Markwed Excavating, Inc. v. City of Mandan

791 N.W.2d 22

2010 ND 220

MARKWED EXCAVATING, INC., Plaintiff and Appellant

v.CITY OF MANDAN and Swenson, Hagen, & Co., Defendants and Appellees.

No. 20100076.

Supreme Court of North Dakota.

Nov. 15, 2010.

Clark Jay Bormann (argued) and Sophie Young Morgan (appearance), Bismarck, N.D., for plaintiff and appellant.

Randall Joseph Bakke (argued) and David Ray Phillips (on brief), Bismarck, N.D., for defendant and appellee City of Mandan.

Lyle W. Kirmis, Bismarck, N.D., for defendant and appellee Swenson, Hagen, & Co.

CROTHERS, Justice.

[¶ 1] Markwed Excavating, Inc., appeals from orders granting summary judgment dismissal of its action against the City of Mandan and against Swenson, Hagen& Company for breach of contract and for negligence. We hold the plain and unambiguous language of the construction contract between Mandan and Markwed precludes Markwed from recovering damages for delays allegedly caused by Mandan or Swenson. We affirm the summary judgments.

I

[¶ 2] After competitive bidding, Mandan and Markwed entered into an August 16, 2006 contract for a storm sewer improvement project requiring Markwed to bury more than 1,300 feet of 36 inch pipe from the Missouri River to a development west of Raging Rivers Water Park in Mandan. The project also required Markwed to tunnel underneath three Mandan roads, 46th Avenue Southeast, Bismarck Expressway and Marina Road. Mandan employed Swenson as the engineer and manager for the project, and Swenson prepared a written "specification and proposal" for the project.

[¶ 3] The August 16, 2006 contract between Mandan and Markwed identified twelve component parts of the "contract documents" in the following order: the advertisement for bids; the information for bidders; a copy of the accepted proposal; a guaranty and required insurance certificate; the contract; a performance bond; a payment bond; general conditions; Mandan's construction specifications and the specification and proposal prepared by Swenson; the contractor's income, sales and use tax clearance certificate; a certificate of premium payment from workforce safety and insurance; and the contractor's license. The August 16, 2006 contract stated it and the component parts formed the contract between Mandan and Markwed and if "any provision in any of the component parts of the Contract conflicts with any provision of any other component part, the provision in the component part first enumerated herein shall govern, except as otherwise specifically stated."

[¶ 4] The August 16, 2006 contract required Markwed to complete work on the project by May 1, 2007 and included language about delays and extensions of time:

"Extension of time may be granted if the Contractor be delayed at any time in the progress of the work by any act or neglect of the Owner or his employees, or by any other Contractor employed by the Owner, or by changes ordered in the work, or by strikes, lockouts, fires, unusual delay in transportation, unavoidable casualties or any causes beyond the control of the Contractor, or by delay authorized by the Engineer, or by which the Engineer shall determine to justify the delay. Any such extension of time shall be extended for such reasonable time as the Engineer may determine, or as agreed upon by the Owner."

The contract incorporated Mandan's construction specifications, including language about delays and extensions of time in a "no damages for delay" clause:

" Delays. The Contractor will not be entitled to any compensation for causes resulting in delays or hindrances to the work. Extensions of time will be granted for unavoidable delays, which in the opinion of the Engineer are clearly beyond the control of the contractor, resulting from causes such as Acts of Providence, fortuitous events and the like. The Engineer must receive written notice of claim for such delays from the Contractor before any extensions of time will be granted. Any extension of time will not relieve the Contractor or his sureties from their obligations which shall remain in full force and effect until the satisfactory discharge of the contract. The contractor will indemnifyand hold harmless the owner and the engineer and their agents and employees from and against all claims, damages, losses and expenses including attorney's fees arising out of or resulting from the performance of the work, provided that any such claims, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property including the loss of use resulting therefrom; and is cause in whole or in part by any negligent or willful act or omission of the contractor and subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts, any of them may be liable."

