HomeMy WebLinkAbout93-0415 CivilIN RE:
BILL C. LOY
v.
BILLY M, ROUSH, JEFFREY A.
CONRAD AND EDWARD R.
KENNEDY,
AS IN THEIR CAPACITY
PERRY COUNTY COMMISSIONERS
IN THE COURT OF CO
THE 41ST JUDICIAL MMON PLEAS OF
DISTRICT OF
PENNSYLVANIA
: PERRY COUNTY BRANCH
CIVIL ACTION - LAW
NO. 93-415
IN RE: PETITION FOR PRELIMINARY INJUNCTIpN
BEFORE OLER J.
ORDER OF COURT
AND NOW, this 3rd day of May, 19931 uP o
for Prelimin n consideration of Plaintiffs
ary Injunction, and following a heariPetition
ng the Petition is DENIED.
BY THE COURT,
Samuel L. Andes, Esq.
525 North Twelfth Street
LemoyIIe, PA 17043
Attorney for Plaintiff
William R. Bunt, Esq.
P.O. Box 336
109 South Carlisle Street
New B1oomfield, PA 17068
Attorney for Pe'
rry County
:rc
Wesle
y Oler J
pecially Presiding
IN RE: IN THE COURT OF COMMON PLEAS OF
BILL C. LOY THE 41ST JUDICIAL DISTRICT OF
PENNSYLVANIA
PERRY COUNTY BRANCH
V.
BILL M. ROUSH, JEFFREY A. CIVIL ACTION - LAW
CONRAD AND EDWARD R.
KENNEDY, IN THEIR CAPACITY
AS PERRY COUNTY COMMISSIONERS NO. 93-415
IN RE: PETITION FOR PRELIMINARY INJUNCTION
BEFORE OLER, J.
OPINION AND ORDER OF COURT
Oler, J.
At issue in the present case is whether a preliminary injunction should be
entered ordering the Board of Commissioners of Perry County to rescind its acceptance
of a certain bid and either rebid the project or award the contract to a second bidder.
A hearing was held on this issue on Thursday, April 29, 1993. For the reasons stated
in this Opinion, the request for a preliminary injunction will be denied.
Factual background. Pursuant to Section 1802(b) of the County Code,' the
Commissioners of Perry County (Defendants) advertised for sealed bids, to be opened
on April 13, 1993, in connection with the renovation, or conversion, of a certain
building owned by the County in New Bloomfield.' Bids were sought on four
' Act of August 9, 1955, P.L. 323, as amended, 16 P.S. §1802(b) (1992 Supp.).
' Defendant's Exhibit 3.
This building, now known as the Perry County Administration Building, formerly known
as the Food Rite Building, and to be dedicated as the Perry County Veterans Memorial
Building, was purchased by the County to accommodate county office expansion occasioned by
the legislature's creation of a second judicial position in the 41st Judicial District.
41st Judicial District
of Pennsylvania
Perry County Branch
No. 93-415
contracts: a general contract, a plumbing contract, a heating, ventilating and air
conditioning contract, and an electrical contract.3
A request for bidding documents with respect to the general construction
contract was submitted to the County's construction manager for the project, CCI
Construction Company, Inc.,4 by a company called Cumberland Contracting Group,
Inc., on stationery bearing a letterhead of
CARSON DRM
Cumberland Contracting Group
and giving a Harrisburg address.' The accompanying check, refundable upon return
of the documents or submission of a bona fide bid,' was drawn by Cumberland
Contracting Group Inc., "Debtor in Possession Case #1-92-00825.11'
The bidding documents supplied by the County reserved the County's right to
reject any bid which was "in any way incomplete or irregular" and provided for
affixation of the corporate seal in two places on the proposal form if the bidder was a
3 Defendant's Exhibit 3.
' CCI Construction Company, Inc., was engaged by the County for $25,000.
' Plaintiff's Exhibit 6.
B Defendant's Exhibit 4.
' Plaintiff's Exhibit 6.
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corporation.8
Bids were opened at the appointed time, and a tabulation of the proposals was
made as to each contract.9 With respect to the general construction contract, the
bidders and base bids were as follows:
Larson/DRM
$379,772
Lobar
$386,000
W.S. Miller
$407,200
T.R. Rollason
$409,500
Barrick
$432,888
East Coast
$458,11210
Pursuant to their duties in connection with the project, the construction
manager and architect reviewed the materials submitted by the bidders. The proposal
form of Larson/DRM Construction Services, Inc., did not contain a corporate seal in
either space provided and was signed on behalf of the corporation by a Peter B.
