City of Auburn Ex Rel. Board of Public Works & Safety v. Mavis

468 N.E.2d 584, 1984 Ind. App. LEXIS 2966
CourtIndiana Court of Appeals
DecidedSeptember 25, 1984
Docket3-883A255
StatusPublished
Cited by14 cases

This text of 468 N.E.2d 584 (City of Auburn Ex Rel. Board of Public Works & Safety v. Mavis) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Auburn Ex Rel. Board of Public Works & Safety v. Mavis, 468 N.E.2d 584, 1984 Ind. App. LEXIS 2966 (Ind. Ct. App. 1984).

Opinions

GARRARD, Judge.

Gene Mavis (Mavis) was a losing bidder for a contract to provide radio communications equipment to the Auburn Fire Department in June 1978. Mavis brought a private action for treble damages pursuant to IC 24-1-2-8 and IC 24-1-2-7 against the City of Auburn (city) and D & L Communications, Inc. (D & L). Mavis alleged that prior to open and competitive bidding the city and D & L contrived to develop specifications favoring equipment sold by D & L such that they violated the antitrust statute. Mavis claimed as damages the time spent in preparing his bid. In the second jury trial 1 on this matter, Mavis obtained a [585]*585verdict of $1,458.00 (three times his actual damages) and $17,092.00 in attorney fees.

Restated, the issues on appeal are:

1) What are the essential elements of a private antitrust action under IC 24-1-2-8 and / and has the plaintiff proven them by a preponderance of the evidence?
2) Did the trial court err in excluding evidence at trial which it had determined to be prejudicial when it granted plaintiff's motion in limine prior to trial?

Issue 1

IC 24-1-2-8 2 makes unlawful acts which operate to restrain open and free competition in bidding to obtain contracts for private or public work. Under IC 241-27 3 a person injured in his business or property by a violation of this statute may bring a civil action seeking treble damages, costs and attorney fees.

Due to the dearth of decisions under IC 24-1-2-3 & -7, Indiana courts use decisional law under the similar federal antitrust law, Section 4 of the Clayton Anti-Trust Act, 15 U.S.C. Section 15. Sandidge v. Rogers (S.D.Ind.1958), 167 F.Supp. 553. Federal case law requires a plaintiff to prove three essential elements: 1) a violation of the statute, 2) injury to a person's business or property proximately caused by the violation, and 8) actual damages. M.C. Manufacturing Co., Inc. v. Texas Foundries, Inc. (5th Cir.1975), 517 F.2d 1059; Citizens National Bank of Grant County v. First National Bank in Marion (1975), 165 Ind.App. 116, 331 N.E.2d 471.

The city maintains that Mavis failed to prove an essential element of his claim, i.e. a violation which caused his damages. In addition, they claim that damage claims for lost time in preparing bids are not cognizable under antitrust law without proof that the plaintiff would have received the contract but for the violation, citing M.C. Manufacturing Co., Inc., supra; Ovitron Corporation v. General Motors Corporation (24 Cir.1975), 512 F.2d 442; Urban Products International, Ltd. v. National Disposal Service (1975), 32 Ill.App.3d 299, 336 N.E.2d 138; and A.J. Goodman & Son, Inc. v. United States Lacquer Mfg. Corp. (D.Mass.1949), 81 F.Supp. 890.

All four of the city's cages cited above are distinguishable on the same ground. In each case the court held that the plaintiff failed to prove it would have received the contract but for the violation. How[586]*586ever, each case involves a damage claim for lost profits. Thus, it would be necessary to establish that the claimant would have received the contract except for the violation in order to establish that the sought-for damages were the natural and probable consequence of the violation. Mavis' damage claim is not for lost profits but is premised on a violation of the statute prior to the submission of bids and the award of the contract. His damages resulted not from the award of the contract but from the collusion between the city and D & L in establishing specifications favoring D & L's equipment. But for the violation, i.e. the collusion prior to competitive bidding, Mavis' time spent in preparing a bid would not have been wasted.

The purpose of the antitrust act is to:

"... prevent fraud and collusion in the letting of contracts and to protect trade: and commerce against unlawful restraints and monopolies. To accomplish these ends the legislature has seen fit to incorporate into the statute different remedies and drastic measures for the punishment of those who violate its provisions, and for the relief of those who suffer on account thereof."

Royer v. State ex rel. Brown (1916), 63 Ind.App. 123, 112 N.E. 122. As the United States Supreme Court held in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. (1977), 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701, plaintiffs must prove an:

"... injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation. It should, in short, be 'the type of loss that the claimed violations ... would be likely to cause.' Zenith Radio Corp. v. Hazeltine Research, 395 U.S. [100] at 125 [89 S.Ct. 1562, 1577, 23 L.Ed.2d 129]." _

The city and D & L do not dispute the trial court's judgment that a violation of the statute occurred. The city maintains that Mavis' expenses of preparing a bid are the type inherent in any competitive bidding. However, this position ignores the fact that the bidding was no longer competitive after the violation. When the bidding was no longer open and competitive due to collusion between the government and a favored bidder, injury in the form of lost time in preparing a useless bid was a direct result of the antitrust violation. It is the type of injury which the antitrust laws intend to prevent and the type of injury which naturally flows from what makes the defendant's acts unlawful. Brunswick, supra.

Issue 2

The city maintains that the trial court erred in granting Mavis' motion in limine and in excluding evidence at trial that the city properly considered various factors which led them to award the contract to D & L.

A motion in limine may be used by a trial court to exclude prejudicial matter from a jury. Beta Alpha Shelter of Delta Tau Delta Fraternity, Inc. v. Strain (1983), Ind.App., 446 N.E.2d 626 (transfer denied); Burrus v. Silhavy (1973), 155 Ind.App. 558, 293 N.E.2d 794. Mavis sought, inter alia, a court instruction to the defendants that they might not interrogate witnesses or refer to the following in the jury's presence. Whether or not:

"General Electric or D & L Communications, Inc. was the best bid or that plaintiff Mavis' bid was not the best bid. IC 24-1-2-8 permits no defense based on this fact. The end does not justify the means. The issue is whether the defendants violated the prohibitions in IC 24-1-2-8 not whether they chose the best bid.

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City of Auburn Ex Rel. Board of Public Works & Safety v. Mavis
468 N.E.2d 584 (Indiana Court of Appeals, 1984)

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Bluebook (online)
468 N.E.2d 584, 1984 Ind. App. LEXIS 2966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-auburn-ex-rel-board-of-public-works-safety-v-mavis-indctapp-1984.