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Earth Movers of Fairbanks, Inc. v. Dept. of Transportation (1/24/92), 824 P 2d 715
Notice: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
requested to bring typographical or other formal errors
to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, in order that
corrections may be made prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
EARTH MOVERS OF FAIRBANKS, )
INC., ) Supreme Court No. S-4275
Appellant, ) Trial Court No.
) 4FA-89-1180 Civil
) O P I N I O N
STATE OF ALASKA, DEPARTMENT )
OF TRANSPORTATION AND PUBLIC )
Appellee. ) [No. 3804 - January 24, 1992]
Appeal from the Superior Court of the
State of Alaska, Fourth Judicial District,
Appearances: Joseph L. Paskvan, Hoppner
& Paskvan, P.C., Fairbanks, for Appellant.
Mason Damrau, Assistant Attorney General,
Fairbanks, Charles E. Cole, Attorney General,
Juneau, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
Earth Movers of Fairbanks, Inc. ("EMF") sued the
Department of Transportation and Public Facilities ("DOT/PF") for
breach of contract and for declaratory relief. The superior
court upheld the conclusion of the DOT/PF Appeals Officer that
DOT/PF had not breached the contract. The superior court also
ruled that declaratory relief was inappropriate. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
EMF and DOT/PF entered a $11.5 million contract on
August 31, 1987, for the construction of the Geist Road
Extension. The contract required that the work be done in
accordance with "the Plans and Specifications."1
In early June 1988, after EMF had begun work, DOT/PF
identified a need for temporary signs where construction had
closed Phillips Field Road at Nome Drive.2 DOT/PF requested
that EMF submit an estimate for the work. EMF responded that the
work would cost an additional $1675.00. DOT/PF calculated that
it could perform the work for less than $500 and rejected EMF's
proposal. Using its own personnel and existing signs, DOT/PF
completed the project in less than 12 man hours.
Based on EMF's contention that the signing constituted
extra work for which it had the exclusive contractual right to
perform, EMF submitted a claim for $530.3 The Contracting
Officer found that DOT/PF had authority to remedy the sign
problem and rejected EMF's claim for compensation. EMF appealed
the decision to the Acting Regional Director, who upheld the
EMF then brought an action in superior court for review
of the agency's decision and for a declaratory judgment regarding
the liability for potential negligence claims arising from
DOT/PF's sign placement. The superior court agreed with the
Appeals Officer that EMF had no exclusive right under the
contract to extra work. The court also concluded that this was
not an appropriate time to rule on potential liability. EMF
appeals both decisions.
A. Breach of Contract
EMF claims it has an exclusive contractual right to
perform and receive compensation for any extra work. DOT/PF
argues that under the contract, DOT/PF could require EMF to do
the extra work but had no obligation to award extra work to EMF.
We agree with DOT/PF and affirm the superior court.4
Section 104-1.04, entitled "Extra Work,"5 which appears
in the Standard Specifications states that
[t]he Contractor shall perform work for
which there is no price included in the
contract wherever it is deemed necessary or
desirable in order to complete fully the
project. Such work shall be performed in
accordance with the specifications and as
directed, and will be paid for as provided
under Subsection 109-1.04 and 109-1.05.
Based on this provision alone, it might be reasonable for EMF to
expect to perform and be compensated for all extra work.
However, EMF's interpretation is not reasonable in the context of
other contract provisions.6
Standard Specification 105-1.07 provides in part:
Cooperation Between Contractors. The
Department reserves the right at any time to
contract for and perform other or additional
work on or near the work covered by the
When separate contracts are let within
the limits of any project, or projects each
Contractor shall conduct his work so as not
to interfere with or hinder the work being
performed by other Contractors. Contractors
working on the same project shall cooperate
with each other. He shall join his work with
that of the others in an acceptable manner
and shall perform it in proper sequence to
that of others.
The first sentence of this section clearly reserves the State's
right to perform additional work.
Moreover, paragraph VI of the Construction Contract
provides in part:
[i]t is distinctly understood and agreed
that no claim for additional work or
materials, done or furnished by the
Contractor and not specifically herein
provided for, will be allowed by the
Contracting Officer, nor shall the Contractor
do any work or furnish any material not
covered by this Contract, unless such work is
ordered in writing by the Contracting
This paragraph indicates that DOT/PF is only liable to compensate
EMF for work performed pursuant to DOT/PF's written
authorization. In the present case, DOT/PF never authorized EMF
to perform the signing.
In sum, the language of the contract as a whole
indicates DOT/PF's intent to retain control over any work not
specifically covered by the contract. As for "the objects sought
to be accomplished by the contract,"a factor identified in Craig
Taylor Equip. Co. v. Pettibone Corp., 659 P.2d 594, 597 (Alaska
1983), as relevant to contract interpretation, DOT/PF was trying
to have a road built in the best interest of the State. There is
a credible public policy interest in the Department's efforts to
minimize the cost of that construction. We therefore hold that
EMF is not entitled to additional compensation.
EMF sought a declaratory judgment regarding the
liability for potential negligence claims arising from DOT/PF's
sign placement. However, the superior court correctly ruled that
consideration of the liability issue was inappropriate in this
There is no actual case or controversy. According to
DOT/PF, there have been no negligence claims arising from the
signing. Also, two years have elapsed since the signs were
removed, extinguishing all potential claims under the statute of
limitations. "Advisory opinions"are to be avoided. Gieffels v.
State, 552 P.2d 661, 664-65 (Alaska 1976). While the court may
address an issue which is technically moot in light of "the
recurring nature and importance of the issue," Central Constr.
Co. v. Home Indem. Co., 794 P.2d 595, 597 (Alaska 1990), there is
no indication that this is such an issue.
The contract did not provide EMF with an exclusive
right to do any work necessitated by the construction. This
litigation is not the appropriate setting for the court to rule
on liability. The judgment is AFFIRMED.
1 According to both parties, this meant that the following
documents were incorporated by reference into the contract: the
1981 Standard Specifications for Highway Construction, the
Standard Modifications to the Standard Specifications and the
2 Since the road closure was not anticipated, the placement
of signs at that location was not specified in the written
3 Of the $530, $465 represented anticipated mark-up and $65
was for engineering time spent developing the proposal.
4 Since this is a question of law which does not require
agency expertise, we substitute our judgment for that of the
agency's. Earth Resources Co. of Alaska v. State, Dep't of Rev.,
665 P.2d 960, 964-65 (Alaska 1983).
5 Both parties agree the signing constitutes extra work.
6 In interpreting a contract, one factor we look at is "the
language of the contract as a whole." Craig Taylor Equip. Co. v.
Pettibone Corp., 659 P.2d 594, 597 (Alaska 1983).