Bookholt, whose title was given as "CEO."11 The address of the company was given
as "1707 South Cameron Street, PO Box 10502, Harrisburg, PA 17105," and the state
s Defendant's Exhibit 4.
9 Defendant's Exhibit 1.
10 Defendant's Exhibit 1; see Plaintiff"s Exhibit 1.
11 Defendant's Exhibit 5. The attestation was executed by a Connie Bookholt as
secretary/treasurer. Id.
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of incorporation was named as California."
The Cameron Street address is the corporate headquarters of the aforesaid
Cumberland Contracting Group Inc., a general contractor presently in Chapter 13
bankruptcy proceedings. It does not appear that any salaried employee of the bidder
works at the Harrisburg address. In addition, it is not clear that Cumberland
Contracting Group Inc., could have gotten bonding for this particular project.
The Contractor's Qualification Statement submitted with the bid listed the
principal office of the bidder as Bedford, Texas," the president, vice-president, and
secretary/treasurer as Don Morelli, Doug Fritz, and Connie Bookholt respectively,14
and the only states in which the company was legally qualified to do business as
California and Texas.15 In addition, trade and bank references were exclusively from
California and Texas, and the projects listed for reference were all from California,
12 Defendant's Exhibit 5.
La A 'branch office" was said to be at "1707 South Cameron Street, PO Box 10502,
Harrisburg, PA 17105." Defendant's Exhibit 6.
14 Testimony at the hearing herein on behalf of Plaintiff was to the effect that Peter
Bookholt was president. A document submitted with the bid entitled Resumes lists Peter E.
Bookholt as chief executive officer and states that he "maintains general contractors licenses
in Arkansas and Florida, as well as Class A and Class B General Contractors licenses in
California.
15 Defendant's Exhibit 6.
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Texas, Arkansas, Georgia, and Florida."'
On April 16, 1993, the construction manager submitted a letter to Defendant
Commissioners containing the joint recommendations of it and the project's
architect"' with regard to the bids on the four contracts.i8 As to the electrical
contract, the manager and architect believed the bidding documents of all bidders to
be in order and recommended awards to the low bidder.19 As to the plumbing and
the heating, ventilating and air conditioning contracts, they recommended
disqualification of one of the bidders for failure to acknowledge receipt of both addenda
to the bid documents, and suggested awards to the low bidders.20
As to the general contract, the manager and architect recommended
disqualification of two bidders, one being East Coast by reason of an omission from its
proposal form of the percentage of overhead and profit markup and the other being
Larson/DRM Construction Services, Inc., the ostensible low bidder.21 In pertinent
"s Defendant's Exhibit 6.
17 The project architect is Crabtree, Rohrbaugh & Associates.
18 Plaintiff's Exhibit 2.
19 Plaintiff"s Exhibit 2.
20 Plaintiff's Exhibit 2. In neither case was the bidder recommended for disqualification
the low bidder. Defendant's Exhibit 1.
21 Plaintiffs Exhibit 2.
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41st Judicial District
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part, the letter to Defendants containing the advice of the manager and architect
stated as follows:
I. GENERAL CONSTRUCTION
Apparent Low Bidder; Larson/DRM Construction
Services, Inc.
Recommendation; Upon review of the submitted bid
proposal, it has been determined that the firm of
Larson/DRM Construction Services, Inc., did not complete
the bid proposal form by affixing a corporate seal with the
required signatures. In addition, the bidder's qualification
form submitted by the firm of Larson/DRM Construction
Services, Inc., did not indicate any projects completed in the
Pennsylvania area of similar size and/or complexity. Based
upon these findings, it is our feeling that the firm of
Larson/DRM Construction Services, Inc., be considered an
unqualified bidder.
It is our recommendation that the firm of Lobar, Inc., by
named as the qualified low bidder for General Construction.
All information submitted by the firm of Lobar, Inc.,
appears to be complete......
