C.N. Robinson Lighting Supply Co. v. Board of Educ. of Howard County

• Decision Date: 01 September 1991
• Docket Number: No. 739,739
• Parties: , 72 Ed. Law Rep. 890 C.N. ROBINSON LIGHTING SUPPLY COMPANY v. The BOARD OF EDUCATION OF HOWARD COUNTY, et al. ,
• Court: Court of Special Appeals of Maryland

Page 515

90 Md.App. 515

602 A.2d 195, 72 Ed. Law Rep. 890

C.N. ROBINSON LIGHTING SUPPLY COMPANY v. The BOARD OF EDUCATION OF HOWARD COUNTY, et al.

No. 739, Sept. Term, 1991.

Court of Special Appeals of Maryland.

Feb. 28, 1992.

Certiorari denied June 9, 1992.

Alan J. Bloom, Towson, for appellant.

David C. Hjortsberg (Reese and Carney, on the brief), Columbia, for appellee, The Bd.

Susan D. Campbell, Baltimore, for appellee, Shephard Elec. Co.

Argued before WILNER, C.J., and CATHELL and MOTZ, JJ.

MOTZ, Judge.

Appellant, C.N. Robinson Lighting Supply Company ("Robinson"), appeals the order of the Circuit Court for Howard County (Sweeney, J.) granting the motion to dismiss of appellees, the Board of Education of Howard County ("the Board") and Shepard Electric Company, Inc. ("Shepard"). Although the complaint does state a claim for injunctive and declaratory relief, albeit barely, because the case is now moot we affirm the order of the court below dismissing it.

(i)

In the Spring of 1990, the Board invited bids on a lamp contract; among the timely bidders were Shepard and Robinson. The Board awarded the contract to Shepard. The contract commenced on August 1, 1990 and expired on July 31, 1991. On September 13, 1990, Robinson filed suit against the Board, claiming that it was the lowest responsible bidder for the contract and that, under Md.Educ.Ann.Code § 5-110(c), it should have been awarded the contract. The complaint sought a writ of mandamus directing the Board to award the contract to Robinson, and damages "in a reasonable amount." On November 19, 1990, the Board answered and moved for joinder of Shepard. The Circuit Court ordered the joinder.

On December 3, 1990, Robinson filed an amended complaint, adding Shepard as a defendant, and a request that the Board's contract with Shepard be declared void. The Board answered and moved to dismiss; Shepard also moved to dismiss. On January 18, 1991, Robinson filed a second amended complaint, alleging that in awarding the contract to another bidder, the Board acted "in abuse of its discretion." It further alleged that the Board's actions were "arbitrary, discriminatory, and abusive, since there was personal animosity between representatives of the Board of Education" and Robinson "as a result of a prior argument which occurred when the [Board] failed to promptly pay prior invoices to [Robinson] on an unrelated contract." In the second amended complaint, Robinson also requested "appropriate Injunctive or Declaratory Relief declaring the contract between the Board of Education and Shepard Electric [to] be void." ¹ The Board and Shepard each moved to dismiss the second amended complaint.

After a hearing on the motions was postponed once at the request of Robinson, it was held on April 5, 1991. Five days later, the circuit court entered a written memorandum and order dismissing the complaint for failure to state a claim upon which relief could be granted. Robinson appeals. At the time of the hearing, Shepard had filed a motion for sanctions against Robinson; the trial court did not rule on this motion. On appeal, Shepard moves for sanctions in the amount of its attorneys' fees and costs for pursuing the appeal. The Board has moved to dismiss the appeal on the ground that it is now moot. ²

(ii)

Robinson relies on Md.Educ.Code Ann. § 5-110 as its sole ground for asserting that the lamp contract between the Board and Shepard must be declared void. In relevant portion, § 5-110 provides:

(c) Award of contract.-- ... a contract for the school building, improvements, supplies, or other equipment shall be awarded to the lowest responsible bidder who conforms to specifications with consideration given to:

(i) The quantities involved;

(ii) The time required for delivery;

(iii) The purpose for which required;

(iv) The competency and availability of the bidder; and

(v) The ability of the bidder to perform satisfactory service.

* * * * * *

(e) Contract in violation of section.--A contract entered into or purchase made in violation of this section is void.

As Robinson points out, the requirement in § 5-110 that the Board award its contracts to the "lowest, responsible bidder" has long been recognized to be mandatory. See, e.g., Hanna v. Board of Education of Wicomoco County, 200 Md. 49, 53, 87 A.2d 846 (1952). It is, however, equally well-established that a governmental board acting pursuant to such statutes possesses a large measure of discretion in determining which bidder is the lowest responsible bidder eligible to receive the contract. See, e.g., Maryland Pavement Co. v. Mahool, 110 Md. 397, 72 A. 833 (1909); Board of Education of Carroll County v. Allender, 206 Md. 466, 475, 112 A.2d 455 (1954).

