GREEN CONSTRUCTION COMPANY, an Iowa corporation,
Plaintiff-Appellant and Cross-Appellee,
v.
The KANSAS POWER & LIGHT COMPANY,
Defendant-Counterclaimant-Appellee and Cross-Appellant,
v.
SEABOARD SURETY COMPANY and Green Holdings, Inc.,
Counterclaim-Defendants-Appellees.
Nos. 91-3150, 91-3151.
United States Court of Appeals,
Tenth Circuit.
July 21, 1993.
John P. Ahlers, Barokas & Martin, Seattle, WA (Kevin E. Glynn, Niewald, Waldeck & Brown, Kansas City, MO and Gilbert G. Lundstrom, Woods & Aitken, Lincoln, NE, with him on the brief) for plaintiff-appellant.
Jeffrey S. Southard, Kansas Power & Light Co., Topeka, KS (J. Nick Badgerow, Spencer, Fane, Britt & Browne, Overland Park, KS, with him on the brief) for defendant-appellee.
Before KELLY and SETH, Circuit Judges, and KANE, District Judge.d
PAUL KELLY, Jr., Circuit Judge.
This appeal arises out of a contract dispute over the construction of a dam by Plaintiff-appellant Green Construction for Defendant-appellee Kansas Power and Light (KPL). Green Construction appeals the district court's order limiting its recovery to contraсt damages and disallowing additional expenses and prejudgment interest. KPL cross-appeals the district court's orders denying KPL's motions for realignment of the parties, bifurcation of the trial, post-trial juror interviews and judgment notwithstanding the verdict or a new trial. KPL also appeals the admission of evidence of insurance and the testimony of multiple expert witnesses. Our jurisdiction arises under 28 U.S.C. Sec. 1291 and we affirm.
Background
The best laid plans ...
In 1984, KPL solicited bids for the construction of an earthen dam to create a reservoir at a power plant in Kansas. The dam was to be built out of the clay soil found at the project site. KPL provided bidders with a Geotechnical Data Report on the subsurface conditions at the site, but instructed the bidders to make their own investigation as there would be no future adjustment in price for unforeseen conditions. Green was the lowest bidder, but did not conduct an investigation.
The contract required Green to construct the dam with a soil moisture content that would yield the greatest strеngth. The soil moisture range was to be +3% to -2% from "optimum." The soil in the borrow area (located behind the dam site) contained more moisture than indicated in the Geotechnical Report, however. Green began construction in the spring of 1985 and finished in June 1986. Within a few weeks, the dam developed cracks which Green attempted, unsuccessfully, to fix. KPL refused to accept the dam and eventually replaced the dam at its own cost. KPL withheld $420,000, or 5% of the contract price, which would have been due to Green upon acceptance.
Green initiated litigation to collect the 5% retainage as well as extra costs incurred during construction, based on theories of implied warranty, constructive change and misrepresentation. Green argued that the dam failed due to KPL's design. KPL counterclaimed alleging defective construction and breach of contract. The district court granted summary judgment for KPL on Green's claims for additional compensation, with the exception of the compensation based on misrepresentation, which it ruled would be available only as a set-off against any damages awarded to KPL. A jury trial resulted in a verdict for Green on its retainage claim and denying recovery to KPL. Both sides appeal, raising numerous issues.
Discussion
I. Green's Claim for Additional Compensation
Green Construction appeals the district court's partial summary judgment on its claim for expenses in excess of the contract price. The district court eliminated Green's theories оf implied warranty and constructive change, and limited any recovery based on misrepresentation to a set-off against damages that might be awarded to KPL.
