Hoon v. Pate Const. Co., Inc.
| Decision Date | 02 September 1992 |
| Docket Number | 90-2284,Nos. 90-1254,91-0035,s. 90-1254 |
| Citation | 607 So.2d 423 |
| Parties | 17 Fla. L. Weekly D2041 L. Ed HOON, and Hoon & White, Architects, Inc., a Florida corporation, and Fairview Properties, Inc., a Virginia corporation qualified to do business in the State of Florida as Fairview South, Inc., Appellants/Cross Appellees, v. PATE CONSTRUCTION COMPANY, INC., a Florida corporation, Appellee/Cross Appellant. |
| Court | Florida District Court of Appeals |
Larry Klein of Klein & Walsh, P.A., West Palm Beach and Crary, Buchanan, Bowdish & Bovie, Stuart for appellants/cross appellees.
Leif J. Grazi of Law Offices of Grazi Gianino & Cohen, Stuart, and Marjorie Gadarian Graham, P.A., West Palm Beach, for appellee/cross appellant.
Thomas J. Guilday of Huey Guilday Kuersteiner & Tucker, Tallahassee, Amicus Curiae--Florida Ass'n American Institute of Architects.
This is an appeal and cross appeal from a judgment, and post verdict orders, on claims by appellee, Pate Construction Company, Inc., against appellants, L. Ed Hoon, Hoon & White, Architects, Inc., and Fairview Properties, Inc., arising out of events surrounding Fairview's failure to award a construction contract to Pate after Pate submitted a low bid. We reverse.
Pate sued Fairview, the property owner and the owner's architects, on multiple counts. At trial the court directed a verdict for defendants on quantum meruit and promissory estoppel. The jury found in favor of Pate as to the remaining counts, and awarded various damages: (1) $123,000 compensatory damages for breach of implied contract; (2) $150,000 compensatory damages and $100,000 punitive damages for negligent misrepresentation; (3) $7,000 for defamation; (4) $1,000,000 compensatory damages and $1,150,100 punitive damages for conspiracy to defame; and (5) $100,000 compensatory damages and $550,000 punitive damages for civil conspiracy. Subsequently, the trial court granted a new trial as to damages on the claim for negligent misrepresentation and conspiracy to defame. The trial court also set aside the verdict on negligent misrepresentation as to Hoon and Hoon & White.
The trial court entered a final judgment: (1) against all defendants for $123,000 compensatory damages for breach of implied contract; (2) against all defendants for $7,000 compensatory damages for defamation; (3) against all defendants for $100,000 compensatory damages for civil conspiracy; (4) punitive damages against architect Hoon for $250,000; (5) punitive damages against Fairview South for $250,000; and (6) punitive damages against Hoon and White for $50,000.
L. Ed Hoon, an architect with the firm of Hoon and White Architects, Inc., requested Pate, a general contractor, to submit a bid for construction of the "Sun Bank Monetary Triangle" on property owned by Fairview South, Inc., in Stuart, Florida. Pate was one of six prequalified contractors asked to submit a bid.
The written bid instructions supplied to the contractors stated an intent to award the bid to the lowest bidder, as well as a reservation of rights to reject any bid for any reason. The instructions provided:
Owner intends to award construction to the lowest responsible bidder qualified by experience and who possesses adequate plant, equipment, and supervisory * * * * * *
personnel to complete the contract, and who is financially secure.
Owner reserves right to reject any or all bids for whatever reason he may deem necessary for his best interest, and to waive any or all formalities in regard to acceptance or rejection of any bid.
Six contractors submitted bids on the project. Subsequently, bid opening for the contractors was held and it was determined that Pate presented the lowest bid, in the amount of $3,720,913. However, Maddox Construction, the second lowest bidder at $3,850,000, was awarded the construction contract by Fairview South.
The bid form contained in the specifications required a listing of the identities of five major subcontractors and the dollar amount of these subcontracts. Pate's bid form failed to disclose the identities of two of the major subcontractors and failed to list the estimated charges of any of the subcontractors.
The owner and architects assert on appeal that there is no legal or factual basis for any of the claims of Pate. They assert that all of Pate's claims arose out of the Stuart construction project and the failure of the owner to award the construction contract to Pate as the lowest bidder. They claim that the trial court erred in failing to grant either their motion for judgment on the pleadings made at the start of trial or their subsequent motions for directed verdict on all claims. To determine these issues we must examine the legal and factual predicates for each of the claims.
