OPINION ISSUED JANUARY 4, 1991

L. G. DEFELICE, INC.
VS.
DIVISION OF HIGHWAYS

(CC-85-388)

Jack M. Quartararo, Michael T. Chaney, William W. Lanigan, Stanley E. Deutsch, Michael J. Delgiudice, and Timbera Carte, Attorneys at Law, for claimant.
Robert F. Bible, Attorney at Law, for respondent.

STEPTOE, JUDGE:

L. G. DeFelice, Inc., claimant contractor, entered into a contract with respondent for the construction of a section of the West Virginia Turnpike also known as Kanawha County Project No.ID-77-2 (37) 71. The contract was awarded to claimant L. G. DeFelice, Inc. (hereinafter to be referred to as DeFelice) on August 13, 1979, for upgrading a section of the West Virginia Turnpike from the existing two lanes to a four-lane highway. The project involved heavy excavation, the construction of two bridges, and concrete payment. The construction area was mountainous on the north end, involving blasting operations for excavation, while the south end of the project consisted of fill areas. The project had a considerable amount of excess excavation which had to be wasted.

The claim has seven causes of action. The first four causes of action are on behalf of the prime contractor, DeFelice. The fifth cause is on behalf of the subcontractor Atlas Machine and Iron Works, Inc. The sixth cause of action is on behalf of the subcontractor Norther Systems, Inc. The seventh cause of action is on behalf of the subcontractor the Vaughn Building Co., which cause of action was withdrawn and dismissed by the Court at the beginning of the hearing of this claim. The total amount of the claim as brought by DeFelice is in the amount of

$539,238.89. The Court has determined that each cause of action shall be considered and decided separately.

FIRST CAUSE OF ACTION

This claim is for interest on the final payment by respondent. Both parties have agreed that the amount of $976.14 is due and owing to DeFelice pursuant to West Virginia Code Chapter 14, Article 3, Section 1. The Court accordingly makes an award to DeFelice in the amount of $976.14.

SECOND CAUSE OF ACTION

This claim is for delay expense incurred by DeFelice due to the alleged interference with and obstruction of its normal construction operations, by respondent's having ordered a change in claimant's blasting schedules.

Site preparation involved the blasting and removal of large quantities of rock and surface and sub-surface material in the northern part of the project area, and transporting it to the southern part of the project area, where it was to be used as fill material.

It appears from the evidence that DeFelice devised a blasting sequence involving three shots per working day, with intervals of about three hours between shots. Such an interval was required for removing random rock falling on the existing turnpike, setting up and taking down temporary barricades, loading and removal of the blasted material, and, principally, for moving blasting equipment from one site, after use, to the next site, and setting it up for the next blast, all in difficult terrain. The system was efficient, and no criticism of it appears to have been made by the respondent.

It further appears from the evidence that, on or about the 22nd day of April, 1980, the respondent, apparently at the insistence of the West Virginia Turnpike Commission which felt that traffic on the existing two-lane turnpike was not moving as briskly as it should, ordered DeFelice to conduct blasting only on even hours of the working day; that DeFelice could not prepare for a succeeding blast in a two-hour period, and was forced to blast at four-hour intervals, and consequently lost production; that by October of 1980 the contractor was some 13% behind in its projected blasting and site preparation schedule; consequently it elected, in order to get back on schedule, to continue blasting and hauling operations during the winter months of December, 1980, and January, February and March of 1981, a period during which all construction operations were usually suspended.

DeFelice contends that respondent's unilateral change of its blasting procedures on or about April 22, 1980, caused it, DeFelice, to be delayed in its performance, and that the delay resulted in extra expense to DeFelice in the amount of $86,356.05. The respondent, the Division of Highways, correctly points out that the respondent had a contractual right to take measures to protect traffic on the existing Turnpike and that the order revising the timing of explosions was a lawful exercise of such right for the protection of the Turnpike, and its revenues, and for the convenience of its customers. Be that as it may, the respondent, in exercising its right, made it more expensive for the contractor to perform its duties under the contract.

It is a necessary implication of every contract with promises binding each party that neither will interfere to prevent performance by the other.

17 Am.Jur.2d 899, Contracts §442.

A building contractor may recover damages sustained by him resulting from unreasonable delay on the part of the owner in permitting him to perform his contract.

See Atlantic Coast Line R. Co. v. A. M. Walkup Co.,
132 Va. 386, 112 S.E. 663 (1922)

In a contract action where one party has been wronged and has a number of remedies, he may select the most efficient one.

Cochran v. Ollis Creek Coal Company, 157 W.Va. 931,
206 S.E.2d 410 (1974).

