Independence Tp. v. Reliance Bldg. Co.
| Decision Date | 10 April 1989 |
| Docket Number | Docket No. 101909 |
| Citation | 175 Mich.App. 48,437 N.W.2d 22 |
| Parties | INDEPENDENCE TOWNSHIP, Plaintiff-Appellant, v. RELIANCE BUILDING COMPANY and the Hartford Accident and Indemnity Company, Defendants-Appellees. 175 Mich.App. 48, 437 N.W.2d 22 |
| Court | Court of Appeal of Michigan — District of US |
[175 MICHAPP 49] Kohl, Secrest, Wardle, Lynch, Clark & Hampton by Gerald A. Fisher and Joan A. Bacon, Farmington, for plaintiff-appellant.
Kemp, Klein, Umphrey, Endelman & Beer, P.C. by Raymond L. Morrow, Birmingham, for defendants-appellees.
Before MICHAEL J. KELLY, P.J., and MAHER and WARSHAWSKY, * JJ.
Plaintiff Charter Township of Independence appeals as of right from a June 29, 1987, order of summary disposition entered in the Oakland Circuit Court pursuant to MCR 2.116(C)(8) and (10). Plaintiff's complaint for breach of a construction contract against defendants was dismissed. We affirm the circuit court.
Plaintiff Independence Township advertised for bids for the construction of Fire Station # 2, in accordance with architectural plans and specifications prepared by G.H. Forbes Associates Architects. According to the specifications, bidders were invited to submit offers, the offers were irrevocable [175 MICHAPP 50] for a period of thirty days and, pursuant to Sec. 13.1, acceptance would be made upon "formal notice of intent ... duly served upon the intended awardee by the Owner or Architect."
On about June 16, 1986, defendant Reliance Building Company submitted a bid proposal to undertake the project for the base-bid price of $487,500. Attached to Reliance's bid proposal was defendant Hartford Accident and Indemnity Company's surety bond. Shortly thereafter, Reliance was informed that it was the low bidder. The president of Reliance, Alfred T. Deptula, however, informed plaintiff's architect, G.H. Forbes, that he had inadvertently omitted the structural steel subcontract from the base bid and requested that Reliance be excused from its offer. On June 20, 1986, a meeting was held during which Deptula and Forbes discussed issues with respect to construction estimates for the project, particularly the masonry, concrete, carpentry, and structural steel subcontracts. On June 24, 1986, Deptula advised Forbes that he had substantially reduced some of his subcontracts and that Reliance was prepared to enter into a contract with plaintiff in the amount of their original bid proposal. On June 27, 1986, Forbes mailed a letter and ten sets of construction documents to Reliance together with its bid deposit.
On July 22, 1986, more than thirty days after Reliance had submitted its bid, the matter was considered by the township board. The board approved awarding the contract for construction of the fire station to Reliance. However, on August 5, 1986, Deptula sent a letter to the township fire department advising that Reliance was formally withdrawing its bid because the thirty-day acceptance period had lapsed. Plaintiff was required to contract with another party, O'Brien Waterford [175 MICHAPP 51] Construction Company, to perform the work for a sum of $522,000. Plaintiff mailed O'Brien Waterford Construction Company a "formal notice of intent" on October 15, 1986.
On February 25, 1987, plaintiff commenced this breach of contract action in the Oakland Circuit Court. Plaintiff alleged that defendant had been formally awarded the contract by plaintiff's acceptance letter of June 27, 1986. Plaintiff further alleged that, as a customary and standard practice in the industry, the mailing of the ten sets of construction documents to the low bidder, together with the bid deposit, constituted notice to defendants that they had submitted the low bid and, thus, had been awarded the contract, and that defendants' attempt to withdraw the bid on August 5, 1986, constituted a breach of contract with plaintiff. Plaintiff alleged damages in the amount of $32,500, reflecting the difference between Reliance's bid and the amount plaintiff was required to pay for the performance of the contract.
In granting defendants' motion for summary disposition, the trial court found that defendants had not received "formal notice of intent" in accordance with Sec. 13.1 of the plans and specifications prepared by G.H. Forbes Associates. The court stated that Sec. 13.1 was not ambiguous and should be resolved in favor of defendants and against the drafter, Independence Township.
On appeal, plaintiff argues that the trial court erred in granting defendants' motion for summary disposition pursuant to MCR 2.116(C)(8) and (10). Plaintiff contends that "formal notice" has no determined legal meaning and thus it is necessary to look to the customary and standard practice in the industry to determine its legal effect. Plaintiff argues that in light of the dispute concerning the meaning of "formal notice," a genuine issue of [175 MICHAPP 52] material fact is present, and therefore summary disposition was improper.
A motion for summary disposition under MCR 2.116(C)(8), failure to state a claim upon which relief can be granted, tests the legal sufficiency of plaintiff's pleading. The appropriate test is whether plaintiff's claim is so clearly unenforceable as a matter of law that no factual development could possibly justify a right to recovery. Abel v. Eli Lilly & Co., 418 Mich. 311, 323-324, 343 N.W.2d 164 (1984), cert. den. sub. nom. E R Squibb & Sons v. Abel, 469 U.S. 833, 105 S.Ct. 123, 83 L.Ed.2d 65 (1984).
Under MCR 2.116(C)(10), no genuine issue of material fact, the trial court is to review the entire record to determine whether the nonmoving party has presented facts to support the claim or defense. The trial court must give the benefit of any reasonable doubt to the nonmoving party in deciding whether a genuine issue of material fact exists. Before judgment may be granted, the trial court must be satisfied that it is impossible for the claim to be supported by evidence at trial. Rizzo v. Kretschmer, 389 Mich. 363, 371-372, 207 N.W.2d 316 (1973).
Plaintiff contends that Sec. 13.1 of the specifications, which governed acceptance of bids by formal notice of award, was ambiguous, thereby creating a factual dispute. It is plaintiff's position that the June 27, 1986, letter constituted a formal acceptance in conformance with customary and standard industry practice. Thus, plaintiff argues that testimony as to customary...
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