In Specialty Asphalt & Construction, LLC v. Lincoln County, 191 Wn.2d 182 (Wash. 2018), the Court evaluated claims of gender discrimination, negligent misrepresentation, and breach of contract.
SNAPSHOT: This is a case summary of Specialty Asphalt & Construction, LLC v. Lincoln County, 191 Wn.2d 182 (Wash. 2018). It contains multiple sections. The following section is a snapshot of key data including case citation, description, categories, and impact on Legal Trees.
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I. SNAPSHOT
case citation
Specialty Asphalt & Construction, LLC v. Lincoln County, 191 Wn.2d 182 (Wash. 2018)
DESCRIPTION
“Specialty Asphalt & Construction LLC and its majority owner, Lisa Jacobsen (Specialty), brought suit against Lincoln County (County) for gender discrimination, negligent misrepresentation, and breach of contract arising out of the County’s bidding and contracting process for a paving project.” Specialty Asphalt, 191 Wn.2d at 185.
“Through various motions, Specialty lost all three claims at the trial court.” Id.
“The Court of Appeals affirmed, and Specialty petitioned for review.” Id.
“We reverse the Court of Appeals in part and affirm in part.” Id.
“We hold that Specialty defeated the County’s motion for summary judgment on the gender discrimination and negligent misrepresentation claims but the contract claim was properly dismissed.” Id.
“The case is remanded to the trial court to reinstate the two surviving claims.” Id.
CATEGORIES
(1) Standard of Review
(2) Washington Law Against Discrimination: Independent Contractors
(3) Negligent Misrepresentation
(4) Contract Remedies
(5) Waiver of Assignments of Error
(6) Reasonable Attorney Fees
LEGAL TREEs
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CASE SUMMARY SECTION: The following section contains facts and enumerates material evidence that the Court considered in this case.
II. CASE SUMMARY
FACTS (20 Total):
[1] Lisa Jacobsen is majority owner of Specialty Asphalt & Construction LLC (Specialty).” See Specialty Asphalt, 191 Wn.2d 182, 185 (Wash. 2018).
[2] “Specialty, a licensed contractor that performs paving and maintenance work, responded to a call for bids from the County for a paving project.” Id. at 185.
[3] “On two separate pages, the bid proposal stated that no bond was required.” Id. at 186 (internal citation omitted).
[4] “The bid proposal was prepared by Phil Nollmeyer, the county operations and permit coordinator[ ][;] [h]e used the maintenance project template that had the no bond required language because bonds are not required for the purchase of materials or simple maintenance contracts.” Id.
[5] “The County claimed that Nollmeyer made a clerical error and that he should have removed the no bond required language.” Id.
[6] “The bid proposal announced a scheduled opportunity to view the project and scope of work prior to the bid deadline (referred to as a walk-through).” Id.
[7] “Jacobsen was the only contractor to attend the walk-through, which was led by three county commissioners and Nollmeyer[ ][;] [a]t the beginning of the walk-through, Nollmeyer made a comment that Jacobsen’s shoes with heels were not the most appropriate attire for the walk-through.” Id.
[8] “A few days after the walk-through, a male representative of Arrow Concrete & Asphalt Specialties, Inc. came to see the paving project location[ ][;] Nollmeyer showed him where the work locations were and went over the basic tasks to be performed, essentially giving an unscheduled private walk-through.” Id. (footnote omitted).
[9] “Prior to the bid deadline, Nollmeyer called Jacobsen and asked if Specialty was going to submit a bid[ ][;] [h]e discouraged her from bidding because the project was more trouble than it was worth.” Id. at 186-87 (footnote omitted).
[10] “Nevertheless, Jacobsen submitted a bid for the project on behalf of Specialty. The County also received a bid from Arrow.” Id. at 187.
[11] “The day after awarding the project to Specialty, the County began Department of Labor and Industries (L&I) contractor tracking which allowed the County to track Specialty’s status on an ongoing basis.” Id. (footnote omitted).
[12] “Nollmeyer testified that the County normally checks contractor status on the L&I website prior to awarding bids to ensure that the contractors are not disbarred.” Id. (footnote omitted).
[13] “Checking contractor status is different from tracking.” Id. at 204 n.4.
[14] Nollmeyer “admitted that he checked Specialty’s status prior to awarding the bid but could not recall if he did so for Arrow[ ][;] [h]e denies having initiated contractor tracking, but the evidence shows that someone at the County did, unless it truly was a clerical error on L&I’s part.” Id. at 187.
