State v. Infinity Sur. Agency

Decision Date10 May 2011
Docket NumberNo. 2010–C–2264.,2010–C–2264.
Citation63 So.3d 940
PartiesSTATE of Louisiana, DIVISION OF ADMINISTRATION, OFFICE OF FACILITY PLANNING AND CONTROLv.INFINITY SURETY AGENCY, L.L.C., Benetech, L.L.C. and JRDKS Construction, L.L.C., a Joint Venture, Benetech, L.L.C., and JRDKS Construction, L.L.C.
CourtLouisiana Supreme Court

OPINION TEXT STARTS HERE

Jason Adam Bonaventure, Pamela Miller Perkins, Baton Rouge, for Applicant.Marc Edward Belloni, Couhig Partners, LLC, Robert Emmet Couhig, Jr., New Orleans, Phelps Dunbar, LLP, Shelton Dennis Blunt, Baton Rouge, for Respondent.GUIDRY, Justice.

[2010-2264 (La. 1] We granted the State of Louisiana's writ application to determine whether the lower courts erred in sustaining the defendants' exceptions of no cause of action and dismissing the State's suit with prejudice. For the reasons set forth below, we reverse the rulings of the lower courts and remand the case to the district court for further proceedings.

FACTS

Because this case concerns review of a ruling on an exception of no cause of action, we begin as we must with the allegations asserted in the State of Louisiana's Petition for Damages and Forfeiture of Bid Security (hereinafter, “petition”), accepting them as true for the purpose of ruling on the exception of no cause of action. See Scheffler v. Adams and Reese, L.L.P., 06–1774 (La.2/22/07), 950 So.2d 641. The State of Louisiana, through its Division of Administration, Office of Facility Planning and Control, on or about May 29, 2008, issued a Project Manual and Bid Specifications (hereinafter, “project manual”) to remove and replace existing cabins at Bayou Segnette State Park, Jefferson Parish, Westwego, Louisiana (hereinafter, “project”).

[2010-2264 (La. 2] According to the petition, the “Advertisement for Bids” section of the project manual provided, in pertinent part:

All bids must be accompanied by bid security equal to five percent (5%) of the sum of the base bid and all alternates, and must be in the form of a certified check, cashier's check, or Facility Planning and Control Bid Form written by a surety company licensed to do business in Louisiana, signed by the surety's agency or attorney in fact. Surety must be listed on the current U.S. Department of the Treasury Financial Management Service list of approved bonding companies as approved for an amount equal to or greater than the amount for which it obligates itself in the Bond, or must be a Louisiana domiciled insurance company with at least an A-rating in the latest printing of the A.M. Best's Key Rating Guide.

The project manual included a Facility Planning and Control Bid Form (hereinafter, “bid form”), which set forth the procedure and conditions for the submission of bids for the project. According to the petition, the bid form provided, in pertinent part:

If the Bidder is notified of the acceptance of the bid within thirty (30) days after the opening of bids, he agrees to execute and deliver the “Contract Between Owner and Contractor and Performance and Payment Bond,” a copy of which is attached to the Contract Documents, within ten (10) days after notice from the Owner that the instrument is ready for signature.

If the Bidder fails to complete all requirements for executing the “Contract Between Owner and Contractor and Performance and Payment Bond” within ten (10) days after notifications, the Owner may reject the Bid, retain the Bid Bond, call in the surety for payment, and award the contract to the next lowest bidder.

* * *

Bid Security: Attached is the bid security in the sum of 5% of total base bid and all alternates. The bid security is to become the property of the Owner in the event the Contract and bond are not executed within the time set forth, as Liquidated Damages for the delay and additional work caused thereby.

The petition alleges the State opened the sealed bids for the project on or about July 9, 2008. Benetech, L.L.C., and JRDKS Construction, L.L.C., A Joint Venture (hereinafter, Joint Venture), submitted the lowest bid for the project.

[2010-2264 (La. 3] The petition alleged the bid bond attached to Joint Venture's bid was signed by both Joint Venture and Infinity Surety Agency, L.L.C. (hereinafter, “Infinity Surety”). According to the petition, the bid bond provided in pertinent part:

Surety represents that it is listed on the current U.S. Department of the Treasury Financial Management Service list of approved bonding companies as approved for an amount equal to or greater that the amount for which it obligates itself in this instrument or that it is a Louisiana domiciled insurance company with at least an A- rating in the latest printing of A.M. Best's Key Rating Guide.

The State claims it relied on the representations of both Infinity and Joint Venture in the bid bond, stating that Infinity Surety was qualified to write bid bonds, when on July 18, 2008, it accepted Joint Venture's bid by sending contract documents to Joint Venture to execute and return.

According to the petition, the bid form required the lowest responsible and responsive bidder to execute the contract and return it along with a performance and payment bond, which was to be governed by La.Rev.Stat. 38:2219.1 Joint Venture selected Infinity Surety for the required performance and payment bond. At this point, the State's petition claims, it discovered that Infinity Surety did not meet any of the requirements of either La.Rev.Stat. 38:2219, or the bid specifications, in terms of being qualified to write surety bonds on public works projects. The State's petition asserts it refused to accept Infinity Surety's improper performance and payment bond. But, despite the fact that the bid form requires Joint Venture to deliver both the properly executed “Contract Documents and [2010-2264 (La. 4] Performance and Payment Bond” to the State within ten (10) days of receipt, the petition alleges the State, in good faith, negotiated for approximately four months with Joint Venture in an attempt to have Joint Venture deliver an acceptable performance and payment bond.

