STATE, DEPT. OF TRANSP. v. Cone Bros. Contracting Co.

364 So. 2d 482
CourtDistrict Court of Appeal of Florida
DecidedNovember 15, 1978
Docket77-1006
StatusPublished
Cited by3 cases

This text of 364 So. 2d 482 (STATE, DEPT. OF TRANSP. v. Cone Bros. Contracting Co.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
STATE, DEPT. OF TRANSP. v. Cone Bros. Contracting Co., 364 So. 2d 482 (Fla. Ct. App. 1978).

Opinion

364 So.2d 482 (1978)

STATE of Florida, DEPARTMENT OF TRANSPORTATION and Thomas E. Drawdy, Appellants,
v.
CONE BROTHERS CONTRACTING COMPANY, Appellee.

No. 77-1006.

District Court of Appeal of Florida, Second District.

September 6, 1978.
As Modified On Denial of Rehearing November 15, 1978.

*483 Jerrold K. Phillips, Tallahassee, Fletcher N. Baldwin, Gainesville, and H. Reynolds Sampson, Tallahassee, for appellants.

J. Rex Farrior, Jr., and Joseph G. Thresher of Shackleford, Farrior, Stallings & Evans, Tampa, for appellee.

OTT, Judge.

The case below and this appeal involves the validity of the legislature's retroactive amendment (Ch. 76-174, Laws of Florida) of a prior enactment (Ch. 74-262, Laws of Florida). The lower court ruled that the 1976 amendment was inapplicable. We disagree.

In 1974, the energy crisis caused petroleum prices to rapidly increase. This created a potentially catastrophic situation for road contractors, or their subcontractors and suppliers, who employed bituminous materials (asphalt) in the performance of binding road contracts. The Florida Legislature responded by enacting Section 337.143, Florida Statutes (1974) (Ch. 74-262, Laws of Florida). By this legislation the Department of Transportation (DOT) was directed to adjust the unit price of bituminous materials used in certain road construction contracts. The act was directed to apply to asphalt used after December 1, 1973 for use in "contract(s) for roadway construction for which bids were received ... prior to April 1, 1974... ." Thus, the legislation was directed at contracts for which bids had been accepted but where the contract work had either not commenced or was incomplete.

The preamble to the 1974 act detailed the need for and purpose of the legislation:

WHEREAS, the price of bituminous material has substantially increased during the past months due partly to the worldwide energy crisis, and the situation now and in the future appears to be very volatile and unstable, and WHEREAS, a contractor has no control over the rapidly increasing prices of bituminous material after he has successfully bid on a road construction project with the Department of Transportation, and after entering into binding contracts for the supply of bituminous material, and WHEREAS, the Department of Transportation has recognized this situation by adopting a specification providing for adjustment of the bid unit price for bituminous material which is applicable to contracts on which bids are received after April 1, 1974. The price adjustment activates upon a rise in the current asphalt price index ... applicable at the time bids were received for a project, and WHEREAS, contractors on projects for which bids were received by the Department of Transportation prior to April 1, 1974 will suffer irreparable economic harm and injury in performing their contracts upon the failure of the Legislature to enact this law, ...

Part (E) of the 1974 act authorized the DOT to extend an offer to all contractors with uncompleted contracts entered into prior to April 1, 1974 to amend the affected contracts so that asphalt prices would be adjusted on the basis of market prices instead of the fixed bid prices during the applicable period. Part (E) provided:

No adjustment shall be made to the contract unit price for bituminous material on any applicable contract unless a contractor agrees to the application of this adjustment for all applicable contracts he holds with the department. The department shall notify each contractor in writing by registered mail of his right to have this act apply to his contracts with the department. If a contractor fails to respond within 15 calendar days of such notice, no adjustment provided for in this act shall be made to any applicable contract.

The DOT, by letter of August 29, 1974, notified the appellee contractor of its "rights to have this act to apply to applicable contracts with the Department." On September 12, 1974 appellee returned (signed) a Letter of Agreement to Participate.

*484 Part (A) of the 1974 act set out the formula by which adjustments would be made. Part (A) provided as follows:

The adjustment shall be calculated separately for each month during which bituminous material is incorporated into a project, using the following formula:
Pa = Id + 5 cents where:
Pa = Adjusted unit price for bituminous material; and
Id = Department's Asphalt Price Index in effect during the month in which the material is incorporated into the project. The Department of Transportation shall determine the Asphalt Price Index by averaging quotations in effect on the first day of each month at terminals which could reasonably be expected to furnish bituminous materials to road construction projects in the State [of Florida].

With very minor exceptions, the Asphalt Price Index rose steadily from December 1973 through July 1975. The record reflects the following figures:

      MONTH                           INDEX
  December, 1973                     0.1591
  January, 1974                      0.1958
  February, 1974                     0.2192
  March, 1974                        0.2590
  April, 1974                        0.2650
  May, 1974                          0.2776
  June, 1974                         0.2787
  July, 1974                         0.2875
  August, 1974                       0.2875
  September, 1974                    0.2889
  January, 1975                      0.2928
  February, 1975                     0.2929
  March, 1975                        0.2933
  April, 1975                        0.2988
  May, 1975                          0.2969
  June, 1975                         0.2980
  July, 1975                         0.3029

In mid-1975, the DOT realized that certain road contractors were making windfall profits under the provisions of the 1974 act. Accordingly, the DOT promulgated emergency regulations in July, September and October of 1975. The DOT contacted appellee and other contractors by letter asking them to participate under these emergency regulations. The appellee declined to do so, stating in its letter of July 28, 1975 that "[w]e hereby agree to the application of bituminous unit price adjustments, but only as defined by [the 1974 act]." The DOT then declined to make further payments under the 1974 act and appellee brought this action. The attempt of the DOT to correct this deficiency of the 1974 act by the promulgation of emergency rules was successfully challenged. See State Department of Transportation v. Pan American Construction Company, 338 So.2d 1291 (Fla. 1st DCA 1976).

The legislature acted in June 1976 with Ch. 76-174 amending Section 337.143, Florida Statutes.[1] Part (1) of the amendment stated as follows:

Recognizing that the unprecedented increase in the cost of petroleum products seriously affects a vital segment of the construction industry, legislative intent was, and is, to protect, by this act, said industry from irreparable economic harm and injury. It was not, and is not, legislative intent that any single contractor or group of contractors should receive excess or windfall profits to the detriment of the taxpayers, and the department shall take immediate steps to recoup any excess profits made since July 1, 1974. [Emphasis supplied.]

The method of calculation of the recoupment, etc. was set out in Parts (2)-(7) of the 1976 amendment. Part (3) (b) added the *485

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