KAJIMA RAY WILSON v. LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY (1999)

Court of Appeal, Second District, Division 4, California.

KAJIMA/RAY WILSON, Plaintiff and Respondent, v. LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY, Defendant and Appellant.

No. B109867.

Decided: February 17, 1999

Lloyd W. Pellman, County Counsel, and Richard P. Chastang, Deputy County Counsel, for Defendant and Appellant. Kamine, Steiner & Ungerer, Maurya K. Hogan and Bernard S. Kamine, Los Angeles, for Plaintiff and Respondent. Eileen M. Diepenbrock;  Dauer & Thompson, James E. Thompson, Jennifer L. Dauer and Paul F. Dauer, Sacramento, for The Association of General Contractors of California as Amicus Curiae on behalf of Plaintiff and Respondent.

Defendant and appellant Los Angeles County Metropolitan Transportation Authority (MTA) appeals from a judgment granting injunctive relief and awarding damages in favor of respondent Kajima/Ray Wilson (respondent) for violation of federal regulations, the result of which was the award of a public works contract (Contract) to the second lowest bidder, Tutor-Saliba.   The Contract concerned the MTA Red Line station and tunnels at Hollywood Boulevard and Highland Avenue in Hollywood.   The issue on appeal is MTA's disparate treatment of the respondent and Tutor-Saliba, as manifested by its calculations of the Disadvantaged Business Enterprise credits due the respective proposals.   A review of the evidence and the arguments requires affirmation of the judgment.

STATEMENT OF FACTS

As a condition of receiving federal funds for rail construction, MTA must comply with the Code of Federal Regulations (C.F.R.) as set forth in 49 C.F.R. Part 23, implementing the Intermodal Surface Transportation and Efficiency Act of 1991 (23 U.S.C. 103).   Included within the regulations are requirements that prime contractors utilize businesses known as Disadvantaged Business Enterprises (DBE):  “[N]ot less than 10 percent of the amounts authorized to be appropriated ․ shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals.”  (§ 1003, subd. (b)(1) of Act.) These concerns are defined as small firms which are at least 51 percent owned by one or more socially and economically disadvantaged persons as identified in the regulations.  (49 C.F.R. § 23.53.)

In November of 1994, MTA solicited bids for the Contract, No. C0301R, to build a public project known as Hollywood/Highland Station and Tunnels.   The Contract set a minimum DBE goal of 30 percent of the total amount bid.   The three lowest bids came from respondent at $68,912,089, Tutor-Saliba at $69,887,867 and Kiewit-Shea at $72,970,345.   The contract was awarded to Tutor-Saliba despite the fact that its bid was almost $1 million more than that of respondent.

MTA justified its selection of Tutor-Saliba over respondent on the ground that the Tutor-Saliba DBE credits, at 30.88 percent, exceeded the goal, while those of respondent, at 29.51 percent, fell short.   The record discloses that respondent fell below the DBE goal because the DBE credits attributable to the involvement of subcontractor Manual Tejeda Trucking (Tejeda), a DBE qualified business entity, were miscalculated with respect to respondent's bid.

The error is explained as follows.   Each prime contractor received bids from Tejeda and in turn described Tejeda's participation in the project in its bid to the MTA. Respondent mistakenly checked the box identifying Tejeda as a “broker” in its bid, while Tutor-Saliba correctly checked the box identifying Tejeda as a “subcontractor.”   Unknown to respondent, MTA utilized an unwritten policy to grant only a five percent DBE credit of bid amounts designated for entities identified as “brokers,” while it awarded a 100 percent credit of bid amounts designated for those identified as “subcontractors.”   Had respondent received the same percentage credit for the work to be performed by Tejeda as had Tutor-Saliba, respondent's DBE credit would have exceeded the 30 percent goal.

Respondent filed suit against MTA, requesting injunctive relief and the issuance of a writ of mandate or prohibition, as well as damages.   The complaint alleged that respondent's intended use of Tejeda on the project was substantially similar to the use proposed by Tutor-Saliba and that respondent's checking the “broker” box instead of the one for “subcontractor” was a minor irregularity that should not have resulted in the significantly different calculations of the DBE credit.   Additionally, it alleged that the use of MTA's unwritten and unannounced policy of granting only five percent DBE credit for those identified as “brokers” was improper, and that but for this disparate treatment respondent would have qualified for and received the bid for the project.

