Northwest Tennessee motorsports, LLC park Vs TAC

In the spring of 2007, Plaintiff/Appellant Northwest Tennessee Motorsports Park, LLC (“Northwest”) began negotiations with Defendant/Appellee Tennessee Asphalt Company (“TAC”) to re-pave approximately 700 feet of Northwest's drag strip in Gleason, Tennessee. In TAC's bid on the project, it offered to mill two inches of existing asphalt from 700 feet of the drag strip, and to re-pave the area for $39,500.00.

Prior to beginning work, TAC sent an employee to the drag strip to take core samples in four locations on the site. The coring machine used a drill bit and a water cooling system that could drop as much as two gallons of water onto the ground and into the holes left by coring. The core samples took an approximately two-inch section of asphalt from the surface of the drag strip to determine the depth of the existing asphalt. In two of the four samples, TAC noted water in the holes, but TAC's engineers testified that the water was due to the drill and was not an indication of moisture in the sub-grade. According to TAC's engineers, water in the holes left from coring was usual and no one was concerned about it.

TAC began milling off the existing two inches of asphalt on April 30, 2007. During the milling process, TAC became aware of “soft spots” in the asphalt that caused ruts in the sub-grade when the milling machine went over them. Additionally, when the pavement was proof rolled, as required under the contract, there was ground movement indicating a soft sub-grade.

At this point, TAC's engineer proposed two options: (1) purchase additional asphalt to fill in the ruts, which would be relatively quick and inexpensive, also known as an overrun; or (2) excavate and replace the existing sub-grade and re-pave the track, which would take considerably more time and money. While there is no evidence that TAC specificallyguaranteed the work, Monte Smith, one of the owners of Northwest, testified that TAC informed him that they had successfully performed the faster, less expensive option on numerous occasions, and he relied on that information in choosing the first option.

The parties entered a change order for the additional asphalt on April 30, 2007. The change order specifically provided for the additional asphalt at $60.00 per ton above the original amount in order to obtain “the best paving project possible when paving over the soft sub-grade.” During testimony, ...