Metropolitan School Dist. of Martinsville v. Mason

• Decision Date: 12 July 1983
• Docket Number: No. 1-982A280,1-982A280
• Citation: 451 N.E.2d 349
• Parties: 12 Ed. Law Rep. 502 METROPOLITAN SCHOOL DISTRICT OF MARTINSVILLE, Defendant-Appellant, v. Claudette MASON, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 349

451 N.E.2d 349

12 Ed. Law Rep. 502

METROPOLITAN SCHOOL DISTRICT OF MARTINSVILLE, Defendant-Appellant, v. Claudette MASON, Plaintiff-Appellee.

No. 1-982A280.

Court of Appeals of Indiana First District.

July 12, 1983.

James Bruce Dodd, Martinsville, for defendant-appellant.

Phillip R. Smith, Wehrle & Smith, Mark Peden, Foley, Foley & Peden, Martinsville, for plaintiff-appellee.

NEAL, Judge.

STATEMENT OF THE CASE

Defendant-appellant Metropolitan School District of Martinsville (School or School Board) appeals from a judgment entered in the Morgan Superior Court upon a jury verdict, awarding plaintiff-appellee Claudette Mason (Mason) money damages in the amount of $30,075.

We reverse in part and remand in part for a limited new trial.

STATEMENT OF THE FACTS

Mason was an individual contract bus driver for the School, and her last contract with the School Board expired at the end of In making their decision to rebid Mason's route, the School Board considered both economic and personal factors. The Board was aware of certain personal problems involving Mason's inability to control student behavior on her bus. The second round of bidding was on January 3, 1980, and a fleet bidder outbid all individual bidders and was awarded a transportation contract for five routes, including Mason's former route 21.

the 1979-1980 school year. During the Fall of 1979, the School Board advertised that it would receive bids on school bus transportation contracts for a four year period from 1980 to 1984. All bids were received on December 6, 1979, and Mason entered the only bid on route 21 for $97.50 per day. Mr. Forrest Wildman and Mr. Richard Cunningham, the Business Manager and Director of Transportation for the School, respectively, recommended to the School Board that bids on five of the routes should be rejected, including Mason's bid on route 21. Wildman testified that although Mason was the only person to bid on route 21, her bid was considered excessive when compared to similar routes. As a result, both Wildman and Cunningham recommended that route 21 and four other routes be rebid. The School Board accepted their recommendation and rebid those five routes.

During and following the bidding process Superintendent Tracy Dust met with Mason to discuss why her bid was rejected. At trial, Superintendent Dust testified that Mason's bid was rejected for both economic and personal reasons, stemming from the discipline problems with students riding on her bus.

Mason filed a three count complaint which we have abbreviated as follows: Count I--reimbursement on her school bus contract for extra mileage incurred due to road construction on her route; Count II--the value of the four year transportation contract which the School Board refused to award her, and Count III--the lost profits under her existing contract for failure of the School Board to use Mason for extracurricular trips when the School Board had accepted her bid for such trips.

Following a three day trial, the jury returned a general verdict in favor of Mason, assessing her damages in the sum of $30,075.00.

ISSUES

Restated, the School Board presents the following issue:

Whether there was sufficient evidence to show that the School Board's action was arbitrary and capricious.

DISCUSSION AND DECISION

The verdict and judgment was a single, indivisible judgment, and not apportioned among the three counts, each of which contained a separate claim. The evidence of damages to support Counts I and III is negligible, comparatively, and it must be concluded that the bulk of the jury award was contained in Count II. The School Board contests only Count II.

The claim in Count II is premised upon the loss of profits on the contract over the life of the contract period. However, no contract was entered into. In Inman's Incorporated v. City of Greenfield, (1980) Ind.App., 412 N.E.2d 126, we stated that a parallel existed between the public lawsuit statute and the bidding statutes in that the purpose of the statute was not to provide disgruntled bidders with a new cause of action, citing State ex rel. Sekerez v. Lake Superior Court, (1975) 263 Ind. 601, 335 N.E.2d 199, and Gariup v. Stern, (1970) 254 Ind. 563, 261 N.E.2d 578. However, any defense the School Board may have had under Inman was waived by not litigating that issue in trial court and not preserving it in its motion to correct errors. The School Board belatedly attempts to raise the issue for the first time on appeal by labeling it subject matter jurisdiction. It cites no satisfactory or relevant authority, nor does it make any cogent argument to demonstrate why the Morgan Superior Court has no subject matter jurisdiction over causes of actions for breach of contract or suits under the bidding statute. However since we are reversing on the merits, we need not address that issue.

Under the pupil transportation statute, Ind.Code 20-9.1-2-9 provides that transportation or fleet contracts shall be awarded to the lowest responsible bidder; however, the section states:

"The governing body may refuse to award the bid to the lowest responsible bidder, if the amount bid is not satisfactory to the school corporation."

Ind.Code 20-9.1-2-11 states:

"A governing body is authorized to reject any or all bids. If no bid is received for a specified route, the governing body may either readvertise for bids or negotiate a contract for the route without further advertising."

It is to be noted that the power to reject all bids is not qualified in any way. The portion quoted above, denominated as Ind.Code 20-9.1-2-9 and 11, first appeared in the Indiana statutes on school bus contracts in 1973. The previous law, Burns 28-3930, enacted in 1945 as ch. 210, Sec. 1, contained only the provision that

"[w]henever sealed bids are received the trustee, with the advice of his advisory board, shall award each contract so made to the lowest and best responsible bidder."

Generally a statutory amendment which changes the language of a prior statute indicates a legislative intention that the meaning of the statute has been changed, and raises a presumption that the Legislature intended to change the law. Indiana Alcoholic Beverage Commission v. Osco Drug, Inc., (1982) Ind.App., 431 N.E.2d 823.

One of the reasons the School Board rejected Mason's lone bid for a bus route was that the amount of the bid was not satisfactory to it.

64 Am.Jur.2d Public Works and Contracts Secs. 75 and 76 contains a summary of cases in other jurisdictions. We have found no comparable Indiana case. In 64 Am.Jur.2d, supra, is the following discussion on the right of public authorities to reject any and all bids:

"3. Rejection of Bids

Sec. 75. Generally; effect of reservation of right to reject.

Frequently, the provisions of a constitution, city or county charter, or a statute or ordinance gives public authorities the right to reject 'any and all' bids or 'any or all' bids, and the authority thus granted is usually given effect by the courts, although in some cases under a particular statute involved, the right of public authorities to reject all bids has been recognized as one of limited discretion. Moreover, in the absence of such a provision, the courts have recognized the right of public authorities to reject all bids, particularly where the invitation to bid contained an express reservation of the right, notwithstanding that the provisions of a statute or a city charter required the letting of the contract to the lowest bidder or lowest responsible bidder. However, in some cases in the absence of a constitutional or legislative provision reserving the right to reject all bids, the right is recognized as one of limited discretion, even though the proposal or invitation to bid contained an express reservation of the right.

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Sec. 76. Extention of discretion to reject.

Generally, the discretion conferred upon public officials to reject all bids is a very broad one to be exercised for the benefit of the public, particularly where the proceeding is irregular or questionable, but in any case only for a proper purpose. It has been held, however, that where the right to reject is reserved, the lowest bid or any bid may be rejected on a mere technicality, that all bids may be rejected, even if arbitrarily and unwisely, or under a mistake, and that in the exercise of...