Lahr Construction Corp. v. J. Kozel & Son, Inc.

168 Misc. 2d 759 (1996)

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Nature of the Case

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Facts

P prepared to bid on the Omega Upgrade Project. P requested a number of subcontractors to bid for various parts of the job. D submitted bids in response to the solicitation. D supplies both structural steel, called 'Division 5' work, and reinforcing steel, called 'Division 3' work. D submitted a written bid for the Division 3 reinforcing steel work on the Omega project. D also submitted an oral bid of $55,000 for the Division 5 structural steel work on the project. D incorporated the figures received from Kozel for the Division 3 work and the Division 5 work into its final bid for the general contract and was subsequently awarded the contract. On October 7, 1992, shortly after the award, P employee Lanni telephoned Jeffrey Loeffler of D and advised him that P was awarded the general contract for the Omega project. Lanni told Loeffler that he 'would like to talk to them about doing a deal for both the reinforcing and the structural steel.' P Lanni did not tell D that P got the contract. Lanni testified that the 'deal' he envisioned was 'an agreement on price and scope for both divisions and write a contract.' The subcontract contemplated might 'possibly' involve a change in scope or price for each division, but Lanni's purpose, according to his testimony, 'was to do both structural and reinforcing [steel] together' and 'Come to an agreement' with D. Loeffler was unaware that D submitted an oral bid for the Division 5 structural steel work, and therefore he told Lanni that someone from D would get back to him. Raymond Benoit, vice-president of D, called Lanni and stated that D would not perform the work. Lanni told Benoit that P had relied upon their bids and, therefore, it was too late to refuse the work. On October 13, 1992, Lanni sent D a letter that purported to serve as a letter of intent to enter into P's 'standard' form of contract for Division 5 work as bid by D on September 29, 1992, and as a notice to proceed with the preliminary work pending receipt of the contract. D did not sign the letter, because it contained a waiver of its right to file a mechanic's lien and also required D to purchase additional insurance. D again notified P that it would not perform the work under the new terms demanded. D was required to hire another subcontractor at a higher price. P sued D to recover the difference paid to the substitute subcontractor. D filed a motion for summary judgment.