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High Steel Structures, Inc. v. Cardi Corp.

Supreme Court of Rhode Island

January 20, 2017

High Steel Structures, Inc.
Cardi Corporation et al.
State of Rhode Island and Providence Plantations, Department of Administration, Division of Purchases.

         Providence County PC 09-5310 Superior Court Luis M. Matos Associate Justice

          For Plaintiffs: Stacey P. Nakasian. Esq. Stephen D. Nelson, Esq.

          For Defendant: Adam S. Sholes Department of Attorney General

          Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.


          Gilbert V. Indeglia Associate Justice.

         This matter comes before the Court on appeal from the Superior Court's grant of summary judgment in favor of the State of Rhode Island (the state) in a third-party action for breach of contract brought by Cardi Corporation (Cardi) in response to a suit by High Steel Structures, Inc. (High Steel). At issue was Cardi's contract with the state to construct a portion of a prodigious highway construction project dealing with Interstate 195 in Rhode Island (I-Way Project). Specifically, this case arises from Cardi's subcontract with High Steel to supply steel for this project and High Steel's assertion that it was never paid for 182, 873 pounds of temporary steel bracing.[1] For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.


         Facts and Travel

         The I-Way Project is a multiyear, multi-faceted highway construction endeavor for various parts of Interstate 195. In 2004, the state released details regarding Contract 6, one of fifteen I-Way Project contracts, which provided for "the construction of a series of new tub-girder bridges and ramps, along with associated public way and utility relocations and improvements." In this regard, the state retained Maguire Group, Inc. (Maguire) as the project's managing consultant and engineer of record.[2] Contract 6, the contract from which this dispute emanates, detailed plans to construct I-Way ramps labeled "NE, WS, WES and SE." Completion of Contract 6 required the use of various materials, including temporary cross braces. The temporary bracing in question, Grade 36 steel, was used for work identified as Item No. 312, [3]Item Code 824.9921, in the "Distribution of Quantities."[4] Item No. 312 was the item for Grade 50 structural steel. There was no separate line item listing the weight for the Grade 36 temporary bracing steel.

         The bid-submission deadline was set for July 30, 2004.[5] Prior to the bid deadline, on June 29, 2004, the state held a conference to address potential bidders' questions or concerns relative to Contract 6.

         On July 22, 2004, the state received a question from a prospective bidder concerning payment for temporary cross braces. Specifically, the contractor inquired, "What is the pay item for the temporary A36 steel braces between the tub beams?" In light of this question, on July 27, 2004, the state, in collaboration with Maguire, prepared and released Addendum No. 7 to Contract 6. This addendum issued a "Clarification, " which provided:

"[T]emporary bracing between girders on Bridges NE, WS and SE is not measured separately for payment. All costs associated with the temporary braces, filler bolts and field touch up are considered as incidental and shall be included in the structural steel items of work. For further clarification see changes to notes on sheets NE 45, WS 51, SE 21 found elsewhere in this Contract Addendum."

         Additionally, the state modified the field notes associated with each Contract 6 ramp to track the language of Addendum No. 7.[6]

         At the conclusion of bidding, the state selected Cardi as the general contractor for Contract 6. Cardi was the lowest bidder, with a contract price of $63, 991, 186.42, nearly $900, 000 less than the next lowest bidder. On September 10, 2004, Cardi subcontracted with High Steel for the latter to provide-among other items-temporary cross frames. High Steel bid $2.343 per pound on Item No. 312; and, using this bid price, Cardi bid $2.58 per pound for that item. High Steel's contract with Cardi specifically excluded certain items, namely "field measurements or surveys, stud shear connectors, scuppers or any other bridge drainage, scupper supports, bearings, bearing pads, anchor bolts, field touch up paint, stenciling or painting." High Steel's contract, however, included temporary cross frames. The state entered into a written contract with Cardi on October 29, 2004.

         In preparing its subcontract bid with Cardi, High Steel confirmed "receipt of Addenda #1 through #7" and acknowledged that the state issued Addendum No. 7 to Contract 6 before it subcontracted with Cardi. Further, High Steel indicated that it reviewed Addendum No. 7 and understood it as conforming to the manner in which it prepared its bid. Neither Cardi nor High Steel changed its bid as a result of Addendum No. 7, nor did they request further clarification.

         On July 31, 2008, in a letter addressed to the state, High Steel, by way of Cardi, claimed that it had not been paid for the temporary cross frames. The state consulted Maguire, which agreed that the temporary cross frames weighed 182, 873 pounds, but nevertheless recommended against payment. It did so citing Addendum No. 7, the Distribution of Quantities, and the Rhode Island Department of Transportation Standard Specifications for Road and Bridge Construction (Blue Book).[7] As a result, the state did not pay Cardi (or High Steel) any additional amount.

         On September 11, 2009, seeking payment for the temporary bracing, High Steel filed suit against Cardi and its surety, Safeco Insurance Company of America. On October 28, 2009, Cardi filed a third-party complaint seeking declaratory relief and indemnification from the state for any payment that High Steel might receive from Cardi. Cardi's complaint against the state further alleged breach of contract and quantum meruit/unjust enrichment.

         Thereafter, the state and High Steel filed separate motions for summary judgment against Cardi.[8] High Steel argued that its "bid and invoices [were] consistent with Contract 6 and Addendum No. 7, " and that "[t]he [s]tate [was] not being asked to pay more than High Steel's original bid amount." High Steel also averred that its contract interpretation was corroborated by its significant industry experience and general industry practice. In support of its motion for summary judgment, the state argued that High Steel's interpretation as to how it bid other projects and general industry practice were not relevant in reviewing this contract. The state submitted that the specific and clear language of Contract 6, and the documents it incorporated by reference, supported its reading of the contract. After hearings on January 8 and April ...

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