## Facts

- A general contractor solicited subcontractor bids for EIFS work on a Home Depot project in Mesa, Arizona.
- A subcontractor sent the general contractor a written (unsigned) proposal offering to perform the EIFS work for $115,000 and stating, “Our price is good for 30 days.”
- The general contractor used the $115,000 figure in its bid to the owner.
- The owner awarded the general contract to the general contractor within the 30-day period.
- Within the 30-day period, the general contractor sent the subcontractor a written subcontract to sign and return.
- The subcontractor refused to sign or perform, citing scheduling constraints and existing work commitments.
- The general contractor hired a replacement subcontractor at a higher price and sought recovery of the increased cost.

## Issues

1. Whether substantial evidence supported liability under promissory estoppel based on the subcontractor’s bid and 30-day price commitment and the general contractor’s reliance in submitting its prime bid.
2. Whether a prevailing party on a promissory estoppel claim may recover attorneys’ fees under A.R.S. § 12-341.01(A) as an action “arising out of a contract.”

## Decision

- The court affirmed the judgment for the general contractor on promissory estoppel.
- The court affirmed the damages award measured by the difference between the subcontractor’s bid and the cost of the substitute subcontractor.
- The court affirmed the denial of attorneys’ fees to the general contractor under A.R.S. § 12-341.01(A).

## Legal Principles

- Promissory estoppel requires a promise, reasonable and foreseeable reliance, and resulting detriment such that enforcement is necessary to avoid injustice.
- A subcontractor’s written bid that includes a time-limited price commitment can constitute a promise for promissory estoppel purposes when reliance in the prime-bid process is foreseeable in the construction industry.
- Reliance is supported where the general contractor actually uses the subcontractor’s bid figure in submitting its bid to the owner and attempts to accept within the bid’s stated time period.
- In a bid-reliance promissory estoppel case, reliance damages may be measured by the increased cost incurred to obtain substitute performance.
- A.R.S. § 12-341.01(A) does not apply where the claim rests on promissory estoppel rather than an actual contract; enforcing a promise via promissory estoppel is not an action “arising out of a contract” within the statute.

## Conclusion

The court upheld promissory estoppel liability and reliance damages against a subcontractor that withdrew a time-limited written bid after the general contractor relied on it to win the prime contract, and it held that attorneys’ fees are not recoverable under A.R.S. § 12-341.01(A) when recovery is based solely on promissory estoppel rather than contract.


Double AA Builders, Ltd. v. Grand State Construction L.L.C., 210 Ariz. 503, 114 P.3d 835 (Ct. App. 2005)