Beco Const. Co., Inc. v. Bannock Paving Co., Inc.

• Decision Date: 30 August 1990
• Docket Number: No. 18087,18087
• Citation: 118 Idaho 463,797 P.2d 863
• Parties: BECO CONSTRUCTION COMPANY, INC., an Idaho corporation, Plaintiff-Appellant, v. BANNOCK PAVING COMPANY, INC., an Idaho corporation, and Jack B. Parson Companies, a Utah corporation authorized to conduct business in Idaho, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 863

797 P.2d 863

118 Idaho 463

BECO CONSTRUCTION COMPANY, INC., an Idaho corporation, Plaintiff-Appellant, v. BANNOCK PAVING COMPANY, INC., an Idaho corporation, and Jack B. Parson Companies, a Utah corporation authorized to conduct business in Idaho, Defendants-Respondents.

No. 18087.

Supreme Court of Idaho.

Aug. 30, 1990.

Fuller and Carr, Idaho Falls, for plaintiff-appellant. Mark R. Fuller argued.

Racine, Olson, Nye, Cooper and Budge, Pocatello, for defendants-respondents. John A. Bailey argued.

HERNDON, Justice pro tem.

This case arises in quasi contract. Appellant Beco Construction Company, Inc. (Beco) and respondent Bannock Paving Company, Inc. (Bannock Paving), a wholly owned subsidiary of respondent Jack B. Parson Companies, submitted written bids on a subcontract under a Small Business Administration (SBA) set-aside program to benefit contractors having annual average receipts of less than seventeen million dollars ($17,000,000.00) for the preceding three (3) fiscal years. 13 C.F.R. 121.1 (1985). Bannock Paving was awarded the contract as low bidder, but did not qualify as a small business. Beco, the second low bidder, brings this action and alleges fraud and unjust enrichment, and now appeals the summary judgment granted in favor of Bannock Paving.

We affirm.

I. STATEMENT OF FACTS AND PROCEEDINGS

Morrison-Knudsen Company (M-K), the prime contractor for general construction for the Department of Energy (DOE) at the Idaho Nuclear Engineering Laboratory (INEL), on July 10, 1985, issued a Request for Proposals (RFP) on a project involving road repairs and the construction of a helicopter pad at the INEL.

The RFP, entitled "FY-84 INEL Road Upgrade Line Item Construction Project" solicited "a firm fixed unit price proposal" and specified that the contract was a small-business set-aside, as authorized by the Small Business Act, 15 U.S.C. § 631 et seq., and its implementing regulations.

The RFP also set forth a tight schedule for the submission of offers and completion of the work. The bid documents provided for the bid opening on July 31, 1985, the award of the contract and notice to proceed by August 1, 1985, and completion of the work by September 15, 1985.

Beco and Bannock Paving attended the pre-bid conference and tour of the proposed projects in July, 1985.

Both Beco and Bannock Paving self certified that they were small businesses, as required by SBA regulation.

The bids were opened at 3:30 p.m. on July 31. Bannock Paving bid $1,203,039.30 and Beco $1,221,875.00. At 8:05 a.m. on August 1, 1985, M-K notified by telephone Bannock Paving that it had been awarded the contract. Written notice of the award was delivered to Bannock Paving on August 2, 1985.

On August 1, 1985, Beco learned that Bannock Paving might not qualify as Small Business concern because it was a wholly owned subsidiary of Jack B. Parsons Companies, with revenues exceeding the SBA limit. Beco also discovered a mathematical error in its own bid computation and that its bid was actually $1,171,875.00.

Beco informed M-K of both discoveries at noon on August 2, 1985. However, M-K told Beco that the contract had already been awarded to Bannock Paving.

Beco submitted a written protest to the General Accounting Office of the United States Government (GAO), but Bannock Paving had already signed a contract with M-K and had begun work. The DOE report on Beco's bid protest recommended that the GAO deny Beco's challenge. The GAO then denied Beco's protest. Beco sought relief through the various administrative agencies, and then filed suit in Federal Court for the District of Idaho. The Federal Court granted Summary Judgment to Bannock Paving and dismissed the case. The Federal Court ruled that it lacked diversity jurisdiction, and no private cause of action existed under the Small Business Act. Beco then brought this action.

Meanwhile, Bannock Paving completed the project and received the contract payment.

II. SUMMARY JUDGMENT

Motions for summary judgment should only be granted when no genuine issue of material fact exists after the pleadings, depositions, admissions and affidavits have been construed most favorably to the opposing or non-moving party, and the moving party is entitled to judgment as a matter of law. Dekker v. Magic Valley Regional Medical Center, 115 Idaho 332, 333, 766 P.2d 1213, 1214 (1988); Corbridge v. Clark Equipment Co., 112 Idaho 85, 86, 730 P.2d 1005, 1006 (1986); Anderson v. City of Pocatello, 112 Idaho 176, 179, 731 P.2d 171, 174 (1986); Boise Car & Truck Rental Co. v. Wakco, Inc., 108 Idaho 780 783, 702 P.2d 818, 821 (1985); Idaho Rules of Civil Procedure (I.R.C.P.) 56(c). Liberal construction of the facts in favor of the non-moving party requires the court to draw all reasonable factual inferences in favor of the non-moving party. Williams v. Blakley, 114 Idaho 323, 324, 757 P.2d 186, 187 (1988); Blake v. Cruz, 108 Idaho 253, 255, 698 P.2d 315, 317 (1985).