The DeFelice claim consists of:

$51,044.20 for labor,
$ 8,750.48 for equipment expenses,
$10,394.73 for materials used, and,
$7,166.64 for a total of $86,356.05.

The Court finds from a preponderance of the evidence that respondent unreasonably delayed DeFelice in the performance of its duties specified in their contract, and that DeFelice is entitled to recover, in the second cause of action, the sum of $51,044.20, for labor delay, and $8,750.48 for equipment expense delay.

The Court further finds that DeFelice has not proved by a preponderance of the evidence a loss of materials due to the delay caused by the respondent.

The Court disallows that portion of the claim designated as an overhead item, upon the ground that the claim is conjectural and speculative.

See State ex rel. Shatzer v. Freeport Coal Co. et. al.,
144 W.Va. 178, 107 S.E.2d 503 (1959).

Accordingly, the Court makes an award to DeFelice, on the second cause of action, in the amount of $59,794.68.

THIRD CAUSE OF ACTION

This claim, by DeFelice against the respondent, the Division of Highways, is for delay expense incurred early in the construction period, due to the alleged failure of the respondent to provide a right-of-way for the use of the contractor in hauling, by truck, blasted rock and other surface and subsurface material, from the northern part of the construction area to the southern portion, for use as fill material.

In the contract between DeFelice and the respondent, the latter was required to provide for necessary access to construction areas and necessary rights-of-way for haulage. There were no roads available except the West Virginia Turnpike, which was used by various vehicles, including ten-wheeler trucks of coal haulers and which the contracting parties apparently assumed could be used by the ten-wheel trucks of the contractor in hauling blasted materials and concrete and aggregates for use in the project. At a pre-construction conference on August 20, 1979, however, representatives of the West Virginia Turnpike Commission appeared and announced that DeFelice would not be permitted to haul blasted rock and other materials, by ten-wheelers, over a bridge crossing Paint Creek near Station 1370, between the loading and dumping areas, and opined that such a use would result in traffic deaths. It appears from the evidence, however, that trucks of the same size, carrying coal, and other trucks of the same size operated by DeFelice in transporting cement and aggregates, were permitted to use the bridge.

In order to obtain a haulage-way, DeFelice negotiated with Eastern Associated Coal Corporation for a right-of-way on the latter's abutting land, and with CS Corporation for a right-of-way across its railroad property, and built a new haulage road, with a new temporary bridge across Paint Creek, near Station 1370. The delay was approximately four months.

The Court finds from the evidence that the construction area, including the area for drilling and blasting, was land-locked; that it was a condition of performance by DeFelice that DeFelice have a right-of-way for its use in hauling rock and other blasted materials from one section of the project to the other; that respondent failed to provide such a right-of-way; that performance by DeFelice was impossible without such a haulage; that DeFelice, on its own initiative and at its own expense, obtained rights-of-way and constructed a haulage road considerable longer than that by the Turnpike, for the sole purpose of transporting blasted materials from the northern section of the construction area to the southern end, as required by the contract; and that DeFelice incurred additional expense as a result of the delay.

A building contractor may recover damages sustained by him for loss resulting from unreasonable delay on the part of the owner in permitting him to perform his contract.

Atlantic Coast Line R. Co. v. A. M. Walkup Co., supra
See also McDonald V. Cole et. al., 46 W.Va. 186,
32 S.E. 1033 (1899).
17 Am.Jur.2d 899, Contracts §422.

The Court finds from the evidence that DeFelice incurred additional expense for which it was not compensated under the contract between the parties as the result of the respondent's having failed to provide DeFelice with a haulage-way for the transportation of blasted material, and that its damages consist of $24,024.80 for labor, $24,372.33 for equipment, $18,081.33 for materials and rights-of-way, and $15,264.60 for constructing the haul road and temporary bridge across Paint Creek, for a total of $81,743.06.

No award is made for home office overhead of DeFelice as the Court considers such element of the claimed damages to be speculative and conjectural.

The Court makes an award to DeFelice, on the third cause of action, in the amount of $81,743.06.

THE FOURTH CAUSE OF ACTION

Over the Memorial Day weekend one night's heavy rain caused extensive damage to a partially constructed segment of the new highway north of the Paint Creek Bridge near Station 1370. The rainfall, for this period from Saturday morning to Tuesday morning, was something between 3.55 inches and 6.0 inches, according to unsatisfactory evidence on the subject.

Since restoration required extra work, for which the contractor was required to give advance notice to the respondent, DeFelice duly notified the respondent by letter dated June 7, 1982, that extra work would be required for which it would seek extra compensation. The restoration was duly completed according to original plans and specifications, and DeFelice seeks compensation for the extra work in the amount of $84,238.00.

