Pittman Const. Co. v. Housing Authority of Opelousas
| Decision Date | 01 October 1958 |
| Docket Number | No. 7030.,7030. |
| Citation | 167 F. Supp. 517 |
| Parties | PITTMAN CONSTRUCTION CO., Inc., v. HOUSING AUTHORITY OF OPELOUSAS. |
| Court | U.S. District Court — Western District of Louisiana |
Gerald J. Gallinghouse of Deutsch, Kerrigan & Stiles, New Orleans, La., for plaintiff.
Joe J. Tritico, Lake Charles, La., for defendant.
Robert F. DeJean, Opelousas, La., for intervenor.
Federal jurisdiction is pegged on diversity. The controlling statute is LSA-R.S. 38:2211 (), which provides in pertinent part:
In chronological sequence, the pertinent and undisputed facts are these:
In April, 1958, defendant, acting through the Board of Commissioners (herein called the "Board") published advertisements, including an invitation for bids, for construction of a low-rent housing project to consist of 140 dwelling units.1
The advertisment specified that defendant would receive and open the bids on May 8.2 However, this date was later postponed to May 223 by the Board at the request of H. J. Danel, who, as President of Danel-Ryder, Inc., was interested in bidding on the work, and another prospective bidder.4
This project had been under consideration for more than two years.5 It was planned, and is being constructed and operated by defendant in cooperation with the Public Housing Administration (herein called "PHA") under the federal housing act of 1954.6
On May 22, the Board met, and opened, and read aloud the amounts of the nine bids which had been received. The four lowest bids were: (1) Danel-Ryder Construction Co., Inc. (herein called "Danel-Ryder") —$1,112,500; (2) Pittman Construction Co., Inc. (plaintiff herein)— $1,169,000; (3) Marco Construction Company, (sometimes referred to herein as "Marco", or intervenor)—$1,169,118;7 and (4) Wohfield Construction Company—$1,172,500.8
The Board went into "executive session",9 and passed a resolution10 to award the contract to Danel-Ryder subject to PHA approval.11
The PHA refused to approve the Board's recommendation on the ground that Danel-Ryder was an ineligible bidder13 because H. J. Danel (President and major stockholder of the company) had been a member of the Board until March 7, 1958.
The rejection by PHA of the Board's recommendation was expressed in a telegram14 (dated May 28) from Marshall W. Amis (PHA Regional Director) to John Edwards (Chairman of the Board). The telegram concluded with this request: "Please submit promptly your formal recommendations of an award to an eligible bidder."
Soon after receipt of the foregoing telegram the Board requested plaintiff to have a representative attend a meeting to be held in Opelousas on the evening of Monday, June 2.15 In response to this request, Albert E. Pittman (Secretary-Treasurer of plaintiff) attended the meeting, answered all questions put to him, and furnished all information requested of him, by members of the Board,16 who seemed to be fairly satisfied with the disclosure.17
At about noon on Wednesday, June 4, Albert E. Pittman, accompanied by his father (Theodore A. Pittman, President of plaintiff), his brother (Charles R. Pittman, Vice-President of plaintiff), and Wayne Slagel (an estimator for plaintiff) visited and talked with Yorick Chachere (Executive Director of defendant) while they were driving through Opelousas on their way to New Iberia.18
On June 4th, Chairman Edwards communicated by telephone with Director Amis, and inquired as to whether PHA would approve the award of the contract to plaintiff.19 The question was answered in the affirmative, and confirmed by telegram (dated June 4, 1958, wired at 4:29 P.M. and received in Opelousas at 5:03 P.M.),20 which stated "If the Housing Authority of Opelousas recommends an award to Pittman Construction Company, we will approve it."
