Frost Const. Co. v. Lobo, Inc.

• Decision Date: 16 January 1998
• Docket Number: No. 97-32,97-32
• Citation: 951 P.2d 390
• Parties: FROST CONSTRUCTION COMPANY, Appellant (Plaintiff), v. LOBO, INC., a Wyoming corporation; and Carr Construction Co., Inc., a Wyoming corporation, Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 390

951 P.2d 390

FROST CONSTRUCTION COMPANY, Appellant (Plaintiff), v.LOBO, INC., a Wyoming corporation; and Carr Construction Co., Inc., a Wyoming corporation, Appellees (Defendants).

No. 97-32.

Supreme Court of Wyoming.

Jan. 16, 1998.

Joseph E. Darrah and S. Joseph Darrah of Darrah & Darrah, P.C., Powell, for Appellant.

David B. Hooper of Hooper Law Offices, P.C., Riverton; and Tom A. Glassberg of Hooper Law Offices, P.C., Teton Village, for Appellees.

Before TAYLOR, C.J., and THOMAS, MACY, GOLDEN and LEHMAN, JJ.

MACY, Justice.

AppellantFrost Construction Company appeals from the order which dismissed its complaint and granted a judgment in favor of AppelleesLobo, Inc. and Carr Construction Co., Inc.(the contractors) on their counterclaim.

We affirm.

ISSUES

Frost Construction presents a number of issues for our review:

A.Was there an unconditional acceptance of the essential terms of the quote sufficient to form a contract?

B.Was it error for the lower court to find a contract when the parties both agree that no contract was formed?

C.Alternatively, did the lower court err in failing to consider custom and trade usage when it found a formal contract to exist?

D.Did the lower court violate appellant's due process rights when it held appellee[s] would not be required to prove the liability elements of promissory estoppel?

E.Did the lower court err in excluding evidence of mitigation of damages and lack of reliance?

FACTS

The contractors formed a joint venture to bid on the highway construction project between Buffalo and Gillette, which the Wyoming Department of Transportation(WYDOT) let in May of 1993.During the early morning hours of May 13, 1993, prior to the bid letting, Frost Construction delivered a complete eight-page proposal to the contractors for the paving work.The written proposal contained all the exact quantities specified by WYDOT for all the paving.

Frost Construction's proposal was the lowest offer that the contractors received, and they relied upon this proposal in their bid to WYDOT.A week later, WYDOT awarded the job to the contractors, and on May 22, 1993, the contractors received their contract from WYDOT.On the same day, the contractors issued a subcontract to Frost Construction.The subcontract incorporated all the prices, quantities, terms, and conditions contained in Frost Construction's eight-page proposal.The subcontract was a "Standard Sub-contract Agreement" which had been published by Associated General Contractors of Wyoming, Inc.This was the subcontract form which was customarily used in the Wyoming highway construction industry and was the exact contract form which Frost Construction expected the contractors to use.

On February 18, 1994, approximately nine months after the bid letting, Frost Construction sent a letter to the contractors which stated the following:

Our original quotation stipulated the project had to be ready for the commencement of surfacing operations by May 1, 1994 and that we would necessarily be able to proceed uninterrupted by other operations (other than traffic switch-over) to accommodate our completion by July 1, 1994.

Obviously, our quoted prices were based on these conditions in addition to the exclusion of the off-project work to further ensure our timely demobilization.

Inasmuch that this was the only period available to us, our proposal is not valid except under these circumstances.

On February 23, 1994, the contractors responded to Frost Construction's letter in the following manner:

While in the future we would greatly appreciate your placing any conditions or constraints on your quotation, we have every expectation of being able to meet your scheduling requirements.Please return your signed subcontract promptly so that the submittal process will not cause delay.

On March 4, 1994, Frost Construction sent a new subcontract to the contractors which differed from the original subcontract in various respects.First, the new subcontract deleted substantial quantities for "off-project" work which were included in Frost Construction's proposal and in the original subcontract.Second, the new subcontract proposed to impose liability upon the contractors for consequential damages for any delays to Frost Construction's work regardless of whether or not such delays were caused by the contractors.