The recommendations of the manager and architect were made "with the
understanding that the final award decisions [were to] be rendered by the
Commissioners."23
On April 19, 1993, at a public meeting Defendants unanimously adopted a
22 Plaintiffs Exhibit 2.
23 Plaintiffs Exhibit 2.
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motion awarding the general construction contract to Lobar, Inc., as well as awarding
the other contracts to the bidders recommended by the manager and architect.24 On
April 22, 1993, Bill C. Loy (Plaintiff), a Perry County resident and taxpayer, and
general superintendent in the employ of Cumberland Contracting Group Inc., filed the
present complaint in mandamus and for a preliminary injunction (Complaint) against
the Commissioners.25 The Complaint alleges that the rejection of the bid of
Larson/DRM Construction Services, Inc., was "arbitrary and vexatious conduct due to
the lack of a valid reason to reject Larson's bid. "2' The Complaint further alleges
that Plaintiff is an employee of a "subcontractor" of Larson, presumably meaning
Cumberland Contracting Group Inc. A petition for a preliminary injunction (Petition)
was also filed by Plaintiff.27
A hearing on the Petition was held before the undersigned judge on April 29,
1993. At the hearing, evidence was presented tending to show, inter alia, that a
business relationship existed between the president of Cumberland Contracting Group
24 Defendant's Exhibit 2.
25 Complaint, Loy v. Roush et al., No. 93-415, 41st Judicial District (Perry County Branch).
22f Complaint, paragraph 12.
27 Petition for Preliminary Injunction, Loy v. Roush et al., No. 93-415, 41st Judicial
District (Perry County Branch).
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Inc., and the chief executive officer of Larson/DRM Construction Services Inc., and
permitted an inference that the general construction contract here involved would be
performed by employees of Cumberland Contracting Services, Inc.
Statement of law. With respect to preliminary injunctions, the Pennsylvania
Supreme Court has stated as follows:
Three criteria have been established for the granting of
a preliminary injunction .... They are: (1) the preliminary
injunction must be necessary to prevent immediate and
irreparable harm which could not be compensated for by
damages; (2) greater injury would result from the denial of
the preliminary injunction than from the granting of it; and
(3) it would operate to restore the parties to the status quo
as it existed prior to the alleged wrongful conduct. In
addition, to meeting all three criteria, the court must be
convinced that [plaintiff's] right to a preliminary injunction
is clear ... and general equity jurisdiction must be
warranted.
Committee of Seventy v. Albert, 33 Pa. Commw. 44, 49, 381 A.2d 188, 190 (1977). "In
order to obtain a preliminary injunction, the movant must... `make a strong showing
that it is likely to prevail on the merits' and ... `show that without such relief [the
movant] would be irreparably injured."' Enterra Corporation v. SGS Associates, 600
F. Supp. 678, 683 (E.D. Pa. 1985), quoting Klitzman, Klitzman & Gallagher v. Krut,
744 F.2d 955, 958-59 (3d Cir. 1984).
A preliminary injunction which is more than restrictive or prohibitory — which
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goes beyond restraint and commands action — is reserved for "unusual cases." Soja
v. Factoryville Sportsmen's Club, 361 Pa. Super. 473, 477, 522 A.2d 1129, 1131 (1987).
"Injunctive relief, in particular a preliminary injunction, is `considered an
extraordinary remedy ....... Sheaffer v. Fry, 403 Pa. Super. 560, 565, 589 A.2d 752, 755,
(1984), quoting Soja v. Factoryville Sportsmen's Club, 361 Pa. Super. 473, 477, 522
A.2d 1129, 1131 (1987).
Under Section 1802(b) of the County Code, "[c]ontracts or purchases in excess
of ten thousand dollars ($10,000), except [in certain circumstances], shall not be made
except with and from the lowest responsible bidder ...." Act of August 9, 1955, P.L.
323, as amended, 16 P.S. §1802(b) (1992 Supp.). However, it is to be noted that "[i]n
passing upon the propriety of the actions of municipal officials, judicial restraint rather
than judicial intervention should guide the courts. We are not a super municipal body
" Weber v. Philadelphia, 437 Pa. 179, 189, 262 A.2d 297, 302 (1970) (relief denied
rejected bidder).
It has also been said, in connection with municipal bidding, that "[t]he scope of
[a court's] review must ... be limited to the following issues: (a) fraud, (b) bad faith,
(c) arbitrary and capricious action, and (d) flagrant abuse of power." Parker Oil Co.
v. Hamilton Twp. Bd. of Supervisors, 43 D. & C.3d 106, 109 (Monroe Co. 1985).