On that same evening, Randolph McCormick (a Board member), together with Leo Carron (Vice-Chairman of the Board), and Chachere came to the hotel room of Albert E. Pittman in New Iberia21 (about 45 miles from Opelousas). According to Carron and Cachere, the idea of the trip originated with McCormick,22 who, being in the glass business, was interested in getting the work for his glass company from plaintiff under the prime contract recently awarded to plaintiff by the United States for construction of the postoffice at Lafayette.23 Albert E. Pittman informed McCormick that plaintiff would be glad to receive a quotation for the glass and glazing, but no commitment was made.
Just two days later (on Friday, June 6), the Board met, received evidence presented against plaintiff by Robert F. DeJean (attorney for Marco, third lowest bidder), and passed a resolution24 (offered by Carron, seconded by McCormick) declaring the lowest responsible bidder to be, and awarding the contract to, Marco, subject to PHA approval. The Pittmans were not invited to this meeting.
As soon as plaintiff's officers learned about the Board's action, they protested the award (by telegrams dated June 7 to each Board member),25 insisted that the contract be awarded to them as lowest responsible bidder, and requested a statement of the Board's position.
The Board did not reply to plaintiff's telegram, but proceeded to recommend to PHA (by letter dated June 9) that the contract be awarded to Marco.26
Meanwhile, on June 19, plaintiff engaged the law firm of Deutsch, Kerrigan & Stiles, which, acting through Gerald Gallinghouse, requested (by telegram)27 a meeting with the Board on the next day. This attorney, with Albert E. and Theodore A. Pittman, went to Opelousas, and prevailed on Chairman Edwards to call a meeting.28 Defendant avers in its answer that this "hearing was granted for the purpose of redetermining whether or not there had been just cause for rejecting plaintiff's bid."29
The Board refused to alter its position at this meeting. As a result, plaintiff filed this suit.30
On June 25, this court (on plaintiff's motion) ordered, in effect, defendant and the members of the Board to show cause on July 7 why they should not be enjoined from executing the contract with Marco, and ordered to award the contract to, and execute the contract with, plaintiff.31
Later, plaintiff discovered that defendant had executed a contract with Marco on June 25 (the same date on which the order was signed),32 whereupon it filed an amended complaint and prayer, in which it also asks that the purported contract be declared null and void, and that Marco be enjoined from doing any work thereunder.33
In substance, plaintiff's main contentions are as follows:
(1) The public works statute (LSA-R.S. 38:2211-38:2217) is a prohibitory law founded on public policy. The requirement that "All public work * * shall be * * * let by contract to the lowest responsible bidder who has bid according to the contract, plans, and specifications as advertised" is mandatory and must be complied with by defendant.
(2) The determination of the lowest responsible bidder rests in the sound discretion of the Board; but this determination must be based on good, reasonable and sufficient reasons and sustained by the evidence, and is subject to review by the court. The Board's preference of the Marco's higher bid over plaintiff's bid was arbitrary and unreasonable, and must be set aside.
(3) Marco is not the lowest responsible bidder within the meaning of the statute. Therefore, the contract entered into by Marco and defendant under date of June 25, 1958 is contrary to the statute, and is null and void.
(4) Plaintiff is the lowest responsible bidder within the meaning of the statute. Defendant did not exercise its right to reject all bids, but elected to award the contract to one of the bidders. Therefore, plaintiff, as the lowest responsible bidder, is entitled to the contract.34
(5) Plaintiff will suffer permanent and irreparable injury, for which it has no adequate remedy at law, as a result of defendant's action in: (a) declaring that plaintiff was not the lowest responsible bidder; (b) refusing to award the contract to plaintiff, after deciding to accept one of the bids; and (c) awarding the contract to Marco. Therefore, plaintiff is entitled not only to a decree declaring the contract null and void, but to equitable relief in the form of a permanent injunction (prohibitory as to Marco, and mandatory as to plaintiff).
The defendant Authority and Marco, Intervenor, contend:
(1) That plaintiff, as the unsuccessful bidder, is without interest to maintain an action to set aside the award,...
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