Creative Collateral Claims Against Public Entities and Their Agents
| Author | By Kevin J. Gleeson and Mark L. McAlpine |
| Pages | 33- 41 |
THE CONSTRUCTION LAWYER 33Winter 2020
Kevin J. Gleeson Mark L. McAlpine
Published in The Construction Lawyer, Volume 40, Number 1 Winter 2020. © 2020 American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Creative Collateral Claims Against Public Entities
and Their Agents
By Kevin J. Gleeson and Mark L. McAlpine
LOW-BIDDER CHALLENGES
Kevin J. Gleeson is the leader of the Construction,
Architectural and Engineering Litigation Department
of Sullivan, Ward, Patton, Gleeson & Felty, P.C., in
Southeld, Michigan. Mark L. McAlpine is the Founding
Principal of McAlpine, P.C., in Auburn Hills, Michigan.
When a low bidder fails to win a construction contract
(which happens often), the disappointed low bidder
may suspect it was inappropriately denied the contract,
perhaps due to prior disputes with the owner or its design
engineer, the contractor’s reputation, or the owner’s
subjective desire to do business with a different contractor
regardless of the bids submitted. The contractor may be
correct, but its legal options are generally limited. Most
states and local municipalities either do not permit or
severely restrict the rights of disappointed bidders to
challenge nonfederal construction contract awards. One
such case was Cedroni Associates v. Tomblinson, Harburn
Associates,1 where the disappointed bidder alleged that the
engineer tortiously interfered with its right to be awarded
the contract as the lowest responsible bidder. While
the plaintiff in Cedroni was unsuccessful in pursuing
its claim, there are other legal options available for a
disappointed low bidder to challenge a public owner’s
award or alternatively to seek to recover lost prots where
it should have been awarded the contract but was not due
to the wrongful acts of a third party.
Overview of Cedroni Associates Inc. v. Tomblinson,
Harburn Associates
The Cedroni case originated with a school construction
project at Holly Academy where Cedroni Associates, Inc.,
was the contractor and Tomblinson, Harburn Associates
(THA) was the design professional. During construction,
Cedroni and THA disagreed over the proper ballasts to
use. The owner ultimately replaced THA with another
design rm. Thereafter, Cedroni found evidence that
THA provided negative, and factually untrue, feedback
to the bid evaluation committee organized by Davison
Community Schools regarding the Holly project and other
projects in which THA and Cedroni were involved. The
school district awarded the contract to the second-lowest
bidder, at an increased cost to taxpayers of over $50,000.
Cedroni then sued THA, alleging that THA tortiously
interfered with its business expectancy as low bidder.
The trial court granted THA’s motion to dismiss on
the basis that there was no evidence of Cedroni having
a reasonable or valid expectation of entering a business
relationship with the school district and had likewise
failed to show that THA did anything improper. The
court of appeals reversed.
2
The opinion noted the school
district’s bid management policy’s requirement that “[b]
ids shall be awarded in compliance with applicable bidding
obligations imposed by law to the ‘lowest responsible
bidder.’”
3
The opinion went on to analyze the legal criteria
for determining the lowest responsible bidder and held
that “the multiple provisions reserving the right to reject
bids are subject to the provision requiring an award to
be made to the lowest responsible bidder, otherwise,
the ‘lowest responsible bidder’ provision is rendered
meaningless and nugatory.”4 Because the evidence
submitted to the trial court created an issue of material
fact as to whether Cedroni was a “responsible” bidder in
addition to being low, the court of appeals reversed and
remanded.
5
The opinion noted in passing that Cedroni’s
low-bidder status alone did not give it an actionable
business expectancy.6
The Michigan Supreme Court reversed the court of
appeals and reafrmed the trial court’s order dismissing
Cedroni’s claims. The supreme court rst reasoned that
because a disappointed low bidder has no cause of action
against a municipality when its bid is rejected, Cedroni
had no business expectancy in the award and could not
sue the design rm, either.7 The court further concluded
that the denition of “lowest responsible bidder” afforded
so much discretion to the school district that the court
would not second-guess its judgment and that Cedroni’s
apparent satisfaction of many of the factors dening
“lowest responsible bidder” was not enough to give
Cedroni a business expectancy.8
To continue reading
Request your trial