Plowden Construction v. Richland-Lexington Riverbanks Park District

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.

Appeal From Lexington County

Alexander S. Macaulay, Circuit Court Judge

Unpublished Opinion No. 2008-UP-207

Submitted March 4, 2008 – Filed March 25,
2008   

AFFIRMED

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.

[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.