The contractors rejected the new subcontract.They informed Frost Construction by letter on March 11, 1994, that there was no reason to believe that Frost Construction's scheduling requirements could not be met, but they insisted that the terms of the initial proposal be adhered to and that, if Frost Construction did not return the original subcontract agreement properly executed by March 18, 1994, they would have no choice but to replace Frost Construction as the paving subcontractor.On March 21, 1994, when they had not received an executed subcontract, the contractors faxed a letter to Frost Construction, notifying it that they could wait no longer to get the paving portion of the job under subcontract and that, therefore, they were going to subcontract the work to another paving contractor.The contractors then subcontracted the paving work to another paving company and informed Frost Construction that they had done so, adding that they had mitigated their damages as much as possible and would look to Frost Construction to cover the difference.

Frost Construction filed a complaint, alleging that the contractors breached their oral contract which contained the condition precedent that it would be able to commence paving by May 1, 1994, in order to complete its portion of the contract no later than June 30, 1994, when it was committed to start a different project.The contractors counterclaimed, invoking the original subcontract's provisions, for a breach by Frost Construction of its contractual obligation to hold the owner and the contractor harmless from all loss, cost, and expense resulting either directly or indirectly from its failure to faithfully carry out any provision of the subcontract.The contractors alleged that, due to Frost Construction's wrongful actions and breach of their agreement, they were forced to replace Frost Construction with another paving subcontractor, thereby suffering damages.

At the close of Frost Construction's case in chief, the contractors moved for a judgment as a matter of law pursuant to W.R.C.P. 52(c).The trial court granted their motion, finding that Frost Construction's written proposal was an offer which was accepted by the contractors by virtue of the delivery of the subcontract form to Frost Construction.The trial court ruled that the subcontract incorporated all the terms of Frost Construction's offer and that, upon the acceptance of this offer, a contract was formed between the parties.The trial court also determined that the contractors were entitled to recover on their counterclaim for Frost Construction's breach of the contract.The trial court found that, due to Frost Construction's refusal to perform under the contract, the contractors were damaged in the amount of $90,818.25, the actual cost to the contractors minus the amount that Frost Construction would have completed the project for under the contract.Frost Construction appeals from the trial court's findings of fact, conclusions of law, and judgment.

DISCUSSION

A.Existence of a Contract

In Frost Construction's first claim of error, it contends that the contractors did not unconditionally accept the essential terms of its proposal and that, therefore, a contract was not formed.More particularly, Frost Construction claims that, when the contractors forwarded the form subcontract, without including the scheduling conditions and bonding costs that it maintains were communicated orally, they tendered a counteroffer which was not accepted by Frost Construction.The contractors argue that the subcontract incorporated all the prices, terms, quantities, and conditions of Frost Construction's proposal which made it a mirror-image acceptance of the written offer.

Whether a contract has been formed is a question of fact.Wyoming Sawmills, Inc. v. Morris, 756 P.2d 774, 775(Wyo.1988).This Court presumes that the trial court's findings of fact are correct and will not disturb those findings on appeal unless they are inconsistent with the evidence, clearly erroneous, or contrary to the great weight of the evidence.Narans v. Paulsen, 803 P.2d 358, 360(Wyo.1990).The question is not whether we would have reached the same result but is whether sufficient evidence supported the trial court's conclusion.Id.

The basic elements of a contract are offer, acceptance, and consideration.McCormick v. McCormick, 926 P.2d 360, 362(Wyo.1996)."When these elements have been established, 'courts conclude that there has been a meeting of the minds and an enforceable contract exists.' "Id.(quotingIdaho Migrant Council, Inc. v. Warila, 890 P.2d 39, 41(Wyo.1995)).

Whether a contract has been formed depends upon the parties' intent.Wyoming Sawmills, Inc., 756 P.2d at 775.

"An agreement to make a written contract where the terms are mutually understood and agreed on in all respects is as binding as the written contract would be if it had been executed."Robert W. Anderson House[w]recking and Excavating, Inc. v. Board of Trustees, School District No. 25, Fremont County, Wyoming, Wyo., 681 P.2d 1326, 1331(1984).

"In general, the principle is well settled that where the parties to a contract intend that it shall be closed and consummated prior to the formal signing of a written draft, the terms having been mutually understood and agreed upon, the parties will be bound by the contract actually made, although it be not reduced to writing; but, on the other hand, if the parties do not intend to close the contract until it shall be fully expressed in a written instrument properly attested, then there will be no complete...