The count of the complaint entitled "Breach of Contract" stated:
32. The Defendants either directly or through their agent made express warranties to PATE that the low bidder would be entitled to construct THE PROJECT.
33. By pre-certifying PATE as a qualified and solicited bidder on the project, HOON impliedly guaranteed PATE, pursuant to the usage of trade and the course of dealing, that PATE would be the general contractor for construction of THE PROJECT were PATE's bid the lowest received.
34. The defendants breached their oral and written warranties and the terms of their contract with PATE.
The trial court denied defendants' motion for judgment on the pleadings and for directed verdict on breach of contract and submitted the issue to the jury as a claim for breach of an "implied contract". Appellants initially assert that there was no contractual relationship, and hence, no cause of action could arise for breach of contract for the owner's failure to award a private construction contract to the lowest bidder.
In L. Lieby, Florida Construction Law Manual Sec. 5.01 (2d ed. 1988), it is stated:
[T]he general rule in the case of private construction, as distinguished from construction for governmental bodies or agencies, is that the owner or contractor receiving the bid has the freedom to accept or reject it, whether it is high, low, or in between, responsive or non-responsive.
The Restatement (Second) of Contracts Sec. 26(d) (1981), similarly states:
Invitation of bids or other offers. Even though terms are specified in detail, it is common for one party to request the other to make an offer. The words "Make me an offer" would normally indicate that no offer is being made, and other conduct such as the announcement of an auction may have similar effect. See Sec. 28. A request for bids on a construction project is similar, even though the practice may be to accept the lowest bid conforming to specifications and other requirements.
Although citing no Florida cases involving private bidding, appellants rely on similar bidding cases involving government construction projects. In William A. Berbusse, Jr., Inc. v. North Broward Hosp. The invitation to bid contains the provision that the award of the contract will be made to the lowest responsible bidder provided it is to the owner's interest to accept the bid. A public body is not required unqualifiedly to award the contract to the low bidder unless there exists a statutory requirement.
Dist., 117 So.2d 550, 551 (Fla. 2d DCA 1960), the court held that no cause of action was stated where the defendant did not award the contract to the lowest bidder:
Similarly, in City of Cape Coral v. Water Serv. of America, Inc., 567 So.2d 510, 514 (Fla. 2d DCA 1990), rev. denied, 577 So.2d 1330 (Fla.1991), the second district held:
Regardless of the name of the theory, we hold now, as we did in Berbusse, that a cause of action against a public entity by an unsuccessful bidder for lost profits by reason of its failure to become the successful bidder is not available in Florida, particularly in the absence of arbitrary, capricious, dishonest, illegal, fraudulent or oppressive misconduct.
(Emphasis supplied).
In Jones v. Sterile Prod. Corp., 572 So.2d 519, 520 (Fla. 5th DCA 1990), rev. denied, 583 So.2d 1037 (Fla.1991), the fifth district stated:
In addition, the record does not establish as a matter of law that SAS took any business action which could result in the tort of "interference with a business relationship" owed or claimed by SPC. SAS merely engaged in the competitive bidding process for government contracts. SAS and SPC were not the only bidders, and the government did not have to accept the lowest bidder. Such a process on its face does not lend itself to the required elements for the tort of tortious interference with a business relationship.
Other states have also held that a bid made pursuant to an invitation to bid does not form a contract. In North Cent. Util., Inc. v. Walker Community Water Sys., Inc., 506 So.2d 1325 (La.App.1987), the Louisiana court cited the Berbusse case, and held that there could be no recovery even where the invitation to bid did not reserve the right to reject any and all bids. In Olson v. Beacham, 102 N.W.2d 125, 128 (N.D.1960), a similar conclusion was reached in a factual situation similar to the present case:
In the instant case there was no meeting of the minds of the plaintiff and defendants. The defendants by their advertisement merely invited offers for the construction of certain specified improvements to their place of business. They reserved the right to reject any or all bids. The plaintiff submitted a bid, accompanied by a stipulation that he would enter into a contract if his bid was accepted. It was not accepted, and therefore no contract resulted and the defendants could not, upon the record before us, be held to be obligated to the plaintiff in any manner.
See also O.C. Kinney, Inc. v. Paul Hardeman, Inc., 151 Colo. 571, 379 P.2d 628 (Colo.1963).
The authorities cited above stand for the proposition that no...
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