[15] “A few days later, Jacobsen received a letter from the County (dated August 12, 2013) with the contract and contract bond[ ][;] Jacobsen signed the contract on behalf of Specialty on August 16, 2013, and on the contract bond, she wrote ‘[n]o proposal bond or performance bond required as per page #2’ and left it unsigned.” Id. at 188 (third alteration in original) (internal citation omitted).
[16] “On August 19, 2013, the County withdrew the bid award. On or about August 20, 2013, a new call for bids was sent out with a bond requirement.” Id.
[17] “Specialty sent a demand letter (dated August 23, 2013) requesting that the County maintain its bid award[ ][;] [i]n the letter, Specialty conceded that the bond was statutorily required by RCW 39.08.010, but claimed that failure to require the bond does not void the contract.” Id.
[18] “In response, the County ceased and withdrew the rebidding process.” Specialty Asphalt, 191 Wn.2d at 187.
[19] “The County was willing to proceed with Specialty’s award of the original bid so long as Specialty obtained the bond[ ][;] [t]he County also offered to reimburse Specialty for the expense of the bond premium.” Id.
[20] “The following spring, April 2014, the County contacted Specialty to see if the project could be done with the bond at the County’s expense[ ][;] [t]he County indicated that in the alternative it would look to use the small works roster to complete the project and invited Specialty to be included on the roster.” Id. at 189.
PROCEDURAL HISTORY (10 Total):
[21] “In May 2014, Specialty sued the County for breach of contract, seeking injunctive and declaratory relief.” Id. at 189.
[22] “In October 2015, over a year later, Specialty filed a motion for leave to add a party and amend the complaint. Specialty sought to add intervenor Jacobsen as an additional plaintiff and add claims of negligent misrepresentation and gender discrimination under RCW 49.60.030[ ][;] [t]he trial court granted the motion over the County’s objection.” Specialty Asphalt, 191 Wn.2d at 189 (hyperlink added).
[23] “The County filed a motion for summary judgment, seeking dismissal of all claims. The trial court granted partial summary judgment and dismissed the discrimination and negligent misrepresentation claims but denied the motion with regard to the contract claim.” Id. at 190.
[24] “After the summary judgment order, Specialty filed a motion for leave to file a second amended complaint. Specialty sought to modify the prayer for relief on the contract claim to add monetary damages in an amount to be proved at trial.” Id.
[25] “The trial court … denied the motion.” Id.
[26] “The County conceded the breach of contract issue, stipulated that Specialty could complete the project under the terms of the written contract that Specialty signed on August 16, 2013 (without a bond), and moved to compel specific performance or, alternatively, dismiss the case as moot.” Id.
[27] “Specialty objected, but the trial court issued an order granting the County’s motion. In that order, the trial court issued a deadline for Specialty to declare whether it intended to complete the project.” Id.
[28] “Specialty filed a timely notice declaring its intent to not perform the contract. Its stated reasons included that the cost of the project had increased, the condition of the parking lot had deteriorated, the law governing the project had changed, and it was unclear whether Specialty would be able to recover the costs associated with the project.” Id. (emphasis in original).
[29] “The County argued that since Specialty chose not to avail itself of the only remaining relief, no justiciable controversy remained and the case should be dismissed. The trial court agreed and dismissed the case as moot.” Id.
[30] “Specialty appealed, and the Court of Appeals affirmed[ ] … [;] Specialty petitioned for review, which we granted.” Id. at 191. (internal citation omitted).
Specialty Asphalt & Construction, LLC v. Lincoln County, 191 Wn.2d 182 (Wash. 2018).
GENERAL RULES SECTION: The following section contains general rules. Our website uses the term “general rules” to mean the Court’s statement of relevant laws in this case.
III. GENERAL RULES
The General Rules Section for this case includes the following topics:
1. Standard of Review;
2. Washington Law Against Discrimination
3. Negligent Misrepresentation
4. Contract Remedies
5. Waiver of Assignments of Error, and
6. Reasonable Attorney Fees.
1. STANDARD OF REVIEW
(A) SUMMARY JUDGMENT: GENDER DISCRIMINATION & NEGLIGENT MISREPRESENTATION
DE NOVO REVIEW: “We review the trial court’s grant of summary judgment de novo.” Specialty Asphalt, 191 Wn.2d at 191 (internal citation omitted).
