Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Weitz Co. LLC v. Hands, Inc.

Supreme Court of Nebraska

July 22, 2016

Weitz Company, LLC,
v.
Hands, Inc., doing business as H & S plumbing and Heating, appellant.

         1. Equity: Estoppel. Although a party can raise estoppel claims in both legal and equitable actions, estoppel doctrines have their roots in equity.

         2. Equity: Appeal and Error. In reviewing judgments and orders disposing of claims sounding in equity, an appellate court decides factual questions de novo on the record and reaches independent conclusions on questions of fact and law. But when credible evidence is in conflict on material issues of fact, an appellate court considers and may give weight to the fact that the trial court observed the witnesses and accepted one version of the facts over another.

         3. Forbearance: Estoppel. A claim of promissory estoppel requires a plaintiff to show: (1) a promise that the promisor should have reasonably expected to induce the plaintiff's action or forbearance, (2) the promise did in fact induce the plaintiff's action or forbearance, and (3) injustice can only be avoided by enforcing the promise.

         4. ___: ___ . A plaintiff claiming promissory estoppel need not show a promise definite enough to support a unilateral contract, but it must be definite enough to show that the plaintiff's reliance on it was reasonable and foreseeable.

         5. Contracts. Usages of trade are strong evidence of the foreseeability of reliance on a promise.

         6. Estoppel. Evidence that a promisee had little time to act on the promise shows that the promisee's reliance was foreseeable.

         7. Contracts: Contractors and Subcontractors. A general contractor can reasonably rely on a subcontractor's bid even if the general contractor and subcontractor contemplate signing a formal subcontract with additional standard terms after the bidding process ends.

         [294 Neb. 216] 8. Contractors and Subcontractors. A general contractor cannot demand that a subcontractor agree to unusual and onerous terms while still holding the subcontractor to its original bid.

         9. ___ . If a subcontractor's bid is so low that a mistake should be apparent, a general contractor cannot reasonably rely on the bid.

         10. Estoppel: Damages. No single measure of damages applies in every promissory estoppel case.

         11. ___: ___. The damages that the promisor ought to pay under promissory estoppel are those that justice requires.

         12. Damages: Proof. A plaintiff's burden is to prove his or her damages to a reasonable certainty, not beyond all reasonable doubt.

         13. Election of Remedies. The election of remedies doctrine is an affirmative defense.

         14. Pleadings. A party must specifically plead an affirmative defense for the court to consider it.

         Appeal from the District Court for Douglas County: Joseph S. Troia, Judge.

          Brian S. Kruse, of Rembolt Ludtke, L.L.P., for appellant.

          Gregory C. Scaglione, Kristin M.V. Krueger, and Patrice D. Ott, of Koley Jessen, P.C., L.L.O., for appellee.

          Heavican, C.J., Wright, Connolly, Cassel, Stacy, and Kelch, JJ.

          Connolly, J.

         I. SUMMARY

         The Weitz Company, LLC (Weitz), a general contractor, received an invitation to bid on a planned nursing facility. Hands, Inc., doing business as H & S Plumbing and Heating (H&S), submitted a bid to Weitz for the plumbing work, as well as the heating, ventilation, and air conditioning (HVAC) parts of the job. Weitz' bid to the project owner incorporated the amount of H&S' bid. After the owner awarded the project to Weitz, H&S refused to honor its bid. Weitz completed the project with different subcontractors at greater expense.

         At trial, Weitz sought to enforce H&S' bid under promissory estoppel. The court determined that Weitz reasonably [294 Neb. 217] and foreseeably relied on H&S' bid, and it therefore estopped H&S from reneging. The court measured Weitz' damages as the difference between H&S' bid and the amount Weitz paid to substitute subcontractors. H&S appeals. We affirm the judgment and the amount of damages.

         II. BACKGROUND

         1. Weitz Is Invited to Bid

         In 2011, the Evangelical Lutheran Good Samaritan Society (Good Samaritan) invited four "prequalified General Contractors, " including Weitz, to bid on a proposed nursing facility in Beatrice, Nebraska. Good Samaritan chose the four prequalified general contractors based on "prior relationships'' recommendations from its architect and its own research.

         Good Samaritan is a "big player" in the retirement living market. Weitz is a "dominant contractor" in the same market. Alan Kennedy, a Weitz executive, said that Weitz had sought to build a relationship with Good Samaritan that would lead to "negotiated work, " meaning that Good Samaritan would work with Weitz without inviting other general contractors to bid. Kennedy testified that negotiated work is "one of the best places to be as a contractor." When Good Samaritan invited Weitz to bid on the Beatrice project, Weitz knew of another potential project with Good Samaritan in Sarpy County, Nebraska.

         Good Samaritan's "Invitation to Bid" stated that it would not consider bids received after 2 p.m. on August 30, 2011 (bid day). The invitation incorporated certain "Instructions to Bidders, " which provided that Good Samaritan and its architect could object to a general contractor's proposed subcontractors. The invitation stated that "[n]o bids may be withdrawn for a period of 60 days after opening of bids." If a general contractor refused to enter into a contract, the instructions provided to bidders state that the general contractor would forfeit its bid security as liquidated damages. A bid security is a bond that "assures the owner that [it] can rely upon the [294 Neb. 218] bids." But Good Samaritan did not ask for bid securities, because it prequalified the general contractors.

         2. Bid-Day Madness

         Before bid day, Weitz assigned "lead person[s]" to the different categories of work on the project, referred to as "tickets." The ticket leaders reviewed the project specifications and created a "scope checklist" that described the work for each ticket. Weitz prepared scope checklists because subcontractors sometimes excluded certain work from their bid.

         On bid day, Weitz assembled its people in a conference room to collect and organize the hundreds of bids from subcontractors. Ticket leaders called out the bids after comparing them with the scope checklist. Weitz then added the numbers to a "bid day spreadsheet."

