Innovative Architectural Planners, Inc. v. Ohio Dept. of Adm. Servs.

2024 Ohio 824, 239 N.E.3d 942
CourtOhio Court of Appeals
DecidedMarch 7, 2024
Docket23AP-116
StatusPublished
Cited by9 cases

This text of 2024 Ohio 824 (Innovative Architectural Planners, Inc. v. Ohio Dept. of Adm. Servs.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Innovative Architectural Planners, Inc. v. Ohio Dept. of Adm. Servs., 2024 Ohio 824, 239 N.E.3d 942 (Ohio Ct. App. 2024).

Opinion

[Cite as Innovative Architectural Planners, Inc. v. Ohio Dept. of Adm. Servs., 2024-Ohio-824.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Innovative Architectural Planners, : Inc., d/b/a IAP Government Services Group, :

Plaintiff-Appellant, : No. 23AP-116 (Ct. of Cl. No. 2021-00354JD) v. : (REGULAR CALENDAR) The Ohio Department of Administrative : Services and the Ohio Facilities Construction Commission, :

Defendants-Appellees. :

D E C I S I O N

Rendered on March 7, 2024

On brief: Porter, Wright, Morris & Arthur, LLP, Scott E. North, L. Bradfield Hughes, and Spencer C. Meador, for appellant. Argued: Scott E. North.

On brief: Dave Yost, Attorney General, Randall W. Knutti, James E. Rook, and Jerry K. Kasai, for appellees. Argued: Randall W. Knutti.

APPEAL from the Court of Claims of Ohio DORRIAN, J.

{¶ 1} Plaintiff-appellant, Innovative Architectural Planners, Inc. (“IAP”), appeals a judgment of the Court of Claims of Ohio that granted summary judgment to defendants- appellees, the Ohio Department of Administrative Services (“DAS”) and the Ohio Facilities Construction Commission (“OFCC”). For the following reasons, we affirm in part, reverse in part, and remand for further proceedings. No. 23AP-116 2

I. Facts and Procedural History {¶ 2} In 2015, after issuing a Request for Competitive Sealed Proposals, DAS awarded a third-party administrator contract (“TPA contract”) to IAP. Under the TPA contract, state agencies could engage IAP to serve as a third-party administrator for certain agency projects. As the TPA contract explained, “[t]he [third-party administrator] serves as an intermediary between the agencies and the Contractors [hired to] perform[ ] the work. The role of the [third-party administrator] is to: receive task orders from using agencies, set up scope meetings with all interested parties, bid and award contracts to Contractors and oversee the scope of work, costs and schedules of all awarded projects.” (Pl.’s Memo in Opp. to Defs.’ Mot. for Summ. Jgmt., Ex. A.) Typical projects for which IAP could act as a third-party administrator included minor construction, interior and exterior finishes, mechanicals, plumbing, electrical, fire safety, elevators, HVAC, and roofing. {¶ 3} The TPA contract provided that it was available for the use of specific, named agencies, including the Ohio Department of Natural Resources, the Ohio Department of Rehabilitation and Correction, and the Ohio Department of Agriculture. According to the TPA contract, “[t]he agency is eligible to make purchases of the contracted services in any amount and at any time as determined by the agency.” (Pl.’s Memo in Opp. to Defs.’ Mot. for Summ. Jgmt., Ex. E at 1.) {¶ 4} A state agency could engage IAP’s services by submitting a task order to IAP. Upon receiving the task order, IAP would meet with the agency to determine the scope of work the agency needed. IAP would then solicit bids from contractors for the agency’s project, review the bids, and negotiate with the contractors. Once the agency selected a contractor, IAP would award the project to the contractor. At that point, the agency would issue a purchase order to IAP. According to Jennifer Schneider, IAP’s senior vice president, a purchase order constituted the contract between IAP and the agency as to the agency’s project. After receiving the purchase order, IAP would oversee the contractor’s work on the project and pay the contractor the amount due. {¶ 5} Pursuant to the TPA contract, the agency receiving IAP’s third-party administrator services paid IAP directly for those services. IAP could “not be paid, nor [could] the agency be invoiced, for task orders that [did] not result in active projects or for projects in which the Contractor [was] not paid for work completed.” (Pl.’s Memo in Opp. No. 23AP-116 3

