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CRUZ CONSTR. CO. v. LANCASTER AREA SEWER AUTH.

October 27, 1977

CRUZ CONSTRUCTION COMPANY, INC.
v.
LANCASTER AREA SEWER AUTHORITY



The opinion of the court was delivered by: TROUTMAN

 TROUTMAN, J.

 This is an action by Cruz Construction Company, Inc. (Cruz) for damages for alleged breaches of a construction contract by the Lancaster Area Sewer Authority (the Authority). Cruz has asserted two causes of action, the first alleging underpayment for work completed and the second seeking recovery of damages suffered by Cruz in reliance on certain representations allegedly made by certain agents of the Authority. Before the Court is the Authority's motion for summary judgment as to the second cause of action.

 The following facts are uncontradicted:

 1. Cruz entered into a contract with the Authority for the construction of a sanitary sewerage system.

 2. Included in the contract or incorporated into the contract were various documents, including the conditions and prices stated in the Proposal, General Conditions, Supplemental General Conditions and Special Conditions of the Contract, the Plans, the Specifications and other contract documents (the contract documents).

 3. Huth Engineers, Inc. (Huth) was the project engineer and prepared many of the contract documents including the plans and the specifications and supervised construction of the project.

 4. Included in the plans were certain test borings or soundings which were plotted at 200 foot intervals and which indicated the level at which rock was first encountered by the contractor making the borings.

 5. The contract documents also included an estimate of 8,050 cubic yards as the amount of rock that would have to be removed from trenches that were to be excavated in the course of the construction of the project.

 6. Edward Cruz is the Vice President and Chief Operating Officer of Cruz. He first learned of the sewer project by reading about it in the Dodge Reports.

 8. Cruz bid $10.00 per square foot for removal of rock from trenches within a two-foot pay width.

 9. Upon commencement of the work, Cruz encountered rock at much higher levels than were indicated on the test borings shown on the plans. As a consequence, Cruz removed 27,124 cubic yards of rock from the two-foot pay width, not 8,050 as was estimated.

 10. The Authority paid Cruz for all of the 27,124 cubic yards of rock removed, at the rate of $10.00 per cubic yard.

 11. Cruz advised the Authority and Huth fully as to the difference in the subsurface rock conditions.

 12. Cruz was forced to employ more costly and time-consuming techniques to remove the rock because of the greater quantity of rock removed as opposed to that which it would have been obliged to remove had the rock been as indicated by the test borings.

 13. Cruz was also required to excavate rock from a greater width than the estimated two-foot pay width, and was, therefore, required to backfill the increased trench area with stone and to pave and restore the surface over a greater than anticipated area.

 14. Jack McSherry, who was employed as Chief Construction Engineer, testified in deposition that test borings in Lancaster County were extremely unreliable because of the unpredictable nature of rock in Lancaster County, but there was no warning in the contract documents as to such unreliability. Furthermore, McSherry testified that no test boring results can ever be used to accurately estimate rock quantity unless such borings are taken at five-foot intervals.

 15. McSherry testified further that he could not understand why the borings were included in the plans or why the estimate was computed to be 8,050 cubic yards, instead of a round figure such as 8,000 or even 10,000, in light of the extreme unreliability of such test borings in the Lancaster County area.

 16. Allen Forbes, Executive Director of the Authority, testified that he was responsible for estimating the quantity of rock and that he based his estimate on the test borings. He also testified that no rock overrun in the entire sewer project was as great as that in this case.

 17. Forbes testified further that he was informed during the construction of the sewer that Cruz was encountering more rock than that which had been estimated.

 18. Calvin Levis, President of Huth, testified that Huth generally does not utilize test borings because of their great unreliability, and that it was a mistake ...


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