[¶ 1.] A-G-E Corporation (A-G-E) entered into a road construction contract with the South Dakota State Department of Transportation (DOT) on a portion of U.S. Highway 83. DOT inspectors randomly spot inspected A-G-E’s work after each layer of the road work was completed, and gave verbal approval for each subsequent level to be applied. While the final layer was being applied, the state engineer determined that the elevation and slope of the roadway was off between the randomly inspected locations and required A-G-E to tear off the layers and re-grade to contract specifications. A-G-E brought suit against DOT claiming waiver or estop-pel precluded DOT from requiring A-G-E to perform additional work to correct the elevation and slope, as DOT’s employees had verbally approved the application of subsequent layers after randomly spot inspecting the work. A-G-E also claimed the work was “extra work,” or in the alternative “alterations,” under the terms of the contract for which A-G-E should have received additional compensation. On competing motions for summary judgment, the circuit court held for DOT. We affirm.
FACTS AND PROCEDURE
[¶ 2.] On May 6, 2003, A-G-E submitted a sealed bid to DOT for grading, structures and part asphalt course for 11.065 miles of U.S. Highway 83 in Stanley County, South Dakota. A-G-E was awarded the contract as the low bidder. The contract was subject to the Standard Specifications for Roads and Bridges, 1998 Edition (hereinafter SSRB), published by DOT, except for section 5.8, which was modified by a “Special Contract Provision for Contractor’s Staking.” 1
[IT 3.] Per the provisions of the contract, A-G-E conducted the surveying and setting of blue-top grading stakes (blue-tops)
2
at 100 foot intervals, using DOT’s specifications for the required slope and grade. The grading portion of the project required A-G-E to 1) prepare the sub-grade (dirt), 2) lay the sub-base (salvage material) to support the base course, 3) place the base course on the sub-base, and 4) place oil on top of the base course.
[¶ 4.] The quantity of material necessary for each layer of the project was calculated based on the length, width, slope and desired grade elevation of the roadbed. A spreadsheet was used to determine the spread rate and was then included in the construction plans. DOT checkers reviewed the scale ticket of each A-G-E truck that brought material to the site, referred to the spread rate for the specific portion of the roadbed involved, and then directed the truck driver to dump the material over the prescribed length.
[¶ 5.] A-G-E was then responsible for equalizing the material in a windrow and then uniformly blading the material out to the required grade elevation and slope. The process was repeated for each truckload of material and for each layer of the project. A-G-E maintained its own checkers and inspectors on site during the project. However, the record does not indicate their function or what actions they took during the project.
[¶ 6.] After each layer was constructed, the state inspector assigned to the project checked the grade elevation and slope at randomly selected blue-tops. At each randomly selected blue-top that was inspected, the layers were found to be within the contract specifications. After each layer was inspected, the inspector verbally communicated to A-G-E an “okay” to proceed with the next layer. Once the first three layers were constructed, A-G-E placed the oil on top of the base course and DOT issued written consent for the subcontractor to begin applying the final layer of asphalt surface.
[¶ 7.] The contract required the asphalt surfacing to be one to one and one-half inches in depth. Shortly after the asphalt layer was started, it was discovered that a substantially irregular depth of asphalt was being laid down by the paving subcontractor with up to five inches of asphalt being laid in some spots in order to achieve the proper grade and slope. It was subsequently discovered that the grade and slope between the 100-foot blue-tops along approximately the first two miles of roadway did not comply with the contract specifications.
[¶ 8.] A-G-E was then directed by the DOT engineer to rework the material between the 100-foot blue-tops along the two miles of roadway in order to bring the grade and slope in those areas into compliance with the contract specifications. AG-E determined the manner in which to conduct the re-grading based on its experience, equipment and staffing. A-G-E hauled some excess gravel off site, stockpiled it and then brought the same gravel back onto the site to fill in low spots, and then re-graded the materials.
[¶ 9.] The quantity of materials used was neither increased nor decreased by DOT during the re-grading process. Nor did DOT alter the grade or alignment of the road from that shown in the original plans. At its own expense, DOT placed additional blue-tops every fifty feet longitudinally and every twelve feet across the width of the roadway to guide A-G-E’s corrective work.
[¶ 10.] A-G-E filed suit in circuit court claiming $45,517.50 in damages. A-G-E alleged in its complaint that the expenses were incurred as a result of DOT’S direction to remove excess gravel from high spots and fill low spots. A-G-E alleged that DOT waived its rights under the contract to a final inspection by virtue of conducting the random blue-top inspec
[¶ 11.] After DOT filed its answer, the depositions of Rick Gordon, engineering supervisor for DOT; Mark Peppel, the DOT project engineer who was supervised by Gordon; Rodney Larson, DOT senior transportation technician on the project, and Gary Johnson, president of A-G-E, were taken. A-G-E then moved for summary judgment, and DOT filed a cross-motion for summary judgment. On December 20, 2005, oral arguments were presented to the circuit court. The circuit court entered an order granting DOT’s motion and judgment of dismissal on January 4, 2006.
