from the Iowa District Court for Linn County, Sean W.
contractor Rice Lake appeals the district court's ruling
in favor of its equipment supplier following a bench trial on
the parties' breach-of-contract claims. AFFIRMED.
Jeffrey A. Stone of Simmons Perrine Moyer Bergmann P.L.C.,
Cedar Rapids, and Nathan R. Sellers of Fabyanske, Westra,
Hart & Thomson, P.A., Minneapolis, Minnesota, for
P. Kresowik of Stanley, Lande & Hunter, P.C., Davenport,
by Vaitheswaran, P.J., and Tabor and Mullins, JJ.
Lake Contracting Corporation appeals the district court's
ruling that Rice Lake's supplier, Zimmer &
Francescon, Inc. (Z&F), met its contractual obligation to
deliver four new motors for intermediate lift pumps as part
of a major project undertaken by the City of Cedar Rapids
following the 2008 flood. Rice Lake contends the rejection of
Z&F's motors by the city and its design engineer,
HDR, is binding not only on Rice Lake under its prime
contract with the city but also on Z&F under its separate
supply contract with Rice Lake. During oral arguments, Rice
Lake claimed the district court erred in substituting its
judgment for HDR's decision that Z&F's motors did
not meet the project's "design intent."
According to Rice Lake, the court was not authorized to
analyze the terms of its supply contract with Z&F given
HDR's discretion to reject Z&F's motors unless
HDR acted fraudulently in doing so.
we agree with the district court that Z&F met its
obligation to Rice Lake to "furnish as submitted"
under Rice Lake's instructions regarding these motors, we
Background Facts and Proceedings
Project. Flooding in 2008 damaged equipment at the
Cedar Rapids Water Pollution Control Facility (the facility).
The city hired HDR as the design engineer for its seven-year
permanent improvement plan for the facility. Permanent
repairs package 3 (the project) was a final phase in the
city's plan. Michael Butterfield served as HDR's
principal engineer and project manager. Butterfield stamped
and sealed engineering documents prepared under his
supervision, indicating the documents were "prepared
accurately and appropriately for the design conditions."
Butterfield provided his seal of approval on the
project's plans and specifications.
city has general conditions for all of its construction
projects. These general conditions are "a variant of the
engineering contract documents" and are included in the
city's contract with its general contractors. Butterfield
explained the city "has a much better working
knowledge" of the general conditions but HDR knows the
documents "very well."
an Iowa company with nine employees, is a manufacturer's
representative and distributor of equipment for waste water
treatment plants. Andrew Larson, an experienced salesperson,
prepared proposals and secured subsequent orders.
Larson's May 2012 memorandum told all potential
contractors for the project that Z&F intended to submit a
proposal to supply equipment, including the motors at issue.
Larson submitted Z&F's quotation or proposal, he
reviewed HDR's plans and specifications, which set out
very specific requirements for the motors. Butterfield
explained the specifications, through the use of tasks and
key notes, set out the "key design parameters" of
the motors-horsepower, volts, rpm, and phases. Larson agreed,
stating the specifications "identify the parameters
[Z&F needed] to compare to the pump requirements"
and "taken together, are necessary for Z&F to make
the proper selection of a motor in its quotation."
Larson understood the plans and specifications' intent
was for Z&F's motors to be compatible with the pumps.
did not have amperage requirements for its motors when
providing its quotation, even though HDR had specified
amperage for other equipment.Neither did the bid documents tell
Z&F to "replace in kind" or to "replace
with compatible motor, " which, similarly, HDR specified
for other equipment. Larson understood the plans and
specifications for the new motors "weren't asking us
to duplicate" the existing motors, and he created
Z&F's quotation based on HDR's plans and
30, 2012, Larson submitted Z&F's quotation to all
contractors, bidding to supply more than $1 million in
equipment, including the motors. Z&F's scope of work
was limited to "furnishing" the equipment. The
parties agree Z&F is a "supplier, " one who
furnishes "materials or equipment to be incorporated in
the Work by Contractor or any Subcontractor."
city hired Rice Lake, a Minnesota company, to be the general
contractor for the project. On July 16, 2012, Paul Kujak, the
project manager for Rice Lake, accepted Z&F's May 30
quotation by issuing a purchase order to Z&F. The parties
agree the purchase order created a contract for Z&F to
supply the motors. Rice Lake planned to work with its
electrical subcontractor to install the motors after
delivery. Rice Lake's purchase order stated:
then contacted Fairbanks, the pump manufacturer, to help
coordinate Z&F's ultimate purchase through Fairbanks
from U.S. Motors. The next month, August 2012, Larson went to
the facility to gather additional information for the shop
drawings, which are "submittals or technical data."