NONMOVING PARTY CANNOT RELY ON SPECULATION: “We consider all facts and reasonable inferences in the light most favorable to the nonmoving party, but the nonmoving party may not rely on speculation.” Id. (citing Seven Gables Corp. v. MGM/UA Entm’t Co., 106 Wn.2d 1, 13, 721 P.2d 1 (1986); Hiatt v. Walker Chevrolet Co., 120 Wn.2d 57, 66, 837 P.2d 618 (1992) (“to overcome summary judgment, ‘the employee must do more than express an opinion or make conclusory statements'”)).
WHEN SUMMARY JUDGMENT IS IMPROPER: REASONABLE BUT COMPETING INFERENCES OF BOTH DISCRIMINATION AND NONDISCRIMINATION: “When the record contains reasonable but competing inferences of both discrimination and nondiscrimination, the trier of fact must determine the true motivation.” Id. at 191-92 (citing Scrivener v. Clark Coll., 181 Wn.2d 439, 445, 334 P.3d 541 (2014) (citing Rice v. Offshore Sys., Inc., 167 Wn.App. 77, 90, 272 P.3d 865 (2012))).
TOTALITY OF THE EVIDENCE: “[E]vidence should be taken together when considering whether there are ‘reasonable but competing inferences of both discrimination and nondiscrimination.'” See id. at 192 (internal citation and quotation marks omitted).
WHEN SUMMARY JUDGMENT IS PROPER: NO GENUINE ISSUES OF MATERIAL FACT & MOVING PARTY ENTITLED TO JUDGMENT: “Summary judgment is proper only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Id. (citing CR 56(c)). Thus, “when reasonable minds could reach but one conclusion, questions of fact may be determined as a matter of law.” Id. at 191 (internal citations and quotation marks omitted).
(B) SUMMARY JUDGMENT: MOTION TO AMEND & DISMISSAL OF CONTRACT CLAIM
MANIFEST ABUSE OF DISCRETION: “We review the trial court’s denial of the motion to amend and dismissal of the contract claim for manifest abuse of discretion.” Id. at 199 (citing McDonald v. State Farm Fire & Cas. Co., 119 Wn.2d 724, 737, 837 P.2d 1000 (1992)). “The trial court’s decision will not be disturbed on review except on a clear showing of abuse of discretion, that is, discretion manifestly unreasonable, or exercised on untenable grounds, or for untenable reasons.” Id. (internal citation and quotation marks omitted).
2. WASHINGTON LAW AGAINST DISCRIMINATION
(A) SEX DISCRIMINATION
THE PRIMA FACIE CASE: “RCW 49.60.030 does not provide the criteria for a prima facie claim, so we crafted criteria through case law[ ][:]
[T]he plaintiff in a sex discrimination case must show (1) membership in a protected class; (2) the plaintiff was similarly situated to members of the opposite sex, i.e., that he or she was qualified for the position applied for or was performing substantially equal work; (3) because of plaintiff’s sex he or she was treated differently than members of the opposite sex.
Specialty Asphalt, 191 Wn.2d at 204 n.6 (citing Marquis v. City of Spokane, 130 Wn.2d 97, 113-14, 922 P.2d 43 (1996)) (alteration in original) (hyperlink added).
(1) Treated differently from similarly situated members of the opposite sex because of gender
“The Marquis case provides three examples … [of how a plaintiff–in an action for discrimination in the making and performance of an employment contract–may show that she was treated differently from similarly situated members of the opposite sex because of her gender]:
[ (1) ] [T]hat he or she was denied the position,
[ (2) ] was offered a contract only on terms which made the performance of the job more onerous or less lucrative than contracts given to members of the opposite sex, or,
[ (3) ] once offered the contract, was treated in a manner that made the performance of the work more difficult than that of members of the opposite sex who were similarly situated.
Id. at 193 (internal citation omitted) (second-fifth alterations in original).
(B) INDEPENDENT CONTRACTORS
MAKING OR PERFORMANCE OF PERSONAL-SERVICES CONTRACTS: “[A]n independent contractor may bring an action for discrimination in the making or performance of [a] contract for personal services.” Id. at 192 (citing Marquis v. City of Spokane, 130 Wn.2d 97, 100-01, 922 P.2d 43 (1996)) (alterations in original) (internal quotation marks omitted).
(C) EVIDENCE
CIRCUMSTANTIAL, INDIRECT, & INFERENTIAL EVIDENCE: “To establish discriminatory action, plaintiffs may rely on circumstantial, indirect, and inferential evidence.” Id. (citing Mikkelsen v. Pub. Util. Dist. No. 1 of Kittitas County, 189 Wn.2d 516, 526, 404 P.3d 464 (2017) (“assessing a claim under RCW 49.60.180“) (internal quotation marks omitted).
