City of Fort Worth v. GENE HILL EQUIPMENT CO.

761 S.W.2d 816, 1988 Tex. App. LEXIS 3203, 1988 WL 139400
CourtCourt of Appeals of Texas
DecidedNovember 17, 1988
Docket2-88-034-CV
StatusPublished
Cited by6 cases

This text of 761 S.W.2d 816 (City of Fort Worth v. GENE HILL EQUIPMENT CO.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Fort Worth v. GENE HILL EQUIPMENT CO., 761 S.W.2d 816, 1988 Tex. App. LEXIS 3203, 1988 WL 139400 (Tex. Ct. App. 1988).

Opinion

OPINION

FARRIS, Justice.

The City of Fort Worth appeals from the judgment in favor of Gene Hill Equipment Company, Inc. (Gene Hill) in a contract dispute over payment for “extra” construction work done at the City’s Citran facility. During excavation for the installation of underground fuel storage tanks, Gene Hill encountered rock, subsurface water, and unstable soil, for which it alleges it incurred additional expense. The contractual dispute centers on who was to bear the cost of the additional work. Based upon the jury’s findings that the contract provided the City would pay for the reasonable cost of work necessitated by abnormal conditions and that such conditions were encountered, the trial judge awarded Gene Hill $15,523.87 for the extra work done, prejudgment interest and its attorneys’ fees and court costs.

Having raised twenty points of error, the City waived points four, eight, nine, thirteen, and fifteen through nineteen during oral argument. In the remaining points before this court, the City contends that Gene Hill is: (1) not entitled to sums in excess of the base contract price due to its failure to notify the City of abnormal conditions and failure to obtain an executed change order prior to commencing work; *818 (2) not entitled to recover under the doctrine of quantum meruit; and (3) not entitled to attorneys’ fees. The City also argues that the trial court erred in not awarding the City liquidated damages for Gene Hill’s late completion of the project.

We sustain the City’s fourteenth point of error in part because there was insufficient evidence to support the jury’s finding that the construction of the retaining wall and removal of subsurface water were performed with prior notice to and approval from the City’s engineer. We overrule the City’s points one, three, five, ten and eleven because the contract governing project construction did not require a change order for extra work. Points of error two, seven and twelve are overruled because the doctrine of quantum meruit is not applicable in this case and was not a basis for awarding judgment in the trial court. Point of error six is overruled on the ground that Gene Hill is statutorily entitled to attorneys’ fees from the City for a suit founded on contract on a cause of action arising prior to June, 1987. We sustain the City’s twentieth point of error on the ground that the City is entitled as a matter of law to recover liquidated damages for Gene Hill’s delay in completing the project.

I. THE CHANGE ORDER

The City contends that Gene Hill is not entitled to sums in addition to the base contract price in the absence of an executed change order and argues that the trial court erred in (1) overruling its motion for instructed verdict, (2) submitting issues to the jury as to whether the City agreed to pay for extra work necessitated by abnormal subsurface conditions, and (3) denying its motion for judgment notwithstanding the verdict as to these issues. We find that the contract did not require the change order process be followed with respect to extra work due to abnormal conditions and overrule points one, three and ten.

The contract between the City and Gene Hill contained three provisions addressing subsurface conditions: (1) Paragraph B-2 of the General Conditions provided that the owner’s survey describing the physical characteristics of the site was for information only. The owner would not be liable for inaccuracies. B-2 also provided that the contractor inspect the site and be familiar with any obstacles to the work required.

(2) Gene Hill’s bid qualification:

Gene Hill Equipment Co. shall not be held responsible for unknown underground conditions such as utilities, concrete thicker than normal construction practices requires, natural conditions such as solid rock, rotten soil, running sand and/or water.

(3) The City’s response to the bid qualification:

Since rock, unstable soil or water are not included in any surveys we might provide, these unknown subsurface conditions are not covered by this General Condition. In this case we do not know what abnormal subsurface conditions may exist and have not asked you to verify what these conditions might be or to assume responsibility for same. Your bid is assumed to reflect “normal” excavation: if abnormal conditions are encountered, we are to be notified so that we may verify the condition and reach agreement with you on the manner in which to proceed.

The City argues Gene Hill is not entitled to additional sums absent a charge order; however, the contract does not contain any language requiring change orders be used. The only references to change orders refer either to “Section —” or “Section L”, which is not included in the contract. In support of its position, the City relies upon the following provision of the Fort Worth City Charter:

When it becomes necessary to make changes in the plans or specifications after performance of a contract for public works has been commenced, or it becomes necessary to decrease or increase the quantity of work to be performed, such change, alteration or modification shall be made only when a change order therefor is authorized by the city council upon the written recommendations of the city manager.
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*819 No such change, alteration, or modification shall be valid unless the price to be paid for the work, materials, equipment or supplies has been agreed upon in writing and signed by the contractor and the city manager upon the authorization of the city council.

Fort Worth City Charter, Ch. 27, sec. 14 (1986).

In its brief, the City argues that section D-8 of the contract required Gene Hill to comply with the charter provisions. The City is mistaken. Section D-8 provides that if the contractor performed work in violation of or contrary to the charter without first providing notice to the City, the contractor would bear the cost of that work. The contract provisions set out above clearly would provide the requisite notice to the City.

The City also asserts that interpreting the contract to allow Gene Hill to recover “any reasonable sums” incurred in excess of the base contract price would mean that the contract was awarded in violation of state competitive bidding regulations for municipalities and the Fort Worth Charter, and that such an interpretation would be unenforceable because of indefiniteness and uncertainty regarding a critical aspect (price) of the agreement. We are not persuaded.

As the City notes in its brief, the state competitive bidding requirements applicable to municipalities and the counterpart requirements in the Fort Worth Charter are designed to ensure competent, low cost work. Both, however, contemplate that changes occasionally need to be made which would alter the original bid price, and accordingly confer authority to authorize changes and adjust the amount of payment. See former TEX.REV.CIV.STAT.ANN. art. 2368a (Vernon Supp.1982); 1 Fort Worth City Charter, Ch. 27, sec. 14 (1986).

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Bluebook (online)
761 S.W.2d 816, 1988 Tex. App. LEXIS 3203, 1988 WL 139400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-fort-worth-v-gene-hill-equipment-co-texapp-1988.