Riley Bros. Constr., Inc. v. Shuck

• Decision Date: 04 October 2005
• Docket Number: No. A04-2133.,A04-2133.
• Parties: RILEY BROS. CONSTRUCTION, INC., Respondent, v. Craig SHUCK, d/b/a Beaver Masonry, Appellant.
• Court: Minnesota Court of Appeals

704 N.W.2d 197

RILEY BROS. CONSTRUCTION, INC., Respondent, v. Craig SHUCK, d/b/a Beaver Masonry, Appellant.

No. A04-2133.

Court of Appeals of Minnesota.

October 4, 2005.

Derek A. Trosvig, Swenson Lervick Syverson Anderson Trosvig Jacobson, P.A., Alexandria, MN, for respondent.

John E. Mack, New London, MN, for appellant.

Considered and decided by RANDALL, Presiding Judge, KLAPHAKE, Judge, and WILLIS, Judge.

OPINION

KLAPHAKE, Judge.

Craig Shuck, d/b/a Beaver Masonry, appeals from the district court's award of a $78,522 judgment to respondent Riley Brothers Construction. Appellant argues: (1) the evidence presented at the bench trial fails to support the district court's determination that a contract existed between the parties; (2) the evidence does not support application of the doctrine of promissory estoppel; (3) the district court erred in its determination of damages; and (4) the district court erred in evidentiary rulings, which entitle appellant to a new trial. Because the evidence reasonably supports the district court's findings and because the court did not err in its application of the law, we affirm.

FACTS

In the spring of 2002, the city of Wahpeton, North Dakota, requested bids for a project that involved the construction of parking lots and roadways. Respondent is a large construction company specializing in highway work and, upon learning of the Wahpeton project, decided to submit a "prime bid." Respondent obtained a complete set of specifications and blueprints for the project, which involved substantial concrete work. Respondent performs excavation and construction of bituminous surfaces including roads and parking lots; because it does not perform concrete work, respondent intended to rely on subcontractors to complete that portion of the project.

Appellant runs Beaver Masonry as a sole proprietorship and is engaged in the concrete and masonry business. Appellant learned that respondent intended to submit a prime bid for the Wahpeton project, and on March 21 contacted respondent. Appellant spoke with Jeff Anderson, one of respondent's project managers, regarding its plans for the project. Anderson told appellant that respondent had plans, but that he could not send them to him. Anderson offered to send appellant the summary specifications and "bidder's proposal" for the concrete work, which he faxed to appellant that same day. Anderson testified that he faxed the pages so that appellant could "see if he was interested in bidding the job" and that he did not intend appellant to prepare his bid solely from theses pages.

On March 26, appellant faxed his bid for the concrete work to respondent. Appellant's bid contained a price for each section of the concrete work and provided that the total cost of the concrete work for the project was $537,281. The bid provided that the "price includes all control joints, laser screed concrete, gravel base will be graded and ready for concrete by site contractor."

As Anderson was preparing to submit the prime bid to the City of Wahpeton, he determined that appellant's bid was the lowest, but noticed that his total did not include approximately $4,000 that appellant had listed for the "tank slab" and that the bid did not list whom it was from. On April 1, Anderson called appellant to confirm that the $4,000 for the tank slab should be included in the total cost and asked appellant to resubmit his bid on company letterhead. Appellant faxed a second bid to respondent that contained his company information. Anderson then prepared respondent's prime bid for the project using appellant's bid without "marking up" the price for the concrete work.

The next lowest bid respondent received for the concrete work on the project was approximately $711,000; appellant's bid was approximately 24% lower than this bid. Respondent's president, Joe Riley, testified that bids for the same work may vary by 25% to 30%, and that he has seen variations as high as 40%. He testified bids vary because of a contractor's time schedule, whether the contractor has a skilled foreman and crew, and many other factors. Because of these variations, he did not believe that appellant's bid was disproportionately low.

On April 1, Anderson drove to Wahpeton and submitted respondent's bid for the project in the amount of $1,522,058. That afternoon, the bids were opened and respondent was the lowest bidder.

