Southeast Grading, Inc. v. City of Atlanta, 68781
| Decision Date | 30 November 1984 |
| Docket Number | No. 68781,68781 |
| Citation | 172 Ga.App. 798,324 S.E.2d 776 |
| Court | Georgia Court of Appeals |
| Parties | SOUTHEAST GRADING, INC. v. CITY OF ATLANTA. |
David W. Porter, Jeffrey C. Baxter, Atlanta, for appellant.
Alford J. Dempsey, Jr., Jeff S. Klein, Marva J. Brooks, Atlanta, for appellee.
In the latter part of 1978, the City of Atlanta invited numerous contractors to bid on a construction project known as the Three Rivers Water Quality Management Program--Tunnel Construction Task 7B4. On March 28, 1979, S & M Constructors, Inc. (hereinafter "S & M"), a corporation engaged primarily in tunnel construction, submitted the low bid on the project. During the course of preparing its bid, S & M solicited bids from various subcontractors, including Southeast Grading, Inc. (hereinafter "Southeast"), for the removal of excavated material ("muck") from the project site. Southeast responded to S & M's solicitation by submitting a bid to haul the "muck" for a fee. Pursuant to the bid, the hauling fee was to be determined on a cost per cubic yard basis. Southeast's bid was submitted to S & M on January 26, 1979. It provided that S & M could communicate its acceptance of the bid by signing and returning the original bid proposal or by tendering a letter of intent to Southeast.
With regard to the selection of subcontractors, the project specifications called upon the general contractor to The specifications further provided that "[a]ll potential first tier sub- -contractors (sub-contractors to a prime contractor) and potential lower tier sub-contractors (sub-contractors to a first tier sub-contractor) shall be named at the time of the bid submittal." (Emphasis supplied.) Southeast is a minority owned business enterprise. Accordingly, S & M listed Southeast on its bid documentation as one of the "potential minority subcontractors (including lower tiers) to be utilized on this project ..."
On April 10, 1979, after it was determined that S & M was the low bidder, S & M met with representatives of the city's contract compliance office for a "pre-award" conference. Apparently, the conference was held pursuant to a city ordinance requiring potential contractors to meet with the city's contract compliance officer for the purpose of ensuring "equal employment opportunity." Thereafter, on June 26, 1979, the city awarded the general contract to S & M.
In the meantime, S & M learned that the material which was to be excavated as a result of its tunneling work had value in the Atlanta market. Accordingly, S & M changed its plan for removing the "muck" from the job site. Under the new plan, hauling subcontractors were to purchase the "muck" from S & M for resale. S & M solicited and received bids from several contractors, including Southeast, for the alternative "Buy-Haul" plan.
Understandably, Southeast was more interested in reaching an agreement with S & M according to the terms set forth in its original January 26, 1979, bid. S & M took the position, however, that it had not entered into a contract with Southeast because the January 26, 1979, bid was never accepted. Accordingly, Southeast sought help from the city's contract compliance office. The record reflects that the city urged S & M and Southeast to come to terms; and that each side submitted compromise offers which were rejected. Additionally, the record reflects that certain city personnel interpreted the listing of Southeast as a "potential" subcontractor to be a commitment on the part of S & M to use Southeast.
On September 23, 1980, S & M accepted the bid submitted by Southeast for the "Buy-Haul" plan. Accordingly, Southeast and S & M entered into a written "Buy-Haul" contract for the purchase, by Southeast, of the "muck."
Pursuant to the "Buy-Haul" contract, Southeast purchased over $13,000 worth of "muck" from S & M. Because Southeast did not pay S & M for the "muck," S & M brought suit against Southeast in the State Court of Fulton County. Southeast answered and asserted a counterclaim in which it sought damages resulting from the refusal of S & M to contract with Southeast in accordance with the original January 26, 1979, bid. S & M filed a motion for summary judgment in the State Court of Fulton County action. S & M's motion was granted by the state court on May 26, 1983.
On May 11, 1983, before the ruling by the state court, Southeast brought this suit in the Superior Court of Fulton County against S & M and the City of Atlanta. Insofar as it pertained to S & M, the complaint essentially reasserted the allegations set forth in the state court counterclaim filed by Southeast. Additionally, however, the complaint sought equitable relief vis a vis S & M and the city. The complaint also sought damages against the city on the grounds that (1) Southeast was a third-party beneficiary of the general contract; (2) Southeast reasonably relied on city ordinances and the project specifications to support its understanding that it would be the subcontractor; and (3) the city failed to meet its obligation to enforce the minority business enterprise requirements set forth in the general contract. S & M and the city answered the complaint, and thereafter, each defendant moved for summary judgment. On November 14, 1983, Southeast dismissed its complaint against S & M without prejudice. On December 22, 1983, having determined that the City of Atlanta was entitled to judgment as a matter of law, the superior court granted the city's summary judgment motion. This appeal followed. Held:
1. Southeast is not a third-party beneficiary of the contract between S...
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