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Driscoll Construction Co., Inc. v. State of New Jersey, Department of Transportation

371 N.J. Super. 304, 853 A.2d 270 (App. Div. 2004)

CONTRACTS; INTERPRETATION—Where a contract’s terms are ambiguous, parol evidence may be admitted to resolve the ambiguity.

A contractor’s bid to construct noise barriers was approved. The contractor submitted traffic control plans to the Department of Transportation (DOT) calling for permanent lane closures during the construction of the barriers. The DOT rejected the plans, contending that the bid specifications prohibited the use of permanent lane closures during construction, but rather required temporary lane closures. The contractor submitted new traffic control plans that employed temporary lane closures. It then submitted a claim to the DOT seeking additional funds based on the DOT’s rejection of its proposed use of permanent lane closures. The contractor claimed that the prohibition against using permanent closures during construction was an uncontemplated “change of character” under the contract. The DOT rejected the claim and the contractor sued. The DOT filed a motion for summary judgment dismissing the complaint, which the lower court granted. The lower court refused to allow the contractor to submit evidence that the DOT permitted permanent lane closures in connection with another project with another contractor. The contractor argued that it reviewed that other contract when it reviewed the bid specifications and set its bid price. The lower court refused to consider it, noting that parol evidence is only admissible to resolve an ambiguity in the contract. It held the bid specifications to be clear and unambiguous and that they prohibited the use of permanent lane closures. Therefore, parol evidence was not permitted.

The Appellate Division reversed. It disagreed with the lower court’s finding. It noted that there were several instances in the bid contract that seemed to indicate that permanent lane closures were not prohibited. Therefore, parol evidence should have been admitted to help resolve the ambiguity. The Court also noted that, because the contract was not clear on its face, a factual determination was needed. Therefore, summary judgment was inappropriate.

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