Raymond International, Inc. v. Baltimore County

Liss, J., delivered the opinion of the Court. This appeal by appellant, Raymond International, Inc., arises out of a judgment rendered in a non-jury trial in the Circuit Court for Baltimore County in which the presiding judge ruled that Baltimore County, one of the appellees, was indebted to the appellant in the amount of $18,431.98. At the same time, the trial judge entered a verdict for costs in favor of the remaining appellee, J. E. Greiner, Inc. Appellant filed the within appeal from these judgments. By invitation to bid in May of 1972, Baltimore County solicited bids for underwater repairs to the bascule piers of the Wise Avenue Bridge over Bear Creek.

Bidders were supplied with plans and specifications prepared for the County by Greiner. The proposed repairs consisted of the removal of deteriorated concrete from the bases of the piers and the placement of aggregate concrete in lieu of the deteriorated material. The bridge was originally built about thirty years ago. It was of the bascule type with two main piers which encompassed the channel of the river.

The piers were of concrete resting on piles driven into the river bottom. ²⁴⁹ Their reconstruction was contemplated to be accomplished by driving additional piles into the river bottom and encircling the piling with a cofferdam consisting of interlocking sheet piling driven into the bottom of the river and extending out of the water thus forming a boxlike structure. The cofferdam is erected and sealed in order to permit the water to be removed from the interior of the structure. The sealing of the cofferdam is accomplished by placing in its bottom a mass of concrete heavy enough to act as a plug and sufficient to counteract the pressure of the water. The placement of this mass of concrete is achieved by the "tremie” method which requires a tube to be lowered into the water through which concrete flows that settles on the bottom of the cofferdam.

Subsequent to this operation, the water in the cofferdam is removed and work on the bridge pier may be completed free of the water. The mass of concrete in the bottom of the cofferdam is known as "tremie concrete,” and when construction or repair of the bridge pier is completed, the sheet piling of the cofferdam is removed and the "tremie” is abandoned by being left in place. Over the years after the original construction of the bridge, Greiner conducted regular inspections of the bridge including the piers. In 1971, Greiner reported deterioration of the bridge piers below the waterline.

This deterioration was determined to be of a progressive nature. Based on the data gathered including test borings and inspection by divers, Greiner came to the conclusion that the piers needed immediate repairs. Greiner communicated with Raymond which had some expertise in the making of underwater repairs. Raymond’s representatives recommended a repair procedure which contemplated a jacketing of the piers with preplaced aggregate concrete.

This procedure is a construction technique used in underwater work by which stones are placed in a form with a cementitious material (grout) pumped into the form displacing the water and forming concrete. At the request of the County, Greiner prepared contract documents for the recommended repairs in order that the County could solicit bids. The documents included ²⁵⁰ specifications, drawing, informational drawings, an addenda, an invitation to bid and other general provisions. Bids were solicited from a limited group of bidders who were thought to have the specialized abilities to perform the work.

The group included Raymond which ultimately submitted a bid substantially below the bid of the next lowest bidder. Raymond and the County entered into an agreement by the terms of which Raymond was to finish the work in 100 days. Failure to do so made the contractor liable for liquidated damages under the contract. The County promised to obtain for Raymond a necessary right of way.

Raymond was to be paid on a unit price basis the approximate sum of $213,000 based on the 230 cubic yard quantity estimated by Greiner and the County to be the amount of aggregate concrete required to complete the job. The work to be performed consisted primarily of cleaning around Piers Nos. 3 and 4 of the bridge, forming and pouring preplaced aggregate concrete around the deteriorated faces of the piers, and making repairs to the submarine cables. After the repairs began, Raymond contends it discovered that Greiner’s specifications were inaccurate. It produced witnesses who stated that: (1) the material surrounding the piers was not soft as represented, but contained large pieces of concrete, pile butts, old timbers and steel; (2) the tremie was irregular with variations up to 1.5 feet; (3) no tremie existed in some areas; (4) only an average of two inches of deteriorated concrete could be chipped away, rather than the six inches represented in the plans and specifications which resulted in the projected total of 230 cubic yards of concrete not being able to be placed; and (5) the tremie was so weak in places that the form could not be anchored.

Raymond contended below and contends here that as a result of the inaccuracy of Greiner’s specifications it was required to perform unforeseeable increased work. Raymond also complained particularly that instead of the 230 cubic yards of aggregate concrete estimated to be used, it utilized and was paid for only 114 cubic yards. Raymond urges that its unit price as bid was computed by spreading its fixed costs over the 230 cubic yards stated in the plans and ²⁵¹ specifications and that the County paid for only 114 yards which deprived Raymond of more than half of its computed contract price. Raymond advised the County in a summary of claim filed on January 30,1976, that while its original bid was $213,000, as a result of the misrepresentations included in the plans and specifications and the unforeseeable conditions arising out of the misrepresentations, its acutal expenditure to complete the project amounted to $1,095,804.30.

This calculation is apparently not disputed. Baltimore County rejected the claim and refused any adjustment in its contract with Raymond. Suit was then filed by Raymond against Greiner and the County. The declaration was based on alleged fraud, negligent misrepresentation, breach of warranty and breach of contract.

Raymond sought compensation for the additional costs incurred as a result of the unforeseen conditions of the piers, the return of liquidated damages retained by the County, and an award for punitive damages. During the course of the bench trial which lasted for many weeks, the trial judge granted Greiner’s motion to dismiss at the conclusion of Raymond’s case. At the conclusion of the entire case, the court awarded Raymond $900 representing rental payments made by the appellant for rights of way and $17,531 being the compensation withheld by the County which was due Raymond. The appellant, unsatisfied with the judgment of the trial judge, thereupon filed this appeal.

