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Saturday, March 29, 2008

Dugan Construction Company, Inc. v. New Jersey Turnpike Authority

02-29-08 A-3576-06T1

In a case involving a public contract for remediating
polluted groundwater, we examined the doctrines of patent
ambiguity and reformation. The contractor claimed $9.5 million
for disposing of approximately 200,000 gallons of non-hazardous
wastewater, although its bid of fifty dollars per gallon was
based on the New Jersey Turnpike Authority's estimate that the
project would produce only fifty-five gallons of wastewater.
The trial judge dismissed the contractor's complaint based on
the doctrine of patent ambiguity. We concluded that the
contract estimate was a mistake, rather than an ambiguity, and
that reformation was the appropriate remedy. Based on undisputed
evidence concerning the reasonable per-gallon price of the work,
we concluded that the contract should be reformed to provide the
contractor compensation of about $50,000.