Following a bench trial, the court issued a peremptory writ of mandate, commanding MTA to stop utilizing its five percent broker policy in connection with DBE credits “instead of evaluating the amount of work proposed to be subcontracted to the ‘broker’ and counting toward the ․ DBE goal (1) all reasonable and customary fees or commissions charged for providing bona fide services, (2) all reasonable and customary fees charged for delivery of materials and supplies when the hauler, trucker or delivery service is not also the manufacturer of or a regular dealer in the materials and supplies, and (3) all other reasonable compensation that the broker will receive for performing commercially useful functions under its subcontract.”

In addition, the court awarded respondent $44,869 in bid expenses, $89,223 in bid protest expenses, $300,000 in unabsorbed overhead, $350,000 in loss of profits, prejudgment interest at the legal rate from the date the complaint was filed, “as well as all appropriate legal costs not to include attorney's fees.”   Judgment was entered on January 15, 1997, in the total amount of $923,921.74.   Additional evidence is included in the discussion section of this opinion.

DISCUSSION

 A. Writ relief

Appellant first challenges the trial court's issuance of the writ of mandate.   It argues that determination of DBE credits is entirely discretionary and that respondent failed to establish a “clear and present ministerial duty on the part of MTA to refrain from crediting DBE brokers with 5% of the dollar value of subcontracts.”

 Code of Civil Procedure section 1085 authorizes the superior court to issue a writ “to any inferior tribunal ․, or person, to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station․”   While it has been held that issuance of a section 1085 writ may be based upon violation of a “ ‘clear, present and usually ministerial duty’ ” (Loder v. Municipal Court (1976) 17 Cal.3d 859, 863, 132 Cal.Rptr. 464, 553 P.2d 624), relief is also appropriate where the public entity exercises discretionary authority in a manner which is “ ‘arbitrary, capricious or entirely lacking in evidentiary support.’ ”   (Mike Moore's 24-Hour Towing v. City of San Diego (1996) 45 Cal.App.4th 1294, 1303, 53 Cal.Rptr.2d 355.)

“In reviewing the award of a public contract, our function is the same as the trial court's-to decide whether the public entity's decision is supported by substantial evidence.   Our review is limited to an examination of the proceedings to determine whether the [entity's] actions were arbitrary, capricious, entirely lacking in evidentiary support, or inconsistent with proper procedure.   There is a presumption that the [entity's] actions were supported by substantial evidence, and [petitioner] has the burden of proving otherwise.   We may not reweigh the evidence and must view it in the light most favorable to the [entity's] actions, indulging all reasonable inferences in support of those actions.  [Citations.]”  (Ghilotti Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897, 903-904, 53 Cal.Rptr.2d 389.)

 In deciding whether writ relief is proper, it is important to consider the purpose of requiring governmental entities to have public bidding of public works contracts, which is articulated in Public Contract Code section 100.   There, it is provided that the Legislature intends to “ensure full compliance with competitive bidding statutes as a means of protecting the public from misuse of public funds,” to give all qualified bidders “a fair opportunity to enter the bidding process, thereby stimulating competition in a manner conducive to sound fiscal practices,” and to “eliminate favoritism, fraud, and corruption in the awarding of public contracts.”  “Because of the potential for abuse arising from deviations from strict adherence to standards which promote these public benefits, the letting of public contracts universally receives close judicial scrutiny and contracts awarded without strict compliance with bidding requirements will be set aside.   This preventative approach is applied even where it is certain there was in fact no corruption or adverse effect upon the bidding process, and the deviations would save the entity money.  [Citations.]   The importance of maintaining integrity in government and the ease with which policy goals underlying the requirement for open competitive bidding may be surreptitiously undercut, mandate strict compliance with bidding requirements.  [Citation.]”  (Konica Business Machines U.S.A., Inc. v. Regents of University of California (1988) 206 Cal.App.3d 449, 456-457, 253 Cal.Rptr. 591, italics added.)

With the foregoing in mind, we review the evidence.

