Monarch Constr. Co. v. OHIO SCHOOL FACILITIES
| Decision Date | 30 May 2002 |
| Docket Number | No. 02CVH04-4222.,02CVH04-4222. |
| Citation | 118 Ohio Misc.2d 248,771 NE 2d 902 |
| Parties | MONARCH CONSTRUCTION COMPANY et al. v. OHIO SCHOOL FACILITIES COMMISSION et al. |
| Court | Ohio Court of Common Pleas |
Schottenstein, Zox & Dunn, Roger L. Sabo and Daniel R. Wireman, for plaintiffs.
Arthur J. Marziale, Assistant Attorney General, for Betty D. Montgomery, Attorney General, involuntary plaintiff.
Betty D. Montgomery, Attorney General, and Dan E. Belville, Assistant Attorney General, Education Section, for defendant Ohio Schools Facilities Commission.
Bricker & Eckler, Jack Rosati, Jr., and Sylvia Lynn Gillis, for defendant Tri-Village Local School District.
Kegler, Brown, Hill & Ritter and Donald W. Gregory, for intervening defendant Peterson Construction, Inc.
{s 1} This matter is before the court upon a complaint filed April 16, 2002, by plaintiffs Monarch Construction Company ("Monarch") and Ronald A. Koetters ("Koetters"), Chairman of the Board of Monarch, the latter plaintiff filing this action as a taxpayer of the state of Ohio pursuant to common-law doctrine. Plaintiffs named the Ohio School Facilities Commission ("OSFC") and Tri-Village Local School District ("Tri-Village") as defendants in their complaint and subsequently amended their complaint, naming additional parties Peterson Construction Company, Inc. ("Peterson") as an additional defendant and the Attorney General of Ohio as an involuntary party plaintiff.
{s 2} A temporary restraining order pursuant to Civ.R. 65 was issued by the court upon the application of the plaintiffs after all parties with the exception of Peterson appeared represented by counsel before the court to present their position. The court concluded that the balancing of the interests was such that temporary relief was appropriate in order to preserve and protect the subject matter of this transaction.
{s 3} Generally, this matter involves the award, through a statutorily prescribed competitive bidding process, of a contract to renovate and build an addition to a school building in Darke County, Ohio, for Tri-Village, using in part funds and services supplied by OSFC. The "owner" of the project is jointly Tri-Village and OSFC, and the award decision, pursuant to R.C. 3318.10, is required to be made "by the school district board to the lowest responsible bidder subject to the approval of the commission [OSFC]."
{s 4} Plaintiff Monarch submitted the lowest base price bid for the general trades contract for the project, but this contract ultimately was awarded to Peterson. The defendants found that Monarch was not a responsible bidder on this project and therefore not entitled to an award of the contract even though Monarch's base price was the lowest of the bids submitted.
{s 5} Shortly after this action was commenced, Peterson moved to intervene. Since Monarch subsequently amended its complaint by interlineation to include Peterson as a defendant, there is no need to decide Peterson's motion, as it is MOOT.
{s 6} All defendants have filed answers or a motion in responding to the complaint. A motion to transfer venue was filed by defendant Tri-Village but has been withdrawn on the record, and the parties consented to have the matter heard in Franklin County, Ohio. That motion is therefore not under consideration by this court.
{s 7} This matter was heard by the court on preliminary injunction, and during those proceedings, the court granted defendants OSFC and Tri-Village's Motion to Consolidate Hearing on the Application for a Preliminary Injunction with the Trial on the Merits, filed April 29, 2002.2 Tri-Village's counterclaim was not heard at trial, and the court reserved any trial necessary on the counterclaim until resolution of the issues set forth in plaintiffs' complaint.3
{s 8} In their answers, defendants OSFC, Tri-Village, and Peterson admit the following allegations of the complaint:
{s 9} Defendant Tri-Village is a local school district in Darke County, Ohio, which is authorized, pursuant to law in certain instances, to advertise for bids and enter into contracts, including contracts as the agent for the state.
{s 10} Defendant OSFC is an agency of the state of Ohio established by the Ohio General Assembly for the purpose of providing funding to school districts.
{s 11} In December 2000, OSFC entered into a Project Agreement with Tri-Village for construction and renovation of the Tri-Village K-12 Additions and Renovations (the "Project"). The Project is partially funded by OSFC and the remaining portions by Tri-Village.