TOTALITY OF THE EVIDENCE: “[E]vidence should be taken together when considering whether there are ‘reasonable but competing inferences of both discrimination and nondiscrimination.'” See id. at 192 (internal citation and quotation marks omitted).
3. NEGLIGENT MISREPRESENTATION
(A) THE ELEMENTS
“To prevail on … [a negligent misrepresentation claim], a plaintiff must prove, by clear, cogent, and convincing evidence that[:]
(1) the defendant supplied information for the guidance of others in their business transactions that was false,
(2) the defendant knew or should have known that the information was supplied to guide the plaintiff in his business transactions,
(3) the defendant was negligent in obtaining or communicating the false information,
(4) the plaintiff relied on the false information,
(5) the plaintiff’s reliance was reasonable, and
(6) the false information proximately caused the plaintiff damages.
Id. at 196-97 (citing Ross v. Kirner, 162 Wn.2d 493, 499, 172 P.3d 701 (2007); Lawyers Title Ins. Corp. v. Baik, 147 Wn.2d 536, 545, 55 P.3d 619 (2002) (“Washington has adopted Restatement (Second) of Torts § 552 (Am. Law Inst. 1965)”)).
(1) Misrepresentation: justifiable reliance is an issue of fact
“Whether a party justifiably relied upon a misrepresentation is an issue of fact.” Id. at 198 (citing ESCA Corp. v. KPMG Peat Marwick, 135 Wn.2d 820, 828, 959 P.2d 651 (1998)).
(B) RELIANCE DAMAGES
INCURRED PRIOR TO PERFORMANCE: “[R]eliance damages … are incurred prior to performance.” Id. at 197.
RECOVERABLE DAMAGES INCLUDE PECUNIARY LOSS: “[R]ecoverable damages include pecuniary loss suffered otherwise as a consequence of the plaintiff’s reliance upon the misrepresentation[.]” Id. (referencing RESTATEMENT § 552B(l)(b)).
THE OUT-OF-POCKET LOSS RULE: “The Restatement applies the ‘out-of-pocket loss’ rule as the measure of damages, which is the same rule that is stated in § 549(1), so comments a through f of that section are applicable.” Specialty Asphalt, 191 Wn.2d at 197 (citing RESTATEMENT § 552B cmt. a) (emphasis in original). “[L]oss may be sustained … when he has incurred expenses in preparation for a use of the article for which it would have been appropriate if the representation had been true.” Id. (citing RESTATEMENT § 549(1) cmt. a.) (alteration and emphasis in original).
(C) PUBLIC DUTY DOCTRINE
THE PUBLIC DUTY DOCTRINE: “Under the public duty doctrine, no liability may be imposed for a public official’s negligent conduct unless it is shown that the duty breached was owed to the injured person as an individual and was not merely the breach of an obligation owed to the public in general.” Id. at 198 (internal citations and quotation marks omitted).
EXCEPTION TO THE DOCTRINE (SPECIAL RELATIONSHIPS): “An exception to the public duty doctrine applies if there is a ‘special relationship’ between the parties.” Id. (internal citation omitted). “A special relationship arises where[:]
(1) there is direct contact or privity between the public official and the injured plaintiff which sets the latter apart from the general public, and
(2) there are express assurances given by a public official, which
(3) give[ ] rise to justifiable reliance on the part of the plaintiff.
Id. (second alteration in original) (internal citations and quotation marks omitted) (paragraph formatting added).
4. CONTRACT REMEDIES (PUBLIC WORK CONTRACTS)
INCOMPLETE PROJECTS: INJUNCTION IS APPROPRIATE REMEDY FOR BIDDER ON PUBLIC WORK CONTRACT AGGRIEVED BY GOVERNMENT ACTIONS: “In Mottner v. Town of Mercer Island, we explained that an injunction, not monetary damages, is the appropriate remedy for the bidder on a public work contract who feels aggrieved by the action of the government.” Specialty Asphalt, 191 Wn.2d at 200 (citing Mottner v. Town of Mercer Island, 75 Wn.2d 575, 579, 452 P.2d 750 (1969)) (the Specialty Asphalt Court found exclusive remedy was an injunction, because plaintiff-Specialty had neither completed nor begun performance).