On the question of who should bear the risk of damage to work under construction under a building contract, i.e., whether the contractor (in this case DeFelice) or the owner (in this case, the Division of Highways), the general rule is:
One who contracts absolutely or unqualifiedly to erect a structure for a stipulated price, in other words, enters into an entire or indivisible occasioned by the accidental destruction or damage of the building before completion...the contractor is not excused from his duty to perform where the partially erected building is injured or destroyed by fire, an act of God, such as lightning, violent or unusual storms, tornadoes or other like disturbances .....
13 Am.Jur.2d 67,68, Building and Construction Contractors §64.

Whether a contract is entire or severable is a determination to be made by the Court in this State, in accordance with requirements specified in L.D.A., Inc. v. Cross, 167 W.Va. 215, 279 S.E.2d 409 (1981). After consideration of the evidence in this case, this Court is of the opinion that the contract between DeFelice and the Division of Highways is an entire or indivisible contract for the construction of highway segment, for a set price.

DeFelice maintains, however, that the general rule is inapplicable because the parties, in their contract, have otherwise stipulated as to risk of damage to or destruction of work in progress, citing Standard Specifications Roads and Bridges Adopted 1978, Provision 107.16, which reads as follows:

Until Final written acceptance of the project by the Engineer, the Contractor shall have the charge and care thereof and shall take every precaution against injury or damage to any part thereof by the action of the elements, or from any other cause, whether arising from the execution or from the nonexecution of the work. The Contractor shall rebuild, repair, restore, and make good all injuries or damages to any portion of the work occasioned by any of the above causes before final acceptance and shall bear the expense thereof except damage to the work due to unforeseeable causes beyond control of and without the fault of or negligence of the Contractor, including but not restricted to acts of God, of the public enemy or governmental authorities.

DeFelice relies upon the exception contained in the above Specifications which relate to acts of God, and contends that it was without fault and that the heavy rain was an act of God.

The contractor, it may be seen from Provision 107.16, supra, must bear the expense of damage to or destruction of work in progress by a heavy rainfall, if such a rainfall was foreseeable.

It appears from the evidence that the rainfall which immediately preceded the damage to work in progress was heavy, but probably not of extraordinary duration or otherwise remarkable; that the construction activity in the immediate vicinity of the damage, with steep slopes, and much rock and disturbed surface, probably prevented normal percolation of the rain; that the work was in progress was in a narrow passage, with inadequate surface and subsurface drains; and that in a relatively short period water accumulated above the construction area, and that the surface water, by force of gravity, and having no other place to go, rushed into the choke area and severely damaged the work in progress. We find that there was a potential for a large amount of damage from precipitation which did not approach being a force majeure or act of God, and which this Court believes to have been reasonably foreseeable.

Our finding of foreseeability is re-enforced by the circumstance that at some time before this washout (the record not reflecting the exact date) less extensive damage to work in progress on the same job was done by surface water following precipitation of less intensity and volume, and that damage was repaired or replaced by DeFelice at its own expense, without making claim for extra work.
The extra work for which this claim is made having resulted from events which, in the attendant circumstances, were reasonably foreseeable, the fourth cause of action is denied.

FIFTH CAUSE OF ACTION

The fifth cause of action is the claim of the steel fabrication subcontractor, Atlas Machine and Iron Works, Inc., hereinafter referred to as Atlas. The steel for the bridges on this project were fabricated from the summer of 1980 through the early spring of 1981 by Atlas at its plant in Gainsville, Virginia. Atlas alleges that respondent's inspectors required work to be done which exceeded the standards imposed by the specifications, and that the extra work caused a delay which impacted all of the operations at the plant. The delay was quantified by Atlas as a total of 6.8 days. The girders for the bridges being fabricated for this project were welded plate girders. These girders necessitated welds for the flanges to the web. The girders were then blast-cleaned to remove mill scale (impurities on the steel). Atlas contends that respondent's inspectors required a "near white metal blast" which exceeded the specifications requiring a "near white metal blast." The procedures followed were to run the girders through a wheelabrator which shot the girders with BB type shot. The girder was then inspected for mill scale and the welds were inspected. Atlas contends that to achieve the "white metal blast" required by the inspector it was necessary to run the girder through the wheelabrator for a second time causing delay for the other girders. Respondent's lead inspector testified that it was Atlas' normal procedure to quickly blast each girder, then have the welds inspected and repaired, if necessary, and then run the girder through the wheelabrator a second time more slowly to achieve a complete cleaning of the mill scale. This was the normal procedure selected and determined by Atlas' personnel.

