April 22, 2018

Colorado Court of Appeals: Equitable Relief, Not Legal Damages, Appropriate Where Contract Provided for Equitable Adjustment for Unanticipated Costs

The Colorado Court of Appeals issued its opinion in Parker Excavating, Inc. v. City & County of Denver on Thursday, October 25, 2012.

Contract Dispute—Equitable Relief.

In this government contracts case, plaintiff Parker Excavating, Inc. (Parker) appealed the trial court’s judgment awarding it $1.65 million under an equitable adjustment provision of Parker’s contract with the City and County of Denver’s Board of Water Commissioners (Denver Water). The judgment was affirmed.

This case arose out of a contract dispute between Parker and Denver Water over responsibility for increased costs associated with constructing a dam and reservoir at a sand and gravel pit. The trial court found that Parker’s costs increased by $2,373,679, but “as an equitable matter . . . both parties share some responsibility for the unanticipated muck.” The court concluded that Denver Water was more responsible than Parker. It then awarded Parker $1.65 million.

On appeal, Parker argued that the trial court erred in awarding Parker equitable relief rather than legal damages. The contract contained an equitable adjustment provision, entitling either party to seek an equitable adjustment for increased or decreased costs caused by unanticipated site conditions. Further, the contract excluded compensation for excavation costs. Therefore, from the plain language of the contract, the parties would have reasonably expected an equitable adjustment to be a remedy in equity. Further, the trial court did not clearly err in reducing the measure of equitable adjustment to account for Parker’s relative responsibility in not determining the extent of the muck. The trial court’s findings are, therefore, supported by evidence in the record that certain costs were attributable to Parker, and those findings were not disturbed on appeal.

Summary and full case available here.

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