W. Coast Air Conditioning Co. v. Cal. Dep't of Corr. & Rehab.

230 Cal. Rptr. 3d 458, 21 Cal. App. 5th 453
CourtCalifornia Court of Appeal, 5th District
DecidedFebruary 22, 2018
DocketD071106
StatusPublished
Cited by1 cases

This text of 230 Cal. Rptr. 3d 458 (W. Coast Air Conditioning Co. v. Cal. Dep't of Corr. & Rehab.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
W. Coast Air Conditioning Co. v. Cal. Dep't of Corr. & Rehab., 230 Cal. Rptr. 3d 458, 21 Cal. App. 5th 453 (Cal. Ct. App. 2018).

Opinion

BENKE, J.

*455We consider in this case whether plaintiff West Coast Air Conditioning Company, Inc. (West Coast) was entitled to recover under a promissory estoppel theory its bid preparation costs in the stipulated amount of $250,000, after it successfully challenged the award of a public works contract by the State of California Department of Corrections and Rehabilitation (CDCR) to real party in interest Hensel Phelps Construction Co. (HP).

The court found HP's bid to update the Ironwood State Prison Heating, Ventilation and Air Conditioning System (subject project) illegal and nonresponsive as a matter of law. As a result, the court granted West Coast's request for a permanent injunction, preventing HP from performing any additional work on the subject project.

Although HP had only performed about 8 percent of the contract when the injunction issued, and although West Coast ultimately proved it was the lowest responsible bidder (see Pub. Contract Code,1 § 10108, discussed post ) when granting the injunction, the court refused to command CDCR to award West Coast the contract for the subject project, despite the court's finding in a previous order that West Coast should have been awarded the contract.

As we explain, we conclude the court properly exercised its broad equitable authority in awarding West Coast its bid preparation costs of $250,000. We thus reject CDCR's argument that West Coast as a matter of law was not entitled to recover such costs because West Coast's bid allegedly was nonresponsive and because West Coast had obtained a permanent injunction without any additional relief. Affirmed.

FACTUAL AND PROCEDURAL OVERVIEW

CDCR in February 2015 published an "invitation for bids" (IFB) for the subject project, which involved "building a new central plant" to provide *456air conditioning in, and a reroof of, the Ironwood prison, an *460"active" and "[f]ully occupied prison." In compliance with California law (see § 10108 ), the IFB provided the "[a]ward of the contract, if it will be awarded, will be to the lowest responsible bidder whose proposal complies with all requirements prescribed." West Coast, HP, and four other companies submitted bids to construct the subject project.

In early May 2015, CDCR awarded HP the contract for the subject project, as HP then was ostensibly found to be the lowest bidder with a bid of about $88 million. CDCR issued a list of bidders that showed West Coast was the next lowest bidder with a bid of about $98 million. Both bids were less than CDCR's engineer's estimate of $103 million for the subject project.

In mid-May 2015, West Coast filed a verified petition for a writ of ordinary mandate pursuant to Code of Civil Procedure section 1085, subdivision (a) and a complaint seeking injunctive relief and asserting a promissory estoppel cause of action (collectively, petition) against CDCR and real party in interest HP.2 In the petition, West Coast sought to enjoin CDCR from awarding the contract for the subject project to HP and/or to nullify that award. As relevant to this appeal, in the prayer for relief West Coast requested "general damages in an amount sufficient to reimburse West Coast for its bid preparation costs" and interest.

In support of its petition, West Coast alleged HP's bid suffered from myriad defects, including failing to list the license numbers of about 17 subcontractors among other missing subcontractor information, which the petition alleged gave HP additional time over its competitors to "solicit, receive and negotiate subcontractor prices and price cuts"; submitting a bid containing "typographical/arithmetical errors"; and submitting a revised bid after the deadline that included substantial alterations to the percentages of work that HP's subcontractors would perform. Because these changes materially affected HP's bid price, West Coast's petition further alleged CDCR as a matter of law was precluded from waiving the defects in HP's bid.

On July 1, 2015, West Coast filed a summary judgment type motion asking the court to grant its petition. Despite West Coast's pending motion, about a week later CDCR issued a notice for HP to proceed with the subject project.

On September 11, 2015, the court granted West Coast's motion to set aside the contract award to HP. In so doing, the court found the mathematical errors in HP's bid, which HP admitted , were "material" to the bid price and that HP

*457could have withdrawn its bid pursuant to section 5103, discussed post . Based on this finding, the court ruled HP's bid was nonresponsive as a matter of law. The court also then ruled that the contract for the subject project "should have been awarded to West Coast."

On September 16, 2015, West Coast sent CDCR a letter asking it to issue immediately a "stop work order" on the HP contract based on the court's September 11 order. West Coast in its letter also requested that it be awarded the contract for the subject project, which West Coast noted would "moot [ ]" its promissory estoppel cause of action in its petition. About a week later, CDCR responded that the September 11 order was a tentative decision only, refused to order HP to stop work, and rejected West Coast's request that it be awarded the contract.

*461On October 6, 2015, the court granted West Coast's ex parte application for a temporary injunction and ordered HP to stop immediately all work on the subject project "except tasks necessary for safe and prompt cessation of work."3 The court set the permanent injunction hearing for December 11, 2015.

The court at the December 11 hearing granted West Coast's request for a permanent injunction prohibiting HP "from performing any work on the [subject project] pursuant to the contract between HP and [CDCR]," which the court in its September 11 order had found was "illegal." In granting the permanent injunction, the court found that West Coast would be harmed without an injunction and that it had no adequate remedy at law. In its December 11 order, the court agreed with the "argument raised by CDCR ... that the [c]ourt cannot order that the contract be awarded to West Coast." (Italics added.) The court noted that specific finding was also reflected in its December 9, 2015 statement of decision.

West Coast's promissory estoppel cause of action was tried on May 9, 2016. Before trial, West Coast and CDCR stipulated to the following facts: "a. The bid documents published by CDCR for the Project stated a contract for the Project would be awarded to the lowest responsible bidder"; "b. CDCR received bids for the Project on April 30, 2015"; "c. CDCR awarded the Project contract to HP and on July 7, 2015, issued a notice to HP to proceed with the Project contract"; "d. Work on the Project began in July 2015"; "e. Pursuant to the temporary restraining order issued on October 6, *4582105, CDCR and HP halted all work on the Project and have not recommenced any work"; "f.

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Bluebook (online)
230 Cal. Rptr. 3d 458, 21 Cal. App. 5th 453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/w-coast-air-conditioning-co-v-cal-dept-of-corr-rehab-calctapp5d-2018.