Lawrence Brunoli, Inc. v. Branford, (SC 15872)

• Decision Date: 05 January 1999
• Docket Number: (SC 15872)
• Court: Connecticut Supreme Court
• Parties: LAWRENCE BRUNOLI, INC. v. TOWN OF BRANFORD

247 Conn. 407

722 A.2d 271

LAWRENCE BRUNOLI, INC. v. TOWN OF BRANFORD

(SC 15872)

Supreme Court of Connecticut.

Argued September 23, 1998.

Officially released January 5, 1999.

Borden, Berdon, Norcott, Katz and McDonald, JS. John C. FitzGerald, Jr., for the appellant (plaintiff).

Brian J. Donnell, with whom was Robert M. Barrack, for the appellee (defendant).

Opinion

NORCOTT, J.

The issue in this appeal¹ is whether the court has subject matter jurisdiction over a claim for damages, rather than for injunctive relief, allegedly resulting from fraud, corruption or favoritism in the award of a contract that is subject to competitive municipal bidding requirements. The plaintiff, Lawrence Brunoli, Inc., brought this action against the defendant, the town of Branford, for money damages that the plaintiff claimed to have received as a result of improperly having been denied a certain municipal construction contract on which it had submitted a bid. The trial court dismissed the action on the ground that the plaintiff had no standing to assert a claim for damages in such a situation, and that a disappointed bidder is confined to an action for injunctive relief. The plaintiff claims that an unsuccessful bidder for a municipal construction contract is not limited to injunctive relief, but instead may seek money damages from the municipality. We conclude that a cause of action for money damages is not available to unsuccessful bidders on municipal contracts, regardless of whether there are allegations of fraud, favoritism or corruption in the bidding process. Accordingly, we affirm the judgment of the trial court.

According to the allegations of the plaintiffs revised complaint, which for purposes of this appeal we assume to be true, the defendant published an invitation to bid on a municipal construction project for renovations to and alterations of Branford High School, in response to which the plaintiff submitted a bid. The plaintiff further alleged that, on February 3, 1997, it was informed that it was the "lowest qualified bidder," but that the defendant subsequently withdrew its award of the contract to the plaintiff because the plaintiff had failed to attend a prebid conference regarding details of the work to be performed under the contract.² In addition, the complaint alleged that the defendant had permitted the plaintiff to bid on the project although the defendant knew that the plaintiff had not attended the prebid conference, and that the defendant therefore had waived any attendance requirement by accepting the bid. According to the complaint, the defendant later awarded the contract to the second lowest bidder, in violation of § 75-2 of the code of the town of Branford.³ The plaintiff alleged further that the defendant's conduct constituted favoritism toward the ultimate contract awardee. Finally, the plaintiff alleged that the defendant had breached its agreement to award the contract to the lowest qualified bidder, causing the plaintiff to suffer damages.

The defendant moved to dismiss the complaint for lack of subject matter jurisdiction on the ground, inter alia, that the plaintiff "is seeking money damages rather than injunctive relief, and Connecticut law only affords standing to disappointed bidders for public works contracts to bring actions for injunctive relief to vindicate the public interest in the competitive bidding process as private attorneys general." The trial court granted the defendant's motion and rendered judgment dismissing the plaintiffs action. This appeal followed. The plaintiff claims that the trial court improperly concluded that despite allegations of fraud, favoritism or corruption in the bidding process, an unsuccessful bidder for a municipal public works contract may not maintain an action for money damages. We disagree.

We first note that, because "[a] determination regarding a trial court's subject matter jurisdiction is a question of law," our review is plenary. Doe v. Roe, 246 Conn. 652, 660, 717 A.2d 706 (1998). It is well established that "[i]n ruling upon whether a complaint survives a motion to dismiss, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." Pamela B. v. Ment, 244 Conn. 296, 308, 709 A.2d 1089 (1998). In the present case, however, we need not reach and, therefore, decline to address, the question of whether the facts alleged in the plaintiffs complaint constitute fraud, corruption or favoritism, because we conclude that, as a matter of law, an unsuccessful bidder to a municipal contract has no standing to assert a cause of action for money damages for failure of the municipality to follow its competitive bidding laws, regardless of whether the plaintiff alleges fraud, corruption or favoritism.

