City of Cape Coral v. Water Services of America, Inc.
| Decision Date | 21 September 1990 |
| Docket Number | No. 89-03011,89-03011 |
| Citation | 567 So.2d 510 |
| Parties | 15 Fla. L. Weekly D2392 CITY OF CAPE CORAL, Florida, a municipal corporation of the State of Florida, Appellant, v. WATER SERVICES OF AMERICA, INC., a Wisconsin corporation, Appellee. |
| Court | Florida District Court of Appeals |
William M. Powell, City Atty., and Marilyn W. Miller, Asst. City Atty., Cape Coral, for appellant.
Arthur J. England, Jr., and Enrique Arroyo of Fine, Jacobson, Schwartz, Nash, Block & England, Miami, for appellee.
This appeal causes us to revisit yet again the continuing dispute between these parties. In this appeal, appellant, City of Cape Coral (City), challenges the final summary judgment that awarded appellee, Water Services of America, Inc., (WSA), $1,167,946.25 in damages for lost profits, bid preparation costs and prejudgment interest, and reserved jurisdiction to determine the amount of attorney's fees and costs to award WSA. WSA had sued the City on a theory of promissory estoppel claiming it was damaged when the City disqualified WSA's bid on the proposed construction of a reverse osmosis water treatment facility, and awarded the contract to another bidder. As we will explain, we reverse that part of the final summary judgment which represents damages for lost profits and the interest thereon, and we affirm that portion of the judgment which represents bid preparation costs and the interest thereon. We also reverse the judgment awarding WSA attorney's fees in an amount to later determined.
In May 1984, the City issued an invitation to bid on the proposed construction of a reverse osmosis water treatment facility. In the invitation to bid, the City requested bids on two different versions of the proposed facility, a base plant and an alternate plant. The City advertised that it was not necessary for an otherwise qualified bidder to be licensed as a general contractor under chapter 489, Florida Statutes (1983). WSA was prequalified as a bidder and was found to have met the requirements for bidders although it was not licensed under chapter 489. The invitation to bid contained a provision which stated that the contract would be awarded to the evaluated low, responsive and responsible bidder. The invitation to bid also contained a statement in which the City reserved the right to reject any and all bid proposals. Five firms submitted bid proposals in response to the invitation to bid. The City ultimately chose to award a contract for construction of the alternate plant. The bids for the alternate plant relevant to this appeal were the Envirogenics Systems Company's (Envirogenics) bid of $4,338,331.00; WSA's bid of $4,539,451.00; and Hydranautics Water Systems' (Hydranautics) bid of $4,858,000.00. Of these three, only Hydranautics was a contractor licensed under chapter 489. Hydranautics objected that the City should not award the bid to any contractor who was not a Florida state certified general contractor licensed under chapter 489. In a special meeting of the Cape Coral City Council called for the purpose of awarding the contract, the City's attorney advised the City Council that chapter 489 required all bidders to be licensed and state certified prior to submitting a bid on the project. While the City's engineers recommended that the bid be awarded to Envirogenics based on the advice of its attorney, the City disqualified and eliminated both WSA and Envirogenics as bidders on the facility because they were not licensed under chapter 489. The City Council voted to award the contract to Hydranautics, and the treatment facility was ultimately constructed and completed by Hydranautics. Following the rejection of their bids and the decision to award the contract to Hydranautics, both Envirogenics and WSA filed separate actions seeking a declaratory judgment to declare the award of the contract to Hydranautics null and void and seeking both a temporary and permanent injunction to prohibit the City from proceeding with the Hydranautics contract.
Ultimately, the two actions were consolidated. The request for a temporary injunction was denied, and that denial was affirmed by this court. WSA, in the meantime, had added a second count to its complaint, seeking damages for lost profits, bid preparation costs and attorney's fees. In that count, WSA's alleged as follows:
As a result of the failure of the City to award CONTRACT 3A to WSA and WSA's reliance upon the aforementioned CITY's representations, WSA did not become licensed under Florida Statutes Chapter 489, and has therefore suffered damages in the form of lost profits and the cost of preparation of the bid for CONTRACT 3A, including, but not limited to vendor quotation solicitation and evaluation, contractor selection, negotiation and survey, preliminary design work, bid drawings, bond expenses, and legal expenses.
WSA's theory was that Envirogenics was disqualified as a bidder for reasons other than not being licensed pursuant to chapter 489, and that absent WSA's improper disqualification for not being licensed pursuant to chapter 489, it would have been the low, responsive and responsible bidder. The trial judge severed the licensing issue from the other issues and entered a final declaratory judgment agreeing with the advice of the City's attorney, finding that WSA and Envirogenics were subject to the licensing requirements of chapter 489 and that the City therefore had no liability to WSA or Envirogenics for rejecting their bids. This court affirmed that judgment in Envirogenics Systems Co. v. City of Cape Coral, 510 So.2d 934 (Fla. 2d DCA 1987). The Florida Supreme Court then reversed and quashed this court's decision in Envirogenics Systems Co. v. City of Cape Coral, 529 So.2d 279 (Fla.1988). On remand, the trial court proceeded with the previously severed count in which WSA sought damages for the City's failure to award the contract to WSA, and the court entered its final summary judgment for $1,167,946.25 in favor of WSA for lost profits, bid preparation costs, prejudgment interest and a determination that WSA was entitled to attorney's fees and costs in an amount to be set at a future date. Envirogenics is no longer a party to the action in the trial court or in this appeal.
Under the circumstances of this case, we conclude that it was proper to award WSA its bid preparation costs and prejudgment interest thereon. WSA was clearly induced to incur the costs to submit its bid on the City's proposed project by the City's representation that the bid would not be rejected because WSA was not licensed pursuant to chapter 489. The City failed to adhere to that representation, and WSA suffered the loss of its bid preparation costs in reliance upon that promise. If WSA had not relied upon the City's promise that WSA need not be licensed under chapter 489 to be a qualified bidder, WSA would have had two alternatives. First, it could have consciously decided to continue not to be licensed under chapter 489, not submit a bid and thereby save the bid preparation costs it incurred in reliance on the City's promise. Second, it could have elected to become licensed, submit its bid and, under the circumstances that subsequently developed, if Envirogenics was otherwise disqualified, possibly be awarded the bid as the low, responsive and responsible bidder. The trial judge was, therefore, correct in awarding WSA its bid preparation costs and prejudgment interest thereon. Royal American Development, Inc. v. City of...
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