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TRACO v. ARROW GLASS CO. (07/24/91)

delivered: July 24, 1991.

TRACO, INC., A THREE RIVERS ALUMINUM COMPANY, APPELLANT
v.
ARROW GLASS CO., INC., APPELLEE



Appeal from the 45th District Court of Bexar County; Trial Court No. 87CI-03149; Honorable Antonio G. Cantu, Judge Presiding. This Opinion Substituted for Withdrawn Opinion of May 8, 1991.

COUNSEL

ATTORNEYS FOR APPELLANT, Robert W. Loree, Hubert W. Green, GREEN, McREYNOLDS & REED, San Antonio, Texas, Thomas J. Madigan, COHEN & GRIGSBY, P.C., Pittsburgh, Pennsylvania.

ATTORNEYS OF APPELLEE, Hugh L. McWilliams, BURNS & O'GORMAN, San Antonio, Texas, Franklin S. Spears, Christa Brown, BRANTON & HALL, P.C., San Antonio, Texas.

David Peeples, and Fred Biery, JJ. Opinion by Alfonso Chapa, Justice.

Author: Chapa

ON APPELLEE'S MOTION FOR REHEARING

The motion for rehearing is granted, the opinion delivered on May 8, 1991 is withdrawn, and the following opinion is substituted therefor.

This is a construction dispute stemming from a quotation given by Traco, Inc., A Three Rivers Aluminum Company*fn1, a material supplier of pre-engineered aluminum and glass sliding doors and windows, to Arrow Glass Company, Inc.*fn2, a subcontractor, in connection with the USAA Towers project in San Antonio, Texas. Arrow initially brought suit against Traco on the theories of promissory estoppel and negligence for Traco's failure to supply aluminum and glass sliding doors at the quoted price. After a bench trial, the trial court held for Arrow solely under the theory of promissory estoppel and awarded Arrow judgment against Traco for damages in the amount of $75,843.38, plus attorneys' fees and prejudgment interest.

Appellant raises the following points of error:

1. the trial court erred in rendering judgment for Arrow because Traco's bid was revocable and properly withdrawn thirty days after it was made;

2. the trial court erred in rendering judgment for Arrow because the evidence is legally and factually insufficient to support recovery under the doctrine of promissory estoppel;

3. the trial court erred in rendering judgment for Arrow because the evidence is legally and factually insufficient to support the trial court's findings of fact and conclusions of law that Traco made an unconditional bid to Arrow and that Traco's bid was final;

4. the trial court erred in rendering judgment for Arrow because the evidence is legally and factually insufficient to support the trial court's findings of fact that Traco could have reasonably foreseen that Arrow would rely on its bid;

5. the trial court erred in rendering judgment for Arrow because the evidence is legally and factually insufficient to establish that an injustice has been done to Arrow and to support the trial court's conclusion of law that Arrow sustained its alleged damages on October 9, 1986;

6. the trial court erred in rendering judgment for Arrow because the evidence is legally and factually insufficient to support the trial court's findings of fact that Arrow's purported reliance upon Traco's bid was reasonable, customary, detrimental and justified;

7. the trial court erred in rendering judgment for Arrow because the evidence is legally and factually insufficient to support the findings of fact that Arrow did not engage in bid chiseling or bid shopping practices or that it is not guilty of laches or unclean hands;

8. the trial court erred in awarding Arrow attorneys' fees for a cause of action based on promissory estoppel; and,

9. the trial court erred in awarding Arrow prejudgment interest at a rate of ten percent per annum.

Appellant initially argues that the trial court erred in rendering judgment for Arrow because Traco's bid was revocable and properly withdrawn thirty days after it was made. Appellant primarily relies upon the argument that its sliding doors are goods as defined by the Texas Business and Commerce Code, therefore, § 2.205 of this code is controlling. TEX. BUS. & COM. CODE ANN. § 2.205 (Vernon 1968) (stating that an offer . . . to buy or sell goods in a signed writing. . . is not revocable . . . during the time stated . . . ") (emphasis added). Nevertheless, appellant's arguments ignore the appellee's basic contention and legal theory under which this suit was brought. Appellee sought relief under the equitable doctrine of promissory estoppel on the premise that appellant's promises, by way of its oral bid, caused appellee to substantially rely to its detriment. Consequently, appellant's assertion that its subsequent letter confirming this bid somehow invokes the application of the Uniform Commercial Code ignores the fact that the appellee relied to its detriment when it reduced its bid based on a telephone conversation with the appellant, prior to the time appellant's confirmation letter was sent or received. Thus, any subsequent written document is irrelevant to Arrow's cause of action; appellant's first point is rejected.

Having resolved that the Uniform Commercial Code does not apply under these facts, we must now resolve whether the equitable theory of promissory estoppel applies to bid construction cases and, if so, whether this doctrine applies under the specific facts of this case.

While no Texas case has previously applied the theory of promissory estoppel in a bid construction case, other jurisdictions have consistently applied this doctrine under similar facts, recognizing the necessity for equity in view of the lack of other remedies. N. Litterio & Co. v. Glassman Constr. Co., 319 F.2d 736 (D.C. Cir. 1963); Robert Gordon, Inc. v. Ingersoll-Rand Co., 117 F.2d 654 (7th Cir. 1941); Drennan v. Star Paving Co., 51 Cal. 2d 409, 333 P.2d 757 (1958); Constructors Supply Co. v. Bostrom Sheet Metal Works Inc., 291 Minn. 113, 190 N.W.2d 71 (1971); E.A. Coronis Assoc. v. M. Gordon Constr. Co., 90 N.J. Super. 69, 216 A.2d 246, 249 (1966); Wargo ...


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