We review summary judgment de novo and apply the same legal standard used by the district court under Fed.R.Civ.P. 56(c). Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc.,
A. Implied Warranty
Green contends that the informatiоn provided to bidders regarding subsurface conditions created an implied warranty of these conditions. The district court found no implied warranty as a matter of law because the construction contract expressly instructed bidders to conduct their own investigation of the site, placed the risk of excessively moist soil on the contractor, and stated that the "[l]ogs of test borings may not be indicative of all subsurface conditions that may be encountered."1
Green argues that: (1) the рroject owner impliedly warrants the accuracy and suitability of its plans and specifications; (2) additional compensation was waived only as to local conditions, as addressed in Section A.7 of the contract, and not as to subsurface conditions, addressed in Section A.8; (3) boilerplate disclaimers do not abrogate an implied warranty; and (4) KPL cannot disclaim the accuracy of the tests where the data constitutes a positive misrepresentation.
Generаlly, absent fraud, the party who agrees to complete construction for a fixed cost must absorb any losses resulting from unforeseen conditions. Reece Const. Co. v. State Highway Com'n,
However, where a contractor has a duty to make an independent inspection, reliance on the owner's specifications may very well be unreasonable. Brant Constr. Co. v. Metropolitan Water Reclam. Dist.,
B. Constructive Change
Green's next theory is that the extra work caused by the wet soil amounted to a material change in the scope of the project, entitling Green to additional compensation. Again, we disagree.
When Green encountered wet soil in the designated borrow area, Green opted to obtain soil from anothеr location rather than process (dry out) the soil from the borrow area. KPL consented to the change. Green relies on the "changes" clause, section D.27 of the contract, and on KPL's assent to the change, in support of this theory of recovery. Section D.27 provides in part:
The COMPANY, without invalidating the Contract, may order any extra work or make any changes by altering, adding to or reducing the work, provided the Contract price be adjusted as provided herein and evidеnced by written agreement....
Aplt.App. at 58. The district court found that section D.27 applies only to changes in the scope of work caused by amendments to the project design, and not to difficulties in performance due to unforeseen conditions.
Generally, a contractor may recover for additional work necessitated by a material change in specifications. 13 Am.Jur.2d Building and Construction Contracts Sec. 19 (1964 & Supp.1993). However, there can be no recovery for еxtra work if the work is covered by the terms of the contract. Id. "The extra work doctrine" allows additional compensation only "for work that was not within the scope of the contract, such that the parties could not have established a contract price of their own." Brant Constr.,
C. Misrepresentation
Even where no implied warranty exists, an owner may be liable for unknowingly (or "innocently") misrepresenting material facts about site conditions. The district court ruled that an innocent misrepresentation claim may be maintained only for equitable relief or as a defense to breach of contract. The court therefore limited Green's use of the claim to that of a defense in the event of an award to KPL. Green argues that money damages are available for innocent misrepresentation and that the jury should have been so instructed.
The Restatement (Second) of Contracts Sec. 164 (1981) provides that where one party makes a material misrepresentation, which the recipient justifiably relies upon, the contract is voidable by the recipient. Innocent misrepresentation claims are usually limited to equitable relief. See id. ; 17 C.J.S. Contracts Secs. 147, 152. Kansas law recognizes the equitable theory of innocent misrepresentation as grounds for rescission of a contract. Topinka v. American Eagle Fire Ins. Co.,
II. Green's Claim for Prejudgment Interest
Finally, Green contends that the court erred in denying its Rule 59(e) motion for prejudgment interest on the damage award. We review the district court's order for an abuse of discretion. Oklahoma Radio Assocs. v. F.D.I.C.,
In Kansas, prejudgment interest is allowed on liquidated claims. Kan.Stat.Ann. Sec. 16-201 (1980); Plains Resources, Inc. v. Gable,
KPL appeals numerоus unfavorable rulings on its motions, some of which merit our attention while others border on frivolous. Some of KPL's arguments remind us that "[t]oo often, attorneys forget that the potential for success on appeal begins at the pretrial preparation stage [and] continues during the trial.... [M]ore often than one would expect, cases are lost on appeal due to a failure of counsel at the trial level to make a proper record, or to raise arguments оr objections...." The Honorable Lawrence W. Pierce, Appellate Advocacy: Some Reflections from the Bench, 61 Fordham L.Rev. 829, 834 (1993). This admonition should be heeded by all who would litigate.