Tutor-Saliba presented the lowest bid in the first round of bidding on the project, but MTA rejected all bids after it received a protest that the bid of Tutor-Saliba contained a disqualifying defect.   Tutor-Saliba filed suit on November 28, 1994, against MTA, respondent, and others, contending that MTA had wrongfully rejected its bid.

The second round of bids was received on December 22, 1994.   Respondent described Tejeda's work as “trucking,” and it initially checked the box identifying Tejeda's participation as “subcontractor.”   However, prior to submission of the bid, respondent changed its designation of Tejeda by checking the “broker” box.   Tutor-Saliba described Tejeda's work as “excavation offhaul, furnish back fill material” in its bid, and it checked the box which identified Tejeda's participation as a “subcontractor.”   After this round, MTA awarded the Contract to Tutor-Saliba.

Raymond Hughes testified he had prepared respondent's second round bid.   Afterward, in early January 1995, he received a telephone call from two MTA employees, Barbara Gateway and Don Ballard, each of whom indicated a problem with the DBE participation.   Ballard told Hughes that Tejeda's participation had been listed as “broker” instead of “subcontractor” and that respondent would only receive five percent credit for the work to be performed by Tejeda.   Hughes told Ballard that he had initially listed Tejeda as a subcontractor but had changed the designation to broker.   He explained to Ballard the nature and scope of the work Tejeda would perform on the project.

Edward Riahi, a senior vice-president of respondent, and formerly respondent's Pacific Region manager when this contract was let, was directly involved in the preparation of the first and second bids.   He testified that after the first bid had been presented he was involved in the successful protest proceedings which resulted in the lawsuit being filed by Tutor-Saliba.   After the second bid had been presented and a few days after Barbara Gateway had contacted Hughes, Gateway called Riahi.   She inquired whether respondent intended to issue a subcontract to Tejeda, and Riahi answered in the affirmative.   She asked that he confirm this in a writing, which she would use in a pending meeting to discuss the bids.   She also advised Riahi that someone at the MTA felt that awarding the project to Tutor-Saliba would make the MTA's “problem go away.”   Riahi understood this to be a reference to the Tutor-Saliba lawsuit.   Riahi testified about attending a protest hearing before the Board of the MTA where at least two members of the board inquired of counsel for MTA whether the Tudor-Saliba lawsuit would be resolved if the contract was awarded to Tutor-Saliba.   It was his impression that counsel advised the Board in the affirmative.   The trial court took judicial notice of the fact that the suit had been dismissed.

The deposition testimony of Simon Apodaca, an estimator for Tejeda, also came into evidence.   He testified he prepared the bids for the work on this particular project and that the bid presented to each of the prime contractors was exactly the same.

Paragraph 4.7 of MTA's DBE program manual recognizes “truckers,” and thus Tejeda, as a separate class of DBE firms:  “The bidder shall identify how DBE firms will participate in this contract.   The DBE goal may be satisfied by a commitment to the DBE participation in the contract as a prime contractor, joint venture partner, subcontractor, trucker, or supplier.”  (Italics added.)   The same paragraph, but a different subdivision, provides as follows:  “The following types of fees or commission paid to DBE consultants, brokers, and packages may be counted toward the goal, provided that the fee or commissions customarily allowed for similar services.  [¶] ․ [¶] The fees charged for delivery of materials and supplies required on a job site (but not the cost of the materials or supplies themselves) when the hauler, trucker or delivery service is not also the manufacturer of, or a regular dealer, in the materials and supplies.”

Robert Bivens, a DBE program consultant since 1971, testified as an expert witness for respondent on the subject of DBE credit.   He indicated that pursuant to federal regulations it is improper for MTA to give different DBE credit to different bidders for substantially the same work to be performed by the same subcontractor.   He concluded that the tasks identified in each bid to be performed by Tejeda were basically the same, and to the extent that any question existed relating to the scope and nature of work to be performed by Tejeda, industry standards required MTA to call the subcontractor for additional information.   In Bivens' opinion, the work identified to be performed by Tejeda on each bid should have received 100 percent credit for DBE purposes.

