Watson Bowman Acme Corp. v. RGW Construction, Inc.

Filed 8/9/16

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

WATSON BOWMAN ACME CORPORATION, F070067

Plaintiff and Appellant, (Super. Ct. No. CV002754)

v. OPINION RGW CONSTRUCTION, INC.,

Defendant and Appellant. APPEAL from a judgment of the Superior Court of Merced County. Brian L. McCabe, Judge. Ralls Gruber & Niece, John W. Ralls and W. Samuel Niece for Defendant and Appellant. Lax & Stevens and Paul A. Lax; McCormick, Barstow, Sheppard, Wayte & Carruth and Todd W. Baxter for Plaintiff and Appellant. -ooOoo-

* Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of parts I, II.D and III of the Discussion.

INTRODUCTION RGW Construction, Inc. (RGW) was the successful low bidder on a California Department of Transportation (Caltrans) project for the construction of a Highway 99 overpass near Merced. RGW entered into a contract with Watson Bowman Acme Corp. (Watson) for the delivery of 146 sealed expansion joints for use on the overpass. Caltrans rejected Watson’s two-cell expansion joint but subsequently approved Watson’s larger, four-cell expansion joint for the project. Watson and RGW disagreed on the compensation owed Watson for delivery of the four-cell expansion joints. Watson filed a breach of contract action, contending it was entitled to an adjustment of the price on RGW’s original purchase order because the items ordered were changed. Watson argues that RGW’s purchase order was ambiguous as to exactly what was ordered because the references to Caltrans’s specifications were not consistent with the specific description that used the two-cell expansion joint’s model number. Watson argues parol evidence showed it advised RGW that the two-cell expansion joint would not be approved by Caltrans and, despite this warning, RGW specifically requested a quote from Watson for the less expensive two-cell model. Thus, Watson argues that its subsequent delivery of a four-cell expansion joint to satisfy Caltrans’s specifications should be regarded as a change order that entitles it to an adjustment of the contract price. RGW disagrees, arguing that the price quoted for the two-cell expansion joint was the applicable price because the purchase order, which Watson signed, unambiguously stated the expansions joints would conform to all of Caltrans’s specifications. The trial court concluded that RGW’s purchase order was ambiguous and allowed the jury to decide what the contract meant and what price was appropriate. The jury decided in favor of Watson, finding the amount of the subject agreement was $605,990.