to Defs.’ Mot. for Summ. Jgmt., Ex. A at 21.) IAP interpreted this provision to mean that it could not bill the agency for its services until it received a purchase order from the agency. Under the TPA contract, IAP was entitled to a payment of 8.5 percent of the total project cost. {¶ 6} The original term of the TPA contract was from May 30, 2015 to December 31, 2017. However, the parties renewed the TPA contract for an additional two-year term, which extended the term of the contract to December 31, 2019. As the expiration of the TPA contract approached, the parties agreed to postpone the termination of the contract until March 31, 2020, but only to allow the completion of specific, ongoing projects. {¶ 7} According to IAP, beginning in 2016, DAS and OFCC began diverting and removing projects from IAP. Schneider explained that “instead of it being the agencies deciding whether or not they wanted to use [the TPA] contract, OFCC was now determining whether or not the agencies could even come to [IAP].” (Schneider Depo. at 48.) IAP contends that DAS and OFCC used a variety of tactics to steer projects away from IAP: “OFCC telling OSU that the [TPA] contract was illegal; DAS and OFCC imposing monetary thresholds for use of the TPA [contract]; OFCC labeling projects as tasks OFCC alleged were outside the [TPA] contract; OFCC taking a project and then sending it back to the state agency and avoiding IAP; and OFCC telling state agencies that if agencies used the TPA [contract] and the project went before the [C]ontrolling [B]oard that OFCC would blackball the project.” (Schneider Depo., Ex. C, Pl.’s Resps. to Def. DAS’ First Interrogs. at 6.) {¶ 8} IAP alleges that DAS and OFCC impeded its provision of services under the TPA contract at three different stages: (1) DAS and OFCC diverted projects away from IAP before the agencies could engage IAP, (2) DAS and OFCC removed projects from IAP after IAP had received a task order from an agency but before IAP had received a purchase order, and (3) DAS and OFCC cancelled projects after IAP had received a purchase order from an agency. The last category—the cancelation of projects after IAP had received a purchase order—all occurred in 2016. The other two categories—the diversion and removal of projects from IAP—began in 2016 and “[n]ever ended” during the term of the TPA contract. (Schneider Depo. at 50.) As Schneider explained, “the cancelation of the projects” began and ended in 2016, but “the diversion of projects, the contract steering and all that, that continued on through the end of our contract.” (Schneider Depo. at 156.) No. 23AP-116 4

{¶ 9} On June 28, 2021, IAP filed suit against DAS and OFCC, alleging claims for breach of contract, quantum meruit, promissory estoppel, and misrepresentation against DAS and a claim for tortious interference with contract against OFCC. DAS and OFCC moved to dismiss IAP’s complaint for failure to state a claim pursuant to Civ.R. 12(B)(6). IAP failed to respond to the motion to dismiss. {¶ 10} In a decision issued September 22, 2021, the Court of Claims granted DAS’ and OFCC’s motion as to the claims for breach of contract, promissory estoppel, and misrepresentation, but denied it as to the claims for quantum meruit and tortious interference with contract. Only the court’s ruling on the claim for breach of contract has relevance to this appeal. {¶ 11} In its complaint, IAP had alleged that its average monthly sales volume was $3,710,292 before DAS and OFCC began diverting and removing projects, but $918,499 after. IAP sought damages for breach of contract in the amount of profit it lost due to the diversion and removal of projects. When moving for dismissal, DAS argued that IAP could only succeed on its breach-of-contract claim if IAP specified a provision in the TPA contract that guaranteed the combined value of the contracts it would administer would exceed some minimum value. DAS contended that no such provision existed.

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Cite This Page — Counsel Stack

Bluebook (online)
2024 Ohio 824, 239 N.E.3d 942, Counsel Stack Legal Research, https://law.counselstack.com/opinion/innovative-architectural-planners-inc-v-ohio-dept-of-adm-servs-ohioctapp-2024.