After the cleaning process, the girder was then ready for the edges to be broken. Atlas claims that respondent's inspectors required a radius on all edges of the steel being fabricated. To radius an edge requires work by hand which is labor intensive. Respondent contends that edges were normally not required to be radiused, only broken. The Specifications refer to "break the edges" not "radius the edges."

The next stage in the fabrication process required the girders to be spray painted with an organic zinc system of four mils in thickness. Atlas contends that respondent's inspectors required an over sprayed areas to be hand sanded and resprayed with paint to meet the specifications. Respondent contends that over sprayed areas were required to be sanded but not repainted.
Atlas also put forth a claim in the amount of $969.55 for disruption of cash flow when it was not timely paid for work accomplished. The evidence established that invoices for work not approved by respondent's shop inspector were indeed not processed for payment by respondent when presented, but were subsequently approved after having been approved by respondent's shop inspector and presented for payment. Therefore, this portion of the Atlas claim is denied by the Court.

This Court has previously considered many of the issues of Atlas' present claim in an unpublished opinion issued January 18, 1988, S. J. Groves and Sons, Company, for the Benefit of Atlas Machine and Iron Works, Inc. v. Dep't of Highways, Claim Nos. CC-82-295 & CC-83- 233. The Court denied the claims based upon over spray and for the radius of edges, but allowed recovery for removal of mill scale from snipes. However, the recovery was limited to work performed prior to May 1, 1980.

In the present claim there was no issue made of the necessity of removal of mill scale from the snipes. The Court is of the opinion to deny the fifth cause of action in its entirety as the problems confronting Atlas in fabricating steel for West Virginia were resolved by May 1, 1980. The steel girders being fabricated for the bridges on this project were not due for delivery until September 1980. Therefore, the Court is of the opinion to and does deny the claim of Atlas.

SIXTH CAUSE OF ACTION

The sixth cause of action was brought on behalf of the subcontractor Northern Systems, Inc., which company was responsible for drilling and grouting the rock anchors for two retaining walls adjacent to the mountain. During construction of the project Northern experienced financial problems. As a result of these problems Northern's bonding company, Indemnity Insurance Company, to be hereinafter referred to as Indemnity, expended certain funds relating to this project. The first issue confronting the Court is the standing of the indemnitor in this claim, i.e., does the bonding company of a subcontractor have the same rights and interests as the subcontractor? The doctrine of collateral estoppel was also raised by respondent as there had been a related lawsuit in Kanawha County Circuit Court wherein Northern was defendant and Indemnity satisfied certain judgments against Northern. Respondent contends that this lawsuit involved the same issue which is the basis of the sixth cause of action, that the issue was resolved by the circuit court action and that, therefore, Indemnity cannot now have the same issue tried again before this Court. The Court must resolve these two issues prior to a consideration of the merits of the claim.

As to the issue of standing, the Court is of the opinion that the surety, Indemnity, has standing in the Court of Claims to present Northern claim just as a casualty insurance company brings actions through its insureds. The Court has determined that collateral estoppel is not a bar to this cause of action inasmuch as the Kanawha County Circuit Court action was brought by Construction Drilling, Inc., to prove and recover damages only. The issue of liability based upon misrepresentations on the part of the respondent herein was not an issue in that action and was not considered by that Court.

Indemnity contends that Northern was unable to perform its contract for DeFelice because the depth of the rock anchors was misrepresented on the plans provided by respondent. Originally, the plans indicated 96 rock anchors but respondent reduced this to 71 rock anchors during construction. Northern was unable to drill certain of the holes as its drilling equipment was inadequate. Construction Drilling, Inc., was brought onto the project by Northern to complete this work. This company was able to perform the drilling necessary as it had the proper drilling equipment. Respondent contends that the plans indicated the depth of the deepest holes accurately and that, therefore, the problems encountered by Northern were directly related to the equipment being used by Northern. The Court agrees with respondent. The Court is of the opinion to deny the sixth cause of action as Indemnity has failed to establish a breach of contract on the part of respondent.

In accordance with the foregoing findings and conclusions, the Court makes awards in the following amounts: first cause of action - $976.14; second cause of action - $59,794.68; third cause of action - $81,743.06, for a total award in the amount of $142,513.88 to claimant L. F. DeFelice, Inc.

Award of $142,513.88.

Judge Baker did not participate in the hearing or decision of this claim.

OPINIONS ISSUED JANUARY 4, 1991

WANITA SOMMERVILLE/STATE FARM FIRE AND CASUALTY
VS.
DIVISION OF HIGHWAYS

(CC-89-374)

Claimant present in person.
James D. Terry, Attorney at Law, for respondent.

