North american mechanical inc

COURT OF APPEALS

DECISION

DATED AND FILED

NOTICE

July 22, 1999

��� This opinion is subject to better modifying. If publiburned, the main variation will certainly show up in the bound volume of the Official Reports.

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Marilyn L. Graves

Clerk, Court of Appeals

of Wisconsin

��� A party may file via the Supreme Court a petition to review an adverse decision by the Court of Appeals.� See � 808.10 and also Rule 809.62, Stats.


No.��� 98-3251

STATE OF WISCONSIN

IN COURT OF APPEALS

DISTRICT IV

North Amerideserve to Mechanical, Inc.,

���������������������������� Plaintiff-Appellant,

������������� v.

Diocese of Madiboy,

���������������������������� Defendant-Respondent.


����������������������� APPEALfrom a judgment of the circuit court for Dane County:PAUL B.HIGGINBOTHAM, Judge.Affirmed.

����������������������� BeforeDykguy, P.J., Eich and also Deininger, JJ.

����������������������� DEININGER,J.NorthAmerideserve to Mechanical, Inc. (NAMI) appeals an overview judgment disabsent itsmisrepresentation and also promissory estoppel claims versus the Catholic Dioceseof Madison.� NAMI, a commercial heatingand also air conditioning contractor, had actually bid on a portion of a major renovationproject undertaken by the Diocese.� NAMIalleges that the Diocese, by designating NAMI as a �prequalified�subcontractor, misstood for and promised that the Diocese would not object toNAMI�s participation in the renovation.�The Diocese, but, objected to NAMI�s participation in the projectbecause NAMI was not unionized, and the mechanicals subcontract was awarded toan additional company.� We conclude that theDiocese neither misrepresented nor promised that it would not object to NAMI�sparticipation bereason the materials inviting bids expressly booked to theDiocese the best to refusage any bids.�Accordingly, we affirm the summary judgment� dislacking NAMI�s claims.

BACKGROUND

����������������������� TheDiocese undertook to renovate home it owned on the west side of Madison,which had actually previously been offered as the Holy Name Seminary.� The Diocese, through the assistance of itsarchitect, established that it would enter into a solitary contract through a generalcontractor, that would subsequently contract with the vital subhome builders.� The architect all set a list ofprequalified basic home builders and subbuilding contractors who were invited to bid onthe job.� The subcontractorssubmitted their bids to the general contractors, that integrated thesubcontractors� bids into their bids to the Diocese.� Indevelopment about the project and the bidding procedure wasoffered to the bidders in a �Project Manual� all set by the architect.� The Project Manual gave that(1)bids would be embraced only from invited bidders; (2)the Diocesereserved the right to reject any and all bids; and (3)the Diocese couldraise reasonable objections to specific subhome builders also after the generalconstruction contract was signed.

����������������������� NAMIwas one of the prequalified subcontractors invited to bid on the heating,ventilation and air conditioning (HVAC) percentage of the task.� NAMI�s bid was among the lowest, and also NAMI�sbid was incorporated into the bid of Tri-North Builders, Inc., the low-biddinggeneral contractor.� NAMI learned,with its contacts via Tri-North, that Tri-North meant to be awarded thebasic contract for the Diocese task, and also that Tri-North intended to useNAMI for the HVAC job-related.� NAMI allegesthat on the basis of this indevelopment from Tri-North, it scheduled the capacityto percreate the HVAC occupational on the Diocese project, and also that it abandoned thepursuit of various other contracts that would have interfered with its ability topercreate the Diocese work.

����������������������� TheDiocese awarded the contract to Tri-North, however it objected to NAMI performingthe HVAC job-related.� At some suggest beforehand inthe bidding process, the Diocese had identified that, missing �specialscenarios,� it intended to employ only union-affiliated builders.� NAMI was not unionized, and also the Dioceseindeveloped Tri-North that it had actually selected an additional subcontractor for the HVACwork.

