Kilgore Pavement Maintenance, LLC v. West Jordan City
257 P.3d 460
Utah Ct. App.2011Background
- Kilgore bid $697,901 for asphalt work, using liquid asphalt oil priced at $350/ton.
- City accepted the bid and a written contract was formed in spring 2008.
- Oil price rose to $1005/ton; Kilgore sought a $91,000 price increase on Aug 22; City paid contract price and opposed amendment.
- City council voted against the price amendment on Oct 14.
- Kilgore sued Jan 30, 2009 for impracticability, unjust enrichment, breach of contract, and breach of good faith; district court dismissed most claims, then dismissed the remaining impracticability claim on reconsideration; Kilgore appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kilgore's impracticability claim is barred by contract-based risk allocation. | Kilgore argues the contract did not expressly allocate impracticality risk. | City contends Kilgore assumed the risk via fixed-price terms and material-furnishing obligations. | Impracticability claim is barred; Kilgore assumed risk under contract. |
| Whether contract language allocates risk of cost increases to Kilgore. | Kilgore asserts articles 11.1(b)-(c) show no risk shifted to Kilgore. | City relies on 6.2(d) and 11.1(a) to show Kilgore bears material costs; 11.1(b)-(c) do not negate this. | Contract includes Kilgore's obligation to furnish materials at its own expense, thus Kilgore assumed cost-increase risk. |
| Whether impossibility/impracticability can equitably adjust a contract price without modification. | Kilgore seeks equitable price adjustment under impracticability doctrine. | Court should not extend flexibility of impossibility to provide equitable adjustments absent contract modification. | Utah law does not permit equitable price adjustment without contract modification; dismissal affirmed. |
Key Cases Cited
- Encon Utah, LLC v. Fluor Ames Kraemer, LLC, 210 P.3d 263 (Utah 2009) (contract interpretation and risk allocation principles)
- Gunn v. Utah State Ret. Bd., 155 P.3d 113 (Utah Ct.App. 2007) (review of legal standards on appeal from district court)
- Miller Family Real Estate v. Hajizadeh, 200 P.3d 213 (Utah Ct.App. 2008) (contract interpretation without extrinsic evidence)
- Western Props. v. Southern Utah Aviation, Inc., 776 P.2d 656 (Utah Ct.App. 1989) (impossibility/impracticability defenses and risk allocation)
- Robinson v. Robinson, 232 P.3d 1081 (Utah Ct.App. 2010) (impossibility/impracticability doctrine under Utah law)
- Bitzes v. Sunset Oaks, Inc., 649 P.2d 66 (Utah 1982) (flexibility of impossibility doctrine and risk assumption)
- Raytheon Co. v. White, 305 F.3d 1354 (Fed. Cir. 2002) (equitable adjustments after contract modifications)
- M.J. Paquet, Inc. v. New Jersey Department of Transportation, 171 N.J. 378 (N.J. 2002) (equitable adjustments conditioned on contract modification)