HANLON, JUDGE:

On or about January 15, 1989, claimant, Wanita Sommerville, formally complained to respondent about a recurring problem of tar and gravel splashing against her house from a near-by hole in State Route 19, in Clarksburg. Not only did this claimant call respondent, she also visited their District Office in Clarksburg. Claimant identified to the Court both the name of the individual she complained to, and the date and time of such discussion. Respondent, while not maintaining a log or record of such discussions, testified that such conversations "probably occurred.: Although respondent's work records indicate that the hole was repaired with "cold patch" on the 3rd and 17th of January, 1989, such temporary repairs were not effective, and the section of road surface adjoining claimant's house was eventually repaved to remedy the problem. Prior to the repaving however, claimant's house was damaged by the tar and gravel splash, which produced dents and black scars to the aluminum siding of the house. Repair of the described damage cost $265.00. Claimant filed this invoice for repair with her home owners insurance, State Farm Fire and Casualty. The insurance company paid $165.00 of this claim, while claimant requests the return of her $100.00 expenditure, and the insurance company, a co-claimant in this action requests the return of its $165.00 expenditure. These enumerated amounts have been stipulated to respondent. This Court must decide whether these amounts are recoverable by claimant (s), as a result of negligence on the part of respondent in failing properly to maintain the road adjoining claimant's house.

Respondent avers that it did not commit any act of negligence which proximately caused the damage complained of. Respondent further argues that the damage was the result of intervening and superseding causes, not directly attributable to any act or omission on its part. Essentially, respondent believes the damage was an act of nature, for which it should not be held responsible. This Court believes otherwise.

While these is no evidence that respondent placed the cold patch in a negligent manner, it was certainly foreseeable that it would be a short-lived solution. Respondent had both constructive and actual knowledge of the hole in the road surface that was producing the splash on claimant's house. The respondent knew or should have known that as the cold patch deteriorated over the course of the winter its components would add to the problem. The Court is of the opinion that respondent breached its duty of reasonable care and diligence in repairing this hole and, therefore, respondent is liable for the damage to claimant's house.

This Court is of the opinion to and does award to claimant Wanita Sommerville, the amount of $100.00. This award represents the reimbursement of her out-of-pocket expense of the deductible assessed by her insurer. Although co-claimant is a subrogee under her home-owners policy, and this Court has previously permitted subrogation claims, we believe that such a practice can no longer be permitted in equity and good conscience.

In State Farm Mutual Automobile Insurance Company, Assignee to the rights of Sarah G. Romans, its assured, Claimant v. West Virginia Department of Highways, 8 Ct.Cl. 169 (1970), this Court recognized that a subrogee may have the same right of recovery as the insured, "absent some provision of the Statute conferring jurisdiction upon the Court which would deny the subrogee the remedy afforded to the insured/" It is the position of this Court in reinterpreting West Virginia Code §14-2-13(1), that "claims and demands....which the state as a sovereign commonwealth should in equity and good conscience discharge and pay," mandates that claims which may permit unjust enrichment be disallowed. Subrogation, as defined in Michie's Jurisprudence, Section 2 at page 3, "is purely an equitable right, and being an equity, it is subject to the rules governing equities." Equity does not embrace, nor allow unjust enrichment. Premiums are paid by the insureds for insurance, and, when claims are paid, the accumulated premiums or reserves are used to cover such expenditures. If no claims are made, the premiums are never expended. This is a risk assumed by an insurance company for a valuable consideration, and there is no reason the company should escape the risk. In any event, it is the opinion of the Court that neither equity nor good conscience requires the State to reimburse an insurance carrier for having paid a claim for which it received a premium, a premium which is designed to allow a reasonable profit to the insurer. The claim of the subrogee is accordingly disallowed and an award is made to the insured in the amount of her deductible which is $100.00.

Award of $100.00 to Wanita Sommerville.

OPINIONS ISSUED JANUARY 24, 1991

WESTBROOK CONSTRUCTION, INC.
VS.
DIVISION OF HIGHWAYS

(CC-89-508)

John A. Jenkins and M. Blane Michael, Attorneys at Law, for claimant.
Robert F. Bible, Attorney at Law, for respondent.

