Enerland Recovery Services, Inc. v. Parish of Lafourche

619 So. 2d 129, 1993 La. App. LEXIS 2263, 1993 WL 188940
CourtLouisiana Court of Appeal
DecidedMay 28, 1993
DocketNo. 92 CA 0857
StatusPublished
Cited by2 cases

This text of 619 So. 2d 129 (Enerland Recovery Services, Inc. v. Parish of Lafourche) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Enerland Recovery Services, Inc. v. Parish of Lafourche, 619 So. 2d 129, 1993 La. App. LEXIS 2263, 1993 WL 188940 (La. Ct. App. 1993).

Opinion

CRAIN, Judge.

In July, 1986, the Lafourche Parish Council (Council) published an invitation for bids for the transfer for solid waste generated in Lafourche Parish (Parish) to an approved solid waste disposal site by the bailing process method. The bids were prepared by the engineering firm of T. Baker Smith & Son, Inc. Its employee, Horace Thibodaux, a consulting engineer, was retained as a consultant to the Council in this matter. Thibodaux’s duties included preparing bid specifications, evaluating the bids submitted, as well as advising the Council on selecting the lowest responsive, responsible bidder.

At a public Council meeting held on December 1, 1986, Enerland was the apparent low bidder. However, at that meeting, the Council voted to reject all bids and to rebid the project. As a result, new bid specifications were prepared and bid invitations were subsequently advertised. Enerland, Triad Resources and Systems Holdings, Inc. (Triad) and Solid Waste Distributors, Inc. (SWDI) submitted bids on this proposed project. Triad, the low bidder, was disqualified. The contract was awarded to SWDI in February, 1987.1

On June 6, 1987, Enerland instituted an action against the Parish; the Council; individual Council members; T. Baker Smith & Son, Inc.; Horace Thibodaux and SWDI. Plaintiff alleged the Council was arbitrary and capricious in voting to rebid the project at the December 1, 1986, meeting rather [131]*131than voting to award the contract to Ener-land, thereby depriving Enerland of its constitutionally protected rights. The Council’s actions were allegedly due to ulterior motives. Thibodaux and T. Baker Smith & Son, Inc. were on retainer of SWDI at the time Thibodaux was a consultant to the Council on this matter; thus Thibodaux allegedly used his influence on the Council to encourage the rejection of all bids, and to rebid the project in order to ensure the award of the contract to SWDI. Enerland seeks to have the court declare the contract awarded to SWDI null and void; to issue a writ of mandamus directing the Council to accept Enerland’s bid from the first or original bidding and award the contract to En-erland. Enerland further seeks the award of damages and attorney’s fees.

Motions for summary judgment and the peremptory exception raising the objections of no cause of action and no right of action were filed by defendants. Additionally, the Parish, the Council and individual councilmen filed a third party demand against their insurer, National Union.

The trial court maintained the objection of no cause of action raised by the Parish, the Council, the individual councilmen and SWDI. Additionally, summary judgment was rendered in favor of all defendants.

Enerland appeals alleging as error the trial court’s application of the ruling in Airline Construction Co., Inc. v. Ascension Parish School Board, 568 So.2d 1029 (La.1990) to the instant matter. It also assigns as error the trial court’s determination that Enerland’s bid was not responsive to the specifications without a prior determination that the Council’s actions were arbitrary and capricious.

NO CAUSE OF ACTION

In written reasons for judgment the trial court held that under the ruling in Airline, supra, Enerland’s petition failed to state a cause of action against the Parish, the Council and the individual councilmen.

Part II of Chapter 10 of Title 38 of the Louisiana Revised Statutes applies to the letting or awarding of public contracts (La. R.S. 38:2211-2226). Under the Public Bid Law the contract must be awarded to the lowest responsible bidder who bid according to the contract, plans and specifications. La.R.S. 38:2212(A)(l)(a). Prior to its amendment by La.Acts.1990, No. 869, Sec. 1 which was effective on July 25, 1990, La.R.S. 38:2220 provided as follows:

A. Any purchase of materials or supplies, or any contract entered into for the construction of public works, contrary to the provisions of this Part shall be null and void.
B. The district attorney in whose district a violation of this Part occurs, the attorney general or any interested party possesses a right of action to bring suit for appropriate injunctive relief in the district court to nullify a contract entered into in violation of this Part.
C. Where a judgment of nullity is rendered in any action brought by a district attorney or by the attorney general pursuant to Subsection B of this Section the district court may award a civil penalty not in excess of fifty thousand dollars against each offending member of the governing authority of the public entity who authorized the violation.

The Supreme Court has held in Airline, 568 So.2d at 1029, that although there is no contractual relationship between an unsuccessful bidder and the public body which advertised for the bids, the unsuccessful bidder has a cause of action to timely challenge the rejection of his bid by seeking appropriate injunctive relief to nullify the contract which was awarded in violation of the public bid law.

Under Airline, an unsuccessful bidder who does not timely avail itself of the form of injunctive relief provided by La.R.S. 38:2220 waives any claims, if any are available, for damages against the public entity. The underlying reason is that the public bid law is derived for the benefit of the public, not for the direct benefit of the unsuccessful bidder. Thus, for the benefit of the public fisc “[a]n unsuccessful bidder should not be allowed to sit on its knowledge of the violation and claim damages after the public body can no longer as a practical [132]*132matter correct any errors in letting the contract.” Airline, 568 So.2d at 1035.

This action was instituted before the Supreme Court ruling in Airline. Subsequent to that decision defendants urged the exception raising the objection of no cause of action.2 In response to the exception urged by defendants, Enerland amended its petition (Third Amending and First Supplemental Petition) to allege that at the time of initial filing the Council had not issued to SWDI a work order or notice to proceed; no work had been performed pursuant to the contract; no charges had been incurred by the Council and no payments had been made to SWDI pursuant to the contract. Enerland further alleged in its Third Amending and First Supplemental Petition that the work order to SWDI was eventually issued on or about January 11, 1988; no work was performed by SWDI; on May 4, 1988, the Council voted to rebid the contract; bids were received on August 31, 1988, and the contract was awarded to American Waste and Pollution Control.

Enerland argues in brief that Airline does not apply because under the facts and circumstances of this case the petition was timely in that at the time of the action no funds had been expended by the Council nor had any work commenced under the contract.

[A]n unsuccessful bidder on a public contract who wishes to obtain relief because of the rejection of its bid must seek injunctive relief at a time when the grounds for attacking the wrongful award of the contract were known or knowable to the bidder and when corrective action as a practical matter can be taken by the public body ... If an aggrieved bidder does not timely file a suit for injunction, he has waived any right he may have to claim damages against the public body or the successful bidder.

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619 So. 2d 129, 1993 La. App. LEXIS 2263, 1993 WL 188940, Counsel Stack Legal Research, https://law.counselstack.com/opinion/enerland-recovery-services-inc-v-parish-of-lafourche-lactapp-1993.