Zontelli & Sons, Inc. v. City of Nashwauk

353 N.W.2d 600, 1984 Minn. App. LEXIS 3351
CourtCourt of Appeals of Minnesota
DecidedJuly 24, 1984
DocketC1-83-1933, C2-84-218
StatusPublished
Cited by5 cases

This text of 353 N.W.2d 600 (Zontelli & Sons, Inc. v. City of Nashwauk) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zontelli & Sons, Inc. v. City of Nashwauk, 353 N.W.2d 600, 1984 Minn. App. LEXIS 3351 (Mich. Ct. App. 1984).

Opinion

OPINION

POPOVICH, Chief Judge.

This is an appeal of the judgment, amended judgment and post trial order involving a sewer construction contract between the City of Nashwauk (City) and Zontelli & Sons, Inc. (Zontelli). Zontelli was awarded the contract as the lowest responsible bidder. The contract was a unit price contract based on plans and specifications prepared by Robert R. Wallace & Associates (Wallace) engineering firm.

Certain aspects of the actual construction of the system were substantially different than the estimates in the plans and specifications. When the parties could not agree on the appropriate compensation for the system as constructed, Zontelli commenced an action against both the City and Wallace. Zontelli’s complaint recites four causes of action, two in tort and two in contract. The trial court declared the remedy provisions of the contract inadequate, unconscionable, and against public policy in its original judgment, dated September 8, 1983. The court applied comparative fault principles and apportioned fault among Zontelli, the City, and Wallace.

Wallace filed a post trial motion for amended findings of fact or a new trial. Alternatively, Wallace sought an order permitting introduction of evidence regarding the commercial reasonableness of the remedy provisions of the contract. The City neither joined in Wallace’s motion nor filed its own post trial motion. The trial court denied Wallace’s motion by order of November 15, 1983. The trial court did amend the judgment to give both the City of Wallace a right of contribution for any payment made to Zontelli in excess of their respective percentages of fault.

Wallace filed a notice of appeal on November 25, 1983. Zontelli followed with a notice of review on December 12, 1983. The City filed a notice of appeal on January 31, 1984. Those portions of the City’s appeal not modified in the amended judgment were dismissed as untimely on March 5, 1984. Execution of our March 5 order was stayed, however, by our March 28, 1984 order.

FACTS

As early as 1977, the City contacted Wallace concerning constructing a storm sewer system. Wallace prepared a preliminary study and cost estimate for the project. *602 The study was presented to and funded by the Iron Range Resources and Rehabilitation Board.

On May 2, 1978, the City and Wallace signed an agreement for Wallace’s engineering services. Wallace agreed to design the project and provide sufficient plans and specifications for the project. Bruce Wallace had primary design responsibility although he was not a registered professional engineer at that time. He and a crew inspected and surveyed the project area in the fall of 1978. They visited every intersection of the project but Bruce did not recall seeing any concrete under the bituminous roadways. Wallace did not make any soil borings or conduct other subsurface testing either. A dispute exists over whether Wallace contacted the Mayor or other council members who were lifetime residents of the City. Wallace claims to have contacted street superintendent Stu-par for maps of the existing sewer system and the makeup of the road surfaces. Stu-par, however, testified that no one from Wallace ever asked him about either the concrete or the subsoil conditions underlying the relevant roadways. Stupar further testified he knew about the concrete underlying Highway 65 and Second Avenue and that his experience revealed a lot of muskeg in the soil.

The plans and specifications were delivered to the council for review prior to the invitation for bids. No changes were made.

On January 16, 1979, the City published a bid invitation. The invitation stated a copy of the plans and specifications could be obtained for a fee from Wallace. Dave Zontelli, President of Zontelli, obtained a copy of the bid specifications and read them. He and Frank Kingsley, a Zontelli employee, then made a visual inspection of the project area. Subsequent to this initial inspection, Kingsley took a drilling rig to the project area and took soil borings in three different locations. Two borings were made in areas where the sewer pipe was to be deeper than average. The third boring was in a low lying area of the project. All three test bores revealed clay as the subsurface soil. No inquiry of City officials nor examination of maps of the City was made, however.

Kingsley, Dave Zontelli and another Zon-telli employee prepared bids independently of each other. The three bids were then compared and a final bid developed. The final bid was computed on a crew and equipment cost per day basis and included the price quotations of the subcontractors Zontelli intended to use.

The City Council opened the bids on February 5, 1979. The bids ranged from Zon-telli’s $335,944.00 to $503,998.30. At least part of the reason for Zontelli’s low bid was the particularly favorable subcontract Zontelli had negotiated for the bituminous over concrete restoration. Two of the other seven bids submitted were also under $400,000.00. Wallace itself had estimated the construction cost at under $400,000.00. On or about August 8, 1978, Wallace estimated the construction cost at $304,500.00. Dave Zontelli testified that, at the bid letting, Wallace stated their cost estimate was $359,000. Zontelli was not sure whether this figure included Wallace’s fee.

The project area included a stretch of State Highway 65. After Zontelli was awarded the contract, Wallace applied for the permit necessary for construction on state property. The permit was granted, but included time and work restrictions. The sewer work had to be completed prior to the Highway Department’s planned resurfacing of the highway. Additionally, work could be done on only one intersection at a time, and work sites had to be cleaned up each night.

Zontelli had to start the sewer construction at Highway 65 because of the time limitations of the construction permit. Michael Windorski, crew foreman for Zontelli, testified he objected to starting construction at Highway 65 because it was contrary to the usual construction plan of starting at the low side and bringing the grade up. He claimed that starting at Highway 65 caused drainage back down grade which hampered construction of the down grade *603 area. He also blamed the difficulty in joining pipes on performing the work out of the preferred sequence.

On the third day of work, approximately June 8, 1979, Zontelli unexpectedly encountered concrete beneath the bituminous surface of Highway 65. The concrete ranged from eight to fourteen inches thick and portions were reinforced with steel bars. The plans and specifications did not indicate any concrete beneath Highway 65.

The construction contract provided that in the event of changes in the work or unexpected surface conditions, Zontelli was to provide immediate written notice to the City or Wallace respectively. While Wallace did have an inspector who was reportedly on the job daily and Bruce Wallace said he visited the construction site at least once a week, Zontelli sent no written notice of either the unexpected concrete or the unsuitable soil material until July 23, 1979.

As construction proceeded, Zontelli found concrete beneath bituminous in other unexpected areas. The bid plans indicated there was concrete under one street, including two intersections.

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Bluebook (online)
353 N.W.2d 600, 1984 Minn. App. LEXIS 3351, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zontelli-sons-inc-v-city-of-nashwauk-minnctapp-1984.