����������������������� NAMIsued the Diocese, alleging strict responsibility misrepresentation,misdepiction in violation of �100.18, Stats., and promissory estoppel, as well as two various other claimsno much longer at issue on appeal.<1>� The basis for the misrepresentation andpromissory estoppel clintends is NAMI�s contention that �by pre-qualifying NAMI,the Diocese stood for that if NAMI efficiently completed for thatsubcontract, the Diocese would not disqualify NAMI from receiving it.�� Both parties relocated for summary judgment.� The trial court granted summary judgment forthe Diocese on all clintends, and NAMI appeals.

ANALYSIS

����������������������� Weevaluation the trial court�s grant of summary judgment using the exact same methodologyas the trial court. See M&I First Nat�l Bank v. Episcopal HomesManagement, Inc., 195 Wis.2d 485, 496, 536 N.W.2d 175, 182 (Ct. App.1995). That methodology is famous, and we require not repeat it right here other than toobserve that summary judgment is correct when tright here is no genuine concern ofproduct reality and also the relocating party is entitcaused judgment as a matter of regulation.� See id. at 496-97, 536 N.W.2dat 182; check out likewise � 802.08(2), Stats.� We conclude that NAMI�s misrepresentationand also promissory estoppel claims deserve to be made a decision as a issue of law on the basisof the Project Manual, whose express terms are not in dispute.� Because we decide this appeal on the basisof the Project Manual, any continuing to be factual problems, such as those regardingthe customary methods in the building market, or the allude at which theDiocese determined to prefer union builders, are immaterial.

����������������������� Eachof NAMI�s 3 reasons of activity requires NAMI to present that the Diocese eithermade a false statement of fact or broke a promise to NAMI concerning NAMI�sparticipation in the renovation job.

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<2>� NAMI contends that the Diocese�s designationof NAMI as a prequalified contractor constitutes a representation of truth thatthe Diocese had actually no objection to NAMI performing the HVAC work-related on the renovationproject, and also a promise that the Diocese would not later object to NAMI on thegrounds that NAMI was not unionized.�Thus, although each of NAMI�s causes of action has different elements,NAMI�s claims climb or fall together, depending on the meaning of the Diocese�sdesignation of NAMI as a prequalified contractor.

����������������������� NAMIconhas a tendency that under the bidding procedure established in the Project Manual,the Diocese could exercise absolute regulate over the alternative of subcontractorsonly by deciding whether to prequalify subcontractors and also invite them tobid.� Once bids were opened, the generalcontractor who won the contract from the Diocese �got the ideal to selectthe subhome builders through which it would contract to complete the work-related.�� Therefore, NAMI conhas a tendency, the Diocese representedby means of the Project Manual that it had actually no objection to NAMI, and it promised thatmust the general contractor choose NAMI for the HVAC work, the Diocese wouldnot then object to NAMI�s participation in the project on the basis of anythingthe Diocese kbrand-new at the time NAMI�s bid was invited.

����������������������� NAMIbetter asserts that the Diocese made a decision early on in the bidding process not toengage non-union building contractors, and that the Diocese kbrand-new that NAMI was notunionized as soon as it invited NAMI to bid.�NAMI suggests that the Diocese solicited NAMI�s bid just to use the NAMIbid to obtain the union contractors to reduced their bids, via a process knownas �bid shopping.�� Thus, according toNAMI, the Diocese�s designation of NAMI as prequalified comprised a falsestatement, and then a broken promise, because the Diocese knew when bids wereinvited that it would certainly not allow NAMI to perform the HVAC occupational on the renovationproject.�

����������������������� TheDiocese conhas a tendency that �prequalified� supposed just that, in the initial judgmentof the Diocese and also its architect, the contractor appeared to have actually the capacityto perform the occupational and was therefore invited to submit a bid.

