Diede Construction Inc. v. Monterey Mechanical Co.

Plaintiff Diede Construction, Inc. (Diede) was awarded a $12 million contract to renovate the city hall in the City of Livermore (the city). After the bids were opened but before Diede executed a contract with the city, defendant Monterey Mechanical Company (Monterey), a subcontractor Diede had listed in its bid pursuant to Public Contract Code section 4104, informed Diede that its proposal contained a $300,000 mistake, that it would not honor the proposal, and that Diede should seek to be relieved of its bid to the city pursuant to sections 5101 and 5103. Diede nonetheless proceeded to execute a contract with the city and, when Monterey refused to perform, contracted with other subcontractors to perform Monterey’s portions of the project. Thereafter, Diede filed a complaint seeking to recover from Monterey, on a theory of promissory estoppel, the difference between Monterey’s original bid and the amounts Diede was required to pay the replacement subcontractors. After a bench trial, the court denied Diede’s claim because Diede did not attempt to be relieved from its bid to the city after learning of Monterey’s mistake. We conclude relief is available under sections 5101…