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American Asphalt Company, Inc v. Delaware River Port Authority

August 2, 2011


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-393-09.

Per curiam.


Argued May 2, 2011

Before Judges Lisa, Sabatino, and Alvarez.

This case involves a dispute arising out of a publicly-bid contract for the repaving of parking lots. The contractor, plaintiff American Asphalt Company, Inc., appeals an order granting summary judgment to defendant, Delaware River Port Authority ("DRPA"), dismissing the contractor's claims for price escalation and for payment on additional work it performed.

For the reasons that follow, we affirm the dismissal of the price escalation claim. However, we vacate summary judgment as to the claim respecting additional work, and remand for a trial on that discrete claim.


Although the factual record is unclear and incomplete in certain respects, we summarize the relevant evidence as it was developed in discovery. We consider that evidence in a light most favorable to plaintiff, as the party appealing the entry of summary judgment. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

American Asphalt is a paving contractor with offices in West Collingswood Heights. DRPA is a bi-state transportation agency, created by a compact between New Jersey and Pennsylvania. See N.J.S.A. 32:3-1 (authorizing the New Jersey Interstate Bridge Commission to enter into an agreement with Pennsylvania to form DRPA). Among other things, DRPA operates the Port Authority Transit Corporation ("PATCO") high-speed rail service between New Jersey and Pennsylvania.

In February 2008, DRPA solicited bids for a parking lot improvement project at the Woodcrest and Ashland PATCO station parking lots. DRPA's bid package contemplated that the project would be completed within approximately seven months after bids were opened. The bid package required that the submitted prices include "all costs of any nature incident to and growing out of the [w]ork[.]" The bid package included detailed specifications concerning the materials to be supplied.

Plaintiff submitted a bid for the project based upon DRPA's specifications. The bid proposed to mill*fn1 105,992 square yards of parking area to an average depth of two inches. At a unit cost of $1.90 per square yard, the milling work entailed a sub-cost of $201,384.80. Plaintiff's bid also proposed to supply the project with 106,492 square yards of Bituminous Concrete Surface Course, Mix I-4 ("I-4"),*fn2 at two-inch depth. The mix was priced at a unit cost of $6.65 per square yard, yielding a sub-cost of $708,171.80.

DRPA awarded plaintiff, the lowest responsive bidder, the contract for the project on May 6, 2008. Thereafter, on May 22, 2008, the parties executed a lengthy agreement, Contract No. 15K. The contract specified a total price of $1,739,663.32, which was to include the following:

[T]he [c]ontractor's profit and general overhead and all costs and expenses of any nature whatsoever (including without limitation, taxes, labor and materials) foreseen or unforeseen, and any increases in said costs and expenses, foreseen or unforeseen, incurred by the [c]ontractor in connection with the performance of the

[w]ork[.] [Emphasis added.]

The contract further specified that "all of [the above-cited] costs and expenses shall be borne solely by the Contractor." However, the contract did allow the scope of the work and other terms to be modified, in accordance with certain procedures, which we describe in Part III, infra. The contract further acknowledged that plaintiff could receive additional compensation, again in accordance with certain specified procedures, if it encountered site conditions "differing materially from those ordinarily encountered and generally recognized as involved in the [w]ork[.]"

DRPA retained an engineering firm, Remington & Vernick Engineers ("Remington"), to assist it in overseeing the project.

The record supplied to us reflects that Remington maintained an active presence at the two job sites, and participated in some of the discussions and decisions relating to subject matters involved in this litigation.

A pre-construction meeting was held on May 28, 2008. At that meeting, plaintiff was informed that Thomas Herron, P.E., would be DRPA's contact person for the work, and that Christopher A. Saporano, P.E., and Paul Magowan, an inspector, would be the contact persons at Remington. Plaintiff was specifically instructed that "[a]ll correspondence" concerning the work, such as "submittals, RFI's,*fn3 payment applications, etc." were to be "submitted directly to Remington & Vernick Engineers[,] Attn: Christopher A. Saporano, P.E., P.P."

Shortly thereafter, DRPA sent to plaintiff a notice, which was dated June 6, 2008, and effective June 9, 2008, to proceed with the work within ten days. Plaintiff accordingly began performing the contract.

Beginning in mid-June 2008, what are described in the record as "construction progress meetings" were usually held every two weeks during the project. According to the handwritten sign-in sheets provided in the record, the attendeestypically included Herron and other personnel from DRPA; Saponaro from Remington; representatives of plaintiff, including its vice president, Robert Moncrief; and a PATCO representative. Typewritten minutes of each meeting were prepared by Saponaro. Each set of minutes states on its last page that the "minutes stand as written unless comments are received within three (3) working days of the date of issue."*fn4

At the first such meeting, on June 16, 2008, one of the topics concerned so-called "leveling"*fn5 work in certain portions of the parking lots. This topic was documented by Saporano in the minutes, under Item 1.8,*fn6 as follows:

June 16, 2008 [Plaintiff] stated that in Lots 1A & 1B sixty (60) extra Tons of aggregate were required for leveling in areas of the lots where "snow poles" were previously removedby PATCO. John Rink [of PATCO] stated that he investigated the "snow poles" and verified that they had been previously installed and removed by PATCO. John Rink agreed that leveling the areas with additional aggregate was acceptable to PATCO. [Plaintiff] indicated that they would proceed with leveling in this manner should a similar condition arise in other areas.

At the second project meeting, which was held the following week on June 23, the leveling issue was discussed again:

June 23, 2008 [Plaintiff] asked for direction with regard to leveling and repairing areas that have an approximate 1/2" unadhered layer after the 2" milling operation has been completed.

The DRPA and Remington & Vernick Engineers directed [plaintiff] to remove all loose and unstable materials left behind after milling is complete and provide 2" asphalt overlay as specified in the contract documents. Maintain a maximum [curb] reveal of 7" and ensure that drainage is adequate. [Emphasis added.]

Two days later, on June 25, 2008, Moncrief sent an RFI to Saporano concerning "[a]additional material required due to field conditions," specifically for "T.7 Bituminous Concrete Surface Course." In that request, Moncrief inquired:

We need to know how you would like to address payment for asphalt leveling course required due to existing field conditions? Those conditions are as follows: The existing overlay varied from 2 1/4" to 3" thickness. We milled as per our contract at a 2" depth. The remaining material became loose in various areas due to what would seem a lack of tack coat between the existing base and surface courses. We respectfully feel that this is above and beyond our scope of a 2" overlay as per our contractual obligation. [Emphasis added.]

Thereafter, Item 1.8 of the minutes was updated, at each of the four remaining project meetings, as follows:

July 7, 2008

The DRPA asked [plaintiff] to submit a cost for the additional leveling previously performed and a cost for the additional leveling anticipated in the future. [Plaintiff] was reminded that [it] must follow the procedures specified in the contract documents for work that is out of the original contract scope. [Emphasis added.]

July 21, 2008 [Plaintiff] submitted a change order request for additional leveling that is currently under review by Remington & Vernick Engineers and the DRPA. [Emphasis added.]

August 4, 2008

Remington & Vernick Engineers and the DRPA agreed that one change order will be issued to cover all cost adds and deducts ...

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