B & W Glass, Inc. v. Weather Shield Mfg., Inc.

Decision Date10 April 1992
Docket NumberNo. 91-123,91-123
Citation829 P.2d 809
Parties18 UCC Rep.Serv.2d 1 B & W GLASS, INC., Plaintiff-Appellee, v. WEATHER SHIELD MFG., INC., Defendant-Appellant.
CourtWyoming Supreme Court

Mark R. Smith, Clary, Nantz, Wood, Hoffius, Rankin & Cooper, Grand Rapids, Mich., and Thomas G. Gorman, Hirst & Applegate, P.C., Cheyenne, for defendant-appellant.

Douglas G. Madison, Dray, Madison & Thomson, P.C., Cheyenne, for plaintiff-appellee.

Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY, and GOLDEN, JJ.

THOMAS, Justice.

The only question involved in this case is the one certified to this court by the United States Court of Appeals for the Tenth Circuit. In the Certification of Question of State Law, that court states the certified question to be:

Under the law of the State of Wyoming, may an oral promise otherwise within the statute of frauds as pronounced in Wyo.Stat. § 34.1-2-201 [1991] and the Uniform Commercial Code, nevertheless be enforceable on the basis of promissory estoppel? See Restatement (Second) of Contracts § 90 (1981).

We hold that the doctrine of promissory estoppel can be applied under these circumstances to enforce an oral promise, and the certified question is answered in the affirmative.

An understanding of the application of the doctrine of promissory estoppel by the federal district court in this case requires a careful review of the business transaction which preceded this litigation. B & W Glass, Inc. (B & W) is a Wyoming corporation that sells and installs windows in both commercial and residential buildings. The principals in B & W are three brothers, Larry, Tom, and Doug Ludtke. Sometime during the first three months of 1987, Larry Ludtke learned of a General Services Administration (GSA) project that called for replacement of all the windows in the federal courthouse in Casper, Wyoming. After reviewing the GSA plans, Larry Ludtke prepared a list of specifications for the windows to be replaced, including dimensions, depth and types of glazing required.

Doug Ludtke then contacted Weather Shield Mfg. Inc. (Weather Shield) which is a Wisconsin corporation engaged in the manufacture of both standard size and custom windows. The purpose of Doug Ludtke's contact was to obtain a price quotation. Robert Schwalbe (Schwalbe), an experienced salesman familiar with bidding practices and price quotation procedures, acted on behalf of Weather Shield. Using the list of specifications that Larry Ludtke had prepared, Doug Ludtke discussed the GSA project with Schwalbe in Denver, Colorado. In the course of the first meeting, Schwalbe indicated he thought Weather Shield could produce the windows required for the project, but he explained he needed to check with company officials in Wisconsin.

At a brief second meeting between Schwalbe and Doug Ludtke, Schwalbe presented an itemized, written quotation, dated March 24, 1987, for windows to be used on the project. There is a dispute between the parties with respect to the specific type of windows quoted. Weather Shield's claim is that the quotation was for windows that are mass produced and normally stocked or carried in the company's catalog. B & W's contention is that the quotation included custom windows as well as stock windows. Subsequently, Larry Ludtke reviewed the written quotation, and he telephoned Schwalbe advising him there were too many size discrepancies in the quotation and custom windows, designed to meet GSA specifications, would be required.

A third meeting was scheduled between Schwalbe and Doug Ludtke, in Denver, for the purpose of reviewing the complete GSA project plans and specifications. At trial, Doug Ludtke testified that, at this third meeting, he and Schwalbe went through the plans and specifications together. He said Schwalbe indicated using custom windows would increase the cost, but Weather Shield had no problem in making the custom windows. Doug Ludtke stated that, at the conclusion of this meeting, he gave Schwalbe a copy of the plans and specifications to use preparing a bid. Schwalbe testified, to the contrary, that he could not have been provided with plans and specifications since he spent only forty-five minutes preparing the new quotation.

It is uncontroverted that, following the third meeting with Doug Ludtke, and on or before April 14, 1987, Schwalbe telephoned Larry Ludtke to quote a price of $101,725 for the Weather Shield windows to be used on the project. B & W never received written confirmation of this oral price quotation.