The issues to be decided are: I. Whether the trial judge erred in holding that the plaintiff was not entitled to rely on the conditions, quantities and representations contained in the contract?

II

Whether the trial court erred in holding that the plaintiff was not entitled to compensation for the unforeseen or misrepresented conditions encountered in the performance of the contract?

III

Whether Greiner’s motion to dismiss at the close of Greiner’s case was improperly granted? ²⁵² IV. Whether the County’s motion raising preliminary objection was improperly granted on the issue of sovereign immunity? V. Whether the trial judge erred in denying plaintiffs claim for an equitable adjustment in time and compensation due to a 50.1% underrun in preplaced aggregate? I, n, V One of the principal issues at trial was whether Raymond was justified in relying on the conditions, quantities and representations contained in the contract documents.

Baltimore County in its defense relied principally on the contract documents which were filed as exhibits in this case. These documents included the invitation to bid, specifications, the proposal, the agreement, special provisions and various drawings. Included in the contract documents was the following which appeared in Section 5 of the special provisions: Original construction data has not been verified by actual field measurements and the conditions observed during the underwater inspections and tests may have changed since the date on which they were made. Therefore, the above described data are furnished to the Contractor for general informational purposes only and do not purport to represent existing field conditions.

It shall be the Contractor’s sole responsibility to verify by actual field measurements inspections and tests and data which may be of significance to him in the preparation of his bid. The contract documents specifically stated that: "Special provisions shall govern over specifications, supplemental specifications and plans.” The County points out that the invitation to bid at page 1-03 states: "Bidders must examine the drawings and specifications carefully and must make a ²⁵³ personal examination of the location and nature of the proposed work.” In addition, the proposal which was made a part of the contract documents required the bidders to agree as follows: The undersigned hereby declare that they have carefully examined the Form of Contract, Specifications, Special Provisions and Drawings forming a part of the same and have to their satisfaction examined the locality of the proposed work and agreed to furnish all labor, tools, materials, machinery, equipment and other means of construction called for in the manner provided in the Contract, Specifications, Special Provisions and Drawings thereto and requirements under them of the Engineer.... Sheet "X” which also was made a part of the contract documents provided: Note 2 — contractor to verify all dimensions in field. Note 5 — dimensions shown taken from as built plans and have not been verified by actual measurement.

The contractor shall verify any and all dimensions as may be required to complete satisfactorily all work under this contract. Relying on these provisions, the County urgently contends that the trial judge was correct when he held that there was no "justifiable reliance” by the appellant on the conditions stated to exist at the Wise Avenue bridge by the County’s engineer, Greiner, and that the trial judge committed no error when he held that: "[T]he contract documents that finally formed the contract clearly placed the burden to the Plaintiff to make a reasonable inspection to determine if these conditions were as depicted as in the contract documents.” The legal issue boils down to a question of whether Raymond was required to verify independently the ²⁵⁴ information upon which it based its bid, or whether Raymond was justified in relying on the information supplied by the County and its engineer as to the plans and specifications for the project. The seminal case on the subject is Hollerbach v. United States, 233 U.S. 165 , 34 S. Ct. 553 , 58 L. Ed. 898 , which was decided by the Supreme Court in 1914. That controversy involved a contract between the appellant Hollerbach and the United States Government for the repair of a dam.

In its specifications for the contract, the Government stated that the dam was backed with broken stone and sediment. As the contractor proceeded with the work of removing the material, it was discovered that the backing of the dam was composed of a soft, slushy sediment and that the required excavation of the dam was substantially greater than that stated in the contract documents. The contract contained several exculpatory clauses which were stated as follows: It is understood and agreed that the quantities given are approximate only, and that no claim shall be made against the United States on account of any excess or deficiency, absolute or relative, in the same. Bidders, or their authorized agents, are expected to examine the maps and drawings in this office, which are open to their inspection, to visit the locality of the work, and to make their own estimates of the facilities and difficulties attending the execution of the proposed contract, including local conditions, uncertainty of weather, and all other contingencies. * * * It is expected that each bidder will visit the site of this work, the office of the lockmaster, and the office of the local engineer and ascertain the nature of the work, the general character of the river as to floods and low water, and obtain the information necessary to enable him to make an intelligent proposal. [ 233 U.S. at 167-68 , 34 S. Ct. at 554 .] ²⁵⁵ In spite of the Government’s attempt to make the contractor responsible for his own inspection, the investigation of the site and the work to be done under the contract, the Supreme Court held: [T]he specifications assured them of the character of the material, a matter concerning which the Government might be presumed to speak with knowledge and authority.

We think this positive statement of the specifications must be taken as true and binding upon the Government, and that upon it rather than upon the claimants must fall the loss resulting from such mistaken representations. We think it would be going quite too far to interpret the general language of the other paragraphs as requiring independent investigation of facts which the specifications furnished by the Government as a basis of the contract left in no doubt. If the Government wished to leave the matter open to the independent investigation of the claimants it might easily have omitted the specification as to the character of the filling back of the dam. In its positive assertion of the nature of this much of the work it made a representation upon which the claimants had a right to rely without an investigation to prove its falsity.

See United States v. Stage Co., 199 U.S. 414, 424 . [233 U.S at 172, 34 S. Ct. at 556 .] 1 Appellant also cites Robert E. McKee, Inc. v. City of Atlanta, 414 F. Supp. 957 (N.D. Ga. 1976). In that case, the results of test borings were gratuitously provided to bidders along with specifications and other contract documents. The contract contained a clause in which the owner disclaimed any responsibility for the