{s 12} Turner Construction ("Turner") is the Construction Manager for the Project.
{s 13} On March 5, 2002, bids were opened for the Project, which included a series of trade packages. For the general trade contract or package of the Project, there are project specifications. The following pricing was submitted for the general trade contract:
{s 14} Monarch Construction Company $6,187,000
{s 16} Peterson has previously worked with Turner on other OSFC projects.
{s 17} By letter dated March 15, 2002, Turner stated to Tri-Village that it recommended that Peterson's bid be accepted and that Monarch's bid "does not meet all the requirements of a responsible bidder as listed in the article 3.5.2. of the Instructions to Bidders for this project and based upon their performance on previous OSFC projects."
{s 18} The contract for the general trades package of the Project was awarded to Peterson {s 19} Monarch was the low bidder for the general trades package of the Project.
{s 20} Tri-Village relied on the recommendation of Turner in advising Monarch that it was not a responsible bidder.
{s 21} The public and the taxpayers of the state of Ohio have a vital interest in having public contracts awarded according to the laws of the state of Ohio and the advertised terms and conditions contained in the bid documents.
{s 22} In their complaint, plaintiffs have prayed for an injunction against the defendants and their agents from taking any action that would result in the execution or continued performance of the general trades contract for the Project or cause to be paid any amounts for the contract, and more specifically that any contract award or further performance to Peterson be enjoined. Further, plaintiffs seek that a permanent injunction bar OSFC and Tri-Village from permitting any other contractor than Monarch from receiving a contract or compensation for the general trades contract for the Project.
{s 23} The plaintiffs also seek an order from the court that, if any funds of the defendants OSFC and Tri-Village have been paid to anyone in furtherance of the general trades package contract, that the defendants be required to take all actions necessary and appropriate to cause those funds to be returned to the Treasurer of the state of Ohio or the Tri-Village Local School District without delay. Plaintiffs seek declaratory judgment that Monarch was the lowest responsive and responsible bidder for the general trades package contract of the Project and that the actions of OSFC and Tri-Village were improper and invalid as contrary to law, an award of plaintiffs' costs and attorney fees under the taxpayer action cause of action, and any other equitable relief that the court may provide.
{s 24} Tri-Village has asserted the affirmative defenses of (1) failure to state a claim upon which relief can be granted, (2) improper venue, (3) waiver and estoppel as to issues not raised at a protest meeting held April 3, 2002, pursuant to R.C. 9.312, and (4) the equitable defense of unclean hands. Peterson has asserted the affirmative defenses of (1) failure to state a claim upon which relief can be granted, (2) improper venue, and (3) that plaintiffs' claims are barred by their own conduct, presumably the defense of estoppel and/or the equitable defense of unclean hands.
{s 25} Involuntary party plaintiff Betty Montgomery, in her capacity as Attorney General of Ohio, filed a motion to dismiss her as a party plaintiff pursuant to Civ. R. 21, which provides that parties may be dropped or added by order of the court on motion of any party or of the court's own initiative at any stage of the action and on such terms as are just. The court notes that OSFC is represented by the Ohio Attorney General, who at the same time has been involuntarily named as a party plaintiff in the action. This creates an irreconcilable conflict for Attorney General Montgomery as relates to the Code of Professional Responsibility. The court agrees with the Attorney General that she is not required to be a party to this taxpayer action, nor does R.C. 2721.12 require that she remain a party to this action . The court finds that the Ohio Attorney General does not have an interest in the declaration of the court in this action. In the interest of justice, and to avoid any professional conflict between the Ohio Attorney General as a party and as counsel to one of the defendants (OSFC), the court hereby GRANTS the Motion to Dismiss of Attorney General Betty D. Montgomery, filed April 30, 2002.
{s 26} The three essential causes of action plaintiffs present to the court are (1) declaratory judgment, (2) injunction, and (3) a common-law taxpayer action on behalf of Koetters, an individual, to enjoin the misappropriation of public funds. The findings of the court on declaratory judgment shall govern its decision as to all causes of action of the plaintiffs.
{s 27} A corporation such as Monarch and an individual such as Koetters are "persons" for the purpose of seeking a declaratory judgment from this court and thereby have standing to do so. R.C. 2721.01. This court may declare rights, status, and other legal relations, whether or not...
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