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Specialty Asphalt & Construction, LLC v. Lincoln County

Supreme Court of Washington, En Banc

July 26, 2018

SPECIALTY ASPHALT & CONSTRUCTION, LLC, a Washington limited liability company, and LISA JACOBSEN, an individual, Petitioners,
LINCOLN COUNTY, a Washington State County, Respondent.

          FAIRHURST, C.J.

         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. Through various motions, Specialty lost all three claims at the trial court. The Court of Appeals affirmed, and Specialty petitioned for review. We reverse the Court of Appeals in part and affirm in part. 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. The case is remanded to the trial court to reinstate the two surviving claims.


         A. Factual background

         Specialty, a licensed contractor that performs paving and maintenance work, responded to a call for bids from the County for a paving project. Jacobsen first learned about the project when the County called her business to ask if it worked in the area. Jacobsen then received the bid proposal via e-mail from the County. On two separate pages, the bid proposal stated that no bond was required. Clerk's Papers (CP) at 293 ("No proposal bond or performance bond will be required."), 297 ("No bid bond or performance bond is required for this bid."). The bid proposal was prepared by Phil Nollmeyer, the county operations and permit coordinator. He 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. The County claimed that Nollmeyer made a clerical error and that he should have removed the no bond required language.

         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). Jacobsen was the only contractor to attend the walk-through, which was led by three county commissioners and Nollmeyer. At 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. During the walk-through, the commissioners sought Jacobsen's recommendations for the project, which the County subsequently incorporated into the bid proposal's addendum 1. A few days after the walk-through, a male representative of Arrow Concrete & Asphalt Specialties, Inc.[1] 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.

         Prior to the bid deadline, Nollmeyer called Jacobsen and asked if Specialty was going to submit a bid. He discouraged her from bidding because the project was more trouble than it was worth.[2] Nevertheless, Jacobsen submitted a bid for the project on behalf of Specialty. The County also received a bid from Arrow. According to the addendum 1, the bids would be opened on August 5, 2013.

         On August 6, 2013, the County awarded the project to Specialty. 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.[3] 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.[4] He admitted that he checked Specialty's status prior to awarding the bid but could not recall if he did so for Arrow. He 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. Wash. Supreme Court oral argument, Specialty Asphalt & Constr. LLC v. Lincoln County, No. 95085-7 (May 15, 2018), at 30 min., 40 sec, video recording by TVW, Washington State's Public Affairs Network,

         Several days after August 5, 2013, because she had not yet been notified of the award, Jacobsen called the County and asked who had received the award. The woman on the phone, either Shelly Johnston, the county auditor, or Marci Patterson, the deputy clerk to the board of commissioners, told Jacobsen that Specialty had gotten the award, Nollmeyer had been directed to call her with news of the award, and a notification had been sent by mail. The day after her phone conversation, Jacobsen received the award letter (dated August 6, 2013) by mail and the commissioners' order signed by the county commissioners. Jacobsen began to mobilize resources and materials for the project and told her assistant to stop accepting new jobs because their schedule would be full for the season.

         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. CP at 307. She mailed both documents back to the County. The county commissioners did not countersign. After receiving the documents, Johnston called Jacobsen and told her that the County now required a bond for the project. Jacobsen objected to this change because the bid explicitly provided that no bond was required and because she believed the bond to be a significant item. Jacobsen also explained that Specialty had performed similar public works projects for the city of Davenport, located within the county, without a bond, and that the County could accept responsibility for proceeding without a bond.

         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. Specialty sent a demand letter (dated August 23, 2013) requesting that the County maintain its bid award. In 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. In response, the County ceased and withdrew the rebidding process. The County was willing to proceed with Specialty's award of the original bid so long as Specialty obtained the bond. The County also offered to reimburse Specialty for the expense of the bond premium. Jacobsen believed that this would expose both parties to liability for collusion or bid rigging. Sometime after August 19, 2013, Jacobsen had a phone conversation with county commissioner Scott Hutsell, who described the situation as a mess. He assured Jacobsen that he would investigate the available options that would enable the project to go forward with Specialty.

         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. The 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. Shortly thereafter, Specialty filed suit.

         B. Procedural history

         In May 2014, Specialty sued the County for breach of contract, seeking injunctive and declaratory relief.[5] 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. The trial court granted the motion over the County's objection.

         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. Specialty filed a motion for reconsideration of the trial court's summary judgment order, which the trial court denied.

         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. The County objected to the motion, arguing that the amended complaint was futile because Washington law provided that an injunction was the exclusive remedy for the claim. The trial court agreed and denied the motion. 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. 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. The trial court also found that Specialty would be entitled to recover reasonable increased costs for the project because of the County's delays. The County was ordered to allow Specialty to perform the contract without a bond. 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. 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.

         Specialty appealed, and the Court of Appeals affirmed. Specialty Asphalt & Constr., LLC v. Lincoln County, No. 34480-1-III, slip op. at 1 (Wash.Ct.App. Aug. 29, 2017) (unpublished), Specialty petitioned for review, which we granted.

         II. ISSUES

         A. Whether summary judgment dismissal of the gender discrimination claim was proper.

         B. Whether summary judgment dismissal of the negligent misrepresentation claim was proper.

         C. Whether denial of the motion to amend and dismissal of the contract claim was proper.

         III. ANALYSIS

         A. Summary judgment dismissal of the gender discrimination claim was improper

         1. Standard of review

         We review the trial court's grant of summary judgment de novo. Camicia v. Howards. Wright Constr. Co., 179 Wn.2d 684, 693, 317 P.3d 987 (2014). 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. CR 56(c). 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. 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 the record contains reasonable but competing inferences of both discrimination and nondiscrimination, the trier of fact must determine the true motivation." 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)). "However, 'when reasonable minds could reach but one conclusion, questions of fact may be determined as a matter of law.'" Ruff v. County of King, 125 Wn.2d 697, 703-04, 887 P.2d 886 (1995) (quoting Hartley v. State, 103 Wn.2d 768, 775, 698 P.2d 77 (1985)).

         2. We reverse the Court of Appeals because there are competing inferences of discrimination and nondiscrimination

         Jacobsen brought a claim of gender discrimination under the Washington Law Against Discrimination, RCW 49.60.030.[6] The purpose of the law is to deter and to eradicate discrimination in Washington. Mackay v. Acorn Custom Cabinetry, Inc., 127 Wn.2d 302, 309-10, 898 P.2d 284 (1995). "[A]n independent contractor may bring an action for discrimination in the making or performance of [a] contract for personal services." Marquis v. City of Spokane, 130 Wn.2d 97, 100-01, 922 P.2d 43 (1996). To establish discriminatory action, "plaintiffs may rely on circumstantial, indirect, and inferential evidence." 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). Specialty's evidence should be "taken together" when considering whether there are "'reasonable but competing inferences of both discrimination and nondiscrimination.'" Id. at 535-36 (emphasis omitted) (quoting Hill v. BCTI Income Fund-I, 144 Wn.2d 172, 186, 23 P.3d 440 (2001)).

         Jacobsen was required to show that she was somehow treated differently from similarly situated members of the opposite sex because of her gender. The M ...

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