North Twin Builders, LLC v. Town of Phelps

2011 WI App 77, 800 N.W.2d 1, 334 Wis. 2d 148, 2011 Wisc. App. LEXIS 343
CourtCourt of Appeals of Wisconsin
DecidedMay 3, 2011
DocketNo. 2009AP3036
StatusPublished
Cited by4 cases

This text of 2011 WI App 77 (North Twin Builders, LLC v. Town of Phelps) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
North Twin Builders, LLC v. Town of Phelps, 2011 WI App 77, 800 N.W.2d 1, 334 Wis. 2d 148, 2011 Wisc. App. LEXIS 343 (Wis. Ct. App. 2011).

Opinion

BRUNNER, J.

¶ 1. The Town of Phelps appeals a summary judgment awarding North Twin Builders, LLC, compensatory damages for the Town's violation of Wis. Stat. § 60.47, which governs public contracts and competitive bidding for towns.1 The Town asserts North Twin Builders is not entitled to recover the costs [150]*150of preparing its unsuccessful bid because it did not first obtain injunctive relief. We conclude that a disappointed bidder may recover bid preparation expenses for a violation of the competitive bidding statute regardless of whether it has sought injunctive relief. Accordingly, we affirm.

BACKGROUND

¶ 2. In January 2008, the Town determined its town hall needed repairs. The Town published notices seeking bids for the project on April 2 and April 9, 2008. Bids were to be submitted to the town clerk no later than 5 p.m. on April 14, 2008. There is no dispute that the timing of the notices violated Wis. Stat. § 60.47(2) (b).2

¶ 3. During the notice period, the Town repeatedly changed the scope of the project, including alterations to the heating, ventilating, and air conditioning system, the support structures underneath the library, and a front concrete stairway. The Town's engineering firm sent updated specifications to some interested bidders, but not others. North Twin Builders, one interested bidder, received the final specification changes on Saturday, April 12, two days before bids were due. John Volkmann, North Twin Builders' owner, attempted to incorporate the changes into his company's bid on Monday, April 14, [151]*151but could not obtain a cost estimate for stairway railings on such short notice. Accordingly, North Twin Builders' bid did not include alterations to the concrete stairway.

¶ 4. The Town received three bids for the project. Bids submitted by North Twin Builders and another bidder were rejected as incomplete. At an April 21 meeting, the town board awarded the project to the only remaining bidder, Superior Design & Construction. The Town and Superior Design signed a contract the same day. Work on the town hall started within a week.3

¶ 5. Volkmann did not learn that his company's bid had been rejected until April 23. In an effort to gather additional information about his company's failed bid, Volkmann attended town board meetings, filed public record requests, and asked the board to review its decision. North Twin Builders ultimately filed suit on June 10, 2008, seeking injunctive relief to prevent further work on the town hall, and damages equal to the costs of preparing the failed bid.

¶ 6. On June 17, 2008, North Twin Builders filed a motion for a temporary injunction. Before conducting a motion hearing, the circuit court held a telephone conference with the parties, during which the Town represented that the town hall project was significantly underway and nearing completion.4 Counsel for North Twin Builders "essentially acknowledged that status and informally withdrew the request for [a] restraining order. . . ." Nonetheless, the court observed that the project had an unusually "tight window of completion from the time that the bid was let," and indicated that [152]*152it would have granted an ex parte restraining order if the contract had not yet been let by the Town, or if Superior Design had not yet begun performance.

¶ 7. The Town filed a motion to dismiss and, later, a motion for summary judgment. In both motions, the Town asserted that under controlling case law, a disappointed bidder must obtain injunctive relief to halt a public project before it can recover the cost of preparing its unsuccessful bid.

¶ 8. The circuit court denied both motions. It concluded that existing case law had not yet determined whether an unsuccessful bidder could recover bid preparation expenses without first obtaining injunctive relief. The court then concluded that, for violations of the competitive bidding statute, the public interest is served by allowing an unsuccessful bidder to recover the costs of preparing its bid:

[W]hat is really most important, is making certain that municipalities and other entities follow [the competitive bidding statute] correctly. And therefore [recovery of bid preparation expenses] should not turn on whether .. . injunctive relief is granted .... [Costs of preparation] should be available to an unsuccessful bidder who is essentially acting as an advocate in the public interest to enforce those laws.
[The public benefits from the] elimination of fraud and collusion certainly, and most importantly ... the public has some assurance that it's receiving the best work and materials at the most reasonable price.

A contrary rule, the court noted, would work particular injustice in a case like this, where "a contract of relatively moderate amount. .. was let with the under[153]*153standing that the construction would commence and complete in a very brief time period."

¶ 9. The parties then stipulated to the amount of damages—$3,000—and the court entered judgment for North Twin Builders. The Town appeals the denial of its summary judgment motion.

DISCUSSION

¶ 10. We review a grant of summary judgment de novo. See Tews v. NHI, LLC, 2010 WI 137, ¶ 40, 330 Wis. 2d 389, 793 N.W.2d 860. Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2). Here, the parties agree there are no genuine issues of material fact; the sole question is whether North Twin Builders was entitled to judgment as a matter of law.

¶ 11. This appeal presents a single issue- : whether North Twin Builders, as a disappointed bidder, must first obtain injunctive relief for procedural violations of the competitive bidding statute before pursuing as damages the costs of preparing its failed bid. The Town, noting that North Twin Builders withdrew its injunction request, contends three cases establish such a requirement: Aqua-Tech, Inc. v. Como Lake Protection & Rehabilitation District, 71 Wis. 2d 541, 239 N.W.2d 25 (1976); D.M.K., Inc. v. Town of Pittsfield, 2006 WI App 40, 290 Wis. 2d 474, 711 N.W.2d 672; and PRN Associates LLC v. DOA, 2009 WI 53, 317 Wis. 2d 656, 766 N.W.2d 559.

¶ 12. Our supreme court first discussed a disappointed bidder's available remedies in Aqua-Tech. In that case, Aqua-Tech, the disappointed bidder, obtained [154]*154an ex parte injunction preventing the Como Lake district from awarding a contract to the successful bidder. Aqua-Tech, 71 Wis. 2d at 545. The circuit court denied Aqua-Tech's request for a temporary injunction, and Aqua-Tech immediately appealed and obtained a stay of the court's order vacating the ex parte injunction. Id.

¶ 13.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Five Star Airport Alliance, Inc. v. Milwaukee County
939 F. Supp. 2d 936 (E.D. Wisconsin, 2013)
Horsley Co. v. Milwaukee County
939 F. Supp. 2d 927 (E.D. Wisconsin, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
2011 WI App 77, 800 N.W.2d 1, 334 Wis. 2d 148, 2011 Wisc. App. LEXIS 343, Counsel Stack Legal Research, https://law.counselstack.com/opinion/north-twin-builders-llc-v-town-of-phelps-wisctapp-2011.