A. Motion for Realignment of the Parties
KPL moved for a realignment of the parties sixteen months prior to trial, arguing before the magistrate that KPL was the "real" plaintiff and that Green had simply won the race to the courthouse. KPL relies on the disparity in the size of the damage claims; it sought $12.9 million, while Green was asking for a mere $422,000. KPL also contends that it was prejudiced by its defendant status at trial. This argument is meritless. First, KPL fails to direct us to any authority supporting this position. Second, we have previously held that the denial of a request for realignment, where the request is made in order to proceed first and last at trial, is not reversible error. Commercial Iron & Metal Co. v. Bache Halsey Stuart, Inc.,
B. Motion for Bifurcation and Objection to Jury Trial
KPL moved to strike Green Construction's request for a jury trial as untimely, arguing that the right was waived under Fed.R.Civ.P. 38(b) & (d) and that the nature of the case was too technical for a jury. Alternatively, KPL moved to bifurcate the claims against Green Holdings in order to simplify the trial. Both motions were denied. We review the district court's denial for abuse of discretion. Eastridge Dev. Co. v. Halpert Assocs.,
In the absence of a bench trial, KPL moved to bifurcate its alter ego claims against Green Holdings, in order to simplify the trial for the jury. KPL proposed trying the liability case with Green Construction first and, if KPL prevailed, holding a second trial against Green Holdings as the alter ego of Green Construction. The district courts have " 'broad discretion in deciding whether to sever issues for trial and the exercise of that discretion will be set aside only if clearly abused.' " Eastridge Dev. Co.,
C. Motion for Post-trial Juror Interviews
KPL moved for an order allowing post-trial communication with the jury in order to determine whether the jurors were influenced by outside factors. KPL's basis for the motion was that the husband of the jury foreperson was present during the entire trial and spoke to attorneys for both KPL and Green, but most often to those representing Green. He also chatted with corporate representativеs of both parties who were observing the trial, and he regularly lunched with the jurors. KPL does not know the subject of the discussions involving Green, but claims that the juror's husband attempted to discuss specifics of the trial with KPL's attorneys on two occasions. Aplee.Supp.App. at 635-37. KPL's attorneys claim that they advised Green's attorneys that these communications appeared improper. KPL's attorneys neither expressed that concern to the judge nor formally objected. KPL now asserts that it wаs not fully aware of the extent of the relationship until the juror's husband sat at Green's counsel's table while awaiting the jury's deliberations. Green's attorneys submitted affidavits indicating that neither the trial nor the deliberations were discussed with the juror's husband. Aplee.Supp.App. at 660-66.
District of Kansas Local Rule 123 allows juror interviews if granted by court order, for good cause. District courts have "wide discretion" to restrict attorney-juror contact in order to shield jurors from post-trial "fishing expeditions" by losing attornеys. Journal Publishing Co. v. Mechem,
Furthermore, KPL failed to object to the perceived impropriety during the trial. We reiterate that " 'a party may not sit idly by, watching error be committed, and then raise the claimed error on appeal without having accorded the trial court the opportunity' " to respond. Chevron, U.S.A., Inc. v. Hand,
D. Motions for Directed Verdict, J.N.O.V. or New Trial
We first note that it is difficult to address KPL's arguments here because KPL, as cross-appellant, failed to include in its appendix all of the district court's orders from which it appeals and also makes inaccurate references to its own appendix (e.g., Aplee. Reply Brief at 8). See 10th Cir.R. 28.2(c), 30.1.1, 30.1.2, 30.2; Fed.R.App.P. 30(a).
