Plowden Construction v. Richland-Lexington Riverbanks Park District

• Court: Court of Appeals of South Carolina
• Decided: March 28, 2008
• Docket: 2008-UP-207
• Status: Unpublished

Opinion

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Plowden Construction Co., Respondent-Appellant,

v.

Richland-Lexington Riverbanks Park District and The LPA Group Incorporated, Appellants-Respondents.

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Appeal From Lexington County
Alexander S. Macaulay, Circuit Court Judge

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Unpublished Opinion No. 2008-UP-207
Submitted March 4, 2008 – Filed March 25, 2008   

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AFFIRMED

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Daniel T. Brailsford and Charles H. McDonald, of Columbia, for Appellants-Respondents.

Thomas Elihue Dudley, III, of Greenville, for Respondent-Appellant.

PER CURIAM:  This case arises out of a construction contract between Richland-Lexington Riverbanks Park District (“Riverbanks”) and Plowden Construction Company, Inc. (“Plowden”) for Plowden to build a road for Riverbanks.  During construction, Plowden encountered excess rock and brought the underlying action against Riverbanks and the project engineer, the LPA Group, Inc., (“LPA”).  Riverbanks and LPA appeal the trial court’s ruling for Plowden, and Plowden cross-appeals for prejudgment interest on its award.  We affirm.[1]

1.  Riverbanks hired LPA to assist with the construction of a new entrance from Highway 378 to the Riverbanks Zoo and Botanical Gardens in Columbia.  LPA designed the entrance, prepared bid packages and contract documents for prospective contractors, and acted as Riverbanks’ representative during construction.  Initially, the bid packages were “unclassified” with regard to the amount of rock excavation that would be encountered on the job.[2]  However, the packages were changed to reflect an estimate of 1,000 cubic yards of rock to be excavated.  At a pre-bid meeting, potential bidders were assured by LPA that if the encountered rock became a huge problem, they were “more than willing to worth with [the bidders].”

Plowden was ultimately awarded the job.  Soon after construction began, Plowden encountered bedrock, which required blasting in order to be removed.  Plowden proceeded with the work, but eventually the amount and size of rocks being excavated began to interfere with the project.  The rocks became too large and numerous to leave at the construction site, and Plowden finally halted construction on the project.  This resulted in a delay while a location to deposit the rocks was sought by LPA.

Pursuant to a provision in the contract, Plowden sought a change in the contract price to reflect the quality and quantity of rock removal associated with the project.  The project manager denied the requested changes finding the contract indicated quantities were approximate, Plowden was responsible for examining the physical conditions of the property before bidding, and the work stoppage was unnecessary.  Plowden brought the underlying action against Riverbanks and LPA.  The trial court found Riverbanks and LPA jointly and severally liable for $225,270.17, the cost of the additional work, and $66,000 in delay costs.  Riverbanks and LPA appeal the trial court’s ruling, and Plowden cross-appealed for prejudgment interest.

2.  LPA argues the trial court erred in finding LPA liable when LPA lacked privity in the contract between Riverbanks and Plowden and LPA followed the standard of care for design professionals.  The trial court found LPA liable for breaching its duty to follow the standard of care of design professionals.  In Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones &  Goulding, Inc., 320 S.C. 49, 55, 463 S.E.2d 85, 88-89 (1995), the South Carolina Supreme Court held an engineer who designed the project and supervised construction owed a duty to the contractor not to design or to supervise the project negligently because design professionals owe a professional duty, which is separate from contractual duties.  Therefore, LPA’s liability is grounded in negligence, not contract principles.  Accordingly, LPA’s privity to Riverbanks and Plowden’s contract is irrelevant.

Next, we turn to whether evidence supports the trial court’s finding LPA violated its professional duty.  “In an action at law, when a case is tried without a jury, the trial court’s findings of fact will be upheld on appeal when they are reasonably supported by the evidence.”  Butler Contracting, Inc. v. Court St., LLC, 369 S.C. 121, 127, 631 S.E.2d 252, 255 (2006).  “Where professional negligence is alleged, expert testimony is usually necessary to establish both the standard of care and the professional’s deviation from that standard, unless the subject matter is within the area of common knowledge and experience of the layman so that no special learning is needed to evaluate the professional’s conduct.”  City of York v. Turner-Murphy Co., Inc., 317 S.C. 194, 196, 452 S.E.2d 615, 617 (Ct. App. 1994).

At trial, Herman Snyder, qualified as an expert in road construction in South Carolina, testified it is within industry standards for a contractor to rely on geotechnical information when preparing bids and it is the designer’s responsibility to reflect accurately the anticipated scope of work in its report to assist the bidder.

Additionally, Carroll Crowther was qualified as an expert in geotechnical engineering and construction consulting.  Crowther testified the normal practice in the construction industry is to rely on geotechnical reports when computing bids.  Crowther further testified the method used by LPA to produce its report was superficial and required a “leap of faith” for the report to provide information regarding the location’s rock profile.  Lastly, Crowther testified LPA’s actions only minimally reduced the risk of a contractor encountering unknown situations.

Snyder and Crowther established a basis for the factfinder to conclude that the standard in the industry is for a design professional to provide reasonably accurate estimates, because it is the norm for bidders to rely on the provided information.  Furthermore, Crowther’s testimony clearly intimates that LPA was negligent in providing bidders with only superficial information about the rock associated with the project.  Consequently, the record supports the trial court’s finding of professional negligence on the part of LPA.