Hayden Lee, also a DBE credit expert, testified on behalf of respondent that MTA had failed to conduct a sufficiently thorough evaluation of the scope and nature of the work that Tejeda would perform in connection with respondent's bid.   He found evidence that Tejeda was already performing trucking operations on three other MTA projects, which meant that MTA “should have known that the firm had the capability to do the trucking, was not just a broker.”   He also testified that MTA's policy of crediting a DBE broker with only five percent credit was unreasonable and arbitrary.   In connection with respondent's bid he remarked:  “I haven't seen where it said that Tejeda was going to charge five percent fees for this brokering service.”

Herminio Vargas, the MTA Equal Employment Opportunities Manager, and formerly an MTA Contract Compliance Manager, testified that, while the federal regulations mandate 100 percent credit be given to “a subcontractor or a manufacturer,” federal regulations do not specify what percentage should be counted toward “broker” work.   He also admitted that if a question arises whether the wrong box has been checked, MTA's policy is to contact the bidder to clarify how the subcontractor or broker is to be utilized.   Confirming the testimony of Bivens and Lee, he conceded that had respondent checked the “subcontractor” box it would have received 100 percent DBE credit from MTA “due to our experience with Manuel Tejeda.”

 Based on the foregoing evidence, and in light of the fact that the five percent policy was unwritten, unannounced and unknown to respondent, we conclude that MTA's application of the policy to respondent's bid was arbitrary, violated federal regulations, and was an abuse of discretion.  (Monterey Mechanical Co. v. Sacramento Regional County Sanitation Dist. (1996) 44 Cal.App.4th 1391, 1412, 52 Cal.Rptr.2d 395;  Pozar v. Department of Transportation (1983) 145 Cal.App.3d 269, 270, 193 Cal.Rptr. 202.)   Thus, the trial court did not err in issuing a writ of mandate.

 B. Damages

MTA raises a number of issues relating to damages.

1. Promissory Estoppel

 MTA contends that recovery based on a theory of promissory estoppel is precluded because it is a “tort based doctrine” from which MTA should be immune from liability based on “Government Code Sections 815.2, 818.8 and 820.2.”   We disagree.

 Our Supreme Court has held that promissory estoppel, a theory based on contract, is appropriate to remedy an injustice in a bid context.   “The elements of the doctrine of promissory estoppel, as described concisely in section 90 of the Restatement of Contracts, are as follows:  ‘A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.’   The foregoing rule has been judicially adopted in California and it applies to actions, such as the present case, to enforce a subcontractor's bid.  [Citations.]”  (C & K Engineering Contractors v. Amber Steel Co. (1978) 23 Cal.3d 1, 6, 151 Cal.Rptr. 323, 587 P.2d 1136.)

In Swinerton & Walberg Co. v. City of Inglewood-L.A. County Civic Center Authority (1974) 40 Cal.App.3d 98, 114 Cal.Rptr. 834, the theory was extended to allow a claim for damages based upon the misaward of public works contracts.  “The public obviously has both an economic and moral interest in public works contracts being awarded to the lowest responsible bidders.   An award of monetary damages to the lowest responsible bidder for the misaward of a public works contract would be in the public interest as well as that of the injured bidder because such an award would deter such misconduct by public entities in the future.”  (Id. at p. 105, 114 Cal.Rptr. 834;  see also Hilltop Properties v. State of California (1965) 233 Cal.App.2d 349, 364-365, 43 Cal.Rptr. 605.)

Finally, Government Code section 814 provides as follows:  “Nothing in this part affects liability based on contract or the right to obtain relief other than money or damages against a public entity or public employee.”  (Italics added.)   This section precludes application of the immunity provisions contained within Government Code sections 815.2, 818.8, and 820.2 to a theory of promissory estoppel.  (Swinerton & Walberg Co. v. City of Inglewood-L.A. County Civic Center Authority, supra, 40 Cal.App.3d at pp. 103-104, 114 Cal.Rptr. 834.) ¹

