Leaman & Reynolds Ins. Agency, Inc. v. Housing Authority of City of New Orleans
| Decision Date | 06 January 1964 |
| Docket Number | No. 1197,1197 |
| Citation | 159 So.2d 365 |
| Parties | LEAMAN AND REYNOLDS INSURANCE AGENCY, INC. v. HOUSING AUTHORITY OF the CITY OF NEW ORLEANS. |
| Court | Court of Appeal of Louisiana — District of US |
Morphy & Freeman, A. D. Freeman, Jr., New Orleans, for plaintiff-appellant.
William J. Guste, Jr., New Orleans, for defendant-appellee.
Before McBRIDE, HALL and JANVIER, JJ.
Plaintiff, operator of an insurance agency in the City of New Orleans, sued Housing Authority of the City of New Orleans, a public corporation organized pursuant to the provisions of LSA-R.S. 40:391 et seq., for damages in the sum of $1,354.38 being the amount of an insurance commission which plaintiff alleges it lost as the result of the fault, neglect and illegal actions of defendant in rejecting plaintiff's low bid and accepting a higher bid, for certain fire and extended coverage insurance on defendant's Florida Avenue Project.
Defendant filed an exception of no cause or right of action based on the ground that plaintiff's remedy, if any, was to enjoin the award of the insurance to any other bidder and not for damages. This exception was referred to the merits by the District Judge and after trial on the merits judgment was rendered in favor of defendant dismissing plaintiff's suit. Plaintiff appealed.
During the month of June, 1960 defendant advertised for sealed bids under specifications for fire and extended coverage insurance in the amount of $2,788,000.00 on its Florida Avenue Now Rent Housing Project. The form of bid included in its specifications contained a blank space for the insertion by the bidder of its '3 year rate per $100.00' of insurance coverage, a blank space for the insertion of the amount of the 'gross premium' calculated at that rate, a blank space for the 'net premium' bid, and other spaces for the insertion of the percentage of dividends paid to policy holders on this class of insurance over the past ten years by the insurance company represented by the bidder, and an estimated dividend to be paid on the insurance bid upon, based on that dividend history.
The '3 year rate per $100.00' of insurance coverage is fixed by law at the rate promulgated by the Louisiana Rating and Fire Prevention Bureau, and is mandatory and binding on all fire insurance companies. The 'gross premium' is simply an extension of this unit rate, so that actually there can be no competition between prospective insurers insofar as the 'gross premium' is concerned. The only competition there can be is with reference to the 'net premium', the 'net premium' being the gross premium reduced by the amount of dividends which it is calculated will be paid to the policy holder based on the 10 year dividend history of the insurer.
Pursuant to defendant's advertisement elevan bids were submitted but it is necessary to consider only three. The Steiner Insurance Agency submitted a gross premium bid of $6,744.54 and a net premium bid of $5,395.63; plaintiff submitted a gross premium bid of $6,771.92 and a net premium bid of $5,417.54; Martin-Lebreton Insurance Agency bid a gross premium of $6,772.41 and a net premium of $5,417.92.
Since the '3 year rate per $100.00' was fixed by the Louisiana Rating and Fire Prevention Bureau at $.073 for the fire coverage and $.17 for the extended coverage, all gross premium bids should have been exactly alike. Moreover, since Steiner, the plaintiff, and Martin-Lebreton were each bidding on behalf of Northern Insurance Company of New York which had a 20% Dividend history, all net premiums bid should likewise have been alike. Steiner's apparent low bid results from the fact that that agency bid $.072 for the fire coverage instead of the legally prescribed rate of $.073. Plaintiff's gross bid was apparently forty-nine cents lower and its net bid thirty-eight cents lower than the bid submitted by Martin-Lebreton, the difference between the two bids being caused by a mathematical error on the part of plaintiff in multiplying and extending the unit price and in applying the 20% Calculated dividend to this erroneous extension.
Defendant first awarded the insurance to Steiner. However, when Steiner's tendered policy was rejected by the Louisiana Rating and Fire Prevention Bureau, defendant awarded the insurance to Martin-Lebreton.
Plaintiff contends that it had a lump sum 'g...
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McGowan v. Hous. Auth. of New Orleans
...public housing authority (“PHA”), which was established under Louisiana law. See Leaman & Reynolds Ins. Agency, Inc. v. Housing Authority of City of New Orleans, 159 So.2d 365 (La.App. 4th Cir.1964)(describing HANO as “a public corporation organized pursuant to the provisions of LSA–R.S. 40......
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Palermo v. City of New Orleans, 3580
...of the highest responsible bidder's qualification and his being awarded the contract. In Leaman & Reynolds Ins. Agency, Inc. v. Housing Authority, 159 So.2d 365 (La.App.4th Cir. 1964), this Court held that contracts for the furnishing of Fire and Extended Coverage Insurance was specifically......