Pacific Architects Collaborative v. State of California

• Decision Date: 10 October 1979
• Citation: 166 Cal.Rptr. 184,100 Cal.App.3d 110
• Court: California Court of Appeals Court of Appeals
• Parties: PACIFIC ARCHITECTS COLLABORATIVE, Plaintiff and Appellant, v. STATE of California, DEPT. OF EMPLOYMENT DEVELOPMENT, OFFICE OF MIGRANT SERVICES, Office of Procurement, et al., Defendants and Respondents. Civ. 18130.

Page 184

166 Cal.Rptr. 184

100 Cal.App.3d 110

PACIFIC ARCHITECTS COLLABORATIVE, Plaintiff and Appellant, v. STATE of California, DEPT. OF EMPLOYMENT DEVELOPMENT, OFFICE OF MIGRANT SERVICES, Office of Procurement, et al., Defendants and Respondents.

Civ. 18130.

Court of Appeal, Third District, California.

Oct. 10, 1979.

Irvine P Dungan, Sacramento, for plaintiff.

Evelle J. Younger, Atty. Gen., Geoffrey L. Graybill, Deputy Atty. Gen., Sacramento, for defendants.

WARREN, Associate Justice. ^*

Plaintiff, Pacific Architects Collaborative (Pacific), appeals a granting of judgment on the pleadings and entry of summary judgment in favor of defendants on plaintiff's first amended complaint wherein plaintiff sought to recover expenses incurred in preparing mobile trailers pursuant to a bid solicitation sent by the California Employment Development Department on behalf of the Office of Migrant Services. Plaintiff also sought to recover $16,000,000 in lost profits.

STATEMENT OF FACTS

On June 1, 1977, the California Employment Development Department, at the request of the Office of Migrant Services, mailed out a document entitled "Invitation for Bid and Bid," seeking the solicitation of bids to construct 50 mobile housing units for use by migrant farm workers. The bid invitation stated that bids were to be received by 2:00 p. m. on June 15, 1977. The document contained the notation at the top of the first page "THIS IS NOT AN ORDER," and further provided that:

(1) "A prototype or sample of the proposed brands and model numbers may be required for inspection and evaluation prior to the bid award."

(2) "The State reserves the right to determine the award of this bid on the basis of (various options stated in the bid) and to award by line item, as deemed in the best interest of the State." ¹

In addition, a general provision form was also sent with the bid, which provided in pertinent part:

"9. Award of contracts: (a) Contracts and purchases will be made or entered into with the lowest responsible bidder meeting specifications, except as otherwise specified in the Invitation. Where more than one item is specified in the Invitation, the State reserves the right to determine the low bidder either on the basis of individual items or on the basis of all items included in its Invitation for Bids, unless otherwise expressly provided in the State's Invitation for Bids. (P) (b) Unless the bidder specifies otherwise in his bid, the State may accept any item or group of items of any bid. The State reserves the right to modify or cancel in whole or in part its Invitation for Bids. (P) (c) The State reserves the right to reject any or all bids and to waive informalities and minor irregularities in bids received." (Original italics.)

On May 6, 1977, the Office of Migrant Services mailed a purchase estimate to the Office of Procurement, Department of General Services, estimating the cost of the mobile units at $315,270. Inferably, this estimate was not disclosed to the bidders.

Pacific mailed its bid on June 1, 1977. Although four other manufacturers also bid to construct the mobile housing units, when the bids were opened on June 15, 1977, Pacific's bid of $398,650 was the lowest bid.

Several days after the bid opening, Pacific was contacted by state employees and asked to have a prototype ready for inspection, and subsequently gave an inspection tour of its plant to state employees. So as to have a prototype available, Pacific ordered materials and started production on some of the units. It also appears Pacific relied on a joint powers appropriation agreement between the Employment Development Department and the Housing Authority of Sutter County allocating $453,600 for the project.

Subsequently, Pacific was informed by letter dated June 24, 1977, that on June 22, 1977, the state had rejected all the bids on the ground that insufficient funds existed. In fact, however, the reason the bids were rejected was because of the purchase estimate sent to the Office of Procurement by the Office of Migrant Services, which stated that the price estimate for 50 units was $315,270. Pacific's bid was approximately $83,000 in excess of this estimate exclusive of sales tax and temporary installation costs.

On October 18, 1977, Pacific's claim for its expenses was rejected by the State Board of Control. After this rejection, Pacific filed its complaint, and subsequently filed its first amended complaint.

The first amended complaint alleged four causes of action based, respectively, on promissory estoppel, negligent rejection without making a reasonable effort to ascertain if funds were available, intentional misrepresentation of the nonexistence of available funds, and declaratory relief to require the state to award the contract to Pacific. Damages were stated to be $50,000 for loss of expenses and $16,000,000 for loss of anticipated profits. Exactly how the figure of $16,000,000 was computed is unclear from the record herein.