MTA also argues there is no evidence in the record to establish an intent to defraud, which it claims is an essential element for recovery of damages based on a theory of promissory estoppel.   As support, it quotes from Pacific Architects Collaborative v. State of California (1979) 100 Cal.App.3d 110, 125, 166 Cal.Rptr. 184, as follows:  “We are strongly persuaded by decisions relating to federal procurement bidding.   In these decisions, absent an intent to defraud the bidder, preparation costs are not recoverable.  [Citations.]”   Pacific Architects does not aid MTA. The plaintiff therein was seeking damages where the public entity rejected all bids, and no claim was made that the public entity improperly awarded a contract to another.   The rationale for refusing to award damages was explained as follows:  “ ‘Moreover, we see no injustice in requiring appellant to bear the expense of preparing its bid;  it entered into the bidding procedure with full knowledge of respondent's right to reject the bids if it should choose to do so.   As an experienced business entity, appellant must be deemed to have assumed the risk that respondent might act in accordance with its legal right;  such a risk is a cost of seeking to do business with a governmental body.  [Citation.]’ ”  (Id. at p. 125, 166 Cal.Rptr. 184.)

 While a governmental entity may have the right to reject all bids, it has no right to act arbitrarily and disregard applicable regulations in letting a public works contract.   For such action, the public entity may be held responsible under a theory of promissory estoppel, even in the absence of an intent to defraud.  (Swinerton & Walberg Co. v. City of Inglewood-L.A. County Civic Center Authority, supra, 40 Cal.App.3d at p. 105, 114 Cal.Rptr. 834.)

2. Lost Profits and Overhead

MTA challenges the award of lost profits and overhead.   It argues that such damages have never been condoned in an award against a public entity.   Citing C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d 1, 151 Cal.Rptr. 323, 587 P.2d 1136 and Signal Hill Aviation Co. v. Stroppe (1979) 96 Cal.App.3d 627, 158 Cal.Rptr. 178, it concedes that such damages are appropriate under a theory of promissory estoppel, but points out that each of those cases dealt with the private sector.

Respondent has not cited us to any case which has recognized an award of lost profits or overhead against a public entity under similar circumstances.   Instead, it references Signal Hill Aviation Co. v. Stroppe, supra, 96 Cal.App.3d 627, 158 Cal.Rptr. 178 and argues:  “A contract between a public entity and a private party is governed by the same laws as apply to a contract between private parties.”

“The equitable character of promissory estoppel is confirmed by a close scrutiny of the purpose of the doctrine, namely, that ‘injustice can be avoided only by enforcement of the promise.’  (Rest., Contracts, supra, § 90, italics added.)   As expressed by us in a similar subcontractor bid case, once the prerequisites of the doctrine are met, ‘․ it is only fair that plaintiff should have at least the opportunity to accept defendant's bid after the general contract has been awarded to him.’  [Citations.]   We think that it is noteworthy that a proposed addition to section 90 would add the language ‘The remedy granted for breach may be limited as justice requires.’  (Rest.2d Contracts (Tent. Drafts Nos. 1-7, 1973) § 90, p. 215.)”  (C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d at pp. 7-8, 151 Cal.Rptr. 323, 587 P.2d 1136.) ²

 It is clear that the purpose of promissory estoppel is to make the aggrieved party as whole as possible.   Because the doctrine is equitable in nature, the trial court retains broad discretion to fashion whatever remedies are appropriate “to do justice.”  (Signal Hill Aviation Co. v. Stroppe, supra, 96 Cal.App.3d at p. 640, 158 Cal.Rptr. 178.)   However, that discretion must be “limited as justice requires.”  (C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d at p. 8, 151 Cal.Rptr. 323, 587 P.2d 1136.)

 We see no reason to draw a bright line in public works cases to preclude recovery of any specific type of damages under all circumstances, including lost profits and overhead.   Instead, because of the equitable nature of the remedy, each case should be addressed on its merits to determine if the trial court has abused its discretion.

Here, respondent sought lost profits and overhead expenses through the end of 1996, at which time it expected it would have replaced the lost contract with other work.   The total lost profits it claimed was $1,544,034, after deducting overhead.   The overhead it sought totaled $1,298,589, consisting of $887,959 for head office overhead and $410,630 for regional office overhead.

In the statement of decision the court made the following findings relating to damages:

“The Court is persuaded that Kajima lost opportunities to bid upon other comparable contracts by devoting its energy and resources to bidding upon this contract and pursuing the protest procedure.   The court is also persuaded that Kajima was reasonably likely to have obtained some work from that bidding activity which would have compensated for the loss of the profits that would have come from this contract.   The court is also persuaded that some of the head office and regional overhead expenses that would have been covered by this contract had to be paid for out of the profits from other jobs.

