Triax Pacific, Inc. v. American Ins. Co.
| Decision Date | 29 November 1993 |
| Parties | NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of |
| Court | U.S. Court of Appeals — Tenth Circuit |
Before BALDOCK, HOLLOWAY, and BRORBY, Circuit Judges.
After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R.App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument. 2
Plaintiff Triax Pacific, Inc. appeals from the district court's order granting summary judgment in favor of the defendants on all of plaintiff's breach of contract and promissory estoppel claims. We affirm.
In late July or early August 1990, RG & B Contractors, Inc. defaulted on its contract with the Department of the Navy for renovation of 169 housing units on the island of Guam. R. at 60, 74, 122, 164, 228. Defendants American Insurance Company and Fireman's Fund were RG & B's sureties on the Navy contract. 3 Id. at 1, 13, 61, 74. After the default, defendants solicited bids from plaintiff and other contractors for completion of the construction work left unfinished. Id. at 61, 105. Defendants hired John Sevier as their agent to solicit bids and make recommendations. Id. at 306.
As part of the bidding process, defendants supplied the bidders, including plaintiff Triax, with a written Invitation for Bids. Id. at 76, 106. The Invitation for Bids provided that a "contract for completion will be entered into between the successful bidder and the Surety." Id. at 106. It further provided that any bid would be subject to approval of the Navy. Id.
Plaintiff submitted its written bid prior to the bidding deadline but later withdrew the bid when it discovered an $800,000 error. Id. at 61, 112-13. On October 5, 1990, defendants' agent Sevier wrote defendants indicating that even if the error were accounted for, plaintiff would have been the low bidder. Id. at 114.
On October 30, 1990, Mr. Sevier telephoned Robert Christiansen, plaintiff's vice president. According to Mr. Christiansen's deposition testimony, their conversation proceeded as follows:
John Sevier called me up and said: "How would you like to go to work in Guam?"
And I said, "I'd love to."
He says: "Will you take it at the price you have submitted?"
And I said: "What price?"
And he said: "Your corrected bid with the eight hundred thousand."
And I said: "Yes, we'll take the job at that price."
Id. at 405. Mr. Sevier then stated Id. at 522. Plaintiff alleges that during this conversation, Mr. Sevier also promised to tender plaintiff to the Navy as completion contractor. Id.
Also on October 30, 1990, Mr. Sevier sent a fax to Mr. Christiansen requesting that plaintiff be prepared to respond to the Navy's correspondence deleting certain Specialized Supplemental Personnel from the completion contract at the meeting to be held in Guam. Id. at 118. Mr. Christiansen prepared an estimate for contract modification showing a credit of $233,604 toward plaintiff's previously-submitted bid amount. Id. at 121, 211-12.
On November 3, 1990, plaintiff's representatives, including its president, accompanied Mr. Sevier to Guam. Id. at 62, 79. Mr. Sevier also invited representatives of another contractor, International Bridge CorporationWestern Alaska Contractors, to travel to Guam at the same time. Id. at 70, 179. On November 5, 1990, plaintiff presented its qualifications to the Navy in Guam. Id. at 63.
During the November 5 meeting, the Navy's representative, Mr. Putnam, explained that defendants had three options for dealing with RG & B's default: (1) completing a takeover contract with a contractor; (2) doing nothing and allowing the Navy to reprocure the project; or (3) tendering a contractor to the Navy. Plaintiff's representatives were informed that defendants had not yet selected an option and the Navy could not proceed in drafting a contract with an acceptable contractor until they did so. Id. at 202-03.
Mr. Sevier did inform the Navy representative that defendants wanted to tender plaintiff as replacement contractor. Mr. Sevier further requested that plaintiff be allowed to inventory materials stored by RG & B. Id. at 63, 102. A Navy representative accompanied plaintiff's representatives to the jobsite where they began an inventory. Id. at 63, 202, 217. Representatives of Western Alaska Contractors also performed an inventory of the jobsite. Id. at 79.