����������������������� Wereject NAMI�s interpretation of the term �prequalified� because it contradictsthe ordinary language of the Project Manual, which expressly booked to theDiocese the right to disapprove any bid and to object to subbuilding contractors selected bythe general contractor.� The �Instructionsto Bidders� area of the Project Manual provided that bids would certainly be acceptedjust from prequalified, invited bidders.�The �Invitation to Bid� area of the Project Manual offered that �TheOwner reserves the right to accept or refuse any kind of or all bids and waiveirregularities in a bid.�� The�Instructions to Bidders� area also gave that �Owner reserves appropriate toaccept or reject any or all bids and also waive irregularities in a bid.��

����������������������� TheProject Manual additionally stated that the ultimate contract between the Dioceseand also the basic contractor would incorporate �The General Conditions for theContract of Construction,� a type document all set by the Amerideserve to Instituteof Architects.� Section 5.2.1 of theGeneral Conditions gave that after the contract through the general contractoris signed, the owner might, after �due examination,� raise a �reasonableobjection� to any proposed subcontractor.<3>� Section 5.2.2 gave that the generalcontractor shall not contract with subbuilders to which the owner has actually areasonable objection.<4>� We note that these provisions of the GeneralConditions were not brought to bear in this case, bereason NAMI�s bid wasrejected by the Diocese prior to Tri-North signed the contract through theDiocese.� However, these provisionsoffered additionally notice to bidding subcontractors that the Diocese maintained theideal to object to their participation in the renovation project, even if thebasic contractor would certainly have selected them.

����������������������� NAMIoffers 2 disagreements why, in spite of the statements in the Project Manual thatthe Diocese booked the ideal to refuse bids and object to subbuilders, theProject Manual neverthemuch less constitutes a statement or promise that the Diocesewould certainly not object to NAMI.�

����������������������� NAMIsuggests initially that the provisions in the Project Manual permitting the Diocese todisapprove bids and also object to subbuilding contractors carry out not use to prequalifiedsubbuilders.� NAMI argues that thebids of prequalified subbuilders might not be rejected by the Diocese,because the subbuilding contractors did not actually submit their bids to theDiocese.� Only the basic contractors submittedbids straight to the Diocese; the subbuilding contractors submitted quotes or bids tothe basic contractors.� Hence,according to NAMI, the Diocese might disapprove the bid of a basic contractor forany kind of factor, but the Diocese could not reject a prequalified subcontractorschosen by the basic contractor that won the call, bereason thesubbuilders were not �bidders� within the interpretation of the ProjectManual.� We disagree.�

����������������������� NAMI�sdispute aget contradicts the simple language of the Project Manual.� The �Instructions to Bidders� sectiongave that �The following list of Contractors are the just Contractorsqualified to submit bids for this Project.��NAMI was just one of six subhome builders invited to submit bids for the HVACpercentage of the job-related.� Due to the fact that theProject Manual specifically designated NAMI as among the builders qualified tosubmit a bid for the task, we reject NAMI�s contention that it was not a�bidder� topic to rejection by the Diocese.�

����������������������� Furthermore,under NAMI�s interpretation of the Project Manual, �prequalified� should have actually hadtwo interpretations, one for general contractors and one more for subbuilders.� According to NAMI, the Diocese can rejectthe bid of a basic contractor for any type of factor, also though the generalcontractors were �prequalified.�� On thevarious other hand, the Diocese could not reject the bid of a prequalifiedsubcontractor at all.� Nothing in theProject Manual argues that definition of �prequalified� differs according towhether it is applied to a general or a subcontractor, and also we reject NAMI�sinterpretation of the term as unreasonable.�We conclude that under the �Invitation to Bid� and �Instructions toBidders� sections of the Project Manual, the Diocese maintained the best to rejectthe bids of prequalified subbuilders and also those of prequalifiedgeneral builders.