“An award of Kajima's bidding expenses of $44,869, its protest expenses of $89,223, plus $300,000 of the head office and regional overhead expenses that had to be borne out of the profits from other contracts, plus $350,000 of the reasonably anticipated net profits which Kajima lost from this contract and from not bidding on other available contracts, avoids the injustice to Kajima and is just in the circumstances given the nature and extent of MTA's acts and omissions and the benefit received by the dismissal of the Tutor lawsuit.”

From the foregoing it is clear that the court exercised its discretion in determining the nature and amount of damages to rectify the injustice it found by denial of the contract to respondent.   Thus, the question we are faced with is whether the court abused its discretion.   Here, we only address the award of lost profits.³  We treat MTA's arguments relating to the bid expenses and bid protest costs later in this opinion.

 MTA does not challenge the actual amount awarded;  rather, it contends that respondent did not have a sufficient profit history to justify an award of lost profits.   While MTA is correct that generally damages for loss of profits may be denied to an “unestablished business,” this rule is “ ‘not a hard and fast one.’  [Citation.]”  (S. Jon Kreedman & Co. v. Meyers Bros. Parking-Western Corp. (1976) 58 Cal.App.3d 173, 184, 130 Cal.Rptr. 41.)   “The issue is, rather, whether the damages can be calculated with reasonable certainty.  [Citation.]”  (Id. at pp. 184-185, 130 Cal.Rptr. 41.)   We review the evidence.

Riahi joined respondent in February 1994 at which time it created the Pacific Region, a separate profit center from respondent's home office and other regions.   Riahi was in charge of the region and was involved in this bid as well as the decision whether to bid on other projects.   Because the resources for the Pacific Region were limited, he had to select carefully which projects to bid.   Respondent's success in bids was approximately one out of five and he identified a number of projects which he would have bid on had he not pursued this matter.

Respondent's expert, Roger Shlonsky, testified he was asked to review the audited financial statements of respondent for the years 1994 and 1995 and to estimate the profits lost by respondent as a result of loss of this project.   In carrying out this project, he reviewed financial documents relating to the home office as well as of the Pacific Region and prepared summaries which were presented to the trial court.   It was his opinion that despite the lack of profits reported by the home office, the Pacific Region was a different story.   Shlonsky explained that “the big company represents a mixture of different contracts and times for projects throughout the country;  whereas, the Pacific Region ․ is a division by itself with its own contracts and where you may have profits where the over[ ]all company may have losses.”   He opined that the Pacific Region had lost net profits totaling $1,544,034 from this particular contract.⁴

MTA's expert, Robert Equals, supported the testimony of Shlonsky that the home office demonstrated no profit for the years 1994 and 1995.   With regard to the Pacific Region, he gave conflicting testimony.   At first he indicated he could find nothing in the documents he reviewed relating to the Pacific Region.   Later, he stated he had found documents which would support a profit rate for the Pacific Region lower than the 5.5 percent historical profit rate utilized by Shlonsky.   More importantly, with regard to the history of respondent, Equals gave the following testimony:  “In 1993, Kajima Engineering and Construction had 48.5 million dollars in their audited report.   And in 1994, they have $108.6 million dollars.  [¶] In 1995, they have 256.6 million dollars.  [¶] These are phenomenal growth rates for anyone, any corporation, any business.  [¶] What we see is that from '93 to '94, Kajima grew 144 percent.  [¶] In 1995, they grew again 136 percent.  [¶] ․ [¶] What we have here is phenomenal growth;  therefore, if they lost a contract in December or January of '95, it didn't even dent it financially.   From a revenue sense, they have more than doubled.”

The foregoing demonstrates that respondent was an established business with “phenomenal growth” in revenue from 1993 through 1995.   Shlonsky reviewed the audited accounts of respondent and was able to calculate the estimated lost profits for the Pacific Region, as demonstrated by the summaries presented to the court.   Equals was unable to dispute the conclusion, although he did opine that he believed the profit margin would be less than the 5.5 percent utilized by Shlonsky.

