IN COURT OF APPEALS
d/b/a Beaver Masonry,
Kandiyohi County District Court
File No. C1-02-1888
Derek A. Trosvig, Swenson Lervick Syverson Anderson Trosvig Jacobson, P.A., 710 Broadway, Post Office Box 787, Alexandria, MN 56308 (for respondent)
Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Willis, Judge.
A subcontractor’s bid to perform specific work at a specific price is an offer to enter into a contract, and a contract is formed between the subcontractor and the general contractor to whom the bid was submitted when the general contractor’s words and conduct objectively demonstrate that it has accepted the offer.
O P I N I O N
spring of 2002, the city of
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
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,
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.
On April 1,
On April 2, appellant telephoned
to inquire whether it was the lowest bidder and whether respondent had used appellant’s
bid. Appellant spoke with
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,
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,
On June 11,
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.
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?
existence of a contract is generally a question of fact. Morrisette
v. Harrison Int’l Corp., 486 N.W.2d 424, 427 (
The district court here found that appellant’s bid “constituted an offer to perform the concrete subcontract at the per unit prices contained within his bid” and that respondent accepted the bid on May 21, 2002, when Anderson called appellant to schedule a meeting at the work site to review the timelines for completing his work at the site. Appellant argues that the one-page document that he submitted was “an estimate” and was not intended to be a firm offer. But the district court concluded that, viewed objectively, the document was a firm offer. We will not reverse that finding if there is reasonable evidence to support it.
The record evidence shows that appellant contacted respondent requesting permission to submit a bid to perform the concrete work on the project. After receiving a 14-page fax from respondent outlining the requirements for the concrete work, appellant submitted a one-page document providing that completion of the concrete work for the project would total approximately $540,000 and that the “price includes all control joints, laser screed concrete, gravel base will be graded and ready for concrete [by] site contractor.” Appellant testified that he was aware that respondent would rely on his bid for concrete work when it prepared its bid for the overall project and that he intended for respondent to rely on his bid. Further, the specifications for the project, which were provided to appellant, clearly state that the general contractor cannot charge more for the work performed than the amount listed in its bid, which would lead an objective reader to conclude that he or she could not simply estimate what the costs might be. This evidence is sufficient to support the district court’s finding that appellant’s one-page document was an offer.
well-settled law in
was no language in appellant’s bid providing for an expiration of the offer,
and the evidence reasonably supports the district court’s finding that respondent
accepted the offer before it was revoked.
In particular, Rentz told appellant shortly after April 1 that respondent
was the lowest bidder on the project and that appellant’s numbers had been
Appellant argues that the contract lacked consideration because respondent was not bound by his bid and there was no mutuality of obligation between the parties. Although appellant is correct in stating that respondent was not initially bound by his bid—just as no offeree is bound by the terms of an offer until he accepts it—when respondent accepted appellant’s offer to perform the concrete work, respondent was contractually obligated to pay appellant approximately $540,000 for the work he offered to perform. A promise to pay a person in exchange for work he performs is the quintessential example of consideration and needs no further discussion.
his own testimony, appellant also argues that in the construction trade a
subcontractor does not expect his bid to be binding until there is a signed
construction contract. Unless the
contract is covered by the statute of frauds, which no one suggests is the case
here, a signed agreement is generally not required for formation of a contract.
Servs., Inc. v. Blue Horse, Inc., 497 N.W.2d 283, 285-86 (Minn. App. 1993),
review denied (Minn. May 11, 1993); see also Minn. Stat. §§ 513.01-.07
(2004) (providing types of contracts covered by statute of frauds). While the parties could have agreed that a
written agreement was a condition precedent to completion of a contract, there
is no evidence to suggest that both parties agreed to such a course of conduct. Asbestos
Prods., Inc. v. Healy Mech. Contractors, Inc., 306
Appellant does not challenge the district court’s finding that he breached the contract when he told respondent that he would not perform the work unless he was paid significantly more money. Nor does he specifically challenge the district court’s determination of respondent’s damages resulting from that breach, or the district court’s findings that the mistake in bidding the concrete work was solely his responsibility and that it was not so disproportionately low as to make respondent’s reliance on the bid unreasonable. However, because appellant discusses these issues at great length in his discussion of promissory estoppel, we will briefly address them here.
offeree will not be permitted to snap up an offer that is too good to be true; no
agreement based on such an offer can . . . be enforced by the acceptor.” Speckel
v. Perkins, 364 N.W.2d 890, 893 (Minn. App. 1985) (quotations omitted). Appellant’s bid was 24% lower than the next
although we conclude that the district court correctly determined that appellant
breached the contract, we also affirm the district court’s alternative determination
that respondent is entitled to recover under the doctrine of promissory
estoppel. Application of promissory estoppel requires a showing that (1) there
was a clear and definite promise; (2) the promissor intended to induce reliance
and such reliance occurred; and (3) the promise must be enforced to prevent
Appellant argues that the
district court erred in excluding the expert testimony from two witnesses offered
to prove “trade usage” regarding the non-binding nature of “estimates.” Absent an erroneous interpretation of the
law, the question of whether to admit or exclude evidence is within the
district court’s discretion. Kroning
v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (
Appellant’s only legal basis for
challenging the district court’s evidentiary ruling is his claim that a party
has a right to call witnesses to rebut an opponent’s testimony, citing this
court’s opinion in Farmers Union Grain
Terminal Ass’n v. Indus. Elec. Co., 365 N.W.2d 275 (Minn. App. 1985), review denied (Minn. June 14, 1985). In Farmers
Union, we noted that “[w]hat is proper rebuttal evidence rests almost
wholly in the discretion of the court.”
As discussed above, the only issue regarding appellant’s belief that the contract had to be in writing is whether both parties agreed that the execution of a written contract was a condition precedent to their being bound by the agreement. There is nothing in the record to suggest that either witness had any direct knowledge of such an agreement between the parties. Because the testimony was not highly probative of a crucial issue, appellant has failed to show that the district court erred in excluding the testimony.
Reasonable evidence supports the district court’s determination that a contract was formed between the parties on May 21, 2002, when respondent’s words and actions established its objective intent to accept appellant’s offer to perform the concrete work on the Wahpeton project. Respondent is entitled to its out-of-pocket damages resulting from appellant’s breach of that contract.
 We do not address appellant’s other conclusory claims of error, which are devoid of legal authority. See Ganguli v. Univ. of Minn., 512 N.W.2d 918, 919-20 n.1 (Minn. App. 1994) (stating court need not address allegations unsupported by legal argument).