BAKER, JUDGE:

Claimant contractor entered into an agreement with respondent, designated as project no. I-6404 (72)123, on November 25, 1985, for the construction of the Glade Creek bridge, identified as bridge no. 3382. Claimant had substantially underbid other competitors for the project, which entailed the construction of a four-lane 2,180 foot long, bridge in Raleigh County. The $28,876,876.00 bridge has two main piers, and two intermediate piers, connecting to abutments. Claimant alleges that it encountered unexpectedly hard rock in building two of the piers, designated as pier 2 and pier 3. The foundations for piers 2 and 3 were drilled caissons, which were constructed by Meredith Drilling Company, Inc., and Permian Rat Hole Drilling, a joint venture which was a subcontractor of claimant. During the drilling of the caissons for both piers 2 and 3, claimant alleges the density of the rock base its subcontractor encountered was two to four times greater than was identified by respondent's core drillings. Claimant contends the hard rock constitutes a changed condition of the contract, entitling claimant to equitable adjustment for the resulting cost and delay occasioned by additional labor, equipment, maintenance, and overhead necessary to complete the drillings. Claimant seeks to recover its own excess costs and those of its subcontractor, Meredith/Permian Rat Hole, in the aggregate amount of $2,054,823.02.

Claimant and respondent agree that the prebid core drillings for pier 2 indicated that the caissons were expected to be drilled in sedimentary rock described as sandstone, shale and siltstone with a range of rock harness varying from soft to hard. No very hard sandstone was indicated. Prebid core drillings for pier 3 did indicate hard to very hard sandstone in one of the five sample drillings. Based upon the representations of respondent's prebid drillings, claimant estimated its construction costs and submitted its bid. However, claimant alleges that when the drilling for pier 3 caissons was performed, claimant encountered vary hard sandstone of higher strength and abrasiveness than indicated by respondent's bid samples. Claimant also alleges that greater quantities of this material were discovered than anticipated. Claimant's witnesses indicated their belief that the lost time and additional costs of pier 3 would be recovered and offset by pier 2 performance. Accordingly, with regard to pier 3 claimant provided no formal notice to respondent of a changed condition, nor were force account records maintained.

However, when pier 2 caissons were drilled, very hard sandstone was again found and again obstructed and impaired claimant's performance on the project. Respondent's witness, Mr. John O'Neil, a geologist with respondent and assigned to the Glade Creek bridge project, testified that the sandstone in the area of pier 2 was "10 to 21 percent" harder then originally indicated in the pre-bid core samples. Mr. O'Neil further testified that, "...some of the sandstone was indeed harder than hard. It logged as very hard, based on compressive strength testing." Mr. O'Neil's testimony was consistent with that of claimant's expert, Dr. James W. Mahar. It is of particular interest to the Court that the prebid core samples of pier 2 indicated soft to hard rock, and no very hard rock. Mr. O'Neil's subsequent findings of very hard rock were the result of claimant's request for retesting and serve as the foundation for this equitable adjustment claim.

The retesting as to pier 2 is described in respondent's exhibit no. 7, Materials Inspection Report No. 1180771. The Report at paragraph 2.4.1 states that "the Department (respondent) has never had any intent to make any representation or description of the abrasive qualities of rock strata in soils information presented in contract documents, nor are there any standardized tests for abrasiveness of which we are aware."

The Court observes that no retesting of core samples was requested or made as to pier 3.

Although claimant was awarded this contract in November 1985, it did solicit bids from subcontractors for the caisson work until December 1985. Representatives of the subcontractor which was ultimately awarded the bid visited the respondent's office in Princeton, West Virginia, to inspect the core samples available to all prospective bidders. The subcontractor had not performed drilling operations in the State of West Virginia prior to this particular contract. The fact that the subcontractor was unfamiliar with the nature of subsurface strata in southern West Virginia may have been reflected in its bid which was substantially lower than the bids of other, more experienced contractors which have performed drilling projects in all areas of the State.

It appears from the evidence that certain geotechnical data were obtained by respondent during the design stage for this project. The data included unconfined compressive strength tests in some of the strata, but, as was the usual and customary practice during the pre-bid stage, this information was not made available to prospective bidders. While the information may have been of assistance to claimant herein at the pre-bid stage, the Court believes that it was withheld by inadvertence, and not by design. In the future respondent may wish to consider disclosing the availability of such information to prospective bidders.

Whether or not the differing subsurface conditions previously described permit claimant the remedy of equitable adjustment is the issue this court will now address. Provision for equitable adjustment is made in section 104.2 of the West Virginia Department of Highways Standard Specifications of 1982, and reads in part as follows:

....Should the Contractor encounter or the Department discover during the progress of the work subsurface or latent physical conditions at the site differing materially from those indicated in the Contract, or unknown physical conditions at the site of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in the Contract, the Engineer shall be notified in writing of such condition; and if the Engineer finds the conditions do materially differ and cause an increase or decrease in the cost of, or the time required for performance of the Contract, an equitable adjustment will be made and the Contract modified in writing accordingly. (Emphasis added.)