[¶ 12.] On appeal, A-G-E raises two issues for this Court’s review:
1. Whether the circuit court erred when it denied A-G-E’s motion and granted DOT’s motion for summary judgment.
2. Whether disputed material facts exist that require a reversal of the circuit court’s order granting DOT’s motion for summary judgment and a remand for trial on the matter.
We will address the issues in reverse order, as issue two is a threshold issue that determines whether the matter was appropriate for disposition via a motion for summary judgment.
STANDARD OF REVIEW
[¶ 13.] Summary judgment is properly granted when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” SDCL 15-6-56(c). We will affirm the trial court’s grant or denial of a motion for summary judgment when no genuine issues of material fact exist, and the legal questions have been correctly decided.
Titus v. Chapman,
[¶ 14.] In order to prevail on a motion for summary judgment, the non-moving party “must present specific facts showing that a genuine, material issue for trial exists.”
Stoebner v. South Dakota Farm Bureau Mut. Ins. Co.,
[¶ 15.] “On appeal, this Court can read a contract itself without any presumption in favor of the trial court’s determination.”
Icehouse, Inc. v. Geissler,
ANALYSIS AND DECISION
[¶ 16.] 1. Whether disputed material facts exist that require a reversal of the circuit court’s order granting DOT’s motion for summary judgment and a remand for trial on the matter.
[¶ 17.] As a threshold matter per the provisions of SDCL 15-6-56(c), summary judgment is appropriate when there is no genuine issue of material fact. SDCL 15-6-56(c). In addition, there must be no genuine issue on the inferences to be drawn from those facts.
St. Paul Fire & Marine Ins. Co. v. Engelmann,
[¶ 18.] In the instant case, A-GE submitted a statement of undisputed material facts along with its motion for summary judgment. DOT submitted a response to A-G-E’s statement of undisputed facts, along with its own statement of undisputed material facts in support of its cross-motion for summary judgment. AG-E did not object to DOT’s statement of genuine material facts. Nor did A-G-E argue below that genuine issues of material fact existed. Now on appeal, A-G-E asserts for the first time that such issues existed.
[¶ 19.] This Court does not review issues raised for the first time on appeal.
Cain v. Fortis Ins. Co.,
[¶ 20.] 2. Whether the circuit court erred when it denied A-G-E’s motion and granted DOT’s motion for summary judgment.
[¶ 21.] A-G-E advances three arguments in support of its contention that the circuit court improperly granted DOT’s cross-motion and denied its motion for summary judgment. A-G-E argues that DOT is subject to waiver, or in the alternative it is subject to estoppel as a matter of law. Third, A-G-E argues that the work required to re-grade the first four layers of the two-mile segment in question was “extra work,” or alternatively “altera
Waiver
[¶ 22.] “Waiver is a volitional relinquishment, by act or word, of a known, existing right conferred in law or contract.”
Harms v. Northland Ford Dealers,
[¶ 23.] A-G-E argues that DOT waived its contractual right to reject work identified at the final inspection by the engineer as nonconforming when the project inspector made his inspections at randomly selected blue-tops and gave a verbal “okay” to A-G-E to proceed to the next layer. A-G-E supports its argument by arguing that DOT had a duty and opportunity to inspect the work as it progressed, and that A-G-E relied on the results of the inspections performed by the DOT inspector. A-G-E contends that each layer of the roadway was accepted by the conduct of the DOT inspector within the meaning of section 5.16 of the contract. A contrary interpretation, A-G-E argues, would result in the DOT inspector serving no viable function or purpose.
[¶ 24.] The relevant contract provisions are contained in DOT’S SSRB. Section 5.10, titled Duties of the Inspector, provides:
Department inspectors will be authorized to inspect all work done and materials furnished. This Inspection may extend to any part of the work, preparations, fabrications or manufacture of the materials to be used. The Inspector is not authorized to alter or waive the provisions of the contract. The Inspector is not authorized to issue instructions contrary to the Contract, or to act as a foreman for the Contractor. The Inspector will have the authority to reject work or materials until any issues can be referred to and decided by the Engineer.
(emphasis added). Section 5.1, titled Authority of the Engineer, provides:
Work shall be performed to the satisfaction of the Engineer. The Engineer will decide questions which may arise as to the quality and acceptability of materials furnished, work performed, rate of progress of the work; all questions which may arise as to the interpretation of the plans and specifications; all questions as to the acceptable fulfillment of the contract on the part of the Contractor; and disputes between Contractors where it effects the progress of the work. The Engineer’s decision shall be final.