An unsuccessful bidder to a municipal contract has available to him only very limited forms of standing. "Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy." (Internal quotation marks omitted.) Ardmare Construction Co. v. Freedman, 191 Conn. 497, 501, 467 A.2d 674 (1983). It is axiomatic that a party cannot be liable for breaching a contract with another party unless a contract exists between the parties that could be breached. In the realm of competitive municipal bidding, it is well settled that a contract is created through the municipality's action of awarding a contract, not through the submission of a bid by the contractor. "A bid is a binding offer to make a contract.... A bid, even the lowest responsible one, submitted in response to an invitation for bids is only an offer which, until accepted by the municipality, does not give rise to a contract between the parties.... Furthermore, where the municipality reserves the right to reject any and all bids, no bidder can claim any contractual rights until he has been awarded the contract." (Citations omitted; internal quotation marks omitted.) John J. Brennan Construction Corp., Inc. v. Shelton, 187 Conn. 695, 702, 448 A.2d 180 (1982). Except in certain specified circumstances, "an unsuccessful bidder has no standing to challenge the award of a public contract." Ardmare Construction Co. v. Freedman, supra, 501.

If an unsuccessful bidder has standing to bring a claim against a municipality, therefore, such standing must be derived from a source other than its bid submitted in response to the invitation to bid. That source is the municipal bidding statutes themselves. Spiniello Construction Co. v. Manchester, 189 Conn. 539, 543-44, 456 A.2d 1199 (1983). "[O]nly where fraud, corruption or favoritism has influenced the conduct of the bidding officials or when the very object and integrity of the competitive bidding process is defeated by the conduct of municipal officials, does an unsuccessful bidder have standing to challenge the award." (Internal quotation marks omitted.) Ardmare Construction Co. v. Freedman, supra, 191 Conn. 501. A review of our prior cases illustrates, however, that the only remedy afforded to unsuccessful bidders under the municipal bidding statutes has been injunctive relief against the awarding of the contract to the illegally favored bidder. See, e.g., Blesso Fire Systems, Inc. v. Eastern Connecticut State University, 245 Conn. 252, 713 A.2d 1283 (1998); Unisys Corp. v. Dept. of Labor, 220 Conn. 689, 600 A.2d 1019 (1991); Ardmare Construction Co. v. Freedman, supra, 497; Spiniello Construction Co. v. Manchester, supra, 539; John J. Brennan Construction Corp., Inc. v. Shelton, supra, 187 Conn. 695; Austin v. Housing Authority, 143 Conn. 338, 122 A.2d 399 (1956).

Providing unsuccessful bidders with an equitable remedy alone is consistent with the policies that we previously have identified as underlying the municipal bidding statutes. This court has long maintained that "[m]unicipal competitive bidding laws are enacted to guard against such evils as favoritism, fraud or corruption in the award of contracts, to secure the best product at the lowest price, and to benefit the taxpayers, not the bidders; they should be construed to accomplish these purposes fairly and reasonably with sole reference to the public interest." (Emphasis added.) John J. Brennan Construction Corp., Inc. v. Shelton, supra, 187 Conn. 702; Ardmare Construction Co. v. Freedman, supra, 191 Conn. 504. In Spiniello Construction Co. v. Manchester, supra, 189 Conn. 544-45, we substantially adopted the approach to unsuccessful bidder claims that was described by the Court of Appeals for the District of Columbia in Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859, 864 (D.C. Cir. 1970). In Scanwell Laboratories, Inc., the court concluded that an unsuccessful bidder may bring an action against the municipality, but rather than being an action to vindicate the personal harm the bidder perceives it has suffered, "the [action] itself is brought in the public interest by one acting essentially as a `private attorney general.'" Id., 864. That public interest is triggered when a municipality is involved in some form of fraud, corruption or favoritism, or "when the very object and integrity of the competitive bidding process is defeated by the conduct of municipal officials." Spiniello Construction Co. v. Manchester, supra, 544; see also Ardmare Construction Co. v. Freedman, supra, 504-505. It would be inconsistent with these policies to permit an unsuccessful bidder to assert a private claim for damages.

Furthermore, we have noted previously that we must "strike the proper balance between fulfilling the purposes of the competitive bidding statutes and preventing frequent litigation that might result in extensive delay...