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Show MONDAY, OCTOBER 28, 1974 INTERMOUNTAIN COMMERCIAL RECORD PAGE EIGHT In the Supreme Court of The State of Utah Also, apart from everything else that has been said above, the Smiths compounded confusion by completing and making fait'accompli the transaction under the terms claimed for by the Eckards, for which specific performance was adjudged by the trial court when, on January 3, 1974, a whole week before they filed their Notice of Appeal on January 10, 1974, they both, Gale G. Smith and Joy T. Smith, executed (and had their signatures notarized on said date) a Warranty Deed for "One-ha- lf (12) of a duplex described as follows: Beginning . . . thence to a point on the Centerline of a party wall thence . . . to the point of beginning. " This Warranty Deed was duly delivered to the Eckards and accepted by them in exchange for a certified check for $37, 744. 00, accepted and endorsed by both defendants, which amount if doubled, would equal $75, 488. 00. Adding one half (12) of the $4, 500. 00 advance payment, which would be $2, 250. 00 to the $75, 488. 00, what do you get except $78, 738. 00, which is almost exactly the stipulated price of $78, 900. 00 for the duplex found in the Residential Rental Agreement? These figures and the findings of the courl belie the statement of the main opinion that "The trial court enforced a contract which the parties never made," - although the quoted statement would be true as to Mrs. Smith only, - if it further be assumed that she was not bound by her representations as to satisfaction in the terms of the agreement, - which the ... .... . John M. Rapp, dba Rapp Construction Company, Plaintiff and Appellant, and of It would be a strange conclusion both in the area of procedure i oi termi the with very administering equity, if people, after having complied the which a judgment entered against them could consummate the transaction a court had found to be the fact, but thereafter, by the simple device of filing new ball game. It timely notice of appeal could call for and claim a brand is obvious that this whole case was and is moot, - an unorthodox and abortive attempt to invoke the jurisdiction and consume, without merit, the time of the courts. The trial court should be affirmed with costs to the Eckards. 22, 1974 ' Allan E. Mecham, Clerk Defendants and Respondents. they appealed. Tuckett, Justice, concurs in the views expressed in the dissenting opinion of Mr. Justice Henriod. the government had hamefully broken its implied promise, since it knew from the beginning that it intended to award the contract to a favored party. The court explained:2 ... The advertisement for FILED Oc tobe r C A LUSTER, record, No. 13552 v. Salt Lake City, a municipal corporation; and Marriott Corporation, a corporation, at all. It would appear that waived , the Smith, eliminated any defense of estoppel; that on the contrary ther enwere which it and completely ratified the terms asserted by the Eckards, No could argument forced by the court almost exactly a. finally consummated. defendants the put be urged that all this was not a part of the record, because - before (Emphasis added. ) it in the trial court, however, did not assume bids was a sham, done only to appear to comply with the law, to clothe their apparently dishonest purpose with the habiliments of legality. If these allegations are true, they practiced a fraud on plaintiff and on all other innocent bidders. They induced them to spend their money to prepare their bids on the false representation that their bids would be honestly considered. This implied contract has been broken, and plaintiff may. maintain an action for damages for breach. Chief Justice: Plaintiff initiated this action to recover the expenses he incurred in preparing and submitting u bid to construct a building at the Salt Lake City International Airport. Defendant, Marriott, filed a motion to dismiss on the ground that plaintiff's pleading failed to state a claim upon which relief could be granted, Rule 12(b)(6), U. R. CP. ; the trial court granted this motion. Defendant Salt Lake City, following its responsive pleading, filed a motion for summary judgment, which the trial court granted. Plaintiff appeals therefrom. i t November 30, 1972, Salt Lake City entered into a lease and concession agreement with Airline Foods, Inc. , a subsidiary of the Marriott Corporation, which guaranteed performance of the agreement. Airline Foods leased certain real property at the International Airport from Salt Lake City to operate an catering kitchen. The agreement provided that the City would construct, at its expense, a building in accordance with the plans and specifications prepared by the lessee (Airline Foods). The agreement specified that the City would pay for the cost of the project, provided that in the event the total sum exceeded $550,000, Airline Foods would promptly pay the City the excess. Another provision permitted Marriott Corporation, the guarantor of the agreement, the right to bid on all or any portion of the construction work. On It goes without saying that not every unsuccessful bidder is entitled to recover the cost of putting in his bid. Recovery can be had in only those cases where it can be shown by clear and convincing proof that there has been a fraudulent inducement for bids, with the intention, before the bids were invited or later conceived, to disregard them all except the ones from bidders to one of whom it was intended to let the contract, whether he was the lowest responsible bidder or not. ... Based on the foregoing, plaintiff contends that he had a collateral implied in fact contract, which was breached and that under Section U. C. A. 1953,. as amended 1965, immunity from suit of all governmental entities is waived as to any contractual obligation. Plaintiff urges that in 1. U.S. Court of Claims, 140 F.Supp. 409 (1956); 177 F.Supp. 251 (1959). of 140 F.Supp. 2. Pp. 4 a bidding situation two distinct contracts are involved. Under the first contract, since the governmental entity might reject all bids, the solicitation of bids is not a promise to accept the lowest or best bid; plaintiff concedes that In May, 1973, Salt Lake City, by means of a notice mailed to two bid is a mere offer which must be accepted and all statutory formalities the contractor associations and publication in a newspaper of general circulation, fulfilled prior to the existence of a binding contract. He insists that there is invited bids for. the work of constructing the building at the airport for the ina second, collateral contract under which the government by soliciting bids flight kitchen. According to plaintiff's pleading, this invitation to bid was at the to. fair to consideration of the all give impliedly promises and so that Salt Lake City by instance and request of Marriott Corporation, competitive bids and the this is and by time, supported effort, promise expense in so preparinviting the bids represented and warranted to the bidders that the contract the bid. would be awarded on the basis of competitive bidding and that all would compete ing on an equal basis. Plaintiff, in reliance on such representation and warranty, In Rasmussen v. United States Steel Company. 