Finally, section 5.16, titled Final Acceptance, provides:
When the contract work, including authorized modifications and final cleanup has been completed, the Region Engineer or his designee, will within five days, exclusive of holidays, make a final inspection of the work. When provided in the Contract, the Region Engineer or his designee may make inspections following completion of portions of the contract. If the work is found to conform with the requirements of the Contract, the Region Engineer or his desig-nee will issue written notification to the Contractor of acceptance by the Department of Transportation. Such notice is not to be construed as an acceptance by the Region Engineer or his designee of previously noted defective or unauthorized work, or of unauthorized work subsequently determined during the final computations of field measurements. Should the work fail to conform with requirements of the Contract, a written statement of the features to be remedied will be given the Contractor. Final acceptance will not be made until the Contractor advises the Engineer that the corrections have been made and the requirements have been met.
(emphasis added).
[¶ 25.] A-G-E’s interpretation of the role of the DOT inspector is not controlling. A-G-E’s argument that the DOT inspectors serve no purpose if it cannot rely upon their work as a measure of conformity with contract provisions is immaterial to A-G-E’s duties under the contract. Whatever purpose DOT may have for utilizing inspectors is independent of A-G-E’s duties under the contract. The contract language in section 5.10 merely notifies the contractor that it must permit the DOT inspector access to conduct any and all inspections that DOT requires.
[¶26.] It is the language of the contract that controls. The language permits the DOT inspector to inspect and reject work in progress. The contract does not authorize the DOT inspector to supervise, approve or accept work on behalf of DOT. Nor does the DOT manual require such work-in-progress inspections, or give assurance that such inspections eliminate the contractor’s duties under the contract. In addition, section 5.10 specifically states that the inspector “is not authorized to alter or waive the provisions of the contract.” Only the DOT engineer can effect final acceptance and relieve the contractor of further duties under the contract.
[¶ 27.] Furthermore, the contract language is clear that the entire project must substantially conform to its requirements, not just those portions of the project inspected by the DOT inspector while work is in progress. Section 5.3 of the DOT’s SSRB provides:
In the event the Engineer finds the materials furnished, work performed, or the finished product are not in reasonably close conformity with the plans and specifications resulting in an inferior or unsatisfactory product, the work or materials shall be removed and replaced or corrected by and at the expense of the Contractor.
[¶ 28.] A-G-E, as the contractor, had the duty to perform its work in conformity with “the lines, grades, cross sections, dimensions and material requirements, including tolerances, shown on the plans, specifications or other contract documents.” SSRB, § 5.3 Conformity with Plans and Specifications. The fact that AG-E elected to rely on the DOT inspector’s random blue-top stake inspections as a means of determining whether it was in conformity with the contract requirements does not waive DOT’s right to enforce the terms of the contract.
[¶ 30.] A-G-E’s second argument under its waiver theory, that the interim inspections and partial payments for the earlier stages of the project constituted acceptance and “certification” that those portions of the roadway had been completed in conformance with the contract specifications under SSRT section 5.16, must also fail. SSRB section 5.16 generally deals with acceptance when “the contract work ... has been completed.” Although section 5.16 also contemplates some interim final acceptances, it does so only when interim acceptances are “provided in the Contract.” A-G-E has not identified contract provisions authorizing interim final acceptance following partial completion of this contract. More importantly, even if the interim final acceptances were authorized by this contract, section 5.16 requires that the regional engineer must issue “written notification to the contractor of [the] acceptance.... ” In this case, A-G-E has not indicated that DOT issued such written notifications of acceptance of the prior portions of the project.
Estoppel
[¶ 31.] A-G-E next argues DOT should be estopped from asserting any fault on the part of A-G-E for causing the needed rework. A-G-E argues it relied upon the DOT inspector’s random blue-top inspections for assurance that it was in compliance with the requirements of the contract. A-G-E concedes that the depth, slope and grade requirements were met at the randomly selected blue-tops inspected by the DOT inspector. It also concedes that the spread rate was not in error.
[¶ 32.] Under this Court’s holding in Western Casualty and Surety Co.,
To create an estoppel, there must have been some act or conduct upon the part of the party to be estopped, which has in some manner misled the party in whose favor the estoppel is sought and has caused such party to part with something of value or do some other act relying upon the conduct of the party to be estopped, thus creating a condition that would make it inequitable to allow the guilty party to claim what would otherwise be his legal rights.
