REEDE CONSTRUCTION, INC., Plaintiff, Counterclaim Defendant and Appellee,
SOUTH DAKOTA DEPARTMENT OF TRANSPORTATION, Defendant, Counterclaimant and Appellant.
CONSIDERED ON BRIEFS ON FEBRUARY 13, 2017
FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA THE HONORABLE JOHN PEKAS Judge
G. SCHMIDT of Gunderson, Palmer, Nelson & Ashmore, LLP
Rapid City, South Dakota Attorneys for plaintiff, counter
claim defendant and appellee.
T. CLARKE of Davenport, Evans, Hurwitz & Smith LLP Sioux
Falls, South Dakota and EDWIN E. EVANS of Evans, Haigh &
Hinton, LLP Sioux Falls, South Dakota Attorneys for
defendant, counterclaimant and appellant.
GILBERTSON, CHIEF JUSTICE.
The South Dakota Department of Transportation (DOT)
contracted with Reede Construction Inc. (Reede) to perform
highway construction work in Sioux Falls. DOT refused to
issue a letter of acceptance after requesting numerous
repairs, many of which Reede never performed. Reede
eventually left the job and demanded payment for the repairs
it had completed. Reede sued, and DOT counterclaimed. At
trial, the jury returned a verdict awarding no damages to
either party. DOT filed a motion for a new trial, arguing
insufficient evidence supported the jury's verdict. The
circuit court denied the motion, and DOT appeals. We affirm.
and Procedural History
In March 2006, DOT contracted with Reede to perform work on a
portion of Interstate 29 and Highway 42 in Minnehaha County,
South Dakota. DOT set June 29, 2007, as the completion date.
On April 12, 2006, Reede sent a letter to DOT proposing a
modified concrete mix design. DOT approved, appending a
special provision to the contract allowing for a
contractor-furnished mix design "sufficiently workable
and finishable for all uses intended[.]" Use of the new
mix design would "not relieve [Reede] from the
responsibility for furnishing a concrete mix that meets
specification and workability requirements."
In late 2006 and early 2007, DOT identified various defects
in the pavement and concrete. On February 1, 2007, DOT sent a
preliminary punch list of items requiring repairs to Reede.
The punch list identified numerous instances of cracking and
joint spalling. In late April 2007, DOT observed
additional cracking and distress in the concrete. A DOT
employee noted in an email that he "[had not] seen
anything quite like this before in new pavement." Reede
responded in early May that it would repair the cracks it had
identified prior to the roads being opened to traffic.
Further, Reede would do so at its own expense. However, Reede
requested reimbursement for repairs resulting from
"damage caused by unforeseeable events beyond the
control of the contractor, " e.g., damage caused by
traffic. DOT agreed to compensate Reede for some of these
repairs. DOT claimed, though, that some of the damage stemmed
from the concrete mix design and that Reede had contractually
assumed responsibility for costs associated with pavement
performance. Reede disagreed with DOT's interpretation of
the contract, arguing that while it bore responsibility for
the concrete mix design used in the pavement, it could not be
held responsible for performance of the pavement itself.
In June 2007, concerns arose regarding surface finish,
transverse and longitudinal cracking, joint spalling, and
other "spider web like cracking." In late June, DOT
contacted Reede to again request repairs while denying that
"acts of God or others contributed to the pavement
failure." DOT also contacted Reede in July regarding the
need to remove panels on I-29 "due to poor consolidation
and unacceptable finish." DOT further requested Reede
provide DOT "a written position on the cause of the
above noted conditions and the course proposed to correct
In November 2007, Reede sent DOT a letter containing the
observations of James LaFrenz, a concrete expert Reede had
hired, regarding the condition of the project. DOT reviewed
LaFrenz's letter and determined it needed to conduct
further analysis. DOT informed Reede that once it finished
its examination, DOT would issue a work order detailing
repairs that needed completing before Reede could receive
On February 28, 2008, DOT sent Reede a letter listing issues
still outstanding on the project, including the need for
concrete pavement repairs. Reede responded it would make
additional inspections of the concrete. In July 2008, DOT
sent Reede a work order requesting pavement repairs. DOT
received no response. In September, DOT requested a written
statement detailing what Reede intended to do. On February 6,
2009, Reede wrote back that it "recogniz[ed] the request
to complete the concrete repairs" and "intend[ed] .
. . to execute the work needed to complete the work
requested." However, Reede again requested reimbursement
for any such repairs. DOT responded that Reede would need to
file a formal claim, and DOT reiterated its position that any
costs for repairs should be borne by Reede.
In March 2009, Reede sued DOT, claiming breach of contract,
quantum meruit, and unjust enrichment. DOT counterclaimed for
breach of contract and breach of implied warranty of
workmanship. The parties conducted extensive discovery. On
November 9, 2015, a ten-day jury trial commenced. Both sides
offered numerous exhibits, and the jury heard extensive
testimony, including from experts. The jury returned a
verdict awarding no damages to either party. On February 17,
2016, DOT filed a motion for a new trial. On April 11, the
circuit court indicated orally that it would deny the motion.
On April 13, the court issued its order denying DOT's
motion for a new trial.
DOT appeals, arguing the circuit court abused its discretion
by not granting DOT's motion for a new trial. Reede
responds that DOT failed to preserve the issue for review by