JPL Livery Services v. State
| Decision Date | 26 December 2012 |
| Docket Number | PC 08-8293,C.A. PC 06-2570 |
| Parties | JPL LIVERY SERVICES v. STATE OF RHODE ISLAND; DAVID R. GIFFORD, Director of the Department of Health; THOMAS GILSON, Chief Medical Examiner; ROBERT O'DONNELL; ROSEMARY BOOTH GALLOGLY; JEROME D. MOYNIHAN JPL LIVERY SERVICES, INC. D/B/A/ OCEAN STATE TRANSFER v. RHODE ISLAND DEPARTMENT OF ADMINISTRATION; RHODE ISLAND DEPARTMENT OF HEALTH |
| Court | Rhode Island Superior Court |
DECISION
This case involves a contract dispute between JPL Livery Services Inc. ("JPL") and the State of Rhode Island. The matter is before this Court for decision following a non-jury trial on two complaints filed by JPL against various state agencies and officials. The actions were consolidated on August 23, 2010 and tried without a jury in May 2012. At the conclusion of the Plaintiff's case, Defendants Department of Administration ("DOA") and Department of Health ("DOH") moved for judgment as a matter of law pursuant to Rule 52 of the Superior Court Rules of Civil Procedure. This Court reserved its decision and at the conclusion of testimony instructed the parties to file post-trial memoranda. Jurisdiction is pursuant to G.L. 1956 § 8-2-14.
The testimony established that in 1995, JPL contracted with the State to provide livery services for the transportation of mortal remains. Joseph L. Pilosa, Jr., former President of JPL ("Pilosa"), testified that the livery services were provided from anywhere within the State of Rhode Island to the Office of State Medical Examiners in Providence (the "OME").[1] JPL provided these services pursuant to successive contracts from 1995 until the most recent contract was terminated by the State on December 10, 2007. Pilosa testified that it was his firm belief that the contract with the State was exclusive and unconditional. This belief was based on the fact that JPL was the only livery company that provided this service to the State. Pilosa testified that he and his employees were professionals who worked diligently for the State.
The compensation to JPL was based on each transport. JPL was paid $125 "per case" for transporting the mortal remains from locations within the greater Providence area, and $130 for transportation from all other areas of the state. The 2005 contract (the "Contract") required JPL to provide these transportation services "as requested by agency"[2] and that "continuation of the contract beyond the initial fiscal year will be at the discretion of the state." (Contract at 2-3.) The Contract also provided that: "Termination may be effected by the State based upon determining factors such as unsatisfactory performance or the determination by the State to discontinue the goods/services, or to revise the scope and need for the type of goods/services; also management owner determinations that may preclude the need for goods/services." (Contract at 2.) The Contract was subject to "the specifications, terms and conditions set forth" in the associated bid number. (Contract at 1.) In addition, the Contract mandated that JPL abide by specific criteria regarding the documentation of its employees, its vehicles, and insurance. (Bid Specifications at 3, 6-7.) Among other things, the Contract required JPL to provide "proof of valid drivers license for all employees " "proof of background checks done on all employees, " and "proof of workers compensation insurance." (Bid Specifications at 6.) Moreover, JPL was required to immediately provide the OME with any changes in personnel and submit the necessary documentation for the new employee to OME. (Bid Specification at 6.) The Contract further stated that "[f]ailure to provide annual insurance certification may be grounds for cancellation." (Contract at 2.)
Until October 2005, Pilosa and the State had an amicable and professional relationship. In October 2005, however, Robert E. O'Donnell, Jr. ("O'Donnell") was appointed as the new administrator at the OME. Pilosa testified that from the inception, he was certain that O'Donnell wanted JPL removed from service.