COMPLETED PROJECTS: MONETARY DAMAGES AWARD APPROPRIATE IF PROJECT IS COMPLETED: “In Scoccolo, we affirmed the monetary damages award in favor of Scoccolo, the contractor, after Scoccolo completed the project but incurred damages stemming from delays attributed to Renton.” Specialty Asphalt, 191 Wn.2d at 200 (citing Scoccolo Construction, Inc. v. City of Renton, 158 Wn.2d 506, 509-10, 145 P.3d 371 (2006)).
THE POLICY: “[W]hile equitable, extraordinary, or declarative relief may serve the public interest by preventing the award and execution of a contract for an excessive amount, permitting damages in such cases serves the bidder’s interest alone, and is contrary to the public interest the competitive bidding laws were designed to protect, further burdening a treasury already injured by paying too high a price for the goods or services.” Id. at 200-01 (citing Peerless Food Products, Inc. v. State, 119 Wn.2d 584, 591, 835 P.2d 1012 (1992) (emphasis omitted in original) (quoting James L. Isham, Annotation, Public Contracts: Low Bidder’s Monetary Relief against State or Local Agency for Nonaward of Contract, 65 A.L.R.4th 93, § 2[a] (1988)) (alteration in original).
5. WAIVER OF ASSIGNMENTS OF ERROR
“When an assignment of error was neither argued nor briefed, we deem it waived.” Id. at 204 n.11 (citing Kadoranian v. Bellingham Police Dep’t, 119 Wn.2d 178, 191, 829 P.2d 1061 (1992)) (internal quotation marks omitted).
6. REASONABLE ATTORNEY FEES
RULE: “RAP 18.1 (b) requires ‘[a]rgument and citation to authority’ as necessary to inform the court of grounds for an award, not merely ‘a bald request for attorney fees.'” Id. at 204 n.14 (internal citation an quotation marks omitted) (alteration in original).
ISSUES SECTION: The following section explains the court’s treatment of this case by separately presenting each issue followed by associated rules, analysis, and conclusion. The text color of each issue statement is always blue.
IV. ISSUES
ISSUE #1: Whether summary judgment dismissal of the gender discrimination claim was proper.
(A) SUMMARY JUDGMENT DISMISSAL OF THE GENDER DISCRIMINATION CLAIM WAS IMPROPER
RULE: See § III(2)(A)(1) (General Rules: Washington Law Against Discrimination: Sex Discrimination: Treated differently from similarly situated members of the opposite sex because of gender), supra. In this case, “Specialty’s claim falls within the third example[ ][: once offered the contract, was treated in a manner that made the performance of the work more difficult than that of members of the opposite sex who were similarly situated].” Id. at 193 (footnote omitted).
(1) There are reasonable inferences of discrimination and nondiscrimination
EMPLOYER FAILED TO ASSUME ANY BURDEN TO PROVE LEGITIMATE NONDISCRIMINATORY REASON: “The County took the position that Specialty failed to make a prima facie claim, so it never actually assumed any burden to prove a legitimate nondiscriminatory reason under the framework.” Specialty Asphalt, 191 Wn.2d at 204 n.10 (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)).
SPECIALTY’S EVIDENCE SHOULD BE TAKEN TOGETHER: “Specialty’s evidence should be ‘taken together’ when considering whether there are ‘reasonable but competing inferences of both discrimination and nondiscrimination.’ ” Id. at 192 (internal citation omitted). “After Specialty was awarded the bid, the performance of the work became more difficult[ ][;] [w]e consider the County’s treatment of Specialty (and Jacobsen) before and after the award.” Id. at 193.
a) Direct Evidence of Discrimination
EMPLOYER DISCOURAGED PLAINTIFF FROM BIDDING: “After the walk-through, Nollmeyer called Jacobsen and discouraged her from bidding on the paving project.” Id. at 193-94.
COURT’S ANALYSIS: “The phone call is evidence of discriminatory intent, not benevolence.” Id. at 194 (internal citation omitted).
b) Comparative Evidence of Specialty and Arrow
COMPARATIVE EVIDENCE: In this case, the Court considered comparative evidence of Specialty and Arrow:
[i)] Arrow received an unscheduled private walk-through. In comparison, Specialty attended the scheduled walk-through with Nollmeyer and three county commissioners.
[ii)] Both contractors received information about the basic tasks to be performed, but there may be an inference that Nollmeyer was treating Arrow more favorably by departing from the scheduled walk-through per the terms of the bid proposal.
[iii)] In addition, Nollmeyer explained that the County normally checks contractor status on the L&I website prior to awarding bids, but in this case, he admitted to checking only Specialty’s status. He could not recall if he checked Arrow’s status.