 Apparently, the court did not give full credit to the testimony of Shlonsky because it awarded only $350,000 against a claim of $1,544,034, just over 20 percent of what was requested.   It is fair to infer the court concluded that this amount reasonably represented the lost profits resulting from the missed opportunities described by Riahi to bid on other projects because of the time invested in this bid and the protest.   We cannot conclude that the trial court abused its discretion by awarding $350,000 in lost profits under the circumstances.

3. Bid Preparation Expenses and Bid Protest Costs

 MTA challenges the award of bid preparation expenses on the ground that there is no substantial evidence to support the amount awarded, $44,869.   The primary argument on this issue is that respondent's project manager, Riahi, was not credible.   As previously noted in connection with the credibility argument mounted against Shlonsky, “ ‘[t]o warrant the rejection of the statements given by a witness who has been believed by a trial court, there must exist either a physical impossibility that they are true, or their falsity must be apparent without resorting to inferences or deductions.  [Citations.]’ ”  (Evje v. City Title Ins. Co., supra, 120 Cal.App.2d at p. 492, 261 P.2d 279.)   We cannot so conclude with regard to Riahi's testimony.   Additionally, in mounting its argument on this issue, MTA reviews only the evidence on the issue favorable to it.   It is the duty of an appellant to present to the court in its statement of facts “all the material evidence on the point and not merely their own evidence.   Unless this is done the error is deemed waived.”  (Franck v. Polaris E-Z Go Div. of Textron, Inc. (1984) 157 Cal.App.3d 1107, 1114, 204 Cal.Rptr. 321.)

MTA challenges the amount of $17,747.60 attributed to work done by Riahi in connection with the second bid protest challenge.   As with the challenge to the bid preparation costs, MTA fails to set forth all of the applicable evidence on the subject and attacks the credibility of Riahi.   Consistent with our prior discussion, we conclude that MTA has failed to carry its burden on this issue.

Next, MTA argues that the court erred by including $56,631.61 in attorney fees in the bid protest expenses.   It mounts two argument on this issue:  first, a legal argument that the fees awarded do not fall within the contemplation of Code of Civil Procedure section 1033.5, subdivision (a)(10);  and second, a factual argument that there is insufficient evidence to support the amount of the award.   We first review the evidence in support of this award.

Riahi testified that in connection with the bid protest he retained and worked with outside counsel as well as with in-house counsel over a period of months.   The fees for this work are reflected in a document titled “Summary Bid II Protest Expenses,” one of the cost sheets which was utilized at trial as a summary of the expenses incurred by respondent on this issue.

 Larry Atwater, Vice President of Finance for respondent, testified that he verified the accuracy of cost sheets against respondent's accounting records including the “Summary Bid II Protest Expenses.”   After an objection by counsel for MTA that Atwater's testimony would be cumulative, the court accepted a stipulation that Atwater would be deemed to have testified consistent with the figures reflected in this document.   Turning to the document, under the heading “In House Legal Counsel” is the sum of $3,051.36 for Joseph McGowan.   Under the heading “Protest Legal and Consultant Fees” are the sums of $799.25 for the firm of Drummy, King & White and $52,781 for the firm of Kamine, Steiner et al.   The stipulation is sufficient to establish the foundation for admission of the evidence that these amounts were incurred and paid by respondent, evidence that may be considered by the trier of fact in regard to damages.  (Malinson v. Black (1948) 83 Cal.App.2d 375, 380, 188 P.2d 788;  Watterson v. Knapp (1939) 35 Cal.App.2d 283, 289, 95 P.2d 154;   Caulfield v. Market Street Ry. Co. (1937) 20 Cal.App.2d 220, 221, 66 P.2d 752.)

 Turning to the legal argument, MTA asserts the court erred because Code of Civil Procedure section 1033.5 precludes recovery of attorney fees except “where authorized by contract, statute or law.”   The argument fails because the attorney fees awarded here were not fees incurred in litigating the instant action, as contemplated by section 1033.5.   Rather, the fees awarded were damages incurred by respondent in attempting to address MTA's improper application of its five percent policy during the bid protest.   (Bruckman v. Parliament Escrow Corp. (1987) 190 Cal.App.3d 1051, 1060-1062, 235 Cal.Rptr. 813.)