A. PREEMPTION

The trial court held that the Small Business Act does not preempt state common law actions of fraud and unjust enrichment since such actions are recognized in Idaho. We agree.

In Iconco v. Jensen Construction Co., 622 F.2d 1291 (8th Cir.1980), the 8th Circuit Court of Appeals outlines the Congressional intent behind the Small Business Act ¹:

Congress has two primary goals in mind: First, it wanted to help small businesses by assuring that they receive a fair portion of government contracts so that they may compete on an equal footing with large concerns; this goal of preservation and expansion of competition was considered "basic ... to the security of this nation." 15 U.S.C. § 631....

Congress's second primary goal was to assure that the government contracts were performed in a timely and competent manner. And to the extent that the awarding of contracts to small business is compatible with getting the job properly and at reasonable cost to the public, setting aside contracts for small business accomplishes this goal but Congress did not intend to assist small business at all costs, and authorize contracting agencies to reject all bids, even though submitted by qualified small businesses, if necessary to the public interest. 10 U.S.C. § 2305(c).

Id. at 1298-99.

Thus, furtherance of congressional goals in this area does not require the application of the preemption doctrine.

As the 11th Circuit Court of Appeals states in Automated Medical Laboratories, Inc. v. Hillsborough County, 722 F.2d 1526 (11th Cir.1984):

The rationale underlying the pre-emption doctrine is that the Supremacy Clause invalidates state laws that "interfere with or are contrary to, the laws of congress...." Gibbons v. Ogden, 9 Wheat. 1, 211, 6 L.Ed. 23 (1824). Pre-emption of state law by federal statute or regulation is not favored in the absence of persuasive reasons. Chicago & North Western Transportation Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 317, 101 S.Ct. 1124, 1130, 67 L.Ed.2d 258 (1981); Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963). The touchstone of a pre-emption analysis is congressional intent, which may be either express or implied. Fidelity Federal Savings & Loan Association v. De La Cuesta, 458 U.S. 141, 151, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664, 675 (1982); Jones v. Rath Packing Co., 430 U.S. 519, 529, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977); Howard v. Uniroyal, Inc., 719 F.2d 1552 at 1555-56 (11th Cir.1983). In Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. at 143, 83 S.Ct. at 1218, 10 L.Ed.2d 248, the Supreme Court stated a two-pronged analysis for pre-emption claims: "Does either the nature of the subject matter, ... or any explicit declaration of congressional design to displace state regulation, require [the challenged legislation] to yield to the federal [regulatory scheme]?"

Id. at 1530.

Here, neither the subject matter nor any explicit declaration of congressional design operates to displace State regulation requiring the Idaho causes of action for unjust enrichment and fraud to yield to the federal legislation.

B. UNJUST ENRICHMENT

The district court held that existing Idaho law "fails to recognize a cause of action under either the theory of fraud or unjust enrichment where the alleged injured party has no relationship with the alleged injuring party." Therefore, the district court concluded that Bannock Paving was entitled to summary judgment.

Beco argues on appeal, however, that it should be allowed to recover under the theory of unjust enrichment for the benefit received by Bannock Paving from the set-aside contract even though it did not confer any benefit either directly or indirectly to the alleged unjustly enriched party. ²

In Continental Forest Products, Inc. v. Chandler Supply Co., 95 Idaho 739, 518 P.2d 1201 (1974), this Court observes that the doctrine of unjust enrichment sounds in implied in law contract or quasi contract and explains:

Basically the courts have recognized three types of contractual arrangements. Restatement of Contracts, § 5, comment a, at p. 7 (1932); 3 Corbin on Contracts, § 562 at p. 283 (1960). First is the express contract wherein the parties expressly agree regarding a transaction. Alexander v. O'Neil, 77 Ariz. 91, 267 P.2d 730 (1954). Secondly, there is the implied in fact contract wherein there is no express agreement but the conduct of the parties implies an agreement from which an obligation in contract exists. Clements v. Jungert, 90 Idaho 143, 408 P.2d 810 (1965). The third category is called an implied in law contract, or quasi contract. However, a contract implied in law is not a contract at all, but an obligation imposed by law for the purpose of bringing about justice and equity without reference to the intent or the agreement of the parties and, in some cases, in spite of an agreement between the parties. Hixon v. Allphin, 76 Idaho 327, 281 P.2d 1042 (1955); McShane v. Quillin, 47 Idaho 542, ...