of the contractors’ case was devoted to unexpected rock quantities in the project area referred to as “big cut”. The project manager for the contractors testified that computations based on the bid cross section revealed an estimated 360,000 cubic yards “shooting rock” in the area. He and other witnesses for the contractors calculated these unexpected quantities of rock in the “big cut” in excess of one million cubic yards.
There were also instances where the conditions encountered in the performance of this project were different from the plans and specifications of the Department. In one area the plan showed a fill to be constructed. There was testimony that the plans called for a pipe or “drainage structure” under the road at the fill so that water wouldn’t “pond”, but the pipe was eliminated and the contractors had to “drill and shoot” a 200 foot cut in order to drain “the area all the way down the left hand side of the road” and turn the water out “through a channel change in the gulley.” The Department’s construction engineer stated that the foregoing cut was not shown on the bid plans and was a change ordered by him.
A problem similar to the foregoing occurred in another area. There was testimony that the cross section sheets showed a fill on the “left and right but it turned out to be a cut on the right.” Instead of hauling in dirt to make the fill, “a 190 foot cut” had to be “drilled and shot.” The excavation for the cut involved both dirt and rock. The Department’s construction engineer testified that the cross sections did not show the cut and that this change was ordered by him which increased the quantities of excavation, for which the contractors were paid $.34 per cubic yard.
The record supports the conclusion that the Department’s plans misrepresented the design of the project or the subsurface conditions in, at least, the foregoing areas; that the *440contractors were entitled to rely on these representations; and that they were thereby misled in their calculations of rock quantities.
Testimony of the contractors was to the effect that the cross sections for this highway construction job were different from the usual cross sections furnished by the Department in that “they had rock drawn in at 100 foot intervals and most plans did not have the rock drawn in.” The contractors did not make an independent subsurface investigation, but testified that they relied upon the Department’s bid information because time was prohibitive and they believed it had done a good job due to the existence of the boring log and cross sections.
The Department argues, however, that the contractors were not entitled to rely on the plans, cross sections, boring data, and other bid materials because of certain contractual provisions stating that they were subject to change by the Department, were “for informational purposes only,” and that rock found on any location or elevation of the project would not constitute a waiver of any condition of the contract. These contractual provisions, under the present facts, do not determine the issues here, as a matter of law. These provisions do not clearly specify that the contractors may not rely on the cross sections as an accurate estimate of subsurface rock in making their bid and they do not state that the contractors must make their own independent subsurface investigation. When the cross sections are considered with the boring data furnished, they may be properly interpreted to show the location of blasting rock. The cross sections contained no reference to the contractual provisions stating that they were for informational purposes only, which is very significant in view of the time element involved.
In view of the short time lapse between the advertising and receipt of bids for the project, an issue of fact arises as to whether the contractors were justified in relying upon the site conditions as shown on the cross sections and boring *441data as an unqualified representation by the Department. The following comments of the trial judge indicate that he considered the time element to be an important factor in determining liability:
The defendant required the plaintiffs to submit their competitive bid for the construction of the project within twenty-one (21) days after the public advertisement for bids was made. For a construction project as extensive, large and complex as this was, this period of time was entirely too short, limiting and restrictive. The testimony disclosed that other state highway departments normally allow contractors more time to make computations in order to submit a bid for a project to construct a highway. The preparation of a sound and accurate bid on a large highway construction job is a complicated, difficult task. More time than twenty-one (21) days should have been allowed to the plaintiffs to prepare their bid.
The foregoing findings by the trial judge are supported by testimony in the record that it would have required five or six months to make an accurate estimate of rock on a job of this size and difficult terrain. If the Department intended that bidders make independent subsurface investigations, it should have given ample time to conduct such investigations. In view of the restricted time allowed and the furnishing of cross sections and boring data showing the location of rock, it is reasonable to conclude that bidders might be expected to use the information furnished, which time would not permit them to otherwise obtain; and where insufficient time is allowed to make a personal study, the State cannot invoke general disclaimer or exculpatory clauses to exonerate itself from liability. Peter Salvucci & Sons v. State, 110 N. H. 136, 268 A. (2d) 899, 906.
The opinion of Justice Littlejohn and the argument of the Department focus on certain testimony of Mr. Jordan, one of the officials of the contractors, for the conclusion that they admitted the Department made no representations as to rock *442quantities. It is elementary that in determining the probative effect of the testimony of a witness, his testimony must be considered in its entirety. When this is done, it becomes evident that the testimony of this witness is susceptible of the reasonable inference that the claimed admission was not made, as is shown by the following from his testimony on cross-examination:
Q. As a result of Wilbur Smith’s study and report to you, . . ., prior to the contract in October 1968, L-J and Eastern knew, did it not, that rock excavation quantities could not be accurately calculated from the plans and things and information furnished you by the Highway Department?
A. L-J and Eastern didn’t know that. We had cross sections showing it, plotted cross sections showing where rock was going to be. Had we not had the cross sections, we would not have bid the job.