At trial, the Defendants presented credible testimony that JPL failed to comply with the terms of the Contract. The evidence established that in 2005, JPL submitted a bid to the State and was awarded the contract to provide livery services for DOH. It is undisputed that under its first two contracts with the State, and for a short period of time under the 2005 contract, DOH exclusively used JPL to provide livery services to OME. However, budgetary issues arose in March 2006 and the OME began implementing cost- cutting measures which included reducing the use of livery services. The DOH concluded that it was cost effective to use its own personnel for livery services. As a result, O'Donnell informed Pilosa that he was reducing the number of requests for livery services. O'Donnell testified that the OME was instituting a new policy whereby OME employees would be primarily responsible for transporting mortal remains during normal working hours i.e., Monday through Saturday, 8 a.m to 4 p.m. Under this policy, OME would continue to call on JPL for livery services on weekends and in special circumstances during these hours. This new arrangement was not satisfactory for Pilosa. Pilosa objected to the change and maintained that under the Contract, JPL was the exclusive provider of livery services to the OME. JPL believed that O'Donnell had a personal agenda to have JPL removed from the state contract. Pilosa's conclusion, however, was not based on fact; it is mere speculation.
The use of state employees to provide livery services is the basis for JPL's breach of contract claim. (Amended Complaint at ¶¶ 15, 18.) Pilosa testified that because JPL historically performed all of the state livery work and from his reading of the Contract, he believed that it was an exclusive contract for services. This belief was unfounded. Jerome Moynihan ("Moynihan"), Administrator of Purchasing Systems with the DOA, testified that he was employed in 2005. He explained that the Contract was exclusive to the company hired to pick up the mortal remains but not exclusive of the work. He further testified that he became aware that DOH was unhappy with JPL because JPL had on different occasions arrived late at the scene, placed an incorrect toe tag on a deceased so as to cause confusion as to identification, and failed to properly transport a child. Also, he testified that an individual employed by JPL had stolen from a deceased. Although acknowledging that JPL's performance in the past was successful, Moynihan asserted that immediately before JPL's contract was terminated JPL performed poorly. Moynihan testified that the termination of the Contract was proper. In addition, Deborah Reavey Reynolds, former Chief Purchasing Agent at DOH, testified that the contract was non-exclusive. Ms. Reynolds noted that the Contract was a blanket contract and that JPL was paid per unit. In addition, she testified that the term "as requested" meant "whenever needed by DOH." The State's witnesses provided credible testimony.
At the same time, Angela Harwood, Scene Investigator at OME, did not agree with O'Donnell's decision to limit JPL's services despite admitting that she never read the Contract. The Court has given her testimony little weight. Carl Zambrano, also a Scene Investigator with the OME, testified against the O'Donnell policy to divert JPL's services with the State. Mr. Zambrano had a history of disputes with O'Donnell as he had previously filed two complaints against the Chief Medical Examiner.
On June 29, 2007, O'Donnell and the Chief Medical Examiner wrote to the DOA's Division of Purchases requesting permission to terminate the contract with JPL based on several instances of alleged misconduct by JPL employees, JPL's alleged failure to comply with several contract terms, and JPL's failure to address these concerns after being notified of them. (Def.'s Post-Trial Memo, Exhibit O.) In its letter, the OME cited "the potential for harm to the citizens of Rhode Island" and noted that if given permission to terminate JPL's contract, it would be imperative to "enter into a temporary, emergency contract" with another provider because "[l]ivery service is essential to operations of the Office of State Medical Examiners." (Id.) In addition to the letter, O'Donnell also sent an email to OME personnel stating, effective immediately, JPL "will not be used for Livery service . . . until further notice" and that OME personnel would be required to contact either of two listed ambulance service companies on a rotating basis. (Trial Exhibit 4.)
Then, on July 19, 2007, Moynihan wrote to JPL stating that despite DOH's concerns, it had been decided that no action would be taken to terminate the Contract because JPL had substantially complied with the request for production and documentation. (Def.'s Post-Trial Memo, Exhibit I.) Moynihan ended the letter by stating that "any future failure by JPL to comply with the terms of its contract with the State shall result in punitive action being taken, including but not limited to, termination of JPL's contract with the State."
Moynihan's next letter to JPL terminated the Contract, effective December 10, 2007.[3] (Def.'s Post-Trial Memo, Exhibit L.) The letter cited to several non-exclusive violations of the terms of the award. First, DOH asserted that JPL had deceived the State as to the existence of certain personnel and also as to the backgrounds of those personnel. Among other things the Contract required JPL to "provide proof of background checks done on all employees." On November 30, 2007, JPL requested evidence of Bureau of Criminal Investigation ("BCI") checks for nine alleged drivers whose existence was left undisclosed...
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