         Subcontractors in the mechanical, engineering, and plumbing fields typically submit their bids within 15 minutes of the deadline. As a result, Weitz is often "at the wire turning in [its] number to an owner." Brian Mahlendorf, a project executive for Weitz, oversaw Weitz' bid for the Good Samaritan project. Mahlendorf said that Weitz received H&S' bid "less than 15 minutes or so" before the 2 p.m. deadline.

         Kennedy, who had been involved in "well over a hundred bids, " testified that it was "customary for general contractors to rely on bids submitted by subcontractors" and that subcontractors submit bids because they want the job. Mahlendorf, who had more than 20 years of experience in the construction industry, testified that it was customary for Weitz to rely on subcontractors' bids, that subcontractors knew that Weitz relied on their bids, and that subcontractors submitted bids because they wanted to procure work. Mahlendorf said it was "very rare" for a subcontractor to refuse to honor its bid.

         3. H&S Submits a Bid to Weitz

         On bid day, H&S sent Weitz a bid for the plumbing and HVAC parts of the project. H&S' base bid was $2, 430, 600. For [294 Neb. 219] alternate duct and radiant heating work, H&S quoted $39, 108 and $52, 500, respectively. H&S also sent Weitz a "revised" base bid of $2, 417, 000, but Weitz received the revised bid too late to use in its bid to Good Samaritan.

         Kennedy and Mahlendorf would confirm a subcontractor's bid if it looked "funny" or "off, " but H&S' bid did not seem unusual to them. Weitz had estimated what each ticket would cost based on historical data, and H&S' bid was above Weitz' estimate. Mahlendorf was also comfortable with H&S because Weitz had worked with H&S before. Furthermore, Mahlendorf assumed that H&S was "actually looking at [its] number" because it sent Weitz a revised bid. Two of the other four prequalified general contractors stated that they planned to use H&S for the plumbing and the HVAC work.

         Kennedy and Mahlendorf testified that the market for construction services was weak in 2011. Subcontractors were "aggressively seeking work" and making low bids to "keep their people busy." Kennedy said that subcontractors' bids had "ranges that you hadn't traditionally seen in the marketplace." A difference of 15 percent between the lowest and second-lowest bids was not uncommon.

         4. Weitz Submits Its Bid to Good Samaritan

         Mahlendorf said that Weitz used H&S' bid in its own bid to Good Samaritan. Weitz chose H&S' bid because it included the "complete scope with the lowest cost." Mahlendorf said that H&S' bid was "comprehensive" and that Weitz was "willing to take it as is." Mahlendorf added H&S' base bid to Weitz' bid-day spreadsheet for the plumbing and HVAC tickets.

         On bid day, Weitz sent Good Samaritan a base bid of $9.2 million. Kennedy and Mahlendorf testified that Weitz' base bid of $9.2 million included H&S' $2, 430, 600 bid. Weitz promised Good Samaritan that it would execute a contract for its base bid if offered the project within 60 days. Weitz' bid to Good Samaritan included a list of "Major Sub-Contractors." [294 Neb. 220] For the plumbing subcontractor, Weitz wrote "HEP or H&S." For the HVAC subcontractor, Weitz wrote "Falcon or H&S."

         Mahlendorf explained that he used a disjunctive list of major subcontractors because H&S' bid "came in late enough after this form had been basically ready to send out, and we had to add [its] name to those two line items." Mahlendorf said that Weitz did not use the bids of the other plumbing and HVAC subcontractors, "HEP" and Falcon Heating and Air Conditioning (Falcon), to reach its $9.2 million base bid. Even if Weitz could have used HEP and Falcon instead of H&S, Mahlendorf said that Weitz intended to use H&S.

         5. Good Samaritan Awards the Project to Weitz

         On September 1, 2011, Weitz received "early indications" that Good Samaritan would select its bid. Weitz received "[f]inal notification" on September 2. Mahlendorf called H&S on September 6 and told the head of H&S' engineering department that Weitz had won the bidding and had "carried the H&S number." He said that he told H&S that "we used [its] number in our bid, and we were prepared to enter into a contract with [H&S] and move forward."

         Usually, after the owner of a project accepted Weitz' bid, Weitz asked its subcontractors to sign a "subcontract" establishing the "[e]xact contract terms" between Weitz and the subcontractor. Weitz had used a similar subcontract for more than a dozen years. H&S' chief executive officer testified that in the 10 or 15 times that H&S had worked with Weitz, Weitz had always accepted H&S' revisions to the subcontract.

         Weitz signed a contract with Good Samaritan for the base bid of $9.2 million plus six additional areas of work not included in the base bid. The opening paragraph of the contract states that it was "made and entered" on, and has an "Effective Date" of, September 7, 2011. But "Date: 9-19-11" appears below the signature of Good Samaritan's representatives.

         [294 Neb. 221] Under the contract, Good Samaritan and its architect had the right to reject Weitz' proposed subcontractors. But Good Samaritan did not veto H&S or any of Weitz' other subcontractors. Good Samaritan's architect could not recall having a "conversation of significance" about subcontractors. Despite an owner's reservation of the right to veto subcontractors. Mahlendorf said that "[i]n the real world, " a general contractor treats an owner's silence as an approval and that owners are usually silent.

         6. H&S Reneges on Its Bid

         Hugh Sieck, Jr., H&S' owner and chief executive officer, was fishing in Alaska on bid day. Sieck testified that he told his team of estimators before he left for Alaska not to send a bid to Weitz. He had "bitter feelings" for Weitz because it had a "history of bid shopping, " meaning that Weitz would "get a bid, . . . look at it, and [it] will go to another contractor to get a lower number." Sieck said ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.