Ferrer v. Taft Structurals, Inc.

• Decision Date: 13 November 1978
• Docket Number: No. 5766-I,5766-I
• Parties: R. George FERRER, Plaintiff, v. TAFT STRUCTURALS, INC., Defendant, v. Laird B. PETERSON, Respondent, v. ELLING HALVORSON, INC., a Washington Corporation, Appellant.
• Court: Washington Court of Appeals

Page 832

21 Wn.App. 832

587 P.2d 177

R. George FERRER, Plaintiff, v. TAFT STRUCTURALS, INC., Defendant, v. Laird B. PETERSON, Respondent, v. ELLING HALVORSON, INC., a Washington Corporation, Appellant.

No. 5766-I.

Court of Appeals of Washington, Division 1.

Nov. 13, 1978.

Taylor & Ulin, P. S., Dale R. Ulin, Seattle, for appellant.

Laird B. Peterson, Seattle, for respondent.

SWANSON, Judge.

Elling Halvorson, Inc. (hereinafter "Halvorson") appeals an award of $8,214.76 to Laird B. Peterson, successor receiver of Taft Structurals, Inc. (hereinafter "Taft"), contending the trial court erred in adjudging the consideration in a construction contract between Halvorson and Taft. We agree, and remand for modification of the judgment.

Halvorson, a general contractor, elicited various subbids to formulate a bid for construction of an addition to the Veterans' Administration Hospital in Seattle. Taft telephoned a bid to Halvorson on November 18, 1971, of $28,200 for materials and labor for structural steel framing a basic bid of $22,900, plus $5,300 for agreed upon "column extension" work. On that same day, Halvorson submitted a bid for the entire project, comprised of necessary selected subbids, including Taft's. On or about December 3, 1971, Halvorson was awarded the contract and in turn gave Taft the structural steel framing job. During the same month additional corridor work was allotted Taft at the agreed price of $2,631. Thus, Taft's original subcontract bids totalled $30,831.

On December 21, 1971, however, Taft submitted further quotations to Halvorson incorporating the corridor work as agreed, but increasing the original bid quote from $28,200 to $29,987; thus, the total bid then amounted to $32,507. Later, in April, 1972, Taft submitted additional bid quotes, separating material costs (the materialman demanded payment directly from Halvorson) from installation costs. These quotes totalled $36,193. Actual construction took place in August, 1972, for which Taft was never compensated.

At trial, for recovery of the contract price by the successor receiver, the trial court found Taft's initial bid "was relied upon by Halvorson on November 18, 1971, in submitting its overall bid on the project but it was never reduced to writing," and thus was never formally accepted. The trial court instead found the "effective contract price" to be $22,152, the difference between Taft's last bid of April, 1972, and the cost of the materials used by Taft but paid for by Halvorson. After subtracting offsets for delay and design errors, the trial court held the amount due to be $8,214.76.

Halvorson takes issue solely with the adjudged contract price, arguing Taft's initial bid constituted an irrevocable offer for a reasonable time and Halvorson's subsequent letting of the job to Taft an adequate acceptance. Halvorson contends Taft's later bid quotes were ineffectual unilateral attempts at modification of an existing contract. We agree, as the doctrine of promissory estoppel controls in this fact pattern.

The prerequisites for an action based on promissory estoppel a doctrine well recognized in this jurisdiction, have been stated as follows:

(1) A promise which (2) the promisor should reasonably expect to cause the promisee to change his position and (3) which does cause the promisee to change his position (4) justifiably relying upon the promise, in such a manner that (5) injustice can be avoided only by enforcement of the promise.

Corbit v. J. I. Case Co., 70 Wash.2d 522, 539, 424 P.2d 290, 300 (1967); Accord, Central Heat, Inc. v. Daily Olympian, 74 Wash.2d 126, 132, 443 P.2d 544 (1968); Hilton v. Alexander & Baldwin, Inc., 66 Wash.2d 30, 400

P.2d 772 (1965); Restatement of Contracts § 90 (1932); Annot., 48 A.L.R.2d 1070 (1956). This concept applies readily to the unique situation of a subcontractor and a general contractor, as exists here. A subcontractor submits a bid to the general contractor, knowing the general cannot accept the bid as an offer immediately, but must first incorporate it into the general's offer to the prospective employer. The general contractor incorporates the bid in reliance upon the subcontractor to perform as...