On April 14, 1987, B & W, relying upon the Weather Shield price quotation, submitted its bid to the project's general contractor. The B & W bid was oral and was delivered by telephone around noon on the day that the general contractor's bid for the project was submitted. Two days later, Larry Ludtke was advised that B & W was the low bidder for supplying and installing the windows on the project. B & W also received a letter of intent, dated April 20, 1987, from the general contractor. Larry Ludtke then telephoned Schwalbe to advise him that B & W had received the letter of intent and that B & W would purchase Weather Shield windows for the project.

In either May or June, 1987, Larry Ludtke and Schwalbe met in Cheyenne to review the plans and specifications in detail. Schwalbe received another set of the plans and specifications to send to the Weather Shield plant so that "shop drawings" could be prepared for the construction of the windows. Schwalbe and Larry Ludtke exchanged numerous telephone calls during the balance of the summer in the course of which they discussed the progress of the shop drawings and delivery and production schedules.

After B & W signed a contract with the general contractor in August of 1987, Larry Ludtke arranged for "field measurements" on the existing windows at the Casper federal courthouse. Larry Ludtke, accompanied by an architect from the Cheyenne area, met with Schwalbe in Denver in September to discuss these measurements. During that meeting, Larry Ludtke delivered a letter to Schwalbe, dated September 21, 1987, requesting the shop drawings and providing another set of plans which contained the "field measurements" of the window sizes.

Following that meeting, from late September to December 3, 1987, Larry Ludtke telephoned Schwalbe on numerous occasions, each time requesting the shop drawings and other information. Finally, during the December 3 telephone call, Schwalbe committed to the completion of the shop drawings by December 14, 1987. This commitment was ineffectual, however, because Schwalbe's employment with Weather Shield was terminated in December, 1987. When Larry Ludtke failed to receive the shop drawings and was not able to contact Schwalbe, other Weather Shield employees were contacted. Ultimately, on December 30, 1987, Tom Ludtke spoke to a Weather Shield supervisor, Dan Emerich, who said that Weather Shield could not produce the windows.

After Weather Shield declined to produce the windows, B & W obtained custom windows from another manufacturer at a total cost of $226,579. Upon demand, Weather Shield refused to pay B & W the difference between Weather Shield's quoted price and the actual cost of the windows purchased from the other manufacturer.

B & W then filed suit in the District Court of the First Judicial District of the State of Wyoming in and for Laramie County. Weather Shield answered and successfully petitioned for removal of the case to the United States District Court for the District of Wyoming, pursuant to 28 U.S.C. § 1332 (1986). Extensive discovery followed, after which Weather Shield moved for summary judgment on the ground that no written contract existed between the parties and the purported oral contract was unenforceable under the Wyoming enactment of the Uniform Commercial Code (UCC) statute of frauds. At the same time, B & W moved to amend its complaint to add a claim of promissory estoppel. Weather Shield's motion for summary judgment was denied, and the B & W motion to amend was granted. The United States District Court ruled that Wyoming would allow the doctrine of promissory estoppel to remove an oral contract from the statute of frauds provision found in the UCC.

The case went to trial on three theories: breach of contract; breach of good faith and fair dealing; and promissory estoppel. The United States District Court granted a directed verdict in favor of Weather Shield on the breach of contract and good faith and fair dealing claims. The promissory estoppel theory was submitted to the jury. The jury found in favor of B & W, but it was deadlocked with respect to damages, and the United States District Court declared a mistrial. Weather Shield then moved for a directed verdict and to strike the jury and enter judgment in its favor. The United States District Court granted Weather Shield's motion to strike the jury, but it entered judgment in favor of B & W.

In an opinion order, the United States District Court found that Schwalbe was an authorized agent of Weather Shield and was aware of the plans and specifications for the courthouse project prior to making the oral bid. The court ruled that the bid quotation was made "without any exceptions," which, under usage of the trade, meant the quote was for products meeting the plans and specifications that had been provided. The United States District Court concluded that promissory estoppel had been established and the oral contract between the parties existed and was enforceable despite the statute of frauds provision in Wyoming's version of the UCC. Judgment was entered against Weather Shield for breach of contract in the amount of $100,214.48, with interest. Weather Shield took an appeal to the United States Court of Appeals for the Tenth Circuit, which certified the promissory estoppel question to this court.

The facts stated above essentially are contained in the Findings of Fact entered in the United States District Court and the...

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