Court of Appeals of Arizona, First Division, Division One
HAYDON BUILDING CORPORATION, an Arizona corporation, Plaintiff/Appellee,
FACILITEC, INC., an Arizona corporation, Defendant/Appellant.
Not for Publication Rule 111, Rules of the Arizona Supreme Court
Appeal from the Superior Court in Maricopa County No. CV2010-028120 The Honorable George H. Foster, Judge
Ryan Rapp & Underwood, PLC, Phoenix By John G. Ryan and Richard A. Kasper Counsel for Plaintiff/Appellee
Lorona Mead, PLC, Phoenix By Jess A. Lorona Counsel for Defendant/Appellant
Judge Kent E. Cattani delivered the decision of the Court, in which Presiding Judge Maurice Portley and Judge John C. Gemmill joined.
¶1 Facilitec, Inc., appeals the superior court's judgment after a bench trial finding Facilitec liable to Haydon Building Corporation for breach of contract. Facilitec argues the superior court erred by relying on a theory of law not introduced by Haydon until after the trial. For reasons that follow, we affirm the judgment.
FACTS AND PROCEDURAL BACKGROUND
¶2 In mid-2009, Haydon, a general contractor, received a solicitation to bid on a federal government building project. Because the project included an option to provide furniture according to detailed specifications, Haydon invited bids from Facilitec and other subcontractors for furniture and installation.
¶3 In August 2009, Facilitec submitted to Haydon a signed initial bid to provide all requested furniture and installation for $169, 785. Facilitec revised its bid in September by a signed email with attached amendment to account for additional labor costs of $33, 063. After Haydon was awarded the government contract, Facilitec agreed by signed email with attached amendment to hold its pricing firm through December 2010 to allow time for the government to exercise the furniture option.
¶4In July 2010, the government issued a formal change order exercising the furniture option. Haydon then sent Facilitec a letter of intent reflecting acceptance of Facilitec's bid and authorizing Facilitec to move forward with the furniture package. Two days later, Facilitec's president signed Haydon's Master General Conditions contract, reflecting general terms and conditions governing the relationship between Haydon as general contractor and Facilitec as subcontractor.
¶5 Facilitec informed Haydon in early August 2010 that its bid had mistakenly been based on an incomplete review of the furniture specifications and expressed concern that it could not meet all required specifications. By August 24, Facilitec produced three substitute options priced at over $100, 000 more than its original bid. Three days later, Facilitec determined it could "not honor our pricing and proposal and will not be able to sign the contract d[ue] to our mistake." Facilitec therefore refused to sign the formal integration of the subcontract agreement (based on Facilitec's 2009 bid) that Haydon had provided in late July.
¶6Haydon was able to secure substitute performance for a price $118, 526 greater than Facilitec's agreed price, and brought this lawsuit for, among other claims, breach of contract to recover the difference. Facilitec raised the statute of frauds as a defense, arguing that the parties' agreement could not be enforced against Facilitec absent a writing signed by Facilitec. See Ariz. Rev. Stat. ("A.R.S.") § 44-101(4).
¶7 After a two-day bench trial, both parties simultaneously submitted proposed findings of fact and conclusions of law. Haydon's proposed conclusions included a new legal theory for satisfaction of the statute of frauds: the merchant rule set forth in A.R.S. § 47-2201(B). The superior court's ruling adopted almost wholesale Haydon's conclusions of law, including the existence of a contract between Haydon and Facilitec, breach by Facilitec, damages in the amount of $118, ...