Savin Brothers, Inc. v. State, 48 N.Y.2d 754 (1979)

A contractor cannot recover damages from the state for additional costs incurred due to inaccurate estimates in contract documents when the contract explicitly disclaims any warranty or representation of actual field conditions or quantities.

Summary

Savin Brothers, Inc. sued the State of New York for breach of contract, alleging that the state’s failure to include certain borrow requirements in the earthwork summary provided for bid preparation led to increased costs. The Court of Appeals reversed the Appellate Division’s partial allowance of the claim, holding that the contract documents expressly stated that the earthwork summary was not a warranty of actual conditions and that additional borrow, if required, would be paid at the standard unclassified excavation rate. The court emphasized that the contractor was not entitled to rely solely on the earthwork summary and was compensated according to the contract terms.

Facts

Savin Brothers, Inc. contracted with the State of New York for the reconstruction of a 2.3-mile section of road in Niagara County.
The State provided an earthwork summary for bid preparation, which allegedly omitted certain borrow requirements.
Claimants asserted that the State’s failure to include these borrow requirements led to increased costs in the borrow operation.
The contract documents contained a disclaimer stating that the conditions and quantities in the earthwork summary were not warranted or represented as actual field conditions, and that borrow may be necessary even when not indicated.

Procedural History

The Court of Claims dismissed all causes of action asserted by Savin Brothers, Inc.
The Appellate Division agreed with the Court of Claims except for the cause of action pertaining to the claimants’ “borrow” operation, for which it granted relief to the claimant.
The State appealed to the Court of Appeals regarding the borrow operation claim.

Issue(s)

Whether the State of New York incurred liability for breach of contract by failing to include certain borrow requirements in the earthwork summary provided to Savin Brothers, Inc. for bid preparation, despite a disclaimer stating that the summary was not a warranty of actual field conditions or quantities.

Holding

No, because the contract documents explicitly stated that the earthwork summary was not a warranty or representation of actual field conditions or quantities, and the claimants were only entitled to be paid for additional borrow at the unclassified excavation rate, which they were.

Court’s Reasoning

The Court of Appeals based its decision on the specific language of the earthwork summary and related contract documents. The court highlighted the disclaimer, which stated: “Conditions and quantities as shown on the table * * * are not to be deemed or considered by the contractor as a warranty or a representation * * * of actual field conditions or quantities. Borrow may be necessary even when not shown on the excavation table. Borrow, if required, shall be paid for under the regular item of unclassified excavation, unless specifically provided for in the contract.”

This language, according to the court, made it clear that the claimants were not entitled to rely solely on the earthwork summary. The court emphasized that the claimants were compensated for the additional borrow at the unclassified excavation rate, as stipulated in the contract. The court found no basis to deviate from the express terms of the agreement between the parties. By agreeing to the terms of the contract, the contractor assumed the risk of discrepancies between the estimated and actual borrow requirements.