L-J, Inc. v. South Carolina State Highway Department

242 S.E.2d 656, 270 S.C. 413, 1978 S.C. LEXIS 519
CourtSupreme Court of South Carolina
DecidedJanuary 10, 1978
Docket20576
StatusPublished
Cited by6 cases

This text of 242 S.E.2d 656 (L-J, Inc. v. South Carolina State Highway Department) is published on Counsel Stack Legal Research, covering Supreme Court of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
L-J, Inc. v. South Carolina State Highway Department, 242 S.E.2d 656, 270 S.C. 413, 1978 S.C. LEXIS 519 (S.C. 1978).

Opinions

Littlejohn, Justice:

The plaintiffs-respondents, L-J, Inc. and Eastern Contractors, Inc. (Contractors) are experienced road-building contractors. The two corporations undertook the project here involved as a joint venture; they are owned and/or controlled by Grady Jordan and Barney Jordan, who have built roads for the South Carolina Highway Department for more than 30 years. The defendant-appellant, South Carolina State Highway Department (Department) is a division of State Government charged with the duty of building and maintaining highways.

The contractors successfully bid, in the amount of $3,777,-000.00,1 a job to relocate and construct approximately three and one-half miles of mountainous four-lane roadway on U. S. Highway 25 in Greenville County, ending at the North Carolina line. The road is described as being similar to an interstate highway. The project has been completed and the Contractors have been paid $3,922,000.00, which includes adjustments not in contest.

[418]*418This action was brought by the Contractors to collect $3,106,000.00, plus interest, alleged to be due in addition to the amount already collected. The verdict prayed for includes expenses incurred over and above the bid price, plus $582,000.00 profit and $262,000.00 financing charges incurred. The complaint contains five causes of action based on alleged (1) mutual mistake, (2) false representations, (3) breach of implied warranty, (4) unjust enrichment, and (5) denial of due process of law and equal protection of the law as provided in the Constitutions.

The answer amounts to a general denial, setting forth that the Contractors have been fully paid, and includes a counterclaim for rock taken from the project by the Contractors and sold to third parties.

The case was tried before the judge without a jury. He entered'a judgment in favor of the Contractors in the amount of $409,000.00, plus simple interest at the rate of 6% from March 1, 1973. This amount represented compensation for the excavation and removal of 524,000 cubic yards of solid rock, at the rate of 78‡ per cubic yard. The Department has appealed.

On August 26, 1968, the Department advertised the project for bids to be opened on September 17, 1968. The Contractors requested and received bid material, which included detailed cross-sections, boring scroll, and standard specifications of the Department. When the bids were opened on September 17, 1968, the Contractors, were discovered to be the low bidder by approximately $800,000.00. They were disturbed by the fact that their bid was so much lower than the next lowest bid, and proceeded to discuss the matter with S. N. Pearman, the Chief Highway Commissioner, with it in view ,to forfeit their bidder’s bond in the amount of approximately $180,000.00. They decided against this procedure because of the strained relationship it might create with the Department, with which these contractors did considerable business.

[419]*419Being still reluctant to sign the contract, the Contractors, on September 18, 1968, employed Wilbur Smith and Associates, a consulting engineering firm, and requested that an estimate be made of the quantity of rock required to be removed in the construction of the project.

The contract called for the removal of some 8 million cubic yards of unclassified material. Unclassified material or excavation is adequately defined as anything that lies on or under the ground within the geographical limits defined by the contract, whether it is sand, dirt, earth, rock, boulders, or layers of granite gneiss. The removal of rock is far more expensive than removal of dirt, clay, sand, etc., which is usually referred to as common excavation. The Contractors had bid on the basis of their own estimation that 547,000 cubic yards of the unclassified material was rock and that the remainder was common excavation. The Contractors had figured their bid on the basis of $1.12 per cubic yard for the removal of rock, and 26‡ per cubic yard for the removal of common excavation. Fear that there might be more rock than estimated brought about the Contractors’ dilemma. On September 30, 1968, Wilbur Smith and Associates, by letter addressed to the Contractors, estimated that 682,000 cubic yards of rock would have to be removed. On October 10, 1968, the parties formally executed the contract and thereafter the Contractors entered upon the job and completed the project.

It developed that there was considerably more rock than had been estimated by the Contractors or Wilbur Smith and Associates. The Contractors contend that there were approximately 2,800,000 cubic yards of solid rock, but the judge rejected this figure, holding that it was . . . “based purely on an estimate and is entirely too conjectural and speculative on which to base an award of damages for the [Contractors].”

The gist of the lower court ruling is that the Department should pay for the removal of 524,000 cubic yards of solid rock not anticipated by the Contractors.

[420]*420An understanding of the contract, out of which the controversy arises, is necessary to a discussion of the issue.

The proposal inviting bids stipulates that the Contractors have made an examination . . . “of the Specifications and Contract Form, including the Special Provisions contained herein, also of the Plans, and of the site of the work, and propose to furnish all necessary machinery, equipment, tools, labor and other means of construction, and to furnish all materials specified, in the manner and at the time prescribed, and understand that the quantities of work shown herein are approximately only and are subject to increase or decrease, and further understand that all quantities of work, whether increased or decreased, are to be performed at the following unit prices, except in cases where these Specifications provide for payment under a Supplemental Agreement or on a Force Account basis:....” (Emphasis added.)

The proposal form then proceeds to set forth a “Schedule of Prices” indicating (1) the approximate quantities or work and/or services required by the Department, (2) item with unit price, (3) unit price paid in dollars and cents, and (4) amount bid in dollars and cents; (2), (3) and (4) are filled in by the bidder. There are 61 Schedules of Prices. The largest Schedule of Prices and the one which brings about the controversy for the court, is one which calls for the removal of approximately 8,067,924 “cubic yards of unclassified excavation.” The unit price bid was 34^ per cubic yard, for a total of $1,743,094.16.

The proposal further stipulates that the successful bidder shall ... “do all Extra Work which may be required to complete the work contemplated, at unit prices or lump sums, to be agreed upon in writing prior to starting such extra work, or if such prices or sums cannot be agreed upon, to perform such work on a Force Account basis, as provided for in the Specifications.”

[421]*421The Department’s Standard Specifications, which are a part of the contract, read in relevant parts as follows:

“1.13 Contract. . . .

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L-J, Inc. v. South Carolina State Highway Department
242 S.E.2d 656 (Supreme Court of South Carolina, 1978)

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Bluebook (online)
242 S.E.2d 656, 270 S.C. 413, 1978 S.C. LEXIS 519, Counsel Stack Legal Research, https://law.counselstack.com/opinion/l-j-inc-v-south-carolina-state-highway-department-sc-1978.