E. C. Nolan Co. v. State

227 N.W.2d 323, 58 Mich. App. 294, 1975 Mich. App. LEXIS 1703
CourtMichigan Court of Appeals
DecidedFebruary 10, 1975
DocketDocket 17681
StatusPublished
Cited by6 cases

This text of 227 N.W.2d 323 (E. C. Nolan Co. v. State) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E. C. Nolan Co. v. State, 227 N.W.2d 323, 58 Mich. App. 294, 1975 Mich. App. LEXIS 1703 (Mich. Ct. App. 1975).

Opinions

T. M. Burns, J.

We are here presented with an appeal from the Court of Claims which denied plaintiff’s claim in the amount of $125,244.76 for additional expenses beyond the bid price of $1,005,740.43 under a road-construction contract with the state.

On March 20, 1968, the State Highway Department (hereinafter the department) received bids on Project No. U 82143-021, the purpose of which was to lengthen a bridge carrying tracks of the Grand Trunk Railroad (hereinafter the railroad) across Eight Mile Road in the cities of Detroit and Fern-dale. Bids were solicited on the basis of a proposal [297]*297prepared by the department and plaintiff submitted the low bid and was awarded the contract. Thereafter, pursuant to authorization of the department, plaintiff on March 28, 1968, committed $480,000 to have the necessary structural steel fabricated.

It is undisputed that before plaintiff could commence performance, certain railroad tracks on the bridge had to be relocated. The department had accordingly contracted with the railroad on October 8, 1967, to have this work done. When it became apparent that the railroad would require the use of three rather than two tracks during the period of construction, that agreement was modified by mutual consent in December and finally reduced to writing on March 11, 1968. The department in the meantime notified the railroad to proceed on January 4, 1968, and also advised the railroad that the general contract (plaintiff’s contract) would be let in March of that year. The trial court found as a fact that the railroad expected to begin relocation in April or May of 1968, and that it was anticipated that once started, the work would be completed within five to seven weeks.

On April 8, 1968, at a pre-construction meeting, the department brought the plaintiff and the railroad together to work up a firm progress schedule for the project. The railroad then for the first time indicated it would be unable to proceed with the preliminary work as scheduled in the proposal and stated that it would not begin to perform said work until September. Despite having knowledge of this announced delay, plaintiff, due in large part to the fact that it had already expended large sums of money in ordering the necessary structural steel and in obtaining the requisite bonding, continued to anticipate performance of its contract [298]*298with the department and subsequently signed the contract here in question some 10 days later.

As it turned out, the railroad did not commence work until October 12, 1968, and did not complete its performance until April 1, 1969, a delay found by the trial court to be of 9-1/2 months duration. As a result, plaintiff was unable to fulfill its contract and finish the project until October 23,1970.

Plaintiff claimed $125,244.76 additional expenses as a result of having to work in the winter rather than the summer and fall. After the Central Office Adjustment Board denied the claim on September 9, 1970, plaintiff filed this suit in the Court of Claims. In its suit, plaintiff alleged both changed conditions on the project site and misrepresentation as to the starting dates by the department. On September 1, 1971, the trial court granted summary judgment in favor of the department on the changed-conditions count, finding that the terms of the contract specifically denied plaintiff the right to recover damages due to a delay caused by another party. After the taking of proofs, the court, on March 7, 1973, issued an opinion in which it found that there was no misrepresentation by the department. Plaintiffs motion for new trial was denied on June 13, 1973, and on July 16, 1973, the court entered judgment on the verdict. Plaintiff now appeals as of right.

Plaintiff first contends that it is entitled to recover the additional expenses incurred by it because of misrepresentations as to the time when the railroad would finish its work, said representations being contained in the department’s bid proposals. Plaintiff argues that since it relied on specifications which were a part of the contract and since it suffered damages as a result of such reliance, it is entitled to recover when it is later [299]*299determined that such specifications were inaccurate.

In order to recover for fraud or misrepresentation, a plaintiff must establish that the elements of fraud exist. In Farida v Zahar, 50 Mich App 137, 142; 212 NW2d 739 (1973), the Court reviewed these elements when it stated:

"The elements of actionable fraud were set forth in Papin v Demski, 17 Mich App 151, 154; 169 NW2d 351, 353 (1969):
" 'Initially, the burden of proof in this case, as always, was on the plaintiffs. It was essential to their cause of action based on fraud that certain facts be established. Our Supreme Court in A & A Asphalt Paving Co v Pontiac Speedway Inc, 363 Mich 634, 639; 110 NW2d 601, 604 (1961), quoted with approval the following statement relative to the essential facts:
"' "The general rule is that to constitute actionable fraud, it must appear: (1) that defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly, without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury. Each of these facts must be proved with a reasonable degree of certainty, and all of them must be found to exist; the absence of any one of them is fatal to a recovery.” ’ (Aff’d, 383 Mich 561; 177 NW2d 166 [1970]).”

The trial court determined that there was no material misrepresentation of fact by the department. We disagree. It was not controverted at trial that the department made representations of a material nature as to the work-progress schedule in the project proposal. That this work-progress schedule, if inaccurate, amounted to a material misrepresentation is also not questioned. Nor is [300]*300there any question that plaintiff relied on the representations and expended large sums of money beyond those anticipated. Indeed the only disputed point is whether or not the department knew of the falsity of the work-progress schedule or was without any knowledge upon which to make its representation that the project site would be available in May of 1968.

The department had been carrying on negotiations with the railroad concerning this bridge-lengthening project since 1962. Moreover, at no time did the department ever receive from the railroad a specific date on which the work would be commenced, nor had it ever been assured by the railroad that the work would be completed on a certain date. The department also knew that the railroad had a relatively small work force that was already engaged in a project relating to the Chrysler-Davidson Interchange in Detroit. These facts lead us to conclude that the department knew or should have known that the date given to it by the railroad concerning completion of the preliminary work was tentative at best. Yet, for some unexplained reason, the department chose not to reveal these facts to the bidders, including plaintiff, when it requested bids on the project in question.

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E. C. Nolan Co. v. State
227 N.W.2d 323 (Michigan Court of Appeals, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
227 N.W.2d 323, 58 Mich. App. 294, 1975 Mich. App. LEXIS 1703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-c-nolan-co-v-state-michctapp-1975.