Information Systems & Networks v. City of Atlanta

Citation281 F.3d 1220
Decision Date06 February 2002
Docket NumberNo. 01-12829.,01-12829.
PartiesINFORMATION SYSTEMS AND NETWORKS CORPORATION, A Maryland Corporation, Plaintiff-Appellant, v. The CITY OF ATLANTA, a State of Georgia Entity, Herbert L. McCall, Commissioner, Department of Administrative Services, City of Atlanta, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)

Craig Mitchell Frankel, Frankel & Associates, LLC, Atlanta, GA, Norman H. Singer, Singer & Associates, P.C., Bethesda, MD, for Plaintiff-Appellant.

Jerolyn Webb Ferrari, Risa B. Lischkoff, City of Atlanta Law Dept., Atlanta, GA, for Defendants-Appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before TJOFLAT and BIRCH, Circuit Judges, and GOLDBERG,* Judge.

BIRCH, Circuit Judge:

In this contract dispute, we address the difference between an acceptance and a counteroffer under Georgia law. The district court granted summary judgment to the City of Atlanta ("the City"), holding that the City never accepted the contract terms offered by Information Systems and Networks Corporation ("ISN"). According to the district court, the document which ISN construed as an acceptance was actually a counteroffer. Upon review, we conclude that the district court's grant of summary judgment was inappropriate due to the genuine dispute over the intention behind and the purpose served by the document at issue. For the reasons stated below, we AFFIRM in part, REVERSE in part, and REMAND for judicial action consistent with this opinion.

I. BACKGROUND

Although the Year 2000 ("Y2K") did not usher in the apocalypse, it did leave us with a number of contract disputes. In 1998, the City of Atlanta contracted with a number of vendors, including ISN, to provide Y2K remediation services. The City's Notice of Award to ISN indicates that the contract would run from 28 January 1998 through 30 June 2001, and that any work performed under the contract would require "an agreement of the parties on sizing, scope and price of work to be performed." R6-59 Exh. 12. The Notice of Award was accompanied by the formal Statewide Contract which established the terms of the agreement between ISN and the City. Section 24 of the Statewide Contract incorporates multiple documents into the agreement: the Notice of Award and any amendments thereto, the City's Request for Proposals, the Contractor's Proposal, and all Field Purchase Orders ("FPOs"). R6-59 Exh.9 at 5.

In August of 1998, the City issued a Statement of Need which detailed its expectations regarding Y2K remediation. ISN responded with a proposal entitled "Program Management Office Support Services For City Of Atlanta Citywide Year 2000 Compliance"1 which estimated the cost of Y2K program management to be $5,092,452. R6-59 Exh. 13 at 6. After ISN began work for the City, it became apparent that the City would require more substantial Y2K remediation, including inventory analysis and impact assessment. See R6-59 Exh.23 (FPO for inventory and impact services dated 25 November 1998). For this reason, the City generated a second — and more extensive — Statement of Need in December of 1998. R2-12 Exh. 11. With the extent of the City's need recognized, Commissioner Herb L. McCall purportedly urged ISN to hire the workers necessary to complete the task at hand. R6-59 Exh. 24. ISN therefore hired approximately 100 additional workers, and arranged with a subcontractor for 40 more. As a formal response to the City's revised Statement of Need, ISN submitted a second proposal in February of 1999, which estimated the total cost for Y2K remediation, including program management as well as inventory and impact services, to be $13,091,118. R6-29 Exh. 22 at 48.

It is clear that ISN's proposals were offers; the dispute is over the characterization of the City's response. According to ISN, Commissioner McCall orally agreed to the proposals. Verbal commitments aside, documentation supports the City's intent to enter into some agreement. The City generated a series of FPOs, each one a request that ISN perform certain Y2K-related services. Although most of the FPOs list the cost associated with particular services, one FPO is a "blanket order" for Y2K services with ".00" listed as the cost to be paid by the City. R6-59 Exh. 23.

ISN argues that the City accepted its offer of global Y2K remediation services through the FPOs. The City, on the other hand, argues that the FPOs were counteroffers for discrete Y2K-related projects, accepted by ISN through performance. Based on the City's theory, the cost for services should be less than $3 million — the sum of the costs associated with the particular projects listed on the various FPOs. This dispute would likely be nonexistent but for the fact that the City terminated ISN's contract on 5 March 1999, claiming dissatisfaction with the services rendered.