Respondent also relies upon §104.2, and this Court finds the section to be operative and controlling in the contract between the parties. Accordingly, the Court will apply the section to the claims asserted for damages relating to the excess costs of constructing pier 3 and pier 2, respectively. Before undertaking this consideration, the Court must emphasize that §104.2 is not operative when a claimant fails to invoke the section and abide by its directives in a timely manner. Although claimant has demonstrated by a preponderance of the evidence that very hard rock was encountered, and not anticipated, this Court does not believe the circumstances excuse a strict interpretation of and compliance with §109.4 and §109.4.8, providing that:

Extra work performed in accordance with the requirements and provisions of 104.3 will be paid for at the unit prices or lump sum stipulated in the order authorizing the work, or the Department may require the Contractor to do such work on a force account basis to be compensated in the manner hereinafter prescribed.

The Contractor's representative and the (respondent's) Engineer shall compare records daily of the cost of work done as ordered on a force account basis, and shall indicate agreement by signature on such records. No payment will be made for work performed on a force account basis until the Contractor has furnished the Engineer with duplicate itemized statements.... (Emphasis added.)

Accordingly, the Court makes the following findings or fact and conclusions of law:

Pier 3

Claimant's subcontractor began drilling caissons for pier 3 on the project to pier 2. The plan was to drill a pilot hole with a 12-inch diameter carbide tricone bit, using sufficient down pressure and air circulation with medium drill bit rotation to produce a straight hole. The hole was then enlarged using an 18-inch hole opener and then a 36-inch auger hole opener. This equipment was contained on a Williams LLDH-80 drilling rig. Using this process and equipment 38 caissons were drilled for pier 3. The progress of the drilling was slowed when very hard rock was encountered almost immediately. Foam and water were then utilized by claimant to increase drilling productivity, but this practice was suspended until adequate pollution safeguards were taken. In the interim a hole was attempted with air only resulting in substantial damage to the hole opener. Testimony suggests the hole opener "burned up" when the cutters became so hot that the bearings disintegrated. Concerned and falling behind the critical path (schedule), claimant resorted to what it described as "a radical change in drilling technique." Using 36-inch air barrels, a 36 inch thin wall core barrel, two additional hole openers, and foam and water, the caissons were completed, but not without additional cost. Despite the difficulties encountered at pier 3, Terry Allen Penn, General Manager for Permian Rat Hole, testified that "as far as our production and expenses on the job at that point, we still felt like we could make up the difference on pier 2." Since there was no intent to put forth a claim based upon a changed condition on pier 3, it appears to the Court that subcontractor consciously made the decision not to provide "notice" to respondent.

Respondent avers that the failure on the part of claimant to "notice" the respondent's engineer that there was a changed condition in pier 3, as required by §§104.2, 109.4, and 109.4.8, supra, resulted in the respondent not keeping force account records on the construction of pier 3 to ascertain actual costs in accordance with the Specifications. We cannot now speculate as to same. Respondent received notice that claimant was making a claim for pier 3 through correspondence received in February 1986, well after the completion of the pier.
Since claimant failed to provide timely notice to respondent as to the allegation of a changed condition, no force account records were maintained by respondent. Therefore the claim relating to pier 3 must be disallowed, consistent with the previously described sections, and the holding of Vecellio and Grogan, Inc. vs. Dept. of Highways, 14 Ct.Cl.451 (1983).

Pier 2

The Court now turns its attention to the issue of pier 2. Claimant has provided convincing evidence that unforeseeable subsurface conditions and abrasive rock were encountered, conditions which differed materially from those indicated in respondent's bid proposal. Claimant did provide the requisite notice to respondent concerning pier 2. Accordingly, claimant contends that the difficulties encountered entitle it to an upward equitable adjustment in the contract price under the terms of the "changed condition clause" of the "differing site condition clause" in §104.2, as cited supra.

By reason of the materially indifferent conditions encountered at pier 2, claimant incurred extra expense not contemplated under the contract. The claimant provided notice of the changed conditions to respondent by letter dated October 1, 1986, and same was acknowledged for investigation by respondent in its letter dated November 5, 1986. It is therefore uncontroverted that the requisite notice to invoke §104.2 was timely given and is operative and controlling in this claim for pier 2 expenses. Claimant testified that 44 drilling shifts were estimated to drill the pier 2 shafts, but 298 drilling shifts were ultimately required to drill the very hard rock. The additional labor and equipment expense incurred for the additional shifts are the bases of this equitable adjustment is best set forth by this Court A. J. Baltes v. Dept. of Highways, 13 W. Va. Ct. Cl. 1 (1979), which states in part:

"The recoverable items of cost must be realistically confined to additional cost incurred by the claimant, wand which were directly and proximately caused by the changed conditions. Expenses which the contractor would have been required to expend in any event had no changed conditions occurred are not compensable as part of an equitable adjustment." Baltes at 6-7.