The petition alleges that on November 3, 2008, “due to the failure of Joint Venture to provide an acceptable performance and payment bond within the extended time frame,” the State notified both Joint Venture and Infinity Surety that the bid bond was forfeited, and that the State would be moving on with the project. Thereafter, the State's petition claims it was forced to rebid the project and to enter into a public works contract with another contractor for a higher price than its original bid with Joint Venture.

The State filed its petition on April 15, 2009, against Joint Venture, Infinity Surety, Benetech, L.L.C., and JRDKS Construction, L.L.C. The petition asserts the defendants are liable to the State for the following:

1. Failing to comply with the requirements of the Project Manual and Bid Form regarding the requirements for acceptable bonds;

2. Misrepresenting to the State that Infinity Surety was qualified to write surety bonds on Louisiana public works projects;

3. Failing to tender to the State $121,767.90, which represents the amount of Joint Venture's Bid Bond.

The State's petition claims it suffered damages as a result of the defendants' conduct, including, but not limited to:

1. Costs necessary to rebid project including administrative expenses;

2. Delay damages for the four months the project was delayed while Joint Venture attempted to procure acceptable Payment and Performance Bond;

3. Difference in price between Joint Venture's bid and bid ultimately accepted for the project;

4. Attorney's fees, expenses, and court costs;

5. Any and all damages as may be proven at trial.

[2010-2264 (La. 5] The petition further alleges that Infinity Surety, as “Surety,” and Benetech, L.L.C., and JRDKS Construction, L.L.C., A Joint Venture, as “Contractor,” are liable to the State for these damages. Additionally, the petition asserts, JRDKS Construction L.L.C., and Benetech, L.L.C., as the two entities of which the former Joint Venture comprised, are individually liable to the State for the above damages in the event Joint Venture is no longer in existence.

PROCEDURAL HISTORY

Benetech, Joint Venture, and Infinity Surety filed peremptory exceptions of no cause of action alleging the State's petition fails to state a cause of action upon which relief can be granted. In the exceptions, the defendants contended Joint Venture's bid was non-responsive and, therefore, the State should have rejected Joint Venture's bid and awarded the contract to the next lowest responsible bid, rather than to Joint Venture. The defendants argued the State's right to retain the Bid Bond as liquidated damages was conditioned on the successful bidder failing to execute the contract within a specified period of time. Here, the defendants asserted the State, as the public entity, was required to comply with the applicable bid law, which the State failed to do. The defendants argued the State was prohibited by the public bid law, La.Rev.Stat. 38:2212, from awarding the contract to Joint Venture, because Joint Venture had failed to comply with the advertised bid specifications and, thus, was not a responsive bidder. Essentially, the defendants argued the State should not have relied on their assertions in the bid form that Infinity Surety was an authorized surety and, thus, it was the State's error for awarding the contract to Joint Venture. Additionally, the defendants argued, citing La.Rev.Stat. 38:2212(A)(1)(b), the State was prohibited from waiving any deficiencies in the bid, so as to transform a non-responsive bid into a responsive bid.

[2010-2264 (La. 6] The State responded that its petition asserts three causes of action: breach of contract, intentional misrepresentation, and negligent misrepresentation. The bid form itself, the State argued, established the contractual agreement between the parties. The State contended Joint Venture was required by the bid form to return the executed...

To continue reading

Request your trial
48 cases
  • Geosport Lighting Sys., LLC v. City of Bossier City
    • United States
    • Court of Appeal of Louisiana — District of US
    • April 14, 2021
    ...the plaintiff's right to judicially assert the action against the defendant. State, Div. of Admin., Office of Facility Planning & Control v. Infinity Sur. Agency, L.L.C. , 10-2264 (La. 5/10/11), 63 So. 3d 940 ; Everything on Wheels Subaru, Inc. v. Subaru S., Inc. , 616 So. 2d 1234 (La. 1993......
  • Clary v. State Farm Mut. Auto. Ins. Co.
    • United States
    • Court of Appeal of Louisiana — District of US
    • November 23, 2016
    ... ... to recover damages they claim to have suffered while acquiring and operating an insurance agency in Leesville, Vernon Parish, Louisiana. The Clarys asserted causes of action against all of the ... State, Div. of Admin., Office of Facility Planning & Control v. Infinity Sur. Agency, L.L.C. , 102264, p. 9 (La. 5/10/11), 63 So.3d 940, 946. Additionally, "for the ... ...
  • Herman v. Tracage Dev., L.L.C.
    • United States
    • Court of Appeal of Louisiana — District of US
    • September 21, 2016
    ...So.2d 127, 131.State, Div. of Admin., Office of Facility Planning & Control v. Infinity Sur. Agency, L.L.C ., 10–2264, p 8–9 (La. 5/10/11), 63 So.3d 940, 945–46. The mover has the burden of demonstrating that a petition fails to state a cause of action. Ramey v. DeCaire , 03–1299, p. 7 (La.......
  • Credit v. Richland Parish Sch. Bd.
    • United States
    • Louisiana Supreme Court
    • March 13, 2012
    ... ... v. RICHLAND PARISH SCHOOL BOARD, State Farm Mutual Insurance Company, Cathy Stockton, Georgia Ineichen, Larry ... of Admin., Office of Facility Planning and Control v. Infinity Sur. Agency, L.L.C. ("Infinity"), 102264, p. 1 (La.5/10/11), 63 So.3d ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT