Cedroni Associates Inc. v. Tomblinson

• Decision Date: 16 November 2010
• Docket Number: Docket No. 287024.
• Citation: 271 Ed. Law Rep. 441,290 Mich.App. 577,802 N.W.2d 682
• Parties: CEDRONI ASSOCIATES, INC.v.TOMBLINSON, HARBURN ASSOCIATES, Architects & Planners, Inc.
• Court: Court of Appeal of Michigan — District of US

290 Mich.App. 577
802 N.W.2d 682
271 Ed. Law Rep. 441

CEDRONI ASSOCIATES, INC.
v.
TOMBLINSON, HARBURN ASSOCIATES, Architects & Planners, Inc.

Docket No. 287024.

Court of Appeals of Michigan.

Submitted May 11, 2010, at Detroit.Decided Nov. 16, 2010, at 9:05 a.m.

[802 N.W.2d 685]

McAlpine & Associates, P.C. (by Mark L. McAlpine and Ryan W. Jezdimir), for plaintiff.Sullivan, Ward, Asher & Patton, P.C. (by Kevin J. Gleeson and Maria L. Meldrum), for defendant.Before: MURPHY, C.J., and K.F. KELLY and STEPHENS, JJ.MURPHY, C.J.

[290 Mich.App. 582] Plaintiff appeals as of right the trial court's order granting summary disposition in favor of defendant. This case involves a claim of tortious interference with a business expectancy arising out of, allegedly, defendant's improper conduct, communications, and recommendations that resulted in a school district's decision not to award plaintiff a construction project despite plaintiff's submission of the lowest bid. We hold that genuine issues of material fact existed with respect to the elements of plaintiff's cause of action. More specifically, we reject the trial court's determination that, as a matter of law, plaintiff lacked a valid business expectancy. Plaintiff, as the lowest bidder, submitted evidence sufficient to create a factual dispute with respect to whether it was a “responsible” contractor to the extent that the trier of fact could have concluded that there existed a reasonable probability or likelihood that plaintiff would have been awarded the project absent the alleged tortious interference. Therefore, there was a genuine issue of material fact with respect to whether plaintiff had a valid business expectancy. We emphasize that the submission of the lowest bid, in and of itself, was inadequate to sustain plaintiff's suit. We reject any rule per se that would allow litigation to proceed simply on the basis of proof of the lowest bid, except, of course, if no additional criteria needed to be satisfied, which is unlikely. Absent sufficient additional evidence on relevant award criteria, there would be no valid business expectancy. We further reject the trial court's determination that, as a

[802 N.W.2d 686]

matter of law, plaintiff failed to show that defendant did anything improper. Plaintiff submitted evidence sufficient to create a factual dispute with respect to whether defendant's conduct was intentional and improper, motivated by malice and not legitimate business reasons. On this issue, we emphasize that the exercise of professional business judgment in making recommendations relative to governmental contracts[290 Mich.App. 583] and projects must be afforded some level of protection and deference. But we will not preclude litigation when there exists evidence suggesting that the ostensible exercise of professional business judgment is in reality a disguised or veiled attempt to intentionally and improperly interfere with the contractual or expectant business relationships of others. Here, issues of fact were established and, accordingly, we reverse and remand.I. BACKGROUND

The Davison Community Schools (DCS) opened bidding on a construction project that entailed work at two school sites. Pursuant to a contract, defendant, an architectural firm, assisted the DCS with the bid-selection process by reviewing and evaluating bid applications, investigating competing contractors and their references, expressing opinions and views on contractor competence and workmanship, and making recommendations regarding which contractor should be awarded the project. Plaintiff's bid was the lowest submitted to the DCS by any contractor. After entertaining all the submitted bids, the DCS, as recommended by defendant, elected to award the contract on the construction project to the contractor that had submitted the second lowest bid, not plaintiff.

Plaintiff filed suit against defendant, alleging a single count of, as framed by plaintiff, tortious interference with prospective economic relations. ¹ Plaintiff asserted that there existed an expectancy of a valid business relationship developing between it and the DCS, that defendant was aware of the expectancy, that defendant intentionally interfered with the expectant relationship [290 Mich.App. 584] by wrongfully claiming that plaintiff was unqualified to perform the work on the project, that defendant's wrongful interference terminated the expectancy, and that plaintiff suffered damages as a result of the interference, including lost profits. In our analysis, we shall explore in detail the nature of the documentary evidence and how it relates to the issues presented.

The trial court granted defendant's motion for summary disposition under MCR 2.116(C)(10), ruling that the evidence failed to show that plaintiff had a reasonable or valid expectation of entering into a business relationship with the DCS and that the evidence fell short of showing that defendant did anything improper.

II. ANALYSIS A. STANDARD OF REVIEW AND GENERAL SUMMARY–DISPOSITION PRINCIPLES

This Court reviews de novo a trial court's decision on a motion for summary disposition. Allen v. Bloomfield Hills Sch. Dist., 281 Mich.App. 49, 52, 760 N.W.2d 811 (2008). MCR 2.116(C)(10) provides for summary disposition when there is no genuine issue regarding any material fact and the moving party is entitled to judgment or partial judgment as a matter of law. A motion brought under

[802 N.W.2d 687]

MCR 2.116(C)(10) tests the factual support for a party's cause of action. Skinner v. Square D Co., 445 Mich. 153, 161, 516 N.W.2d 475 (1994). A trial court may grant a motion for summary disposition under MCR 2.116(C)(10) if the pleadings, affidavits, and other documentary evidence, when viewed in a light most favorable to the nonmovant, show that there is no genuine issue with respect to any material fact. Quinto v. Cross & Peters Co., 451 Mich. 358, 362, 547 N.W.2d 314 (1996), citing MCR 2.116(G)(5). The trial court's task in reviewing the motion entails consideration of the record evidence and all reasonable inferences[290 Mich.App. 585] arising from that evidence. Skinner, 445 Mich. at 161, 516 N.W.2d 475. “A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ.” West v. Gen. Motors Corp., 469 Mich. 177, 183, 665 N.W.2d 468 (2003). A court may only consider substantively admissible evidence actually proffered relative to a motion for summary disposition under MCR 2.116(C)(10). Maiden v. Rozwood, 461 Mich. 109, 121, 597 N.W.2d 817 (1999). The trial court is not permitted to assess credibility, to weigh the evidence, or to determine facts, and if material evidence conflicts, it is not appropriate to grant a motion for summary disposition under MCR 2.116(C)(10). Skinner, 445 Mich. at 161, 516 N.W.2d 475; Hines v. Volkswagen of America, Inc., 265 Mich.App. 432, 437, 695 N.W.2d 84 (2005).B. VALID BUSINESS EXPECTANCY

On appeal, plaintiff first argues that the trial court erred by granting the motion for summary disposition when there was evidence sufficient to create a factual issue regarding whether plaintiff, as a qualified and responsible bidder that submitted the lowest bid, had a valid business expectancy. We agree.

1. THE CASELAW

With respect to a claim of tortious interference with a business expectancy, a plaintiff must prove (1) the existence of a valid business expectancy, (2) knowledge of the expectancy on the part of the defendant, (3) an intentional interference by the defendant inducing or causing a termination of the expectancy, and (4) resultant damage to the plaintiff. Dalley v. Dykema Gossett PLLC, 287 Mich.App. 296, 323, 788 N.W.2d 679 (2010); [290 Mich.App. 586] Blazer Foods, Inc. v. Restaurant Props., Inc., 259 Mich.App. 241, 254, 673 N.W.2d 805 (2003). A valid business expectancy is one in which there exists a reasonable likelihood or probability that the expectancy will come to fruition; mere wishful thinking is not sufficient to support a claim. First Pub. Corp. v. Parfet, 246 Mich.App. 182, 199, 631 N.W.2d 785 (2001), vacated in part on other grounds 468 Mich. 101, 658 N.W.2d 477 (2003); Trepel v. Pontiac Osteopathic Hosp., 135 Mich.App. 361, 377, 354 N.W.2d 341 (1984).

In Joba Constr. Co., Inc. v. Burns & Roe Inc., 121 Mich.App. 615, 329 N.W.2d 760 (1982), the plaintiff was a corporation that engaged in underground and heavy-duty construction, and the defendant was a firm of consulting engineers that had been retained by the Detroit Public Lighting Commission (PLC) under contract relative to a planned expansion of a utility station. Comparable to defendant's duties here, the engineering firm had contracted “to prepare construction specifications, evaluate bids made by contractors and make recommendations to the PLC as to which contractor should be awarded contracts.” Id. at 624, 329 N.W.2d 760. The plaintiff submitted the lowest bid, but the engineering firm recommended that the PLC award

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the construction contract to another contractor “as it felt plaintiff was unqualified to perform the contract.” Id. The PLC followed the defendant's recommendation, and the plaintiff was denied the contract. On another utility project, a general contractor had been awarded a construction contract by the PLC, and that contractor had designated the plaintiff as a subcontractor. The engineering firm, however, indicated that the plaintiff was an unacceptable subcontractor, and the plaintiff was then removed from the project. The plaintiff sued the defendant for tortious interference with prospective [290 Mich.App. 587] advantageous economic relations, and the jury returned a verdict in favor of the plaintiff in the amount of $272,368. Id. at 624–625, 329 N.W.2d 760.

On appeal, the defendant claimed that the trial court had erred by denying its motion for a directed verdict, arguing “that it was entitled to a directed...