Brunzell Const. Co. v. G. J. Weisbrod, Inc.

• Decision Date: 07 July 1955
• Citation: 285 P.2d 989,134 Cal.App.2d 278
• Parties: BRUNZELL CONSTRUCTION CO., Inc., a California corporation, Plaintiff and Appellant, v. G. J. WEISBROD, Inc., a California corporation, also known as C. J. Weisbrod, Inc., and Gilbert J. Weisbrod, Defendants. G. J. Weisbrod, Inc., Respondent. Civ. 20748.
• Court: California Court of Appeals Court of Appeals

Page 989

285 P.2d 989

134 Cal.App.2d 278

BRUNZELL CONSTRUCTION CO., Inc., a California corporation, Plaintiff and Appellant, v. G. J. WEISBROD, Inc., a California corporation, also known as C. J. Weisbrod, Inc., and Gilbert J. Weisbrod, Defendants G. J. Weisbrod, Inc., Respondent.

Civ. 20748.

District Court of Appeal, Second District, Division 2, California.

July 7, 1955.

Preston D. Orem, Los Angeles, for appellant.

Mitchell & Hibbert, Los Angeles, for respondent.

FOX, Justice.

Plaintiff appeals from the judgment in an action to recover damages for an alleged breach of contract.

Plaintiff and defendant are domestic corporations, the former licensed to engage in building construction and the latter licensed as specialty contractors in the business of steel construction. The individuals primarily concerned as protagonists in the matter before us are Everett S. M. Brunzell, secretary of plaintiff corporation, John C. Ringer, an employee of plaintiff, Gilbert J. Weisbrod, president and general manager of defendant corporation, and Leonard W. Klamm, its sales manager.

Plaintiff sued defendant and its president ¹ for damages resulting from an asserted breach of a subcontract to do the steel construction on a contract with a school district. Defendant answered with a general denial and with allegations that a mistake was made in executing the agreement as prepared by plaintiff, in that steel decking had not been excluded therefrom; that such mistake was known by plaintiff; that notwithstanding such knowledge on the part of plaintiff, it attempted to take advantage thereof by compelling defendant to carry out the terms of the subcontract, knowing that by mistake, the steel decking had not been excluded from such writing; and that upon discovery of the mistake, plaintiff was notified of defendant's election to rescind.

The Burbank Unified School District had announced it would accept bids, beginning at 2:00 p.m., July 2, 1953, for the construction of 'Auditoriums and Connecting Shelter' at the John Muir Junior High School. In anticipation of bidding for the job, plaintiff solicited bids from subcontractors for various phases of the work several days before bidding commenced. Included among the bidding items was the steel work, which consisted primarily of a basis bid and a bid known as Alternate No. 1. This latter item, in general, comprised the connecting covered arcade, for the construction of which the specifications required, among other items, steel decking made by the Detroit Steel Products Company. Mr. Brunzell knew that the Walter Steyer Company was the sole local distributor for Detroit Steel Products. The bid specifications relative to steel were divided into three sections--Section E, Structural Steel, Section EE, Reinforcing Steel, and Section EEE, Miscellaneous Iron and Steel.

Mr. Brunzell testified that plaintiff received four bids for the above steel work--all of them over the telephone--from the Apex Steel Co., the Kyle Company, Walter Steyer Co., and from defendant prior to submitting its own bid. Mr. Klamm, representing defendant, testified he made his bid over the 'phone in the following language: 'We have a figure for the structural steel and miscellaneous iron, omitting decking, on the auditorium building, John Muir Junior High School, Burbank. The sections covered are Section E, Structural Steel, and Section EEE, Miscellaneous Iron and Steel omitting decking. Our base price is $30,000.00, Alternate No. 1 $7,700.00.' (Emphasis added.) Defendant's total bid, therefore, excluding decking, was $37,700. The record shows that Apex Steel bid $39,800.00, excluding decking, for the same work, while the Kyle bid for both the base proposal and Alternate No. 1, including decking, was $51,778. Meanwhile, plaintiff had obtained a bid from the Steyer Company for steel decking alone in the amount of $9,300.

Plaintiff was the successful bidder for the general contract. In compliance with the provisions of sections 4100 to 4106 of the Government Code, ² plaintiff, in submitting its bid, set forth the names of the subcontractors who were to render service for it in performance of the proposed contract. In addition to defendant's name, there was listed the following: 'Steel Deck: Walter Steyer.' Mr. Brunzell stated this was written in the school bid under his direction. Mr. Gerd H. Schulte, a registered structural engineer employed by the Burbank United School District, testified that when the Steyer Company was listed as the subcontractor for the steel decking on the plaintiff's bid, it was understood that the Steyer Company, and not the defendant, would do the decking. If the installation of the decking by defendant were contemplated, he asserted there would be no need to set out the Steyer Company by name, since the subcontractor of a subcontractor need not be listed to comply with the law.