[¶ 33.] A-G-E cites to
Northern Improvement Co. v. South Dakota State Highway Comm’n,
[¶ 34.] A-G-E cites to several other cases where state or city engineers were invested with broad supervisory authority to control the manner in which the contractor conducted the work.
See City Street Improvement Co. v. City of Marysville,
[¶ 35.] In the instant case, the DOT inspector did not have similar broad authorities under the SSRB to supervise and direct the manner in which A-G-E completed the work. Section 5.10 made it unequivocally clear that the DOT inspector could not serve as foreman for A-G-E, nor alter or waive provisions of the contract. The DOT inspector did not order A-G-E to proceed to the next layer, but rather gave a verbal “okay” that the random inspections of blue-tops had not revealed any nonconforming work in a particular layer.
[¶ 36.] In addition, the DOT inspector did not falsely represent, conceal any material facts, or engage in any of the types of conduct that are required for equitable estoppel to apply. A-G-E concedes that the depth, grade and slope at the blue-tops were in compliance with the contract requirements. The defects in the project were discovered in areas that had not been inspected. Moreover, the defects in the project were not discovered by the inspector, but rather by the asphalt contractor when the depth of the asphalt layer began to vary widely by up to five inches. Therefore, just as is the case for waiver, estoppel could not apply because there is
[¶ 37.] Finally, at the time the roadway layers were initially placed by A-G-E, the DOT inspector did not order additional or different work to be done than what was originally contemplated in the contract. Only after the nonconformity was discovered was direction given by the DOT engineer to A-G-E to strip off layers and rework the materials to achieve the proper grade and elevation.
Extra Work or Alterations
[¶ 38.] A-G-E’s final argument is that the work required to bring the roadway slope and grade into conformity with the provisions of the contract was “extra work” or in the alternative “alterations” within the meaning of SSRB. Section 4.3 of the SSRB defines “extra work.” It provides:
The Contractor shall perform authorized work, for which there is no price included in the contract, whenever necessary or desirable in order to complete the work as contemplated. Such work shall be performed in accordance with the specifications and as directed, and be paid for as provided under Section 9.5.
A-G-E argues the rework was authorized and necessary for the completion of the project to the satisfaction of the DOT engineer and not provided for in the contract.
[¶ 39.] A-G-E’s argument that the work conducted after the slope and grade were discovered to be nonconforming was for work for which there was “no price included in the contract.” A-G-E’s argument lacks merit, as the contract language specified a price for the work required to achieve the specified grade elevation and slope for each of the four roadway layers. All the work conducted by A-G-E after the discrepancy was discovered was more properly classified as rework for failure to achieve the contract specifications. Therefore, section 4.3 does not apply.
[¶ 40.] As to A-G-E’s alterations argument, that subject is addressed in section 9.2 of the SSRB, and provides in relevant part:
The Department reserves the right to make such increases or decreases in quantities and such alterations in the work within the general scope of the contract, including alterations in the grade or alignment of the road or structure or both, as necessary or desirable. Such increases or decreases and alterations shall not invalidate the contract nor release the surety. The Contractor agrees to accept the work as altered, as if it had been a part of the original contract.
[¶ 41.] No increase or decrease in the quantities of material was required by the DOT engineer during the rework phase of the project. In addition, the slope and the grade of the roadway were not altered from the original plans. Instead, the DOT engineer required A-G-E to rework the same quantity of materials on the nonconforming portions of the roadway in order to achieve the original slope and grade required under the contract. The rework did not alter the project as originally planned. It merely served to correct AG-E’s errors, which were due to either an inability or failure to monitor its own work.
[¶ 42.] The circuit court did not err when it granted DOT’S motion for summary judgment. Therefore, we affirm on all issues. Affirmed.
Notes
. It should also be pointed out that clauses in the "Special Provision for Contractor’s Staking” also made A-G-E responsible for the problems now in dispute, notwithstanding the fact that DOT may have randomly checked the slope and grade at various times before the project was completed. That provision provided:
The Contractor shall perform all construction layout and reference slaking necessary for the accurate control and completion of all ... grading [and] ... paving.
The Contractor shall be solely responsible for the accuracy of the staking.
Any deficient survey layout or staking that results in construction errors shall be
corrected by the Contractor at no additional charge to the [DOT],
The Engineer may check the accuracy and control of the Contractor’s survey work at any time. The checks performed by the Engineer will not relieve the Contractor of the responsibility for the accuracy of the survey layout or the construction work.
These contractual provisions clearly relieved DOT of responsibility for ascertaining the accuracy of the work in dispute until final notification of acceptance under SSRB § 5.16.
. "Blue-tops” are grade stakes with a blue ribbon or blue spray paint at the top that are set at the desired elevation on the centerline as an aid for the contractor to blade the material to the required grade elevation.