Id. at 194 (paragraph formatting added).
COURT’S ANALYSIS: “When viewed in light of all the other evidence, the inference of discrimination becomes stronger.” Id. at 194.
c) Postaward Treatment of Specialty
POSTAWARD TREATMENT: “After Specialty received the award, the County continued to take actions that underscore our inference of discrimination[ ][:]”
[i)] The County tracked Specialty’s status via the L & I website and altered the terms of the contract by requiring a bond for the project. Normally bidders are checked before an award is made, and the County offered no explanation for why Specialty was subjected to ongoing tracking postaward.
[ii)] With regard to the bond, the County claimed that it should have been included in the bid proposal yet was omitted due to a clerical error. The County believed the bond to be statutorily mandated by RCW 39.08.010, and Specialty conceded this. Nonetheless, Specialty argued that failure to require the bond did not void the contract.
[iii)] While the County did make multiple attempts to ensure that Specialty still performed the project (either by obtaining a bond with the premium expense reimbursed, rebidding the project with a bond, or through work on the small works roster), none of these options adhered to Specialty’s award, as given.
[iv)] Eventually the County conceded the breach of contract issue and agreed to let Specialty perform the work without a bond.
Specialty Asphalt, 191 Wn.2d at 194 (footnotes omitted) (paragraph formatting and hyperlink added).
COURT’S ANALYSIS: “These inconsistent positions about the bond requirement create doubt about the accuracy of the County’s alleged nondiscriminatory reason, that the entire bond issue was a clerical error.” Id. at 195 (footnote omitted).
(2) Record sufficient to defeat summary judgment
VIEWING THE EVIDENCE TOGETHER CREATES STRONG INFERENCE OF DISCRIMINATION: “Some elements of Specialty’s evidence, standing alone, might not create a reasonable inference of discrimination, but when we view the evidence together, the inference of discrimination becomes quite strong. Because there are reasonable inferences of discrimination and nondiscrimination, the record is sufficient to defeat a motion for summary judgment.” Id. (citing Mikkelsen, 189 Wn.2d at 536, 404 P.3d 464).
(B) REVERESED AND REINSTATED
“We reverse the Court of Appeals and reinstate the gender discrimination claim.” Id.
ISSUE #2: Whether summary judgment dismissal of the negligent misrepresentation claim was proper.
(A) SUMMARY JUDGMENT DISMISSAL OF THE NEGLIGENT MISREPRESENTATION CLAIM WAS IMPROPER
(1) The claim was not waived
RULE: See § III(5) (General Rules: Waiver of Assignments of Error), supra.
a) Employer’s Argument
SPECIALTY WAIVED CLAIM BY FAILING TO CONTEND TRIAL COURT OR COURT OF APPEALS ERRED: “The County argued that Specialty waived its negligent misrepresentation claim by failing to contend that the trial court or the Court of Appeals erred in its dismissal of the claim.” Specialty Asphalt, 191 Wn.2d at 204 n.11 (internal citation and quotation marks omitted).
b) Court’s Analysis
SPECIALTY CONTENDED COURT OF APPEALS ERRED RE GENDER DISCRIMINATION & NEGLIGENT MISREPRESENTATION CLAIMS: “[I]n this case, Specialty explained that it was appealing the Court of Appeals decision affirming summary judgment for gender discrimination and negligent misrepresentation, provided a section for the summary judgment standard of review, made some attempt to brief the issue in its motion for discretionary review, albeit minimal, and then dedicated nearly six pages to the argument in its supplemental brief.” Id.
c) Conclusion
CLAIM NOT WAIVED: “The claim is not waived.” Id.
(2) Specialty provided evidence of its reliance damages, which are recoverable
RULE: See § III(3)(B) (General Rules: Negligent Misrepresentation: Reliance Damages), supra.
a) Plaintiff’s Argument
SUMMARY JUDGMENT IMPROPER BECAUSE EVIDENCE OF RECOVERABLE RELIANCE DAMAGES: “[S]ummary judgment was improper because Specialty provided evidence of its recoverable reliance damages.” Specialty Asphalt, 191 Wn.2d at 197 (internal citation omitted).
b) Employer’s Argument
SUMMARY JUDGMENT PROPER BECAUSE SPECIALTY COULD NOT HAVE JUSTIFIABLY RELIED: “[S]ummary judgment was proper because Specialty could not have justifiably relied on the misinformation in the bid[.]” Id. at 198 (internal citation omitted).
c) Court’s Analysis
COURT OF APPEALS: IGNORED AVAILABILITY OF RELIANCE DAMAGES: “The Court of Appeals found that Specialty had no damages simply because ‘Specialty never performed on the contract.’ This ignores the availability of reliance damages that are incurred prior to performance.” Id. at 197 (internal citation omitted).
