Midwest Service Management, Inc. v. Licking Valley Local Board of Education

760 N.E.2d 837 | Ohio Ct. App. | 2001

^* Reporter's Note: A discretionary appeal to the Ohio Supreme Court was not allowed in (2001), 93 Ohio 1452,756 N.E.2d 115.

OPINION Appellant Midwest Service Management, Inc. ("MSM") appeals the decision of the Licking County Court of Common Pleas that granted summary judgment on behalf of Licking Valley Local Board of Education ("Board"). The following facts give rise to this appeal

During the summer of 2000, the Board was in the process of purchasing equipment for the new Licking Valley High School, which included the purchase of technology equipment and video equipment. The Board extended a formal request for proposals, by publication, on June 15, 2000, and June 22, 2000. As part of the bid criteria, the Board requested brand name computers, specifically Compaq or Dell. The Board requested that sealed proposals be received, at the office of the Board treasurer, on June 27, 2000, at 1:00 p.m. Appellant, along with several other contractors, submitted bids. MSM submitted the lowest bid for technology equipment and also submitted the required bid bond. However, MSM's bid was not for Compaq or Dell computers

On July 10, 2000, the Board conducted a meeting and the Board's superintendent, John Larson, recommended approval of the bid for personal computers, servers, printers and network electronics totaling $354,683.50. MSM's bid for these same items was $330,800, which is a difference of $23,883.50. Following discussion and protest from MSM, the Board determined that the issue should be tabled pending review by legal counsel

The Board conducted another meeting on July 27, 2000, and adopted two resolutions concerning the purchase of this equipment. Specifically, in Resolution Number Two, the Board stated, in pertinent part:

Whereas several of the bids were submitted without the required bid bond; and

Whereas none of the bids are sufficiently responsible, considering the terms of the bid and/or the absence of the bid bond to satisfy the Board of Education;

WHEREFORE, all bids for computer software and hardware, both instructional and noninstructional, (sic) are hereby rejected pursuant to the authorization found in R.C. 3313.46(A)(6). The treasurer shall notify all bidders of the rejection and the reason for the rejection

Resolution Number Three also provides, in pertinent part:

* * *

Whereas all of the bids were rejected as invalid or not responsible; and,

Whereas the School District will open the High School to the teachers on August 25, 2000 and to the students on August 29, 2000; and

Whereas it will be necessary for the teachers to work with the computers in preparation for their students on August 25, 2000; and

Whereas it is impossible to proceed with a formal bid pursuant to the Revised Code Section 3313.46, order and install the computers prior to the opening of the School; and

Whereas the Board believes that the computer software and hardware for instructional purposes is an integral part of the operation of the school and that the acquisition and installation of such items is urgent and necessary

"WHEREFORE, pursuant to the provision of 3313.46(B)(4) of the Ohio Revised Code which exempts computer software and hardware purchased for instructional purposes from the bidding process and, because the Board has determined that there is an urgent necessity to order this instructional computer software and hardware in sufficient time to allow it to be installed and prepared for the students, this Board does hereby authorize the issuance of the following purchase orders for computer hardware and software to be used for instructional purposes: * * *[.]"

On July 31, 2000, the treasurer of the Board mailed MSM a letter regarding Resolution Number Two. However, MSM never received a written notice explaining why its bid was rejected by the Board. Pursuant to Resolution Number Two, the Board proceeded to purchase the equipment it needed, bypassing the bidding process

On August 4, 2000, MSM filed a complaint requesting a money judgment against the Board for lost profits resulting from the alleged wrongful rejection of its bid. The Board did not file an answer, but instead filed a motion to dismiss, or in the alternative, a motion for summary judgment. The trial court addressed the motion as a motion for summary judgment and granted the Board's motion on November 30, 2000. MSM timely filed its notice of appeal and sets forth the following assignments of error for our consideration:

I. THE TRIAL COURT ERRED IN GRANTING APPELLEE'S MOTION FOR SUMMARY JUDGMENT

II. THE TRIAL COURT ERRED IN DETERMINING THAT PLAINTIFF DID NOT SUBMIT A RESPONSIVE BID TO THE DEFENDANT'S REQUEST FOR PROPOSALS

Summary Judgment Standard Summary judgment proceedings present the appellate court with the unique opportunity of reviewing the evidence in the same manner as the trial court. Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St. 3d 35,36. As such, we must refer to Civ.R. 56(C) which provides, in pertinent part:

"Summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law * * * A summary judgment shall not be rendered unless it appears from such evidence or stipulation and only therefrom, that reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made, such party being entitled to have the evidence or stipulation construed most strongly in his favor."