 Citing Martino v. Denevi (1986) 182 Cal.App.3d 553, 227 Cal.Rptr. 354, MTA argues that the summary figures listed on the “Summary II Bid Protest” are insufficient to support the award because no timesheets or other forms of documentary evidence were presented to corroborate the amounts.   The same flaw exists here as with the prior argument.  Martino addressed the issue of attorney fees incurred in defense of the same litigation in which the fees are awarded, not an award of fees as damages.  (Id. at p. 558, 227 Cal.Rptr. 354.)   The reason the award of attorney fees was reversed therein was because the record was not sufficiently complete to permit the court of appeal to determine if the trial court had abused its discretion with respect to the amount of fees awarded.   It remanded the matter to the trial court for further proceedings.  (Id. at p. 560, 227 Cal.Rptr. 354.)   Here, the evidence received was for the purpose of demonstrating that respondent had incurred and paid the amount of fees in connection with the bid protest as stated in the summary.   MTA offered no evidence to contradict these figures or to challenge the reasonableness of the amounts paid.   The evidence is sufficient to support the award.  (Malinson v. Black, supra, 83 Cal.App.2d at p. 380, 188 P.2d 788.)

The final component of bid protest costs that MTA challenges is $12,500 awarded for costs associated with consultants Rose & Kindel.   MTA advances the same argument here relating to sufficiency of the evidence.   We reject it for the same reasons:  the amount is contained in the “Summary Bid II Protest Expenses” document authenticated by Atwater, and the stipulation placed the amount in evidence.   Riahi testified that he hired Rose & Kindel as consultants on how to deal with MTA relating to the bid protest, he spent quite a bit of time in their offices and attended over a dozen meetings on the subject.   This constitutes substantial evidence to support the award.

DISPOSITION

The judgment is affirmed.   Costs on appeal are awarded to respondent.

FOOTNOTES

1.   MTA's reliance on Rubino v. Lolli (1970) 10 Cal.App.3d 1059, 89 Cal.Rptr. 320 is not justified.  Rubino was decided prior to C & K Engineering and Swinerton & Walberg, and fails to note or discuss the exception of Government Code section 814 to the immunities relied upon by MTA.

2.   The proposed language referenced by the court was in fact added when the second version of Restatement of Contracts was adopted.  (Rest.2d Contracts, § 90, p. 242.)

3.   The sole reference by MTA of the award of overhead costs in its opening brief is the following:  “The lower court awarded [respondent] $650,000.00 in lost profits and overhead.   As will be shown, California courts as well as virtually every other state and federal court that has addressed the issue have refused to penalize the taxpaying public by rendering an award of lost profits to a disappointed bidder.”  (Italics added.)   Thereafter, MTA mounts no separate argument challenging the propriety of the court's award of $300,000 to respondent for overhead, as contrasted to the award for lost profits.   MTA's expert at the time of trial did separately take issue with an award of damages for general overhead.   By failing to address a specific argument on the issue in the opening brief, MTA is deemed to have waived the issue.  (Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4, 188 Cal.Rptr. 115, 655 P.2d 317.)

4.   MTA challenges the credibility of Shlonsky, partly because of the claimed absence of documentary evidence supportive of Shlonsky's testimony.   An expert need not offer written evidence when giving opinion testimony.  (Evid.Code, § 801.)   In addition, the standard of review regarding credibility is very steep.  “ ‘Although an appellate court will not uphold a judgment or verdict based upon evidence inherently improbable, testimony which merely discloses unusual circumstances does not come within that category [citation].   To warrant the rejection of the statements given by a witness who has been believed by a trial court, there must exist either a physical impossibility that they are true, or their falsity must be apparent without resorting to inferences or deductions.  [Citations.]   Conflicts and even testimony which is subject to justifiable suspicion do not justify the reversal of a judgment, for it is the exclusive province of the trial judge or jury to determine the credibility of a witness and the truth or falsity of the facts upon which a determination depends.  [Citations.]’ ”  (Evje v. City Title Ins. Co. (1953) 120 Cal.App.2d 488, 492, 261 P.2d 279.)   The testimony of Shlonsky does not come close to meeting this standard.

HASTINGS, J.

CHARLES S. VOGEL, P.J., and EPSTEIN, J., concur.