The Court reasoned:
Even though the County initially offered to cover the cost of the bond and later rescinded the need for the bond, potentially alleviating the pecuniary damage, Specialty provided evidence that it would cost more than the bond premium to acquire a bond ….
By the time the bond requirement was removed, over two years had passed so that the project “no longer existed” in the same financial state.
Id. (citing Appellants’ Suppl. Br. at 16; CP at 412 (“the condition of the work site deteriorated and would require more labor and materials”)) (internal citation omitted) (paragraph formatting added).
JUSTIFIABLE RELIANCE IS AN ISSUE OF FACT: SUMMARY JUDGMENT IMPROPER: Moreover, the Court found that the employer’s assertion that “summary judgment was proper because Specialty could not have justifiably relied on the misinformation in the bid” is “not a basis for affirming summary judgment.” Id. at 198 (citing ESCA Corp. v. KPMG Peat Marwick, 135 Wn.2d 820, 828, 959 P.2d 651 (1998) (“Whether a party justifiably relied upon a misrepresentation is an issue of fact.”) (internal quotation marks of parenthetical omitted).
(3) The public duty doctrine does not bar the claim because the parties formed a ‘special relationship’
RULE: See § III(3)(C) (General Rules: Negligent Misrepresentation: Public Duty Doctrine), supra.
a) Plaintiff’s Argument
COUNTY WAS PERFORMING PROPRIETARY FUNCTION & THERE WAS A SPECIAL RELATIONSHIP: “At the Court of Appeals, Specialty argued that the public duty doctrine does not apply because the County was performing a proprietary function and, even if it does apply, there was a special relationship between the parties creating an exception to the doctrine. Specialty did not brief this issue at our court, but based on the County’s briefing, we consider the doctrine and its exceptions.” Specialty Asphalt, 191 Wn.2d at 204 n.12.
b) Employer’s Argument
PUBLIC DUTY DOCTRINE BARS CLAIM: “[T]he County argued that Specialty’s negligent misrepresentation claim is barred by the public duty doctrine.” Id. at 198.
c) Court’s Analysis
PARTIES WERE IN PRIVITY: “Here, the parties were in privity because the trial court found that an enforceable contract had been formed.” Id.
PARTIES FORMED A SPECIAL RELATIONSHIP: “The contract thus formed the basis for express assurances and gave rise to justifiable reliance by Specialty. The public duty doctrine does not bar the claim because the parties formed a ‘special relationship.'” Id. at 198-99.
d) Conclusion
CLAIM NOT BARRED BY PUBLIC DUTY DOCTRINE: “[T]he claim is not barred by the public duty doctrine.” Id. at 199.
(B) REVERSED & REINSTATED
“[W]e reverse the Court of Appeals and reinstate the negligent misrepresentation claim. Specialty alleged pecuniary damages sufficient to overcome a summary judgment dismissal, whether Specialty justifiability relied on the misrepresentation is a factual issue, and the claim is not barred by the public duty doctrine.” Id.
ISSUE #3: Whether denial of the motion to amend and dismissal of the contract claim was proper.
(A) DENIAL OF THE MOTION TO AMEND AND DISMISSAL OF THE CONTRACT CLAIM WAS PROPER
(1) Injunctive relief is the exclusive remedy for Specialty’s contract claim
RULE: See § III(4) (General Rules: Contract Remedies (Public Work Contracts)), supra.
a) Specialty’s Argument
IT WAS ENTITLED TO PURSUE MONETARY DAMAGES: “Specialty argued that it was entitled to pursue monetary damages for its breach of contract claim, analogizing its case to Scoccolo Construction, Inc. v. City of Renton, 158 Wn.2d 506, 145 P.3d 371 (2006).” Specialty Asphalt, 191 Wn.2d at 199.
b) Employer’s Argument
SPECIALTY WAIVED ANY RELIEF BECAUSE IT ALREADY GAVE NOTICE OF INABILITY TO PERFORM: “The County argued[, in part,] that Specialty waived any relief on its contract claim because Specialty already gave notice of its inability to perform the paving project.” Id. at 204 n.13.
c) Court’s Analysis
SPECIALTY’S CLAIM NOT WAIVED BECAUSE IT STILL SOUGHT MONETARY DAMAGES: The Court considered the employer’s argument and found that Specialty’s actions “did not waive the claim because Specialty still sought monetary damages.” Id.