Pursuant to the above rule, a trial court may not enter summary judgment if it appears a material fact is genuinely disputed. The party moving for summary judgment bears the initial burden of informing the trial court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact

The moving party may not make a conclusory assertion that the non-moving party has no evidence to prove its case. The moving party must specifically point to some evidence which demonstrates the non-moving party cannot support its claim. If the moving party satisfies this requirement, the burden shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Vahila v. Hall (1997), 77 Ohio St. 3d 421, 429, citing Dresher vBurt (1996), 75 Ohio St. 3d 280. It is based upon this standard that we review MSM's assignments of error

I, II We will address MSM's First and Second Assignments of Error simultaneously since MSM did not address the assignments of error separately in its brief. In its First Assignment of Error, MSM contends the trial court erred when it granted the Board's motion for summary judgment. In its Second Assignment of Error, MSM contends the trial court erred when it determined that it did not submit a responsive bid to the Board's request for proposals. We will not address the merits of MSM's assignments of error. Instead, under a de novo review, we conclude the trial court properly granted summary judgment in this matter because MSM is not entitled to the relief requested in its complaint. Specifically, monetary damages are not available to an unsuccessful bidder under R.C 3313.46

Paragraph 15 of MSM's complaint provides as follows:

"The Board's wrongful rejection of MSM's bid has proximately caused MSM a loss of business profit, in the amount of $43,817.58. Complaint, Aug. 4, 2000, at 5."

As a result of the monetary damages MSM allegedly suffered, it requested judgment in the amount of $43,817.58, pre-judgment interest, court costs, expenses of litigation and attorney fees, plus interest from the date of judgment. Id

Case law in Ohio provides that injunctive relief is available as a remedy for an unsuccessful bidder. Hardrives Paving and Constr., Inc. vNiles (1994), 99 Ohio App. 3d 243, 247, citing Cedar Bay Constr. vFremont (Nov. 18, 1988), Sandusky App. No. S-87-36, unreported, at 5-6, affirmed (1990), 50 Ohio St. 3d 19; Wilson Bennett, Inc. v. GreaterCleveland Regional Transit Authority (1990), 67 Ohio App. 3d 812, 821 However, "`[a]n injunction is proper only where there is no adequate remedy at law.'" Hardrives Paving and Constr., Inc. at 247, citing Fodorv. First Natl. Supermarkets (1992), 63 Ohio St. 3d 489, 491. Thus, "* * * if monetary damages for lost profits were an available remedy, damages would provide an adequate remedy at law and injunction would not be appropriate. * * * [T]he fact that injunctive relief is available generally indicates that a monetary award is not available for lost profits." Hardrives Paving and Constr., Inc. at 247

The court also noted, in the Hardrives Paving and Constr., Inc. case, that other policy considerations militate against allowing monetary damages. The intent of public bidding is to protect both the public and the bidders. Id. If a plaintiff were permitted to receive monetary damages only the bidders would be protected because the public would have to pay the contract price of the successful bidder in addition to the lost profits of an aggrieved bidder. Id. However, if an injunction is the sole available remedy, both the public and the bidders are protectedId. at 248

The Franklin County Court of Appeals did permit monetary damages, in an unsuccessful bidder case, in Mechanical Contrs. Assoc. of Cincinnati,Inc. v. Univ. of Cincinnati (Feb. 20, 2001), Franklin App. Nos 00AP-665, 00AP-694, unreported. This case involved the violation of competitive bidding rules contained in Revised Code Chapter 153 and other statutes pertaining to public works contracts. In their complaint, plaintiffs requested a declaratory judgment, a preliminary and permanent injunction prohibiting the university from undertaking further construction in violation of competitive bidding rules for public contracts, and monetary damages for detrimental reliance and lost profits. Id. at 1

The Court of Claims granted plaintiffs' partial motion for summary judgment concluding that the university violated Revised Code Chapter 153 and permanently enjoined the university from any other bidding that was not in compliance with Revised Code Chapter 153. Id. at 2. However, following trial, the Court of Claims did not award any monetary damagesId. at 2. On appeal, the Franklin County Court of Appeals recognized the general rule that an unsuccessful bidder is only entitled to injunctive relief. Id. at 7. However, the court stated:

* * * we are troubled by the reality that the limited relief granted results in a public entity's potential ability to violate laws intended to benefit the public without fear of any meaningful reprisal which might deter such violations in the future. In addition, we are mindful of the fact that the plaintiffs who pursue such litigation and prevail in attaining a declaratory judgment favorable to all taxpayers might have no recourse in recouping financial losses incurred in the process. Id

Therefore, due to the ongoing, costly nature of the litigation between the parties, the Franklin County Court of Appeals remanded the matter, to the Court of Claims, to address the issue of damages. Id

We find the case sub judice distinguishable from the MechanicalContrs. case. First, appellants never sought injunctive relief, in addition to monetary damages, as the plaintiffs did in the MechanicalContrs. case. Second, the litigation in this case has not been ongoing for years as it was in the Mechanical Contrs. case. Finally, unlike the bidders in the Mechanical Contrs. case, the record in this case indicates that MSM's bid may not have been responsive in that it did not include either Compaq or Dell computers. Therefore, MSM cannot establish that it would have been the successful bidder

Accordingly, we overrule MSM's First and Second Assignments of Error The trial court properly granted the Board's motion for summary judgment because MSM is not entitled to the relief requested in its complaint

For the foregoing reasons, the judgment of the Court of Common Pleas, Licking County, Ohio, is hereby affirmed

JUDGMENT ENTRY For the reasons stated in our accompanying Memorandum-Opinion, the judgment of the Court of Common Pleas of Licking County, Ohio, is affirmed. Pursuant to App.R. 24(A)(2), Appellant MSM shall pay costs in this matter

___________________ Wise, J

Edwards, P. J., and Boggins, J., concur