Geupel Construction Co. v. Commonwealth Transportation Cabinet

136 S.W.3d 43, 2003 Ky. App. LEXIS 39, 2003 WL 354404
CourtCourt of Appeals of Kentucky
DecidedFebruary 14, 2003
Docket2001-CA-001729-MR
StatusPublished
Cited by1 cases

This text of 136 S.W.3d 43 (Geupel Construction Co. v. Commonwealth Transportation Cabinet) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Geupel Construction Co. v. Commonwealth Transportation Cabinet, 136 S.W.3d 43, 2003 Ky. App. LEXIS 39, 2003 WL 354404 (Ky. Ct. App. 2003).

Opinion

OPINION AND ORDER

COMBS, Judge.

Geupel Construction Company, Inc. (“Geupel”), an Ohio corporation, appeals from a judgment entered on May 16, 2001, by the Franklin Circuit Court in favor of the Commonwealth of Kentucky Transportation Cabinet (the “Cabinet”). Following a bench trial, the court held that Geupel was not entitled to payment above the unit contract price for additional work that it had performed pursuant to its contract with the Cabinet. We vacate and remand for an order of dismissal.

On February 2, 1994, Geupel and the Cabinet entered into a construction contract for the grade, drain, and bituminous surfacing of 1.4 miles of the Maysville-Portsmouth Road in Mason County, Kentucky. The contract obligated Geupel, as the general contractor, to drill, blast, and haul approximately 7.5 million cubic yards of excavation material.

The contract was awarded to Geupel according to a competitive bidding process. In formulating its bid, Geupel’s staff re *45 viewed the Cabinet’s plans and divided the project into various segments according to the types of work to be performed, the nature and quantities of material to be excavated, and the hauling distances for the excavated material. However, the bid document did not allow for the submission of different unit prices for the different types of excavation required for the project. Instead, Geupel estimated the cost for each segment of the work and submitted its bid for roadway excavation based upon a weighted average for all of the work to be done.

Geupel’s bid took into account varying costs associated with the relative difficulty of the different kinds of work to be performed for the project. For example, the estimated cost of the majority of the excavation work, referred to as “mass excavation,” was $1.61 per cubic yard. A limited but more costly type of excavation work, referred to as “transverse benching,” was factored at $2.67 per cubic yard. As a result, the average unit price quoted in the bid sheet amounted to $1.75 per cubic yard.

As the project progressed, Geupel was directed by the Cabinet to perform additional excavation. The extra work included the excavation and removal of 13,428 cubic yards of material beneath the roadway grade originally fixed by the Cabinet (“undercutting”) and an additional 99,072 cubic yards of transverse benching (the “benching”). According to Geupel, the unit costs for these two types of additional work greatly exceeded the $1.75 unit price originally quoted by Geupel in its bid for the project. Accordingly, Geupel sought payment for this additional excavation work at a rate considerably higher than the contract price. It submitted two claims to the Cabinet’s Contracts Claims Committee for review.

Composed of seven engineers from the Division of Construction, the Cabinet’s committee reviewed information relative to the claim and discussed the issues involved. After its deliberations, it voted to deny Geupel’s claims. Pursuant to 603 KAR 1 2:015, Section 10, Geupel then pressed its claims against the Cabinet through the complete administrative process provided for resolving road-related contract disputes between the Cabinet and contractors.

603 KAR 2:015, Section 10, specifically provides “for proceedings in accordance with the provision of KRS 2 Chapter 13B.” KRS Chapters 13A and 13B constitute Kentucky’s version of a model act referred to as the “Administrative Procedure Act.”

Consistent with the requirements of KRS Chapter 13B, Geupel’s case was assigned to a hearing officer from the Office of the Attorney General, Division of Administrative Hearings. An extensive administrative hearing was conducted on March 19-20, 1997. It was a full-blown, due process type hearing in which Geupel was allowed to complete discovery, to confront and cross-examine adverse witnesses, and to offer numerous documents and live testimony into evidence before an impartial decision-maker.

On November 10, 1997, the hearing officer rendered his Findings of Fact, Conclusions of Law, and a Recommended Order. The hearing officer concluded that Geupel was not entitled to compensation exceeding the original unit contract rate of $1.75 for the additional work performed as part of the project and recommended that Geu-pel’s claims for payment at a rate exceeding the unit contract price be denied. *46 Geupel’s exceptions followed. On January 13, 1998, the Secretary of the Cabinet entered a final order denying Geupel’s claims.

The Cabinet’s regulations specify that “[t]he contractor shall have appeal rights pursuant to KRS Chapter 13B.” 603 KAR 2:015, Section 10(6). KRS 13B.140 provides that all final orders of an agency shall be subject to judicial review. It directs an aggrieved party to institute an appeal of an agency’s final order by filing a petition for review in the appropriate circuit court within thirty days after the final order is mailed or delivered to the parties. Provision is also made for the transmittal of the official administrative record.

KRS 13B.150 directs the circuit court to review the final order without a jury and limits the scope of review to the record. The parties’ oral arguments and written briefs may be considered. The circuit court is not at liberty to substitute its judgment for that of the agency as to the weight of the evidence on questions of fact, but it may reverse the order “in whole or in part” and remand the case for further proceedings if it finds that the agency’s final order is:

(a) In violation of constitutional or statutory provisions;
(b) In excess of the statutory authority of the agency;
(c) Without support of substantial evidence on the whole record;
(d) Arbitrary, capricious, or characterized by abuse of discretion;
(e) Based on an ex-parte communication which substantially prejudiced the rights of any party and likely affected the outcome of the hearing;
(f) Prejudiced by a failure of the person conducting a proceeding to be disqualified pursuant to KRS 13B.040(2); or
(g)Deficient as otherwise provided by law.

Id. An aggrieved party may then appeal the final judgment to this court in accordance with the Kentucky Rules of Civil Procedure. KRS 13B.160.

Instead of filing a petition for review of the Cabinet’s final order, Geupel filed a civil action in the Franklin Circuit Court. In its complaint, Geupel claimed to be entitled to $132,901.00 for the additional undercut work and $91,146.00 for the additional transverse benching required for completion of the project. Geupel alleged that jurisdiction and venue were based on the provisions of KRS Chapter 45A.

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Bluebook (online)
136 S.W.3d 43, 2003 Ky. App. LEXIS 39, 2003 WL 354404, Counsel Stack Legal Research, https://law.counselstack.com/opinion/geupel-construction-co-v-commonwealth-transportation-cabinet-kyctapp-2003.