A TRIO OF CASES EVALUATED: The Court considered Specialty’s argument by evaluating three cases: Scoccolo Construction, Inc. v. City of Renton, 158 Wn.2d 506, 145 P.3d 371 (2006); Skyline Contractors, Inc. v. Spokane Housing Authority, 172 Wn.App. 193, 289 P.3d 690 (2012); and Mottner v. Town of Mercer Island, 75 Wn.2d 575, 579, 452 P.2d 750 (1969).
»Scoccolo Construction, Inc. v. City of Renton: “In Scoccolo, we affirmed the monetary damages award in favor of Scoccolo, the contractor, after Scoccolo completed the project but incurred damages stemming from delays attributed to Renton. 158 Wn.2d at 509-10, 145 P.3d 371. The case presents an obvious distinguishing factor— Scoccolo completed the project; Specialty did not, nor did it even begin performance.” Specialty Asphalt, 191 Wn.2d at 200.
»Skyline Contractors, Inc. v. Spokane Housing Authority: “[I]n Skyline, the facts were much more analogous to Specialty’s situation.” Specialty Asphalt, 191 Wn.2d at 200. “Had this not been a public works contract … Skyline [would have a claim] for damages for breach of contract.” Id. at 200 (internal quotation marks omitted).
»Mottner v. Town of Mercer Island: “In Mottner v. Town of Mercer Island, we explained that an injunction, not monetary damages, is the appropriate remedy for the bidder on a public work contract who feels aggrieved by the action of the government.” Specialty Asphalt, 191 Wn.2d at 200 (internal citations and quotation marks omitted). “Similarly, monetary damages were denied in Peerless Food Products, Inc. v. State, 119 Wn.2d 584, 835 P.2d 1012 (1992).” Specialty Asphalt, 191 Wn.2d at 200
d) Conclusion
TRIAL COURT CORRECT: SPECIALTY CAN ONLY PURSUE INJUNCTION: “The trial court properly denied the motion to amend and dismissed the contract claim because Specialty can only pursue an injunction.” Id. at 201.
(B) COURT OF APPEALS AFFIRMED
“Though we affirm the Court of Appeals on this issue, Specialty is not barred from recovering monetary damages from the County. To do so, Specialty must pursue them through its negligent misrepresentation claim … not a breach of contract claim.” Id.
DISSENT (Gordon McCloud, J. (concurring in part/dissenting in part)
(A) THIS IS A NOT A CASE OF GENDER DISCRIMINATION; IT IS A CASE OF NEGLIGENT MISREPRESENTATION
(1) Dissent agrees with majority’s analysis of negligent misrepresentation and breach of contract claims
NEGLIGENT MISREPRESENTATION CLEARLY SURVIVES SUMMARY JUDGMENT & BREACH OF CONTRACT FAILS: “I agree with the majority’s analysis of the negligent misrepresentation and breach of contract claims. The negligent misrepresentation claim clearly survives summary judgment; the breach of contract claim clearly fails on summary judgment.” Id. at 202.
(2) Dissent disagrees with majority’s application of rules to gender discrimination claim
MAJORITY INCORRECTLY APPLIES RULES TO GENDER DISCRIMINATION CLAIM: “I also agree with the bulk of the majority’s analysis of the gender discrimination claim … [b]ut I disagree with the majority’s application of those rules to the facts of this case.” Id.
MAJORITY RELIES ON FACTS THAT DO NOT GIVE RISE TO INFERENCE OF GENDER DISCRIMINATION: “[F]actors upon which the majority relies do not give rise to an inference of gender discrimination[.] Those remaining factors are[:]
[a)] providing a bidding competitor on this relatively small public works project with an unscheduled walk-through …
[b)] checking Specialty’s contractor status on the appropriate state website while not remembering whether the competing bidder’s status was checked …
[c)] tracking Specialty’s status on that website after awarding the bid … and
[d)] ‘alter[ing] the terms of the contract by requiring a bond for the project.’
Id. at 202-03 (last alteration in original) (internal citation omitted) (paragraph formatting added).
(B) CONCLUSION: CONCUR IN PART AND DISSENT IN PART
These facts do “not give rise to an inference of gender discrimination in my mind …. Instead, it gives rise to an inference of negligent misrepresentation— which is what I think this case is really about.” Id. at 203.
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