On November 5, Mr. Sevier also requested a "best and final offer" from both plaintiff and Western Alaska. Id. at 79. Plaintiff's representatives objected that they believed they already had been awarded the contract. Mr. Sevier was apologetic but explained that defendants wanted him to obtain new bids. Id. at 329-30. Plaintiff Triax presented a revised, verbal bid of $10,869,000 in exchange for the deletion of certain inspection work on the project. Id. at 63-64, 71, 181, 217. Western Alaska also provided a new bid in the amount of $10,996,000, but indicated that they might further reduce their bid to $10,769,000. Id. at 70, 134-35.
After receipt of the plaintiff's best and final offer, Mr. Sevier again told plaintiff's representatives that they were the low bidder and would be signing a contract with the Navy. Id. at 64, 181, 218. Mr. Sevier requested that the representatives meet with the Navy again on November 7. Id. at 64. On the morning of November 7, 1990, plaintiff's representatives met with Mr. Sevier. He presented them with a bottle of champagne and told them they were the recipients of the contract. Id. at 64-65, 207-08, 218-19. He also stated that the only remaining step would be to obtain the approval of, and sign a contract with, the Navy. Id. at 208, 219.
Later that day, plaintiff's representatives met with Mr. Sevier and Mr. Putnam of the Navy. The meeting did not go as expected because Mr. Putnam indicated he had just received a letter from Mr. Seidl, defendants' counsel, in which defendants had elected to have the Navy reprocure the project rather than selecting the replacement contractor themselves. Id. at 129-30, 182, 333-34. Mr. Putnam told the parties that he believed it would be necessary for the Navy to obtain new bidding due to the reprocurement. Id. at 222, 452-53. What was said next is a matter of some dispute, but plaintiff's representatives left the meeting without an agreement by the Navy to accept plaintiff as replacement contractor.
Moreover, Mr. Putnam testified that there was no reasonable way that the Navy could have signed a contract at that point in any event. The takeover contract had not been prepared. The Navy was still working on draft language for the release and exoneration agreement to be entered into between the Navy and the defendants. There were still problems with the specifications which needed to be discussed. Id. at 231-32.
Plaintiff's representatives left Guam and returned to Utah. They decided to contact defendants directly to "find out what the problem was." Id. at 320. Plaintiff's president called George McCarthy, the manager of defendants' San Francisco surety claims office, on November 12, 1990. Mr. McCarthy indicated there must have been some confusion and reassured him that plaintiff would be tendered to the Navy. Id. at 58, 65, 224.
Plaintiff's representatives met with representatives of the defendants on November 14, 1990, in San Francisco. They contacted Mr. Putnam, the Navy representative, by speaker phone. Mr. Alexander, defendants' senior surety supervisor, identified plaintiff Triax as the contractor defendants wanted to tender to the Navy during this conversation. Mr. Putnam agreed to accept plaintiff upon receipt of written confirmation. Id. at 57-58, 65-66, 246.
Subsequent to the meeting on November 14, 1990, plaintiff was requested to submit a written commitment reflecting its best and final offer and the other terms discussed in Guam, which it did on November 16, 1990. Id. at 66, 141, 226. The commitment included the cost of curing items on a list of defects which was shown to plaintiff's representatives on November 7, 1990, in Guam. Id. at 142. The list included a revised credit for deletion of a special inspection program in the amount of $385,000, which had been discussed during the Guam trip. Id.
Defendants replied to the commitment letter on November 21, 1990, objecting to some of its terms as non-conforming to the bidding instructions. R. at 66, 143. Defendants indicated that they had received conforming proposals in the interim and that all current proposals would be considered. Id. at 144.
Defendants wrote plaintiff on December 5, 1990, stating plaintiff would have to lower its bid or not be eligible for the contract. Id. at 66. Plaintiff refused to lower its bid. Mr. Sevier recommended to defendants that they use Western Alaska because of its lower bid. Id. at 301. Defendants gave Western Alaska written notice of acceptance of their bid and tendered them to the Navy...
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