����������������������� Asfor the subcontractor approval provisions in section 5.2 of the GeneralConditions, NAMI argues that these also carry out not apply to prequalifiedsubcontractors.� NAMI points out thatarea 5.2.1 does not use to the construction contract if �otherwiseprovided in the ... bidding needs.��NAMI contends that the Diocese had the chance to object tosubbuilding contractors prior to prequalifying them, therefore the prequalification processaplaced to an alternate subcontractor approval system provided in thebidding needs that superseded the provisions of section 5.2.� NAMI likewise argues that the Diocese�sobjection to NAMI on the grounds that NAMI was non-union could not be a�reasonable objection� within the interpretation of area 5.2 because the Dioceseknew NAMI was non-union when it prequalified NAMI and also invited its bid.��

����������������������� Wedisagree through NAMI�s argument concerning the appliccapacity and interpretation ofsection 5.2 to prequalified builders.�The fundamental premise of NAMI�s dispute on this suggest is that the Dioceseexhausted all reasonable objections to subhome builders in the prequalificationprocess, and also for this reason it could have actually had actually no reasonable objection to any of thesubbuilding contractors it determined to prequalify.�As we defined above, yet, this is an unreasonable interpretationof the meaning of the principle �prequalified,� in light of the provisions in theProject Manual specifically reserving the ideal of the Diocese to reject anybid.� We conclude, therefore, thatarea 5.2 of the General provisions offered an additional chance for theDiocese to exercise its appropriate to disqualify a subcontractor after thesubcontractor was liked by the general contractor.� We emphadimension aobtain that area 5.2 was not directly carried tobear on NAMI�s participation in the project.�The importance of section 5.2 in the current problem is that it providedalert to the bidding subcontractors that their participation in the projectwas topic to approval by the Diocese even after the basic constructioncontract was signed.

����������������������� NAMI�ssecond dispute why the Project Manual constitutes a false statement that theDiocese would not object to NAMI is that the Diocese had a duty to disclose itschoice for union home builders.� NAMIargues that information concerning the Diocese�s strong preference for unionhome builders was known only to the Diocese, and also that NAMI had no method ofindividually finding out that indevelopment.�Because of this, NAMI contends, �the Diocese had actually a duty to discshed its truedecision to disqualify and also object to NAMI.��In assistance of this debate, NAMI cites a passage from Ollerman v.O�Rourke Co., 94 Wis.2d 17, 30-31, 288 N.W.2d 95, 102 (1980), statingthat �courts have actually held that the dominion does not apply ...wright here the facts are peculiarly and also solely within the understanding of oneparty to the transaction and also the other party is not in a position to discoverthe facts for himself� (citations omitted).<5>�

����������������������� NAMI�sanalysis is incomplete, yet, and also we are not convinced.� NAMI�s error is in asserting that theDiocese had actually a duty to disclose its choice for union contractors simplybereason the Diocese had this indevelopment and also NAMI had no method of finding out itindependently.� NAMI is correct that thefaitempt to discshed indevelopment may constitute a misrepresentation, if one hasa duty to disclose that indevelopment.�There is, however, no basic rule that a party to a businesstransactivity have to discshed any fact that he or she knows and also that the otherparty has no means of finding out.� Asdescribed in the Restatement (Second) ofTorts �551 cmt. a (1977):

Unless he is under some one of the duties of disclosurestated in Subsection (2), one party to a business transactivity is not liable tothe other for injury resulted in by his faientice to discshed to the various other facts ofwhich he knows the other is ignorant and also which he better knows the other, ifhe kbrand-new of them, would regard as product in determining his course of actionin the transaction in question.