According to ISN, however, the reason for termination was ISN's refusal to hire the minority subcontractor preferred by Commissioner McCall. R1-1-15. Although ISN had already hired a minority subcontractor from the state's list of approved vendors, Commissioner McCall allegedly urged ISN to hire an unapproved vendor. ISN refused and got fired. ISN sued the city for breach of contract, for fraud and misrepresentation in inducing ISN to enter the contract, and defamation based on the statements made by Commissioner McCall regarding the quality of ISN's work.

The district court granted summary judgment for the City, finding that the breach of contract claim failed for three reasons: (1) Commissioner McCall lacked the authority to commit the City to a contract, (2) Commissioner McCall's oral acceptance was invalid because written acceptance was required, and (3) the City's FPOs were counteroffers, not acceptances. The district court further found that the defamation claim failed as a matter of law because the statements at issue were statements of opinion, incapable of being disproven. Lastly, the district court found that the fraud and misrepresentation claims must fail as well since ISN did not comply with ante litem notice requirements of Georgia law.

ISN appeals the grant of summary judgment. Based on our review, we affirm two of the district court's findings: McCall lacked the authority to contract for the City and McCall's statements regarding ISN's performance do not constitute defamation. We also reverse two of the district court's findings. First, we conclude that ISN substantially complied with the requirements of the ante litem statute; the fraud and misrepresentation claims may therefore proceed. Second, we conclude that the City did not meet the standard for summary judgment with respect to the role played by the FPOs in contract formation. Interpreting the facts in the light most favorable to ISN, we conclude that a reasonable jury could find that the City accepted ISN's offer through the FPOs. On these two issues, we reverse the grant of summary judgment for the City and remand to the district court.

II. DISCUSSION

We review a grant of summary judgment de novo, applying the same legal standards as the district court. Carter v. Three Springs Residential Treatment, 132 F.3d 635, 641 (11th Cir.1998). Summary judgment is appropriate only when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). A factual dispute is genuine only if "a reasonable jury could return a verdict for the nonmoving party." United States v. Four Parcels of Real Property, 941 F.2d 1428, 1437 (11th Cir.1991) (citation omitted). The moving party bears the burden of proving that no genuine issue of material fact exists. O'Ferrell v. United States, 253 F.3d 1257, 1265 (11th Cir.2001). In evaluating the argument of the moving party, the district court must view all evidence in the light most favorable to the non-moving party, and resolve all reasonable doubts about the facts in its favor. Burton v. City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir.1999). Assuming the moving party has met its burden, the non-movant must then show a genuine dispute regarding any issue for which it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

A. The Breach of Contract Claim
1. Commissioner McCall's Authority

Both parties acknowledged that some contract existed; the issue is the nature — and therefore the extent — of the obligation.2 According to ISN, Commissioner McCall verbally accepted ISN's offer to manage and coordinate Y2K remediation. The City argues that McCall's acceptance, whether verbal or written, is legally irrelevant since McCall did not have the authority to contractually bind the City.

Under Georgia law, one who deals with a public officer must determine whether the officer has the authority necessary to bind the public entity. City of Atlanta v. Black, 265 Ga. 425, 426, 457 S.E.2d 551, 552 (1995). Such due diligence may require a party to take affirmative steps; parties are presumed to know the law. O.C.G.A. § 1-3-6. Furthermore, a party is charged with notice of state law as well as municipal codes. City Council of St. Mary's v. Crump, 251 Ga. 594, 595, 308 S.E.2d 180, 182 (1983).

Upon review of the documents governing Atlanta, it is clear that Commissioner McCall lacked the authority to contract on the City's behalf. Only two people are so authorized: section 3-104(10) of the City Charter grants the power to the mayor, and section 2-1137(a) of the City Code grants the power to the City's "purchasing agent." Other than these two officers, "no city officer or employee shall order the procurement of supplies, services, construction, professional or consultant services and real estate or make any contract other than through the bureau of purchasing and real estate." Atlanta City Code, § 2-1138(c).

We note that the purchasing agent, who has the authority...

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