On April 2, appellant telephoned to inquire whether it was the lowest bidder and whether respondent had used appellant's bid. Appellant spoke with Jim Rentz, who was also a project manager for respondent. Rentz told appellant that respondent was the lowest bidder and that it had used appellant's numbers when preparing its bid. After learning that respondent had used his bid, appellant proceeded to tell Rentz how many cubic feet of concrete his company could complete in a day and that he would be using a new machine.

On April 24, respondent was offered the general contract for the Wahpeton project. Work began on the Wahpeton project on May 14, 2002.

On May 21, Anderson telephoned appellant and requested that he attend a meeting at the job site to discuss job responsibilities and timelines for the concrete work. The next day, appellant attended the meeting at the job site with Anderson and another foreman. Appellant admitted that he knew at the time of the meeting that respondent intended to use him for the concrete work and that "callin[g][him] out to the meeting" was a "binding thing."

At the meeting, appellant got his first opportunity to review the blueprints for the project. After returning home, he compared his bid to the requirements of the blueprints and realized there were substantial differences between his bid and the specifications. In making his bid, appellant had assumed the tank slab consisted of eight-inch slabs of concrete, but the blueprints required the slabs to be three feet thick. Appellant testified that in order to complete the tank slab according to the blueprints would require an additional $80,000 over what he had bid. He also discovered that certain portions of the concrete were "reinforced," which he testified would mean that sawing joints into the concrete would require an additional $20,000 over what he figured in his bid. Appellant further noticed that the contract was a "Davis-Bacon Act" contract, which would require paying his workers a higher wage.

Two days after the meeting, Anderson called appellant to ask if he wanted information that respondent had obtained regarding concrete materials. The conversation lasted 12 minutes. Appellant did not raise his concerns regarding his bid during this call. Anderson attempted, unsuccessfully, to contact appellant again over the next few days. On June 5, Anderson again spoke with appellant at which time appellant informed Anderson he would not enter into a contract to perform the concrete work for the price that he submitted in his bid.

On June 11, Joe Riley called appellant to discuss his refusal to perform the concrete work. Appellant informed Riley that he would need an additional $80,000 to complete the concrete work and that his price did not include sawing and sealing joints in the concrete. Riley testified that when the conversation ended, he was certain that appellant would not perform under his bid and that he then started looking for another contractor to perform the work. Riley also testified that he did not have the option of asking the City of Wahpeton for additional money to perform the concrete work.

Respondent was able to get two contractors to perform all the concrete work. Respondent paid a total to the two companies of approximately $620,000; about $79,000 more than appellant's bid for the concrete work.

After completion of the project, respondent sued appellant, alleging that he had breached the contract formed between the parties or, in the alternative, that promissory estoppel should be applied to enforce appellant's promise. In March 2004, following a bench trial, the district court found that appellant's quote constituted a firm bid to perform the concrete work and that respondent accepted the offer on May 21, 2002, when it requested that appellant attend the meeting to discuss the project. The court also found that appellant's bid was not so disproportionately low as to alert respondent that there might be an error in the bid.

The district court further determined that even if it erred in finding a contract existed, respondent "met its burden of proving all the elements of promissory estoppel." The court reached this conclusion based on its findings that appellant intended respondent to rely on his bid for the concrete work and knew that respondent would rely on that bid, that respondent did in fact rely on appellant's bid, and that justice required enforcing the promise because respondent suffered damages from appellant's refusal to honor his bid.

The district court finally determined that the appropriate measure of damages under either theory was the difference between appellant's bid and the amount respondent actually paid for the completion of the concrete work, which was approximately $78,500, and entered judgment for respondent in this amount.

ISSUES

1. Does the evidence support the district court's determination that a binding contract was formed between the parties?

2. Did the district court commit evidentiary errors that entitle appellant to a new trial?

ANALYSIS

The existence of a contract is generally a question of fact. Morrisette v. Harrison Int'l Corp., 486 N.W.2d 424, 427 (Minn.1992). If there is reasonable evidence tending to support the district court's findings of fact, this court will not reverse those findings. Rogers v. Moore 603 N.W.2d 650, 656 (Minn.1999).

Minnesota follows the objective theory of contract formation, under which the parties' outward manifestations are determinative, rather than either party's subjective intent. TNT Props., Ltd....