The shop drawings would be drafted by U.S. Motors and
transmitted through Z&F to Rice Lake for the general
contractor's approval. Larson took a picture of the nameplate
on the existing motors, which provided technical data,
including the amperage of the damaged motors.
submitted its first set of shop drawings to Rice Lake, and
these drawings set out amperage for its proposed motors. Rice
Lake reviewed and approved the shop drawings without changes
and forwarded them to HDR with Rice Lake's transmittal
letter. After its review, HDR rejected the first
set of drawings on September 26, 2012, instructing Rice Lake
to tell Z&F to revise and resubmit the drawings in line
with HDR's six detailed comments. HDR's comments did
not call out amperage for the four motors and did not comment
on the amperage Z&F specified.
"engineer review" section of the city's general
conditions states the engineer's "review and
approval" of shop drawings "will be only to
determine if the items covered by the submittals will, after
installation or incorporation in the Work, conform" to
the contract "and be compatible with the design concept
of the completed Project as a functioning whole." The
engineer's approval does not encompass the "means,
methods, techniques, sequences, or procedures of construction
(except where [such] is specifically and expressly"
called for in the contract). Additionally, the engineer's
approval "shall not relieve" the contractor from
its "responsibility for any variation from" the
contract requirements unless the contractor has called the
engineer's attention in writing "to each such
variation" at the time the contractor submits shop
drawings. Butterfield testified Rice Lake did not approach
HDR with a change order for Z&F's motors.
"resubmittal procedures" in the city's general
conditions state the contractor "shall make corrections
required by" the engineer to the shop drawings and
"shall return" them for another review by the
engineer. The contractor "shall" in writing
"direct specific attention" to any "revisions
other than" the engineer's prior corrections on a
November 9, 2012, Larson responded to Kujak about HDR's
comments concerning motor speed, cooling capacity,
thermostats, rotation, and bearings, and on November 30,
Z&F submitted its second set of shop drawings to Rice
Lake. Kujak approved Z&F's second set of shop
drawings the same day, stamping Rice Lake had "satisfied
Contractor's Obligations" as "to
Contractor's review and approval as stipulated under
General Conditions." The general conditions state Rice
Lake is solely responsible for coordinating the work of its
subcontractors and suppliers and Rice Lake's obligations
"shall include data which is 'complete with respect
to quantitates, dimensions, specified performance and
design criteria, materials, and similar data."
(Emphasis added.) Butterfield explained Rice Lake "had
an obligation to verify all of those things under the
specifications, " and "the shop drawing does not
relieve the contractor of meeting the intent of the
contract documents." (Emphasis added.)
giving its approval, Rice Lake forwarded the second set of
shop drawings to HDR for its review. On December 5, 2012, HDR
sent a directive to Rice Lake telling Kujak to instruct
Z&F to "furnish as submitted." HDR's
comments on Z&F's second submittal included comments
on other equipment Z&F was supplying, but HDR did not
make any comments about the four motors.
Butterfield approves shop drawings, he looks for
"general conformance with the design and intent with the
specs and drawings" and his approval states either
"furnish as submitted, furnish as noted, or revise and
resubmit." But according to Butterfield, HDR's
instruction to Rice Lake to "furnish as submitted"
is not "the equivalent of [a] get-out-of jail card if
the contractor does not follow the plans and
specs." (Emphasis added.) Larson testified Z&F
relies on the engineer stamping as verification "the
engineer has validated the plans in conformance with our
specifications." According to Rice Lake, shop drawings
are another way to document communications and can supplement
the contract documents. After Z&F was told to
"furnish as submitted, " it instructed U.S. Motors
to manufacture the motors.
April 1, 2013, Kujak retired and Mark Hinsz became the
project manager for Rice Lake. Later in April, Z&F
delivered the motors to the project site and invoiced Rice
Lake. Rice Lake was not ready to install the four motors at
the time of delivery but would work with its electrical
contractor to install the motors. Z&F was not responsible