[¶ 5] The project plans required the pipeline west of Bismarck Expressway and east of 46th Avenue Southeast to be buried within an existing 75-foot permanent drainage easement. Markwed claims a provision of the contract specifications and proposal prepared by Swenson authorized Markwed "to access across private property and to store materials on private property" owned by Steven McCormick and located north of the 75-foot drainage easement. Markwed claims that provision granted it a staging area for the project and during the bidding process, Swenson's representatives orally told Markwed the land north of the drainage easement was available for a staging area for the project. Markwed claims Swenson and Mandan, acting through Swenson, were responsible for obtaining any required temporary construction easements for that staging area. Markwed also claims the holder of an option to purchase McCormick's land north of the drainage easement advised Markwed in September 2006, that it could not use the land as a staging area for the project. The project was delayed for several weeks before Swenson obtained written temporary construction easements from McCormick. Markwed claims it could not work on the project because of the delay, it was unable to perform any significant work on the project in 2006, and it was forced to complete work the following year after Mandan granted Markwed an extension of time until December 31, 2007, to complete the project.

[¶ 6] Markwed sued Mandan and Swenson, alleging Mandan and Swenson breached the contract by failing to obtain timely easements for Markwed to access land for a staging area, which precluded Markwed from finishing the contract in a timely manner and resulted in more than $400,000 in damages to Markwed. Markwed also alleged Mandan and Swenson negligently engaged in conduct that caused the delay and proximately caused damage to Markwed. Markwed subsequently moved to amend its complaint to include a claim for negligent misrepresentation.

[¶ 7] The district court granted summary judgment for Mandan and for Swenson, concluding the no damages for delay clause was unambiguous, was not unconscionable and precluded Markwed from recovering damages for work delays not contemplated by the parties. The court discussed three approaches for construing the clause, a New York approach, a literal approach, and a Maryland approach; the court concluded North Dakota law more closely resembled Maryland's law. The court decided the unambiguous language of the contract did not authorize an exception for delays not contemplated by the parties and the contract precluded Markwed from recovering damages for delays unless Markwed could establish a claim for negligent misrepresentation. The court decided Markwed could not bring a tort claim against Mandan because any duty Mandan owed to Markwed was based on the contract. The court also decided Markwed's tort claim againstSwenson was barred by the economic loss doctrine. After further briefing, the court decided Markwed could not recover on a claim against Mandan and Swenson for alleged negligent misrepresentations in the contract under North Dakota Pattern Jury Instruction, NDJI-Civil 50.32, because Markwed could not establish the requisite elements for that claim against Mandan. The court determined Swenson was an independent contractor and not a party to the contract between Mandan and Markwed and Markwed thus could not establish the elements of a misrepresentation claim against Swenson. The court denied Markwed's motion to amend its complaint to include a claim for negligent misrepresentation.

II

[¶ 8] Markwed's March 4, 2010 notice of appeal states Markwed "appeals ... from the ORDER ON MOTIONS FOR SUMMARY JUDGMENT" dismissing Markwed's complaint against Mandan and against Swenson.

[¶ 9] "An order granting summary judgment is not appealable." Farmers Union Oil Co. v. Smetana, 2009 ND 74, ¶ 7, 764 N.W.2d 665. "An attempted appeal from [an] order granting summary judgment will, however, be treated as an appeal from a subsequently entered consistent judgment, if one exists." Id. at ¶ 7. Judgments consistent with the order dismissing Markwed's complaint against Mandan and against Swenson were entered in January 2010. Although Mandan argues Markwed did not appeal from the order denying its motion to amend the complaint, that order was incorporated into the subsequent consistent judgments dismissing the actions, and we treat Markwed's appeal as an appeal from those judgments. Markwed's appeal is timely under N.D.R.App.P. 4(a), and the issues raised by Markwed in its appeal are reviewable in its timely appeal from the judgments. See Staiger v. Gaarder, 258 N.W.2d 641, 644 (N.D.1977) (issues raised in interlocutory order are properly reviewable in timely appeal from final judgment).

III

[¶ 10] We review Markwed's appeal under our well-established standards for summary judgment, which:

" 'is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving

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