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Rudzik Excavating, Inc. v. The Mahoning Valley Sanitary District

Court of Appeals of Ohio, Eleventh District, Trumbull

November 20, 2017

RUDZIK EXCAVATING, INC., Plaintiff-Appellee,

         Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2015 CV 01300.

          Stuart A. Strasfeld and David S. Barbee, Roth, Blair, Roberts, Strasfeld & Lodge, (For Plaintiff-Appellee).

          Thomas J. Wilson, Comstock, Springer & Wilson Co., L.P.A. (For Defendant-Appellant).



         {¶1} Appellant, the Mahoning Valley Sanitary District ("the District"), appeals the judgment of the Trumbull County Court of Common Pleas, following a jury trial, awarding appellee, Rudzik Excavating, Inc., $525, 210 in damages on Rudzik's claim against the District for breach of contract. At issue is whether the trial court erred in denying the District's motion for directed verdict. For the reasons that follow, we affirm.

         {¶2} Rudzik filed a complaint against the District, seeking an unspecified amount of damages for breach of contract. The District filed an answer and counterclaim demanding repayment of an amount it claimed it had overpaid Rudzik. At the District's request, the case proceeded to trial by jury.

         {¶3} The District sells water to its member cities, Youngstown, Niles, and McDonald, which in turn sell water to residents of other jurisdictions. As part of the process of making drinkable water, the District maintains lime-sludge lagoons. Lime is a by-product of producing drinkable water. The lime settles at the bottom of storage tanks and is pumped out to lime-sludge lagoons. Water is pumped from the lagoons, which then become full of lime sludge, which must periodically be removed from the lagoons.

         {¶4} In December 2014, the District advertised for bids on Contract G-106 ("the contract"), a lime-sludge removal contract. The advertisement said, "[t]he work for which proposals are invited includes Removal and Land Application/Beneficial Reuse of Lime Sludge from sludge lagoons, which * * * are located in Weathersfield Township * * * It is estimated that the amount of sludge to be removed and * * * reused from the Bid for Lagoon G is * * * 50, 000 cubic yards."

         {¶5} The District prepared Specifications and Instructions to Bidders. The Bid Proposal Form prepared by the District showed the project had three parts: "Base Bid 1, " "Alternate Bid 2, " and "Alternate Bid 3." According to the contract documents, Base Bid 1 involved the removal of lime sludge from Lagoon G and land application/beneficial reuse of the sludge; placement of sand in Lagoon G; and a couple of miles of road-repair work around the lagoons. Alternate Bid 2 was for the placement of sand in another lagoon, Lagoon E (the sludge in that lagoon having previously been removed). Finally, Alternate Bid 3 was for the installation of 24 new "sluice gates" to control the flow of water in the lagoons.

         {¶6} The District's Bid Proposal Form included a section for bidders to insert a total price for work to be performed under Base Bid 1. It also provided a space for the cost to remove sludge per cubic yard from Lagoon G. The form said the total price was to be determined by multiplying 50, 000 cubic yards of sludge by the dollar amount ("unit price") to be proposed and inserted by the bidder. The form also included a section for the total price for work under Alternate Bid 2 with a space for the price to install sand per cubic yard. Alternate Bid 3 simply asked for the cost to replace 24 sluice gates.

         {¶7} The District's Instructions to Bidders provided that if any bidder was "in doubt as to the * * * meaning of any part of the Contract Documents, " the bidder could submit a written request to the District's Chief Engineer for interpretation." The Chief Engineer would respond to a request for information by issuing an Addendum, a copy of which would be provided to all bidders. Further, the contract defined the word "contract" as including any Addenda.

         {¶8} The District's Chief Engineer testified that, in response to questions bidders asked concerning the Instructions, he issued two Addenda to the contract instructing bidders how to prepare their bids. He testified that Addendum 1 instructed bidders "to include whatever was necessary for the contractor to complete that portion of the work in the bid." He instructed them to "add up their numbers for labor, material costs, insurance, overhead and profit, to make a whole number." He said their total bid amount was to be the total of their costs for completing the work.

         {¶9} Addendum I advised bidders that, as to Base Bid I, their bid amount should be the total of the following costs: the cost of removing 50, 000 cubic yards of sludge from Lagoon G; the cost of placing six inches of sand in that lagoon; the cost of labor, equipment, and materials; the cost to dig out pothole areas and fill them with six inches of limestone and to lay three inches of limestone on the whole roadway; and the cost of roadway repairs from Salt Springs Road to the lagoons.

         {¶10} This Addendum contradicted the language of Base Bid 1 in the District's Bid Proposal Form, which simply instructed bidders to multiply 50, 000 cubic yards of sludge to be removed from Lagoon G by a dollar amount ("unit price") to be proposed by the bidder in arriving at the total bid amount of Base Bid 1.

         {¶11} Addendum 1 also stated that "[a]ny unused item(s) in this contract will be a credit back to the project, " meaning it would be a credit to the District. The Bid Proposal Form did not mention anything about credits.

         {¶12} After Addendum 1 was issued, bidders still had questions about the contract, so the Chief Engineer issued Addendum 2. This Addendum explained that for Base Bid 1 and Alternate Bid 2, bidders should make sure the "top line and dollar figure" included their total cost for that part of the work. As to Alternate Bid 2, the "second line per cubic yard" should show the cost of the sand delivered to the lagoon per cubic yard, which indicated the District would receive a credit for sand it provided for the project.

         {¶13} On January 13, 2015, James Tressa, Rudzik's project manager, submitted Rudzik's proposal. The Base Bid 1 "top line" figure was the fixed amount of $1, 260, 000, which was stated to be a product of 50, 000 cubic yards times $16 per cubic yard of sludge. However, $16 times 50, 000 cubic yards only equals $800, 000. The balance of the $1, 260, 000 bid included Rudzik's other costs to complete Base Bid 1, as the Chief Engineer had instructed the bidders to do in the Addenda.

         {¶14} Rudzik's Alternate Bid 2 was the fixed amount of $234, 000 for sand placement in Lagoon E. Alternate Bid 3 was the fixed amount of $200, 000 to provide and install 24 sluice gates.

         {¶15} Of the three contractors who submitted bids, the Chief Engineer determined that Rudzik submitted the lowest total bid ($1, 694, 000, based on the total amounts of each of the three bid items).

         {¶16} Before the contract was awarded, the Chief Engineer e-mailed Mr. Tressa, asking him for a breakdown of Rudzik's costs for sludge removal and sand placement. He also asked for the cost of Base Bid 1 and Alternate Bid 2 if the District provided the sand. Mr. Tressa provided a breakdown of all his costs that comprised Base Bid 1 in the amount of $1, 260, 000. Of this amount, Mr. Tressa allocated $905, 000 for lime-sludge removal. The balance of the $1, 260, 000 total bid was comprised of Rudzik's other costs, including the costs for sand installation and road repair. At the Chief Engineer's request, the breakdown also showed that Rudzik would provide a lime-sludge credit to the District of $16 per cubic yard under Base Bid 1 (for every cubic yard removed less than 50, 000 cubic yards) and a sand credit of $50 per cubic yard under Alternate Bid 2 (for every cubic yard of sand provided by the District for the project).

         {¶17} After the Chief Engineer received this breakdown, he awarded the contract to Rudzik without changing Rudzik's price to fit the formula set forth in the contract. Further, the District Treasurer certified that the full contract price for all three parts of the contract - $1, 694, 000 - had been appropriated by the District to meet its payment ...

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