KPL's problems do not end there. KPL also failed to move for directed verdicts on several issues: Green's claim for retainage, KPL's breach of contract claim against Green, and KPL's alter ego claim against Green Holdings. KPL now attempts to appeal the denial of its motion for judgment n.o.v. or new trial on those issues. It has long been the rule that failure to move for a directed verdict precludes later appellate review of the sufficiency of the evidence. Comcoa, Inc. v. NEC Tels., Inc.,
KPL did move for a dirеcted verdict on Seaboard Surety's defense of no termination of contract. The jury did not reach the issue of Seaboard's liability because it found no liability on the part of Green. Green's liability was a prerequisite to Seaboard's liability. Because we do not disturb the jury's finding on Green's liability, this issue is moot.
IV. KPL's Evidentiary Objections
KPL appeals two adverse evidentiary rulings by the district court; rulings which allowed the admission of evidence of insurance and the admission of multiple expert witnesses. "A trial court necessarily рossesses considerable discretion in determining the conduct of a trial" and its evidentiary rulings "will not be disturbed absent a manifest injustice to the parties." Thweatt v. Ontko,
A. Evidence of Insurance
Prior to trial, KPL filed a motion in limine to exclude evidence of insurance. That motion was denied. KPL failed to renew that objection during trial, except to object to the admission of the policy itself, based on improper foundation. Aplee.Supp.App. at 993. Green argues that KPL waived the objection by failing to preserve it for appeal. We have recently set forth a three-part test to determine whether it is necessary for the objecting party to renew the objection at trial when a motion in limine has been denied. United States v. Mejia-Alarcon,
The third requirement is that the district court's ruling be definitive. Id. at 987-88. We find that it was not. The district court indicated that the ruling would be subject to reconsideration at trial, informing KPL's counsel that "because the court has ruled does not prevent you from submitting them [the objections] again during the trial if the circumstances are such that you believe the Court should take another look at them." Aplee.Supp.App. at 39.
Based on the above, we find that KPL's objection was of the type that must be renewed, and thus KPL has waived the objection. See McEwen v. City of Norman,
B. Cumulative Expert Testimony
Finally, KPL appeals the number of expert witnesses which were allowed to testify.2 We will not disturb an evidentiary ruling unless a substantial right of a party has been affected. Fed.R.Evid. 103(a). In technical cases such as this, it is particularly appropriate that we accord deferencе to the ruling of the trial judge, who is most familiar with the issues and evidence. C.A. Assocs. v. Dow Chem. Co.,
For the foregoing reasons, the district court's judgment is AFFIRMED.
Notes
The Honorable John L. Kane, Jr., Senior United States District Judge for the District of Colorado, sitting by designation
The relevant contract clauses are as follows:
A.7 LOCAL CONDITIONS. Each bidder shall visit the site of the work and thoroughly inform himself relative to construction hazards and procedure, labor, and all other conditions and factors, local and otherwise, which would affect the prosecution and completion of the work and the cost thereof....
It must be understood and agreed that all such factors have been properly investigated and considered in the preparation of every proposal submitted, as there will be no subsequent financial adjustment, to any contract awarded thereunder, which is based on the lack of such prior information or its effect on the cost of the work.
A.8 SUBSURFACE CONDITIONS. The determination of the character of subsurface materials ... shall be each bidder's responsibility. Borings, field testing, and laboratory tests have been performed for the project design. This information has been bound separately and is issued with these specifications. Rock cores from this site are available for inspection upon request at the Jeffrey Energy Center. Logs of test borings may not be indicative of all subsurface conditions that may be encountered.
Aplt.App. at 28.
KPL filed a motion in limine with the magistrate prior to the depositions of the experts, requesting a limit on the number of experts which Green could present. However, KPL withdrew that motion before the magistrate could rule on it. Aplee.Supp.App. at 600. KPL then filed a motion to strike two particular experts that Green had added close to the time of trial. KPL argued that the last minute listing of the experts was prejudicial and that their testimony was cumulative. Id. at 620. The court denied KPL's motion. Id. at 733. KPL renewed the objection during trial, albeit during the testimony of a different expert than those listed in its motion. Id. at 1010