This Court therefore applies an "actual cost" theory as the appropriate measure of damages. Actual cost is defined in Baltes, supra, at 6, as "a daily cost analysis of the additional expenses required by the changed condition." In doing so the recoverable items as enumerated must be realistically confined to the additional costs incurred by the claimant. Expenses which the contractor would have been required to expend had no changed condition occurred are not compensable. See Dale Ingram, Inc. v. United States, 475 F.2d 1177 (Ct. Cl. 1973).

The condition of "very hard rock" was not anticipated by claimant. The claimant was required to drill at substantially higher cost to complete pier 2, and the cost for that labor and equipment will be compensated. However, care must be taken to avoid duplications and overlap, with recovery limited to those costs directly and proximately caused by the changed conditions. In particular, the evidence concerning additional equipment for road maintenance, extra grader and operators appears redundant, if not unrelated.

The Court finds that claimant was in part responsible for the increased costs by not exercising greater diligence in preparing and estimating its project bid. It is uncontroverted that claimant's bid was substantially lower than others received. Although the Court does not adopt respondent's argument that, "the four-fold increase in actual versus estimated time of drilling is attributable to lack of knowledge of local conditions combined with inadequate examination and testing of core samples," the Court is of the opinion that claimant must shoulder some responsibility for its bid.

Claimant's request that the Court award the cost of "travel and sustenance" will not be considered. Claimant has failed to prove that local labor was unavailable. Furthermore, these costs were not a part of the stipulated labor rate.

The Court therefore considers only the following in its determination of recoverable costs, pursuant to §§109.4 to 109.4.7, which the evidence indicates to be the direct and proximate result of the changed conditions of pier 2:

Labor - $ 50,349.00
Mark up on Labor- 20,140.00
Equipment rental-
(subcontractor owned)- 213,033.00
Equipment rental-
(non-owned) 19,350.00
Mark up on non-owned
equipment 3,870.00
Clean out costs for caisson
holes- 35,076.00
Welding subcontractors 20,000.00
Expendables - 80,000.00
TOTAL FOR MEREDITH
PERMIAN RAT HOLE $441, 818.00

These costs incurred by claimant Westbroook which were the result of the changed conditions at pier 2 have also been considered by the Court. The Court is of the opinion to and does make an award to Westbrook in the amount of $119,397.46.

The Court has considered interest on the total award of $516,251.46 in accordance with Provision 9 of the contract which provides for the rate of six (6) per centum per annum. As calculated, the interest to the issue date of this opinion is awarded in the amount of $52,030.46. Therefore, the total amount of the award is $613,245.92.

Award of $613,245.92.


OPINIONS ISSUED JANUARY 25,1991
BARBOUR COUNTY SHERIFF'S DEPARTMENT
VS.
DIVISION OF CORRECTIONS

(CC-91-51)

Claimant represents self.
Lowell D. Greenwood, Assistant Attorney General, for respondent.

PER CURIAM:

Claimant, Barbour County Sheriff's Department, provides and maintains a facility for the incarceration of prisoners who have committed crimes in Barbour County. Some of the prisoners held in the facility are guilty of crimes which require the sentencing of prisoners to facilities provided and maintained by the respondent, Division of Corrections. Claimant brought this action to recover the costs of housing for prisoners who have been sentenced to a State penal institution, but due to circumstances beyond the control of the county, these prisoners have had to remain in the county prison facility for periods of time beyond the date of the sentencing order.

The Court previously determined in the County Comm'n. of Mineral County v. Div. of Corrections, an unpublished opinion of the Court of Claims issued November 21, 1990, that a daily rate of $15.00 for each inmate is fair and reasonable to both claimant and respondent at this time, and directed the parties to calculate a dollar amount based upon the time frame and daily inmate rates of $15.00 excluding, however, all days wherein inmates remained in the county as a result of a stay pending appeal or at the request of county officials and a two week holding period beyond the date of a commitment order.

Pursuant to the guidelines provided in the Mineral County opinion, the respondent reviewed this claim to determine the number of inmate days for which respondent may be liable and filed an Answer admitting the validity and amount of the claim.

In view of the foregoing, the Court makes an award to claimant in the amount of $2,850.00.

Award of $2,850.00.