Dynalectric Co. of Nevada, Inc. v. Clark & Sullivan Constructors, Inc.
127 Nev. 480
Nev.2011Background
- The Nevada Supreme Court reviews promissory estoppel damages on a flexible Restatement-based approach.
- Dynalectric Nevada bid for electrical subcontract on UMC expansion; C&S relied on that bid in its Prime Contract submission.
- Dynalectric repeatedly assured its bid accuracy; after award to C&S, Dynalectric repudiated and refused to negotiate.
- C&S replaced Dynalectric with three other subcontractors and sued for promissory estoppel and related claims.
- The district court awarded C&S damages equal to the difference between Dynalectric's bid and replacement subcontractors' costs ($2,501,615).
- Dynalectric challenged the damages measure; Nevada adopted a flexible damages framework under Restatement §90.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is the proper measure of promissory estoppel damages? | Dynalectric argues against expectation damages. | C&S argues for a conventional promissory estoppel measure per Restatement guidance. | District court may award expectation, reliance, or restitutionary damages. |
| Did the district court apply the appropriate measure in this subcontract bidding context? | Dynalectric disputes using the bid-difference as damages. | C&S contends the Drennan-style measure reflects justice and foreseeability. | Yes; the difference between Dynalectric's bid and replacement subcontractors' costs is appropriate. |
Key Cases Cited
- Drennan v. Star Paving Co., 51 Cal.2d 409 (1958) (promissory estoppel damages measured by bid difference in subcontract context)
- John Price Associates, Inc. v. Warner Elec., Inc., 723 F.2d 755 (10th Cir. 1983) (difference between nonperforming subcontractor's bid and replacement bid)
- Preload Technology v. A.B. & J. Const. Co., Inc., 696 F.2d 1080 (5th Cir. 1983) (damages as difference between original and replacement subcontractor bids)
- Janke Constr. Co., Inc. v. Vulcan Materials Co., 527 F.2d 772 (7th Cir. 1976) (general contractor damages based on bid/replacement costs)
- Branco Enterprises v. Delta Roofing, 886 S.W.2d 157 (Mo. Ct. App. 1994) (award based on bid difference to prevent injustice)
- Riley Bros. Constr., Inc. v. Shuck, 704 N.W.2d 197 (Minn. Ct. App. 2005) (damages computed as bid difference to substitute work)