Where an action of a political subdivision in rejecting a low bid is found to have been
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arbitrary and capricious, however, a court may decide to issue a preliminary injunction
at the instigation of a taxpayer and the aggrieved bidder. See, e.g., Houston v.
Borough of Carlisle, No. 22 Equity 1984 (Cumberland Co.) (May 24, 1984) (Bayley,
J.)28
Under Section 1506(b) of the Associations Code '21 "[t]he affixation of the
corporate seal shall not be necessary to the valid execution, assignment or
endorsement by a corporation of any instrument or other document." On the other
hand, "[w]here the seal of a corporation is affixed to an instrument and the signatures
of the proper officers are proved, it will be presumed that such officers did not exceed
their authority, and the seal itself constitutes prima facie evidence that it was affixed
by proper authority." 8A P.L.E. Corporations §351, at 511 (1971). In addition,
signatures of a president or vice-president and secretary or treasurer (or assistant
secretary or assistant treasurer) of a corporation "shall be held to have been properly
executed for and in behalf of the corporation.i30
28 It is within the sound discretion of a political subdivision's governing body to determine
who are and who are not responsible bidders. On the other hand, it is not within a political
subdivision's power to select a bidder other than the lowest from among responsible bidders.
See Lutz Appellate Printers, Inc. v. Commonwealth, Department of Property and Supplies, 485
Pa. 559, 403 A.2d 530 (1979).
29 Act of December 21, 1988, P.L. 1444, 15 Pa. C.S. §1506(b) (1992 Supp.)
30 Act of December 21, 1988, P.L. 1444, §103, 15 Pa. C.S. §1506(a).
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"An indispensable party is one whose rights are so connected with the claims of
the litigants that no relief can be granted without impairing or infringing upon those
rights.... [T)he failure to join an indispensable party deprives the court of subject
matter jurisdiction ...." 3 Goodrich Amram 2d §1032:13, at 151 (1991). "The
determination of an indispensable party question involves at least these considerations:
1. Do absent parties have a right or interest related to the
claim [of plaintiff]?
2. If so, what is the nature of that right or interest?
3. Is that right or interest essential to the merits of the
issue?
4. Can justice be afforded without violating the due process
rights of absent parties?"
Mechanicsburg Area School District v. Kline, 494 Pa. 476, 481, 431 A.2d 953, 956
(1981).
Application of law to facts. In the present case, a number of factors militate
against the granting of a preliminary injunction. First, it is not clear that Plaintiff will
ultimately prevail on the merits. In this regard, a strong argument can be made that
the bid in question was not in technical conformity with the bidding requirements, and
that the County's reservation of a right to reject a bid in such a case warranted the
disqualification; the bid itself indicated that the bidder had not been qualified to
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conduct business in any state except Texas and California, and no Pennsylvania
projects were referenced; a serious question exists as to whether the bid was not more
realistically to be viewed as that of another company; and the action of Defendants was
the product of advice from their professional consultants. Under these circumstances,
a conclusion that the Commissioners will in all likelihood be shown to have acted
arbitrarily and capriciously can not be justified.
Second, it is arguable that the taxpayer grievance herein in connection with the
rejection of the low bid could entirely be remedied through money damages in the form
of a surcharge. Third, an order directing that the bid be awarded to the low bidder
would go considerably beyond restoration of the status quo. Finally, it is arguable that
both the rejected bidder and the successful bidder should be regarded as indispensable
parties to this action should an injunction issue altering their positions as to the
contract.
For these reasons, the following Order will be entered:
ORDER OF COURT
AND NOW, this 3rd day of May, 1993, upon consideration of Plaintiffs Petition
for Preliminary Injunction, and following a hearing, the Petition is DENIED.
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No. 93-415
Samuel L. Andes, Esq.
525 North Twelfth Street
Lemoyne, PA 17043
Attorney for Plaintiff
William R. Bunt, Esq.
P.O. Box 336
109 South Carlisle Street
New Bloomfield, PA 17068
Attorney for Perry County
Commissioners
: rc
BY THE COURT,
J. Wesley Oler, Jr. J.
Specially Presiding
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