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Meccon, Inc. v. University of Akron

Court of Appeals of Ohio, Tenth District

June 20, 2013

Meccon, Inc. et al., Plaintiffs-Appellants/ Cross-Appellees,
v.
The University of Akron, Defendant-Appellee/ Cross-Appellant.

APPEAL from the Court of Claims of Ohio. Ct. of Cl. No. 2008-08817

Welin, O'Shaughnessy Scheaf LLC, Peter D. Welin, and Andrew R. Fredelake, for plaintiffs-appellants/cross-appellees.

Michael DeWine, Attorney General, William C. Becker, and Mark R. Wilson, for defendant-appellee/cross-appellant.

DECISION

SADLER, J.

{¶ 1} Plaintiffs-appellants/cross-appellees, Meccon, Inc., and Ronald R. Bassak (collectively referred to as "Meccon"), appeal from a judgment of the Court of Claims of Ohio granting judgment in favor of defendant-appellee/cross-appellant, The University of Akron. For the reasons that follow, we affirm the judgment of the trial court.

I. FACTS AND PROCEDURAL HISTORY

{¶ 2} In order to begin public-improvement work in its football stadium, The University of Akron proposed to award plumbing, fire-protection, and heating, ventilation, and air-conditioning ("HVAC") contracts. In addition to other contractors, Meccon submitted a bid for the HVAC contract. Another contractor, S.A. Comunale, submitted four bids for the project: one for each of the stand-alone plumbing, fire-protection, and HVAC contracts and a combined bid to perform all three contracts.

{¶ 3} When the bids were opened, S.A. Comunale's was the lowest of the combination bids as the bid was $1.2 million less than the next lowest combination of bids. S.A. Comunale was also the lowest bidder for each of the stand-alone plumbing, fire-protection, and HVAC contracts. Meccon submitted the next lowest bid for the standalone HVAC work. S.A. Comunale withdrew its combined bid and its stand-alone plumbing bid, and the university awarded the stand-alone HVAC and fire-protection contracts to S.A. Comunale. For the stand-alone plumbing contract, the university rebid the contract, and S.A. Comunale was once again the lowest bidder. Therefore, the university awarded the plumbing contract to S.A. Comunale.

{¶ 4} On August 6, 2008, Meccon filed suit in the Court of Claims seeking, inter alia, a temporary restraining order, declaratory judgment, preliminary and permanent injunctive relief, and damages for its bid-preparation costs. The complaint alleged the university's award to S.A. Comunale of the three stand-alone contracts, after S.A. Comunale had withdrawn both its combination bid and its plumbing bid, was in violation of the university's own "Instructions to Bidders" and comparable provisions of Ohio statutes.

{¶ 5} Arguing that disappointed bidders were entitled only to injunctive relief and that Meccon's claims for bid-preparation costs and money damages were not cognizable claims, the university filed a motion to dismiss for lack of subject-matter jurisdiction. The Court of Claims granted the university's motion concluding that only the court of common pleas had jurisdiction because Meccon's remaining claim was only for equitable relief On the same basis, the Court of Claims denied the motion for a temporary restraining order and dismissed the complaint.

{¶ 6} Meccon appealed to the Tenth District Court of Appeals, and this court reversed the Court of Claims with respect to the question of jurisdiction. Meccon, Inc. v. Univ. of Akron, 182 Ohio App.3d 85, 2009-Ohio-1700 (10th Dist.) ("Meccon I "). This court concluded disappointed bidders can recover bid-preparation costs, and because such costs constitute monetary damages, the Court of Claims had subject-matter jurisdiction to hear Meccon's claims. Additionally, this court determined Meccon's argument that the Court of Claims erred when it failed to consider Meccon's motion for a temporary restraining order was moot. The Supreme Court of Ohio accepted jurisdiction.

{¶ 7} The Supreme Court of Ohio affirmed the judgment of this court and held that, in appropriate circumstances, reasonable bid-preparation costs are recoverable as money damages. Meccon, Inc. v. Univ. of Akron, 126 Ohio St.3d 231, 2010-Ohio-3297 (" Meccon II "). Specifically, the Supreme Court of Ohio held, "when a rejected bidder establishes that a public authority violated state competitive-bidding laws in awarding a public-improvement contract, that bidder may recover reasonable bid-preparation costs as damages if that bidder promptly sought, but was denied, injunctive relief and it is later determined that the bidder was wrongfully rejected and injunctive relief is no longer available." Id. at ¶ 13. After holding that injunctive relief must be promptly sought in order to obtain bid-preparation costs as damages, the Supreme Court acknowledged the parties' disagreement regarding whether Meccon had timely sought injunctive relief in this case and remanded the matter to the Court of Claims for consideration of said issue.

{¶ 8} On remand, the parties filed cross-motions for summary judgment regarding whether the HVAC contract was awarded illegally to S.A. Comunale. The Court of Claims answered in the affirmative and the matter proceeded to trial before a magistrate on the issue of whether Meccon promptly sought injunctive relief

{¶ 9} At trial, it was established that the bidding opened on June 3, 2008, revealing that S.A. Comunale was the lowest bidder and Meccon was the next lowest bidder on the HVAC contract. Bassak, Meccon, Inc.'s president, testified that he learned shortly thereafter that S.A. Comunale could not perform the plumbing contract. Therefore, Bassak testified he contacted David Pierson at the university to inform the university that if S.A. Comunale withdrew the plumbing bid, S.A. Comunale would be ineligible to maintain any of its bids, including its bid for the HVAC contract. On June 13, 2008, Meccon sent a letter of protest to the university protesting the university's decision to award the HVAC contract to S.A. Comunale. The contract between S.A. Comunale and the university was executed on June 22, 2008.

{¶ 10} On July 30, 2008, Meccon received a letter from the university that was sent on July 26, informing Meccon that the university entered into a contract with S.A. Comunale and released Meccon from its bid guaranty. Meccon's complaint for injunctive relief was filed on August 6. According to the testimony from members of S.A. Comunale's management, as of August 6, S.A. Comunale was 80 percent mobilized on site, had executed contracts with contractors, had expended 512 man hours on site, and had purchased materials.

{¶ 11} The magistrate concluded that to determine whether Meccon promptly sought injunctive relief, it had to be determined when the claim for injunctive relief arose. Based on the evidence presented at trial, the magistrate determined Meccon learned the university intended to award the HVAC contract to S.A. Comunale, at the latest, on June 13, 2008, and, therefore, its claim for injunctive relief arose at that time. However, because Meccon did not file a claim for injunctive relief until August 6, 2008, the magistrate concluded ...


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