The circumstances under which one has a duty to discloseinformation relating to a service transactivity are limited, and also they are setout in the Restatement (Second) of Torts�551(2) (1977), which Wisconsin courts have on a regular basis cited.� See, e.g., Omernik v. Bushman,151 Wis.2d 299, 303, 444 N.W.2d 409, 411 (Ct. App. 1989).� Two such scenarios seem pertinent inthis instance.�

����������������������� First,one has actually a duty to disclose �matters known to him that he knows to be necessaryto prevent his partial or ambiguous statement of the facts from beingmisleading.�� Restatement (Second) of Torts �551(2)(b) (1977).� NAMI says that its desigcountry as aprequalified contractor is a misleading partial statement, because the Diocesekbrand-new that it meant to disqualify NAMI because it was a non-unioncontractor.� Comment g clause (b)describes that a partial statement of the reality is misleading �as soon as it purports totell the entirety fact and does not.��

����������������������� TheDiocese�s designation of particular builders as prequalified, yet, did notpurport �to tell the totality truth� about the Diocese�s criteria forevaluating their bids bereason the Project Material educated bidders that theDiocese booked the right to refuse any kind of bids.�The only reasonable interpretation of the multiple provisions in theProject Manual providing for the Diocese�s approval of subcontractors is thatthe staminas and weaknesses of the prequalified builders would certainly be evaluatedin light of their bids� A favoredcandidate could have actually been rejected because its bid was too high, andconversely, a contractor that can have actually initially been taken into consideration a weakcontender could eventually prevail on the stamina of its bid.� In other words, the Project Manual did notpurport to be a finish statement of the criteria whereby bids would beevaluated; it expressly warned prospective bidders that it was not.

����������������������� 2nd,one has a duty to disclose �facts basic to the transaction� if the other party�would certainly sensibly mean a disclocertain of those facts.�� Restatement(Second) of Torts �551(2)(e) (1977).� As Comment j clause (e) defines, a truth basic to the transaction

is a reality that goes to the basis, or essence, of thetransaction, and also is an important component of the substance of what is bargained foror faced.� Other facts might serve asessential and also persuasive inducements to enter into the transaction, however not goto its essence.� These facts might bematerial, but they are not standard.� Ifthe parties expressly or impliedly area the danger as to the visibility of a facton one party or if the law places it there by tradition or otherwise theother party has no duty of disclocertain.�

(Emphasis added.)

����������������������� Weconclude that the criteria whereby the Diocese would certainly evaluate the bids of thecontractors is not a truth basic to the transaction which the Diocese had actually a dutyto disclose, specifically offered the provisions set forth in the ProjectManual.� We acunderstanding that thosecriteria can be material to the transactivity.�To the degree they were well-known at the time bids were let, the bidselection criteria can encourage or dissuade a contractor from submittingbids.� We cannot conclude, however, thatthe Diocese had a duty to totally disclose its selection criteria at the time itinvited bids.� Were we to do so, wewould efficiently re-create the Project Manual by emasculating the provisionthat the Diocese reserved the ideal to reject any kind of bid.� That provision properly notifiesprospective bidders that added, undeclared criteria might be provided to evaluatetheir bids, a lot prefer an �as is� clausage in a actual estate purchase contractinforms a buyer that he or she assumes the threat of non-disclosure of defectsin the residential or commercial property.� See Omernik,151 Wis.2d at 303, 444 N.W.2d at 411.�Given the Diocese�s reserved best to refuse any bid, a prospectivebidder could weigh the danger that some undeclared selection criterion could augerversus it, and also then pick whether to submit a bid in light of that danger.�

����������������������� NAMIhas actually pointed to no various other authority to support its contention that the Diocesehad a duty to disclose its preference for union building contractors, and also we have actually foundnone.� We conclude, therefore, that theDiocese had no duty to disclose that it wanted union building contractors, no matterwhen it embraced this preference.

CONCLUSION

����������������������� Weconclude that the Project Manual did not constitute a statement of fact thatthe Diocese would have actually no objection whatsoever before to NAMI�s participation in therenovation project, nor did it constitute a promise that it would not laterobject on the grounds that NAMI was not unionized.� The undiscussed facts display that NAMI cannot develop an essentialelement of its misrepresentation and also promissory estoppel claims, andaccordingly we affirm the summary judgment in favor of the Diocese.