On July 7, 1953, Mr. Klamm signed and sent to plaintiff a letter entitled 'Confirmation,' expressive of defendant's willingness to furnish for the total sum of $37,700 the following: '1. Structural steel as defined in Section E, of specifications. 2. Miscellaneous iron as defined in Section EEE of specifications. 3. Labor for the erection of structural steel, decking, railing, ladders and wire work. Balance of miscellaneous iron items are to be furnished only F.O.B. job.' Section EEE of the specifications included, as item 21, 'Metal Decking and Siding.' On July 9, 1953, the Steyer Company wrote plaintiff confirming its bid for the steel decking.

After receiving defendant's letter of 'Confirmation' Mr. Brunzell prepared a printed form of 'Subcontract Agreement.' In an available space, in paragraph one, there was typewritten the provision that defendant would perform the work previously quoted in its 'Confirmation.' Klamm thereupon called at Brunzell's office on July 9 to pick up the agreement. While there Klamm, Brunzell and Ringer discussed all phases of the work to be done by defendant. Brunzell stated to Klamm that the school board wanted the portion of the job involving the connecting arcades, which included the decking, done immediately. Klamm replied: 'Furnishing the structural steel for this portion of the work is relatively simple. Completion will be dependent upon the delivery of the metal deck by Mr. Steyer. As soon as I return to my office I'll try to contact Mr. Steyer to learn what deliveries may be expected on the metal deck, since there's no reason to rush my work if we have to wait for the deck.'

After taking the contract back to defendant's office, Klamm checked it and asked that paragraph 13, relating to a surety bond, be deleted. This was done and the contract was signed by the parties. Klamm testified that on July 13, 1953, following a conversation with Mr. Steyer, he realized for the first time that plaintiff purportedly understood that defendant was to furnish the steel decking. He thereupon telephoned plaintiff and spoke to Ringer, telling him: 'I just discovered that neither my confirming proposal nor your subcontract agreement excluded metal decking. I felt certain that you intended metal decking to be excluded. Had you not intended metal decking to be excluded my bid would have been ridiculously low. And, furthermore, I would not have bid on the item of metal decking since it was a proprietary item or material to be furnished by Steyer Company.' Ringer replied that Brunzell was out of town for a few days and the matter would be taken up upon his return. On the same day, Klamm sent plaintiff the following letter: 'We spoke with the Walter E. Steyer Co., today, to learn of the date delivery might be expected of the metal decking for the covered walks only to learn that a contract had not been awarded to them, as yet. It was then recalled that our confirming proposal on this project did not exclude the metal decking, as it should to conform with verbal bid given prior to bid opening. Obviously this was an error by our office and apparently escaped the attention of your office. We would greatly appreciate your cooperation in correcting your contract to us to provide for the deletion of all metal decking.'

On July 15, defendant received its copy of the signed Subcontract Agreement. Klamm amended it by striking out therefrom the word 'decking,' and by typing in the words 'omitting steel decking.' He returned it to plaintiff with a request that plaintiff's copy be amended to conform therewith and that both be initialled by the parties. Brunzell declined to accede. Defendant then made known its refusal to perform under the contract as executed. Brunzell subsequently obtained other bids for the work in question, including the decking. The work was awarded to Apex as lowest bidder at $49,000.00, and Apex's substitution in place of defendant was approved by the school district.

In this action, plaintiff sought damages in the sum of $11,300.00, the difference between the $37,700 bid by defendant and the contract for $49,000 entered into with Apex for allegedly the same work. In entering judgment for defendant, the court made findings conforming to the allegations in the answer. So far as is here germane, the court found that in making its oral bid, defendant had excluded the decking and that the parties understood that if defendant was awarded the contract it would not be required to furnish or install decking but that this would be done by the Steyer company; that in confirming its oral bid defendant mistakenly and inadvertently failed to exclude the decking; that when plaintiff received the letter of confirmation, it was fully aware of defendant's mistake in not excluding decking and knowingly sought to take advantage of that mistake by preparing a 'Subcontract Agreement,' later executed by the parties, which did not exclude decking, and was contrary to the oral bid; 'that there was never any meeting of the minds of the parties agreeing to the provisions of the purported...