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In 1995 and 1996, GBI performed services for subdivisions of
the State of Hawaii and others (collectively, landowners) under
which it excavated and graded the landowners’ land for future
construction. GBI performed these services directly for general
contractors, who, in turn, had contracted with the landowners.
GBI’s contracts with the general contractors generally required
it to excavate materials from specified job sites (sites) and to
grade the sites in accordance with certain specifications. GBI’s
grading services included using “fill”. GBI was required by the
contracts to use as fill any “usable” materials which were
present on the site. When not enough usable materials were
present on the site, the contracts required GBI to supply
additional fill at its own expense.
Materials were considered usable if they met certain
specifications. An engineer employed by the landowners examined
the materials after their excavation and ascertained whether the
materials met the specifications. Materials which the engineer
rejected as not meeting the specifications were characterized as
“unusable” and had to be removed from the site at GBI’s expense.
When GBI agreed to perform the relevant services at a site, it
did not know (either actually or by estimate) the amount of
materials at the site which would be considered usable or
unusable.
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Last modified: May 25, 2011