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Diamond Surface Inc. v. State Cement Plant Comm.8/19/1998
DIAMOND SURFACE, INC., a corporation with its principal place of business at Maple Grove, Minnesota, Plaintiff and Appellant, v. THE STATE CEMENT PLANT COMMISSION, a public corporation and agency operating the Cement Plant at Rapid City, South Dakota, Defendant and Appellee.
SOUTH DAKOTA SUPREME COURT
Appeal from the Seventh Judicial Circuit, Pennington County, SD
Hon. Thomas L. Trimble, Judge
Affirmed
Argued Jun 2, 1998; Opinion Filed Aug 19, 1998
[ ] Diamond Surface, Inc., a Minnesota corporation, brought suit against the South Dakota State Cement Plant Commission (SDCP), the South Dakota Department of Transportation (DOT), and Western Ash Company after completion of a highway paving project near Edgemont, South Dakota. DOT and Western Ash Company settled and were dismissed prior to trial. Diamond Surface alleged SDCP supplied defective cement which resulted in premature drying or stiffness of the concrete used in the paving project. After submission of Diamond Surface's case, the trial court granted SDCP's motion for directed verdict on the following counts: negligence; breach of implied warranty of fitness for a particular purpose; breach of the Uniform Commercial Code's (UCC) obligation of good faith and fair dealing; fraud and deceit; and violation of industry standards. Diamond Surface's remaining claim, breach of implied warranty of merchantability, was submitted to the jury. The jury returned a verdict for SDCP. Diamond Surface appeals the grant of directed verdict but not the jury verdict. We affirm.
FACTS AND PROCEDURE
[ ] Diamond Surface was the successful low bidder on a 1.3 mile long, 44 foot wide, eight inches deep, paving project on Highway 18 near Edgemont. Diamond Surface's owner, Terry Kraemer (Kraemer) had accepted a guaranteed price quotation from SDCP for the cement to be used on the project. Rather than submit its own concrete mix design, Diamond Surface selected a DOT tested and pre-approved mix design for the project. Diamond Surface also optioned to substitute fly ash for a portion of the cement. Fly ash has binding qualities similar to concrete but is cheaper. On the first day of the project it was observed that the concrete was setting up or drying too quickly and could not be worked with to produce an acceptable surface as it came out of the back side of the paver. This complication is known as "false setting" and Diamond Surface alleges this was the cause of a poor finish and difficulties encountered throughout the project.
[ ] Diamond Surface claimed the false setting was caused by defective cement received from SDCP and sought damages of $164,000 at trial for the additional time and labor expended to complete the project. SDCP denied its cement was the cause of the false setting and attributed the problems to several factors, including Diamond Surface's unique paving methods, substandard equipment, disorganization and inexperience among the paving crew, and delays in placing the concrete.
[ ] Diamond Surface's initial complaint alleged: negligence; breach of the implied warranties of merchantability and fitness for a particular purpose; breach of the UCC obligation of good faith and fair dealing; fraud and deceit upon which punitive damages should be awarded; and violations of industry standards. The punitive damage and negligence claims were dismissed by the trial court prior to trial but Diamond Surface was allowed to re-assert these claims by subsequent amendment.
[ ] A five-day trial was held in May 1997. At the close of Diamond Surface's case, the trial court directed a verdict in favor of SDCP on all grounds except the merchant
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