Court Opinion

ID: 9587341
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:21:13.857423+00
Date Added: 2024-06-11T17:37:30.116447
License: Public Domain

DONNELLY, Judge (dissenting). I respectfully dissent. I would affirm the trial court’s order granting a directed verdict in favor of the defendant Sandia Corporation. Plaintiff's first amended complaint alleged that it bid on a construction contract to build a small arms firing range for Sandia and that Sandia negligently misrepresented in its contract, plans and drawings the amount of rock which would be necessary to be removed in constructing the project. As a result of the alleged misrepresentation, plaintiff claims that it successfully bid on the project and then encountered a larger quantity of rock than it anticipated. Plaintiff contends that it should be compensated on the basis of quantum meruit for the necessary additional rock removal. At the close of all of the evidence in this case Sandia moved for a directed verdict. The trial court granted the motion, stating in part: The representation with reference to the amount of rock that was available or disposed of, was not a representation exclusively within the realm of Sandia. They in turn relied upon somebody else [Scanlon & Associates] * * * * [Our Supreme Court Jury Instruction on Negligent Misrepresentation] says: “A negligent misrepresentation is one where the speaker has no reasonable ground,” I emphasize that, no reasonable ground, “for believing that the statement made was true.” Twelve people, reasonable people, being selected in this case, cannot make a mistake with reference to the absence of any information that Sandia had to believe that the information was not true. I’m going to grant the defendant’s motion to dismiss at this point. The question posed on appeal in determining whether the directed verdict was proper, is whether the trial court abused its discretion in determining that the jury could not reasonably find, based on the evidence presented, that Sandia had no reasonable ground to believe that the information it provided to prospective bidders was true. In determining whether a directed verdict is proper, the trial court may grant the motion only after considering all the evidence presented in a light most favorable to the nonmoving party, and determining as a matter of law, that the evidence is insufficient to justify a jury in returning a verdict in plaintiff’s favor. Melnick v. State Farm Mut. Auto. Ins. Co., 106 N.M. 726, 749 P.2d 1105 (1988); Casarez v. Garcia, 99 N.M. 508, 660 P.2d 598 (Ct.App.1983). The record supports the trial court’s ruling. In order to establish a claim of negligent misrepresentation, as indicated in SCRA 1986, 13-819, plaintiff must present evidence indicating that defendant made a negligent and material misrepresentation and that the misrepresentation: [Was an] untrue statement upon which the other party did in fact rely in entering into the contract, and in the absence of which the other party would not have entered into the agreement. A negligent misrepresentation is one where the speaker has no reasonable ground for believing that the statement made was true. [Emphasis added.] Id. The record indicates that prior to requesting bids, Sandia hired an independent engineering firm to prepare plans for the project. The engineering firm in turn hired Albuquerque Testing Laboratories to dig test holes at the site and make preliminary computations concerning the amount of rock necessary to be removed and soil conditions at the construction site. The testing laboratory dug test holes and submitted a report which also recommended that more test holes be dug in order to more fully ascertain the precise amount of rock in the area to be excavated. In addition to its recommendation that more test holes be dug, the testing laboratory added a disclaimer to its report indicating that it could not be certain as to the amount of rock in the project area. After receiving the test reports, the design of the project was modified by Sandia so as to reduce the amount of necessary excavation. Prior to soliciting bids, the plans and specifications, together with the report of the testing laboratory, including its recommendation that additional test holes be dug, were furnished to the plaintiff and all other prospective bidders. The partial record before this court contains the deposition testimony of Paul Lawrence, president of plaintiff corporation. Lawrence testified that before submitting his bid he had access to the plans and specifications and report of the outside engineer and testing laboratory and that he was aware of the recommendation that more test holes should be dug to fully determine ground conditions and he saw the disclaimer concerning the uncertainty of the amount of rock in the site to be excavated. Lawrence testified in his deposition that he went “ahead and bid it knowing that the disclaimer [was] there.” Plaintiff did not make any additional subsurface soil investigation of the area in question, and submitted a successful bid, relying in part, upon information plaintiff received from prospective subcontractors which it solicited to assist in preparing its bid on the project. The appellate record, although incomplete, indicates that among other things, prior to submitting its bid plaintiff received documents from Sandia stating in part: A soil investigation report for the project is available for the contractor’s information at the office of Sandia * * * the soil investigation report is not part of this contract. There is no express or implied guarantee as to the accuracy of the data nor the interpretation thereof. Each Bidder must form his own opinion of the character of the materials which will be encountered from an on-site inspection by himself and from his own interpretation of the information. A Bidder may make additional subsurface soil investigations at his own expense * * *. [Emphasis added.] A prerequisite to determining whether the plans and other documents furnished by Sandia amounted to a negligent misrepresentation, whether plaintiff in fact relied upon an alleged misrepresentation, or whether the materials claimed to have been removed were in fact rock, necessarily requires this court to examine the contract, plans and written materials provided by Sandia to prospective bidders, and to review the record to ascertain whether the evidence is sufficient to support plaintiff’s claim that it relied upon a material misrepresentation of Sandia, and that Sandia had no reasonable ground to believe that the statement was true. I am unable to agree with the majority that “Sandia made a positive representation apart from the soil investigation report, in the plans and specifications as to the amount of rock to be encountered.” First, Sandia’s supplemental brief asserts that “[a]ll of the drawings, designs, and specifications are contract documents * * *. This language clearly bars a contract claim against Sandia based upon the contention that 2,400 cubic yards of material were contracted for. The 2,400 cubic yards was Clifford Andersons’s [Scanlon Engineer] estimate of rock which was adopted by Sandia; it was not a contract amount.” (Emphasis added.) Second, in my opinion the majority statement that “the plans, specifications and drawings representing the amount of rock to prospective bidders were part of the contract and were not disclaimed,” is not verifiable in the record on appeal. Whether plaintiff proved this fact is subject to question because this is contested by Sandia and the applicable plans, specifications and drawings are not part of the appellate record. Whether the language or provisions alleged to have been misrepresented were in fact part of the contract is a question of law. Jaeco Pump Co. v. Inject-O-Meter Mfg. Co., 467 F.2d 317 (10th Cir.1974). I also am unable to agree that the portion of Anderson’s testimony relied on by the majority is sufficient to overturn the trial court’s ruling. The appellate record does not contain all of the testimony of the trial witnesses who testified concerning the alleged misrepresentation, nor does the record contain the full text of the contract, plans and specifications used to formulate plaintiff’s bid, including the matters alleged to have been misrepresented. Under this posture, the trial court’s order granting a directed verdict pursuant to SCRA 1986, 1-050(A) should be affirmed. Nichols v. Nichols, 98 N.M. 322, 648 P.2d 780 (1982) (it is appellant’s duty to present a sufficient record on appeal, and where there is a doubtful or deficient record, every presumption is indulged in favor of the correctness and regularity of the ruling of the trial court). See also Fisher v. Terrell, 51 N.M. 427, 187 P.2d 387 (1947). Without an opportunity to review the testimony of the witnesses who testified concerning the alleged misrepresentation, or the complete text of the contract (including the plans and drawings in question), or to note the contents of all of the exhibits bearing on the claimed misrepresentation introduced at trial, this court cannot accurately assess the issue on appeal. The complete provisions of the contract and other accompanying documents bearing on the case are vital to resolution of a contractor’s claim of misrepresentation. Shaeffer v. Kelton, 95 N.M. 182, 619 P.2d 1226 (1980) (contract must be considered as a whole). See also Gardner-Zemke Co. v. State, 109 N.M. 729, 790 P.2d 1010 (1990). I would affirm the trial court’s ruling.