Double AA Builders, Ltd. v. Grand State Construction L.L.C.

114 P.3d 835, 210 Ariz. 503, 455 Ariz. Adv. Rep. 11, 2005 Ariz. App. LEXIS 81
CourtCourt of Appeals of Arizona
DecidedJune 28, 2005
Docket1 CA-CV 03-0609
StatusPublished
Cited by41 cases

This text of 114 P.3d 835 (Double AA Builders, Ltd. v. Grand State Construction L.L.C.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Double AA Builders, Ltd. v. Grand State Construction L.L.C., 114 P.3d 835, 210 Ariz. 503, 455 Ariz. Adv. Rep. 11, 2005 Ariz. App. LEXIS 81 (Ark. Ct. App. 2005).

Opinion

OPINION

GEMMILL, Judge.

¶ 1 Grand State Construction L.L.C., a subcontractor, appeals a judgment awarding damages to Double AA Builders, Ltd., a general contractor, on a promissory estoppel claim. Double AA cross-appeals the trial court’s denial of attorneys’ fees under Arizona Revised Statutes (“A.R.S.”) section 12-341.01(A) (2003). We affirm the judgment in favor of the general contractor because the evidence is sufficient to support the trial court’s implied findings of each element of promissory estoppel. We also conclude that § 12-341.01(A) is not applicable to a promise made enforceable by the doctrine of promissory estoppel and we therefore affirm the trial court’s denial of attorneys’ fees to the general contractor.

I.

¶ 2 In anticipation of submitting a bid for the construction of a Home Depot Store in Mesa, Double AA (“General Contractor”) solicited bids from subcontractors for various portions of the work.

¶ 3 On December 18, 2001, Grand State (“Subcontractor”) faxed a written but unsigned bid to General Contractor in the amount of $115,000 for installation of the Exterior Insulation Finish System (“EIFS”) on the project. Subcontractor’s proposal stated: “Our price is good for 30 days.” General Contractor also received other bids from subcontractors for the EIFS work.

¶ 4 General Contractor relied upon several subcontractor bids, including Subcontractor’s, in preparing its overall price for the project. Specifically, General Contractor used Subcontractor’s price of $115,000 for the EIFS portion of the work in arriving at the total bid submitted to the owner.

¶ 5 On December 21, 2001, Home Depot advised General Contractor that General Contractor was the successful bidder for the project. On December 31, 2001, Home Depot forwarded a contract to General Contractor for the project.

¶ 6 On January 11, 2002, within the 30-day “price is good” period, General Contractor sent a subcontract for the EIFS work to Subcontractor to be signed and returned. Subcontractor advised General Contractor that it would not sign the subcontract or perform on the project. A letter from Subcontractor to General Contractor explained: “Upon reviewing your schedule for this upcoming project and our own inventory of presently scheduled work, we will not be able to enter into a contract with your company. From the time we received a contract from your office we signed four other contracts that were bid around the same time period.”

¶7 General Contractor subsequently entered into a subcontract with a replacement subcontractor to install the EIFS at a cost of $131,449, which exceeded Subcontractor’s quoted price by $16,449. General Contractor demanded that Subcontractor pay the difference between its bid and General Contractor’s ultimate cost to perform the same work. After Subcontractor refused, General Contractor filed suit based upon promissory es-toppel.

¶8 In accordance with superior court rules, an arbitrator initially heard the ease. The arbitrator ruled in favor of Subcontractor. General Contractor appealed, seeking a trial de novo in superior court. After a one-day bench trial, the court ruled in favor of General Contractor and awarded $16,449 in damages but denied General Contractor’s request for attorneys’ fees. This appeal and cross-appeal followed.

*506 II.

¶ 9 Because this case was tried to the court, we view the evidence in the light most favorable to upholding the trial court’s decision. See Federoff v. Pioneer Title & Trust Co., 166 Ariz. 383, 388, 803 P.2d 104, 109 (1990). Neither side requested that the court make specific findings of fact and conclusions of law pursuant to Arizona Rule of Civil Procedure 52(a), and the court did not, sua sponte, make detailed findings. Under these circumstances, we must presume that the trial court found every fact necessary to support its judgment and we will affirm if any reasonable construction of the evidence justifies it. See Garden Lakes Comty. Ass’n, Inc. v. Madigan, 204 Ariz. 238, 240, ¶ 9, 62 P.3d 983, 985 (App.2003); In re CVR 1997 Irrevocable Trust, 202 Ariz. 174, 177, ¶ 16, 42 P.3d 605, 608 (App.2002).

¶ 10 We apply a de novo standard when reviewing issues of law and statutory interpretation. See Jangula v. Ariz. Prop. and Cas. Ins. Guar. Fund, 207 Ariz. 468, 470, ¶ 12, 88 P.3d 182, 184 (App.2004); Maycock v. Asilomar Dev., Inc., 207 Ariz. 495, 500, ¶ 24, 88 P.3d 565, 570 (App.2004).

III.

¶ 11 We first address Subcontractor’s position that the doctrine of promissory estoppel should not be applied in the context of subcontractors submitting bids to general contractors.

¶ 12 When a general contractor prepares an overall bid for a competitively-bid construction project, it receives bids and quotes from subcontractors for portions of the work. The general contractor uses the bids in preparing its overall price for the project. A subcontractor’s refusal to honor its bid can be financially disastrous for the general contractor, because it will typically be bound by the bid price submitted to the owner.

¶ 13 Arizona has previously adopted Section 90(1) of the Restatement (Second) of Contracts (1981), see Chewning v. Palmer, 133 Ariz. 136, 138, 650 P.2d 438, 440 (1982), which describes those promises that will be binding under the promissory estoppel doctrine:

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

¶ 14 This doctrine “has been used to require the subcontractor to perform according to the terms of its bid to the contractor if the contractor receives the contract award, since the contractor has relied on the subcontractor’s bid and must perform for a price based on that reliance.” Thomas C. Horne, Arizona Construction Law § 202, at 97 (2d ed.1994).

¶ 15 The leading ease applying promissory estoppel in this context is Drennan v. Star Paving Co., 51 Cal.2d 409, 333 P.2d 757 (1958). The Drennan general contractor was preparing a bid for a public school job. Id. at 758. Before submitting the bid, the general contractor received a telephoned bid from a subcontractor of $7,131.60 for paving work. Id. One day later, the subcontractor informed the general contractor that the bid contained a mistake and that it would not perform the work for less than $15,000. Id. at 758-59. The general contractor, however, had already included the subcontractor’s bid in its price, and the owner had accepted the general contractor’s bid. Id. at 759.

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114 P.3d 835, 210 Ariz. 503, 455 Ariz. Adv. Rep. 11, 2005 Ariz. App. LEXIS 81, Counsel Stack Legal Research, https://law.counselstack.com/opinion/double-aa-builders-ltd-v-grand-state-construction-llc-arizctapp-2005.