3 this court incurred great expense and expanded effort to prepare and submit a bid. Plainexplained: tiff's bid was in the amount of $648, 888; the preliminary estimate by the City the distinction between express and implied in fact was $650, 000. J. J. G. Construction Company, which plaintiff alleged was a contracts largely is a difference only in mode of expression. wholly owned subsidiary of defendant Marriott, submitted a bid of $540,000. A contract is express or implied by reason of the expression Plaintiff averred that the bid of J. J. G. was not based upon any estimated cost of offer and acceptance, - whether there is a manifestation of of construction but solely upon the contractual liability of Airline Foods under mutual assent, by words or actions or both, which the lease. Plaintiff alleged that the City failed to disclose to the bidders that are interpretable as indicating an intention to make reasonably a bargain a competitive advantage had theretofore been granted to Marriott Corporation with or terms certain which terms reasonably may be made and its subsidiaries by virtue of the lease, agreement. certain. The elements are basically identical in both cases, although the evidentiary facts may be expressed differently. On June 11, 1973, over the protest of plaintiff, the Board of Commist sioners of the City approved the award of the contract to the lowest bidder J. J. G. Construction. Plaintiff alleged that the action of the City was not taken May the invitation of the City to bid and plaintiff's response be reasonin good faith but for the purpose of creating an appearance of competition in the bidding. Plaintiff alleged that by virtue of the actions of defendants, he had ably interpreted as a manifestation of mutual assent to make a bargain, the terms of which may be ascertained? been damaged in the amount of $6,488. 88, the costs involved in preparation of the bid. Plaintiff alleged that this claim, arising out of the misrepresentation An ordinary advertisement for a bid is not itself an offer, rather the and breach of warranty, was duly presented to the City and was denied. Based bid or the tender is an offer which creates no right until accepted. Particularon the foregoing, plaintiff demanded judgment against defendants, jointly and ly in the case of public contracts, the requirement of certain formalities by law, such as a written contract, indicates that even after acceptance of the severally. bid, there is no contract until there has been compliance with the requisite Salt Lake City pleaded that it was a municipality, that the activities formalities. 4 alleged by plaintiff were engaged in by the City in the exercise and discharge of a governmental function, that the Governmental Immunity Act, Section To create a binding contractual obligation with the City, there must not A. amended did waiver U. for as 1965, C. be 1953, and Section provide compliance with Section etseq., of the Revised of immunity for damages sustained by misrepresentation and breach of warrant) Ordinances of Salt Lake City. The former ordinance provides that no liaand, therefore, the City was immune from suit. bility in excess of $150 shall be created against the City by the commissioner of any statutory department without the sanction of the board of commissioners bids On appeal, plaintiff contends that a municipality in advertising for being first had and obtained. The latter ordinance reflects the statutory manU. C. A. 1953, a. amended warrants that the bids are sought in good faith and for a public purpose; and if date of Section 1961, that the City Recorder the bidding procedure is tainted, the public body is liable for expenses incurred shall countersign all contracts made on behalf of the City, and every contract made in behalf of the City or to which the City is a in preparing the bid. Plaintiff predicates his claim on a theory advanced and party shall be void unless signed by the recorder. (Emphasis added. ) subsequently followed by the Court of Claims in Heyer Products Company v. United States. The court conceded that an advertisement for bids was a reque The invitation to bid by the City may not be for offers, and no contract resulted until an offer was accepted. Therefore, an interpreted as an offer for a unsuccessful bidder could not recover the profits he would have made under the binding contract; this action and plaintiff's response may not be reasonably construed as a manifestation of mutual assent indicating an intention contract, because he had no contract. The court was of the opinion that the of the government knew that considerable expense would be involved in complying with parties to be bound by a contract, the terms of which were certain. Additionthe invitation to bid and therefore implied a promise on its part to give fair and ally, plaintiff's theory must fail since no contractual liability can be created without compliance with the previously cited ordinances. 5 impartial consideration to the bids, confining its consideration solely to the interests of the government and not to the interest of some favorite bidder. In effect, plaintiff's argument on appeal is directed If the government breaches this implied promise, the injured party is entitled towards enforcing a quasi contractual obligation, which is imposed to recover his expenses. by the law for the purpose of ... bringing about justice without reference to the intention of m,. The court stated that if the facts as alleged by the plaintiff were true, obligations are not true contracts but are based on unjust enrichment or resti- in-fli- ght 63-30- -- 413-41- ... t 63-30- 24-1-- 15 -1, 10-10-- I I I 61, 25-16-- 6, -5, |