Sometimes I read about cases where one of the parties, its lawyers or both appears to be like the Keystone Cops. I can only picture how painful it must be to sit through such a trial. I recently read such a case where a subcontractor sued a general contractor who took the sub’s quotes and allegedly “sold” them to the sub’s competitors. That allegation seems strange in and of itself. I think the general contractor actually “shopped” the sub’s quotes with competitors. As you read below, picture the courtroom scene.
Central Contracting Inc., a subcontractor, submitted quotes on numerous jobs with defendant J.R. Heineman, a general contractor, over the course of approximately 10 years. At some point during the relationship, Central Contracting stopped obtaining contracts from J.R. Heineman. In its lawsuit, Central alleged that Heineman and one of its owners, Dennis Rhem, began selling Central’s quotes to competing subcontractors in order to solicit lower quotes from those subcontractors. At trial, Donald Hesse, one of Central’s owners, and his brother, Ronald, testified about numerous jobs (hereinafter referred to as the “challenged jobs”), which allegedly were sold from underneath the plaintiff through the alleged bid-selling scheme.
Hesse testified during the trial that he believed Central’s quotes were confidential before the bidding deadline. Although he claimed that the written invitations to bid that plaintiff received from Heineman contained confidentiality language, he failed to produce any written invitations that contained confidentiality language, and he admitted that he never discussed bid confidentiality with anyone from Heineman.
“I’m not stating that I’m positive”
In the court proceeding Central sought its lost profits on the disputed projects. Central did not offer any specific or documentary evidence to support the amount of its quotes. Central apparently threw away all of its paperwork related to the quote amounts. When Hesse testified on the subject he couched his testimony in terms of probabilities, guesses and approximations. For some of the disputed projects, Hesse gave a range of numbers, which varied by substantial sums, e.g., $300,000 to $400,000. At one point during his testimony, he candidly admitted that, “[o]n these numbers, I’m not stating that I’m positive.” Even the testimony on its standard “markups” was confusing. Hesse’s brother, Ronald, testified that Central liked to maintain a 15% profit margin. Hesse testified that Central ideally liked its quotes to include a 25% margin. He also testified that Central sometimes bid jobs at cost, meaning that no profit was to be made. Hesse admitted that many of the challenged projects were bid at cost, but he was not sure which ones.
Only one of the challenged jobs was supported with any specific evidence. There was evidence that Tri-City Kontracting, one of Central’s competitors, knew the amount of Central’s quote before the bid deadline on one project. However, contrary to Central’s theory of the case, the evidence established that Tri-City Kontracting actually submitted a higher quote. Additionally, on that project Central’s evidence showed it bid the project with no profit.
At the end of Central’s evidence, Heineman requested a directed verdict in its favor and the trial court granted it.
Nothing’s implied
First, the court found there was no implied contract. An implied contract exists where one engages or accepts beneficial services of another for which compensation is customarily made and naturally anticipated. The act of soliciting quotes and submitting them does not create an implied contract. Thus, Central had made no case for breach of an implied contract.
Then, the court turned to Central’s evidence of cost profits. The court stated that before lost profits are recoverable, they must be proven with a reasonable degree of certainty. In this case, Central’s evidence did not come close to the standard. It not only was unable to show what its profits would have been with reasonable certainty, it was not even able to show what its quotes were with reasonable certainty.
