## Facts

- Louis A. Iannuccillo owned and planned to develop a 127,000-square-foot lot in North Providence, Rhode Island.
- Iannuccillo entered a written excavation agreement dated July 22, 1985 with Material Sand and Stone Corporation; the parties understood C. Pezza & Son, Inc. would perform the on-site excavation.
- The contract required excavation from a sloped condition to a specified finished grade (curbline elevation to two feet higher at the rear).
- The parties estimated removal of roughly 50,000–60,000 cubic yards of gravel and exposed rock; 10,000 cubic yards were to be delivered to another Iannuccillo site, and the remainder retained for processing and sale.
- During work, an alleged slope stability problem led town officials to halt excavation pending a remedial plan; work later resumed subject to conditions.
- Further excavation revealed a large underground rock ledge not anticipated by either side; removing it would be substantially more expensive and would yield little saleable gravel.
- Pezza demanded additional compensation to continue; Iannuccillo refused to modify the contract and demanded completion under the original terms.
- Pezza stopped work before achieving the contract grade; Iannuccillo sued for breach of contract and negligence, and defendants asserted a counterclaim for certain blasting-related costs.
- After a jury-waived trial, the Superior Court entered judgment for Iannuccillo on the contract claim, rejected impossibility/impracticability defenses, dismissed claims against Material, and resolved the counterclaim; the parties cross-appealed.

## Issues

1. Whether the newly discovered underground rock ledge made contractual performance legally impossible or commercially impracticable, excusing completion.
2. Whether the contract, properly construed, required excavation to the specified grade even if doing so required removal of substantial subsurface ledge.
3. Whether the trial court correctly allocated liability between Pezza and Material and properly measured damages for noncompletion.

## Decision

- The Rhode Island Supreme Court affirmed the trial court’s rejection of impossibility and impracticability defenses.
- The Court upheld the determination that Pezza’s obligation included completing excavation to the specified grade despite the unexpected ledge and added cost.
- The Court sustained judgment for Iannuccillo on the contract claim, treating Pezza’s cessation of work as a breach rather than excused nonperformance.
- The Court agreed with dismissal of claims against Material based on findings that Material did not breach a distinct duty where Pezza was the understood performing excavator.
- The Court generally approved the damages analysis as protecting Iannuccillo’s benefit of the bargain for completion of the graded, buildable lot.

## Legal Principles

- Impossibility and commercial impracticability are narrow doctrines; increased expense or reduced profitability, without more, does not excuse contractual performance.
- In excavation and similar construction work, contractors commonly bear the risk of substantial subsurface conditions unless the contract clearly reallocates that risk.
- A condition is not “impossible” or “impracticable” merely because it makes performance far more difficult or costly; the event must be extraordinary and must fundamentally alter the nature of the promised performance.
- A party may not unilaterally condition performance of an existing duty on post-contract acceptance of higher compensation absent a recognized legal excuse.
- Benefit-of-the-bargain damages may be awarded to place the nonbreaching party in the position it would have occupied had the contract been completed.

## Conclusion

The court held that an excavation contractor who agreed to deliver a finished grade could not stop work and demand a higher price after encountering an unexpected underground rock ledge, because the added difficulty and cost did not amount to legal impossibility or commercial impracticability and the risk remained with the contractor absent a contrary contractual allocation.


Iannuccillo v. Material Sand & Stone Corp., 713 A.2d 1234 (R.I. 1998)