Sherrodd, Inc. v. Morrison-Knudsen Co.

815 P.2d 1135 (1991)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P subcontracted with COP Construction (COP) to do certain earth-moving work involved in the construction of fifty family housing units. COP itself was a subcontractor to the general contractors D. Safeco Insurance Company of America (Safeco) provided COP's payment bond on the job. P contends that a representative of D told him that there were 25,000 cubic yards of excavation to be performed on the job. P claims that its bid of $97,500 on the subcontract was made in reliance on that representation, based on $3.90 per cubic yard for 25,000 cubic yards. D denies that its representative made any such statement. P submitted its bid and won and immediately began work. A written contract was eventually signed. P discovered that the quantity of work far exceeded 25,000 cubic yards. The contract provided that P would perform earthwork in the quantity 'LS' for the consideration of $97,500. The parties agree that the letters 'LS' mean lump sum. P contends that its officers signed the contract, even though by then they knew that the job involved more than 25,000 cubic yards of earthwork because a COP officer threatened to withhold payment for work already done unless the contract was signed. P further contends that the COP officer verbally represented that a deal would be worked out wherein P would be paid more than the sum provided for in the contract. COP's position is that it only agreed to assist P in presenting a claim for additional compensation to the Army Corps of Engineers, based on differences in the moisture content of the soil from that stated in the bid proposal. That was done, but the claim was denied. The contract had the following provisions: No verbal agreement with any agent either before or after the execution of this Subcontract shall affect or modify any of the terms or obligations herein contained and this contract shall be conclusively considered as containing and expressing all of the terms and conditions agreed upon by the parties hereto. No changes . . . shall be valid . . . unless reduced to writing and signed by the parties hereto.' P was paid the $97,500 provided for in the contract, less approximately $9,750 for work left uncompleted. P sued to recover quantum meruit plus tort damages under fraud, both actual and constructive, and breach of the covenant of good faith and fair dealing. D moved for summary judgment, which was granted based on the parol evidence rule regarding modification of written contracts.