After filing their answer denying the allegations of the complaint, defendants moved for judgment on the pleadings and summary judgment. The basis of the motion was that the state had the right to reject all bids, that it had not abused its discretion in rejecting the bids, and that a rejected bidder has no cause of action against the state for damages occasioned when all bids are rejected. Defendants then moved for and were granted a protective order postponing the depositions of Messrs. Livingston, Mattesich, Babich, and Velez, state employees who considered the bids, until after the summary judgment motion hearing.

The trial court granted defendants' motion for judgment on the pleadings and summary judgment. The trial court reasoned that the complaint failed to state a cause of action, that there were no triable issues of fact, and that it was conclusively established that Pacific could not amend its complaint to allege facts sufficient to state a cause of action.

Plaintiff contends on appeal: (1) the state is liable for Pacific's damages occasioned by Pacific when it attempted to supply a prototype product based on a promissory estoppel theory because when the state asked Pacific to supply a prototype, it impliedly promised and Pacific reasonably relied to its detriment that the contract would be awarded to the lowest bidder; (2) the statement that all bids were rejected was an actionable intentional misrepresentation because the statement was false ²; and (3) the trial court abused its discretion when, prior to the summary judgment hearing, it refused to allow Pacific to depose certain state employees so as to ascertain what their mental state was when they issued the statement that the contract was rejected for lack of funds.

I

Preliminarily, we note the relevant law applicable to review of judgment on the pleadings and summary judgment.

A

"(O)n this review of the judgment on the pleadings, the question before us is whether, disregarding imperfections of form which could be cured by amendment, the facts pleaded and judicially noticed entitle (plaintiff) to any relief, including setting aside the prior judgments. (MacIsaac v. Pozzo (1945) 26 Cal.2d (809) at pp. 813, 815, 161 P.2d 449; see also, 4 Witkin, Cal. Procedure (2d ed. 1971) at pp. 2817-2822.)" (Kachig v. Boothe (1971) 22 Cal.App.3d 626, 630, 99 Cal.Rptr. 393, 396.)

"A motion for judgment on the pleadings is treated identically to a demurrer. (Welshans v. City of Santa Barbara (1962) 205 Cal.App.2d 304, 305 (23 Cal.Rptr. 108).) Consequently, the facts alleged in the complaint must be assumed to be true and liberally construed in favor of the party against whom the motion is made. (Gill v. Curtis Publishing Co. (1952) 38 Cal.2d 273, 275, 239 P.2d 630; Semole v. Sansoucie (1972) 28 Cal.App.3d 714, 719, 104 Cal.Rptr. 897.)" (Gabaldon v. United Farm Workers Organizing Committee (1973) 35 Cal.App.3d 757, 759, 111 Cal.Rptr. 203, 204; see Board of Regents v. Davis (1975) 14 Cal.3d 33, 37, fn. 4, 120 Cal.Rptr. 407, 533 P.2d 1047; Elliott v. City of Pacific Grove (1975) 54 Cal.App.3d 53, 56, 126 Cal.Rptr. 371.)

B

"The procedure for the entry of a summary judgment provides a method by which, if the pleadings are not defective, the court may determine whether the triable issues apparently raised by them are real or merely the product of adept pleading." (Coyne v. Krempels (1950) 36 Cal.2d 257, 262, 223 P.2d 244, 247.)

The trial court must grant the motion for summary judgment if "all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Code Civ.Proc., § 437c.)

"The purpose of the summary judgment statute (Code Civ.Proc., § 437c) is to promote and protect the administration of justice, and to expedite litigation by the elimination of needless trials. (Citations.) The court on a motion for summary judgment does not try issues, but merely determines on the basis of the affidavits of the parties whether there are factual issues to be tried. (Citations.)" (Exchequer Acceptance Corp. v. Alexander (1969) 271 Cal.App.2d 1, 76 Cal.Rptr. 328, 333-334; Jack v. Wood (1968) 258 Cal.App.2d 639, 646, 65 Cal.Rptr. 856.)

"In examining the sufficiency of affidavits filed in connection with the motion, the affidavits of the moving party are strictly construed and those of his opponent liberally construed, and doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion. Such summary procedure is drastic and should be used with caution so that it does not become a substitute for the open trial method of determining facts. (Citations.)" (Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 452, 398 P.2d 785, 788; see, Pettis v. General Tel. Co. (1967) 66 Cal.2d 503, 505, 58 Cal.Rptr. 316, 426 P.2d 884.)

"The motion shall be supported or opposed by affidavits, declarations,...