Architects & Contractors Estimating Service, Inc. v. Smith

Architects & Contractors Estimating Service, Inc., dba Charles Noble Company (Noble) appeals a judgment in favor of Harold H. Smith, Jr., dba Environmental Systems in a corporate and individual capacity (Smith), denying Noble damages for Smith’s refusal to perform a subcontract. We shall hold Smith’s consent to the contract was vitiated by his mistake of fact and Noble’s fraud in intentionally concealing the cost of the subcontracted work and affirm.

I

On February 25, 1982, Noble contracted with the United States Navy to remodel the engine maintenance shop at El Toro Marine Corps Air Station. The contract price was some $647,500. The work included installation of heating, ventilating and air conditioning systems (HVAC). A chilled water system was part of the HVAC.

In preparing his bid for the work, Noble solicited “budgetary bids” from subcontractors. These bids are used as the basis for estimating the component parts of the work and as backup protection if other bids are not received. At the trial, Noble could not remember who submitted a budgetary bid for the HVAC. He used $90,000 to cover the HVAC cost in submitting to the Navy his successful $647,500 bid for the…