In Madison v. Harbor Board of Baltimore City, 76 Md. 395, 396-8, 25 A. 337 (1892), the Court of Appeals held that in determining the lowest responsible bidder, board members are "clothed with such a degree of official discretion ... as to place them beyond the control of courts by mandamus ... unless it can be shown that such public officers have been guilty of fraud in the exercise of their discretion." In Maryland Pavement Co. v. Mahool, supra, the Court considered the lowest bidder's challenge of a governmental board's award of a contract to another. The Court stated that the case presented two issues for consideration, the second of which was:

Is not the letting of contracts by the Board of Awards, like the one in question, to the lowest bidder, in the absence of fraud, absolutely final and beyond the control of the Courts by mandamus?

110 Md. at 407, 72 A. 833. The Mahool court concluded that the answer to this question was "yes," reasoning:

As to the second proposition but little need be said. The subject has been frequently considered by this Court, and all the cases hold that when the awarding of a contract like the one here in question has been committed to a board, in the absence of fraud or collusion, its decision is final and conclusive and cannot be controlled by the Courts.

110 Md. at 409, 72 A. 833 (emphasis added). If Madison and Mahool were the final word on the subject, then Robinson's skeletal complaint, which alleged no fraud or collusion by the Board, might well be subject to dismissal for failure to state a claim upon which relief can be granted.

The principles and standards enunciated in Madison and Mahool, however, have been significantly expanded by the Court of Appeals in subsequent cases. For example, in Fuller v. Elderkin, 160 Md. 660, 154 A. 548 (1931), when, at the behest of a disappointed bidder, a circuit court declared the city's award of the contract to another null and void, the Court of Appeals reversed, reasoning:

[W]here a body such as the board of awards, clothed with discretionary powers, acts within the power conferred by law and without taint of fraudulent, collusive, or arbitrary conduct, its conclusions, even if mistaken, are not reviewable by the courts. There is no question here of fraud or abuse of discretion.

Id. at 669, 154 A. 548 (emphasis added.) Similarly, in Biddison v. Whitman, 183 Md. 620, 628, 39 A.2d 800 (1944), the Court upheld a commission's award of a bid in the face of the complaint of an unsuccessful rival bidder, concluding:

The record in this case does not charge fraud on the part of the Commission in awarding these contracts, and its action in respect to appellant's bid was not arbitrary or capricious.

(emphasis added).

More recently, in Baltimore v. DeLuca-Davis Co., 210 Md. 518, 124 A.2d 557 (1955), the Court described the proper standard of judicial review of an agency's determination of "lowest responsible bidder" as follows:

The Charter gives the Board the power and duty of determining the lowest responsible bidder. In that determination it has wide discretion and the courts will not control it or interfere except for arbitrary or capricious exercise or where there is collusion or fraud.

Id. at 533, 124 A.2d 557 (emphasis added). In Board of Education of Carroll County v. Allender, supra, upon which the Board places principal reliance, the court similarly held that "where there has not been any violation of a statute or ordinance," a local board of education, "in determining who is the lowest responsible bidder, has a wide discretion which will not be controlled by the courts except for fraud, collusion, or arbitrary discrimination." 206 Md. at 475, 112 A.2d 455 (emphasis added).

Thus, the Court of Appeals, in a series of cases, has made it clear that when boards or commissions are mandatorily required to award a contract to the "lowest responsible bidder," they are invested with such a great deal of discretion that their decisions will not be reversed simply because they are mistaken. On the other hand, that discretion is not totally unbridled. Nor are the only limitations on it avoidance of fraud or collusion. Rather, a board's decisions are subject to judicial review and reversal if the board acts fraudulently or collusively or in violation of law or so arbitrarily as to have abused its discretion. Any less rigorous standard would permit a governmental agency to ignore with impunity the legislature's mandate that a contract be awarded to the "lowest responsible bidder."

As noted within, the complaint at hand contains no allegations of fraud or collusion by the Board. ³ It does, however, allege that Robinson was the lowest responsible bidder, that its bid conformed to the bid specifications and documents, that it provided the required bond, and that the Board, in awarding the contract to Shepard acted "in abuse of its discretion and in actions which were discriminatory." Although the complaint could have been more precise, in this era of notice pleading, we believe that these allegations are sufficient to state a claim. See Lutz Appellate Printers, Inc. v. Commonwealth of Pennsylvania, 485 Pa. 559, 403 A.2d 530, 533 (1979) (reaching similar conclusion that fraud and collusion are not...