3.  Riverbanks and LPA allege Plowden expressly or primary impliedly assumed the risk the unit price for rock excavation was inadequate.  “Express assumption of risk applies when the parties expressly agree in advance, either in writing or orally, that the plaintiff will relieve the defendant of his or her legal duty toward the plaintiff.”  Davenport v. Cotton Hope Plantation Horizontal Prop. Regime, 333 S.C. 71, 79, 508 S.E.2d 565, 569 (1998).  Whereas, primary implied assumption of risk focuses on the defendant’s duty of care and whether the plaintiff impliedly assumed risks inherent in the specific activity.  Id. at 81, 508 S.E.2d at 570.

Riverbanks and LPA point to areas in the contract where the bid schedule’s quantity of work is described as approximate and the contractor represents to have studied all reports on the site.  Section 11.9.3 in the contract undermines Riverbanks and LPA’s argument as it provides:

Where the quantity of any item of Unit Price Work performed by CONTRACTOR differs materially and significantly from the estimated quantity of such item indicated in the Agreement and there is no corresponding adjustment with respect to any other item of Work and if CONTRACTOR believes the CONTRACTOR has incurred additional expense as a result thereof, CONTRACTOR may make a claim for an increase in the Contract Price in accordance with Article 11 if the parties are unable to agree as to the amount of any such increase.

(emphasis added).  Therefore, any risk Plowden assumed did not rise to the level of assuming responsibility for a rock quantity materially and significantly differing from the provided estimate.  Given the drastic difference between the estimated quantity of rock and the amount Plowden encountered, the trial court’s reliance on section 11.9.3 was clearly justified.  Further, as discussed above, Plowden established LPA owed Plowden a duty of care.  Accordingly, there is evidence to support the trial court’s rejection of this defense.

4.  Riverbanks and LPA appeal the trial court’s finding that the no-damage-for-delay provision in the contract was not enforceable.  “Generally, no-damage-for-delay provisions are valid and enforceable so long as they meet ordinary rules governing the validity of contracts.”  U.S. for Use and Benefit of Williams Elec. Co., Inc. v. Metric Constructors, Inc., 325 S.C. 129, 132, 480 S.E.2d 447, 448 (1997).  South Carolina recognizes several exceptions to this general rule, including “delay caused by fraud, misrepresentation, or other bad faith; active interference; delay which amounts to an abandonment of the contract; and gross negligence.”  Id. at 137, 480 S.E.2d at 451.

The trial court found the no-damage-for-delay clause unenforceable due to active interference and gross negligence by LPA, while acting as Riverbanks’ representative, in failing to locate a site to move the excess rocks.  In August 2000, Plowden informed LPA the rock estimation had already doubled and requested LPA provide a location where Plowden could deposit the excess rock.  The record includes a chronology and many letters where Plowden repeatedly asked for a rock disposal location because the lack of such a site slowed the project’s progress and eventually caused construction to cease.  During this time, LPA repeatedly claimed to be working on finding a site.  LPA took approximately three months to locate a site.

Because there is evidence in the record which supports the trial court’s decision, we are constrained by our standard of review to affirm the trial court’s holding that the no-damage-for-delay clause was not enforceable.

5.  Riverbanks and LPA next argue the trial court erred in calculating the damages awarded Plowden because of lack of proof of damages and the damages exceeded the original unit price for the non-excessive quantities of rock.  Plowden provided evidence of the additional costs created, which the trial court adopted less the money previously paid Plowden.  This evidence reasonably supports the trial court’s award.  As previously discussed, section 11.9.3 of the contract provided for Plowden to seek an increase in the contract price if “the quantity of any item of Unit Price Work performed by CONTRACTOR differs materially and significantly from the estimated quantity of such item indicated in the Agreement.”  Plowden established the quantity of rock differed materially and significantly warranting adjusted compensation.  Thus, no error occurred when the trial court awarded Plowden $225,270.17 for the cost of the additional work.

6.  Finally, Plowden cross-appeals seeking prejudgment interest.  “[P]rejudgment interest is allowed on a claim of liquidated damages; i.e., the sum is certain or capable of being reduced to certainty based on a mathematical calculation previously agreed to by the parties. Prejudgment interest is not allowed on an unliquidated claim in the absence of an agreement or statute.”  Butler Contracting, Inc. v. Court Street, LLC, 369 S.C. 121, 133, 631 S.E.2d 252, 258-59 (2006)).  Plowden seeks prejudgment interest on the increased cost of work.  As discussed above, the contract set forth a process for Plowden to recover the increased cost if the amount of work materially and significantly differed from the estimated work.  This allowance of an adjustment in contract price speaks to the uncertainty regarding the nature and extent of work contemplated by the contract.  See Vaughn Dev., Inc. v. Westvaco Dev. Corp., 372 S.C. 576, 580-81, 642 S.E.2d 757, 760-61 (Ct. App. 2007) (declining to award prejudgment interest where the extent of work on sewer installation or how the work would be accomplished was not dictated by the terms of the contract).  The contract did not set forth a formula to determine such an adjustment.  Therefore, Plowden’s damages were not capable of being reduced to certainty until the determination by the trial court.  The trial court properly declined to award prejudgment interest.

7.  We conclude the record reasonably supports the trial court’s findings LPA breached its standard of care as a design professional; Plowden did not assume the risk of the rock removal’s increased costs; the no-damage-for-delay provision was unenforceable; and the damage award was proper.  Further, the trial court properly declined to award prejudgment interest.  Accordingly, the judgment of the trial court is

 AFFIRMED.

HUFF, KITTREDGE, and WILLIAMS, JJ., concur.

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[1]  We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] Unclassified generally means the contractor is responsible for excavating whatever rock is encountered.