Speed Way Transp., L.L.C. v. Gahanna
2021 Ohio 4455
| Ohio Ct. App. | 2021Background
- Speed Way (towing company) applied for zoning conditional use and a city towing contract in Gahanna after obtaining site approvals and making required site modifications.
- City officials allegedly promised Speed Way it could obtain a towing contract and gave changing requirements during permitting, which Speed Way satisfied.
- Speed Way submitted a proposal for a municipal towing contract; the City rejected Speed Way, citing facility deficiencies (surface/drainage, fencing, ordinance violations).
- Speed Way sued the City asserting promissory estoppel, seeking declaratory and injunctive relief (including award of the contract), and requesting bid-preparation costs if injunctive relief were unavailable.
- The trial court granted the City’s motion for judgment on the pleadings; Speed Way appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Promissory estoppel — can Speed Way recover based on City promises? | City made clear promises that induced Speed Way to invest and comply; Speed Way relied to its detriment. | Promissory estoppel cannot be asserted against a political subdivision performing a governmental function (towing procurement is governmental). | Reversed in part: pleading sufficient to proceed — City failed on the pleadings to show it was performing a governmental function; factual issues remain. |
| Declaratory/injunctive relief — may court review City's RFP award and grant relief (including contract award)? | Court may adjudicate whether City followed its RFP criteria and may grant further relief (injunction/contract) if abuse found. | Awarding a municipal contract is entirely within City discretion; courts lack authority to make procurement decisions. | Reversed in part: justiciable controversy exists; court can review for abuse of discretion and may grant appropriate relief consistent with limits on judicial interference. |
| Bid-preparation costs (Meccon rule) — may Speed Way recover bid costs? | If injunctive relief is unavailable and City wrongfully rejected the bid, Speed Way should recover reasonable bid-preparation costs. | Not applicable because Speed Way delayed and never promptly sought injunction. | Affirmed in part: Speed Way did not promptly seek injunctive relief; Meccon damages unavailable. |
Key Cases Cited
- Hortman v. Miamisburg, 110 Ohio St.3d 194 (2006) (promissory estoppel inapplicable against a political subdivision performing governmental functions)
- Danis Clarkco Landfill Co. v. Clark Cty. Solid Waste Mgt. Dist., 73 Ohio St.3d 590 (1995) (government entity must follow rules/criteria it sets in an RFP even when competitive bidding statutes do not apply)
- Meccon, Inc. v. Univ. of Akron, 126 Ohio St.3d 231 (2010) (rejected bidder may recover bid-preparation costs if it promptly sought injunction, was denied, and injunctive relief later becomes unavailable)
- Cementech, Inc. v. Fairlawn, 109 Ohio St.3d 475 (2006) (courts may grant injunctive relief for procurement abuses but should do so cautiously)
- State ex rel. Fiser v. Kolesar, 164 Ohio St.3d 1 (2020) (12(C) motion limits court to the pleadings)
- Moore v. Lorain Metro. Hous. Auth., 121 Ohio St.3d 455 (2009) (definition and standards for governmental functions under R.C. 2744.01)
- Cedar Bay Constr. v. Fremont, 50 Ohio St.3d 19 (1990) (court reviews municipal procurement for abuse of discretion)
- Ohio Mfrs.' Assn. v. Ohioans for Drug Price Relief Act, 147 Ohio St.3d 42 (2016) (standard for construing pleadings on motions for judgment on the pleadings)