Q. I am talking about accuracy of figures ?
A. Liars figure, but figures don’t lie. You had a drawing there, showing you where you was going to hit rock.
The quotation in the opinion of Justice Littlejohn of testimony of the witness Williams also fails to consider all of the testimony of this witness. The statement of this witness that “contracting is somewhat of a gamble” and that if he had found zero yards of hard rock he would not owe the Department anything is totally irrelevant to the present inquiry. The main inquiry in the breach of warranty action is justified reliance on the plans and cross sections in computing the bid. Just prior to making the statement concerning the gamble, the following question and answer appears:
Q. So, you really couldn’t have relied on the quarter-to-one slopes to show you where the rock was, because you knew if rock was encountered you were going to have to take it out.
A. We did rely on it. We used the typical and the specific cross sections.
*443While admittedly other inferences may be drawn, the record clearly gives rise to a reasonable inference that the Department made positive representations as to the subsurface conditions on the project, upon which the contractors were entitled to rely, and did rely to their damage. Such facts support recovery. Robert E. Lee and Co., Inc. v. Commission of Public Works, 248 S. C. 84, 149 S. E. (2d) 55.
The applicable principles are summarized from the cases in the annotation in 76 A. L. R. 268, 269, as follows:
. . . Where plans or specifications lead a public contractor reasonably to believe that conditions indicated therein exist, and may be relied upon in making his bid, he will be entitled to compensation for extra work or expense made necessary by conditions being other than as so represented.
The record also sustains the finding of the trial judge that the contractors are entitled to additional compensation for 524,932 cubic yards of rock. The Department argues that there was no competent evidence to support the conclusion that there was an “overrun” in the foregoing amount. The trial judge had before him testimony as to specific quantities of rock in certain areas in excess of the 524,932 overrun figure, and photographs showing rock in areas where none was shown on the plans. The evidence is adequate to support the finding that the contractors are entitled, under a breach of warranty theory, for an additional 524,932 cubic yards of rock in excess of the quantities represented in the Department’s bid materials.
The trial judge computed the amount of the judgment by using the base figure of $1.12 per cubic yard as the reasonable cost of excavating solid rock. This was arrived at from testimony that, in arriving at a composite bid price of $.34 for unclassified excavation, the contractors estimated $1.12 per cubic yard for the removal of rock and $.2671 per cubic yard for the removal of common excavation. The figure of $1.12 per cubic yard for removal of rock was found to be reasonable, and the judgment was calculated by figuring the *444overrun at $.78 per cubic yard, the latter figure representing the difference between $.34 that the plaintiffs (contractors) were paid and $1.12 that the plaintiffs should have been paid. The record amply sustains these findings.
The trial judge awarded interest before judgment on the award. In this he was in error. It is correctly pointed out that prejudgment interest should not be awarded where the amount due on the claim is incapable of ascertainment by calculation. 25 C. J. S. Damages § 52. This case involved a genuine dispute not only as to liability but as to the amount due. Under these circumstances, it was error to assess interest on the award from a point in time prior to judgment.
Subsequent to the judgment of the lower court, the Department filed a motion for judgment notwithstanding findings of fact and a petition for leave to present additional evidence and a reconsideration of the case. Relief was sought under Section 15-27-130 of the 1976 Code of Laws on the ground that the judgment was entered against the Department through its excusable neglect. The issue raised involved alleged unauthorized changes in the road plans sometime between 1968 and 1973 during the progress of the highway construction.
The trial judge, in effect, held that the grounds presented did not constitute excusable neglect so as to entitle the Department to relief on that ground. It appears that the alleged altered documents were in the hands of the Department from six to eight years prior to the trial, and the Department admitted that it entertained questions during the trial concerning the present issue but did not then raise them. In the exercise of his discretion in the matter, the trial judge properly held that the failure to discover and produce the evidence now in question did not constitute excusable neglect.
The final contention is that recovery is precluded under Article 3, Section 30, of the South Carolina Constitution, which provides:
*445The General Assembly shall never grant extra compensation, fee or allowance to any public officer, agent, servant or contractor after service rendered, or contract made, nor authorize payment or part payment of any claim under any contract not authorized by law; but appropriations may be made for expenditures in repelling invasion, preventing or suppressing insurrection.
There is no merit in this contention. The lower court correctly ruled that this is a prohibition directed at the General Assembly and does not affect the jurisdiction of the courts to pass on contractual rights between the highway department and public contractors.
There can be no doubt that the contractors grossly underbid the present project and sustained a sizeable loss. The record also shows that, including the award of the lower court, the State would receive full value, and more, in the quantity and quality of the work performed by the contractors in the construction of the highway. We are not, therefore, dealing with a case where it is sought to require the State to pay for something it did not receive, but rather with the issue of whether the contractors are legally entitled to receive, under these facts, payment for the large unanticipated costs incurred in completing construction of the project.
In concluding, it is important to point out again that the question in this case is not whether this Court would have decided the factual issues as the trial judge did, but rather our sole inquiry is to determine whether there is any competent evidence to sustain the conclusions reached by him. It is possible to view the various contractual provisions separately and reach the conclusion that no liability exists. However, when the provisions of the contract are viewed in the light of the surrounding facts and circumstances, it is equally clear that the fact finder could reasonably conclude that the disclaimer provisions should not be allowed to relieve the Department of liability. There is ample evidence to sustain *446the judgment under appeal and to hold otherwise, I respectfully submit, is to invade the province of the trier of the facts.
I would affirm the judgment, but exclude the allowance of interest prior to judgment.