Jobco, Inc. v. Nassau County

• Decision Date: 13 April 1987
• Parties: JOBCO, INCORPORATED, Respondent-Appellant, v. COUNTY OF NASSAU, Appellant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 108

514 N.Y.S.2d 108

129 A.D.2d 614

JOBCO, INCORPORATED, Respondent-Appellant, v. COUNTY OF NASSAU, Appellant-Respondent.

Supreme Court, Appellate Division,

Second Department.

April 13, 1987.

Edward T. O'Brien, Co. Atty., Mineola (Robert O. Boyhan, of counsel), for appellant-respondent.

Mazur, Carp & Barnett, P.C., New York City (Sayward Mazur and Mark S. Fragner, of counsel), for respondent-appellant.

Before BRACKEN, J.P., and BROWN, NIEHOFF and KOOPER, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, to enjoin the defendant from awarding a contract to the plaintiff and asserting a claim against the bid bond and for related declaratory relief, the defendant appeals, as limited by its brief, from so much of a judgment of the Supreme Court, Nassau County (Morrison J.), entered November 7, 1985, as, after a nonjury trial, discharged the plaintiff from liability on the bid bond, and the plaintiff cross-appeals from so much of the judgment as denied the alternative relief requested in its complaint, i.e., reformation of the bid.

ORDERED that the cross appeal is dismissed; and it is further,

ORDERED that the judgment is affirmed insofar as appealed from, and it is further,

ORDERED that the plaintiff is awarded one bill of costs.

In August 1985 the County of Nassau invited bids for the general construction work on the proposed Mitchel Field Transit Facility in Uniondale, New York. On the morning of the bid opening, the plaintiff, a general contractor, submitted a bid for $17,385,000, accompanied by the requisite bond of 10% of the bid amount, i.e., $1,738,500. Upon realizing, after the bid results became known, that its bid was submitted in error inasmuch as it was $1,000,000 lower than intended due to a clerical mistake, the plaintiff promptly notified the county of the error, requesting either rescission or reformation of the bid.

Several weeks later, after having investigated the situation, the county nevertheless awarded the contract to the plaintiff, informing it that "[w]e do not agree with your contention of honest error" and directing it to "prepare yourselves to undertake this contract".

The plaintiff immediately commenced this action. At the trial, the county asserted that, inter alia, even if rescission were to be granted on the basis of mistake, the plaintiff would not be entitled to be discharged from liability on the bid bond by virtue of the following language, contained within the bid documents:

"If the Bidder to whom the Contract is awarded refuses or neglects to execute it * * * within ten (10) days of the date of the Notice of Award, the amount of his bid security shall be forfeited and shall be retained by the County as liquidated damages. No plea of mistake in a bid shall be available to the Bidder for the recovery of his bid security or as a defense to any action based on the neglect or refusal to execute a contract" (emphasis added).

The plaintiff asserted that forfeiture of the bid bond would be financially ruinous.

The trial court granted rescission, finding, inter alia, that the error was clearly material and occurred despite the exercise of ordinary care by the bidder and is of "such magnitude that enforcement of the contract would be unconscionable".

The county does not challenge this...