State MacHinery and Equipment Sales, Inc. v. Livingston Parish Gravity Drainage District 5

818 So. 2d 133, 2000 La.App. 1 Cir. 2066, 2001 La. App. LEXIS 2678, 2001 WL 1419423
CourtLouisiana Court of Appeal
DecidedNovember 14, 2001
Docket2000 CA 2066
StatusPublished
Cited by2 cases

This text of 818 So. 2d 133 (State MacHinery and Equipment Sales, Inc. v. Livingston Parish Gravity Drainage District 5) 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
State MacHinery and Equipment Sales, Inc. v. Livingston Parish Gravity Drainage District 5, 818 So. 2d 133, 2000 La.App. 1 Cir. 2066, 2001 La. App. LEXIS 2678, 2001 WL 1419423 (La. Ct. App. 2001).

Opinion

818 So.2d 133 (2001)

STATE MACHINERY AND EQUIPMENT SALES, INC.
v.
LIVINGSTON PARISH GRAVITY DRAINAGE DISTRICT # 5

No. 2000 CA 2066.

Court of Appeal of Louisiana, First Circuit.

November 14, 2001.

*134 Steven B. Loeb, Baton Rouge, for Plaintiff-Appellee State Machinery and Equipment Sales.

D. Blayne Honeycutt, Denham Springs, for Defendant-Appellant Livingston Parish Gravity Drainage District # 5.

Before: FOIL and PETTIGREW, JJ., and KLINE,[1] J. Pro Tem.

PETTIGREW, J.

Plaintiff/appellee instituted this suit alleging that defendant/appellant, a political subdivision, violated the public bid law, La. R.S. 38:2211 et seq., and tailored its bid specifications to prevent competition. In an earlier decision, this court concluded that the defendant violated the Public Bid Law and remanded this matter to the district court for further proceedings relative to an award of damages. Defendant now appeals the damages awarded against it by the district court. For the reasons herein assigned, we amend in part, and as amended, affirm.

BACKGROUND FACTS

In our previous opinion in this case, State Machinery & Equipment Sales, Inc. v. Livingston Parish Gravity Drainage # 5, 98-1207 (La.App. 1 Cir. 6/25/99), 742 So.2d 26, we determined that plaintiff/appellee, State Machinery and Equipment *135 Sales, Inc. ("State Machinery"), in response to a bid request from defendant/appellant, Livingston Parish Gravity Drainage District # 5 ("drainage district"), submitted a timely bid covering a Hyundai 200 LCM (Long Crawler Modulator) Hydraulic Excavator. We further noted that the State Machinery bid set forth a total sales price of $106,907.00, payable under a 60-month lease-purchase at $2,120.12 per month, with extended warranty, or $2,064.37, without the warranty.

At its March 2, 1996 meeting, the drainage district received three bids in response to its excavator bid solicitation. After reviewing the bids received, the drainage district's chairman concluded that the bid submitted by Norwel Equipment Company ("Norwel Equipment") was the lowest responsive bid. The bid submitted by Norwel Equipment set forth a price of $124,732.00 for a John Deere 690E LC excavator. The drainage district notified State Machinery through a certified letter dated March 12, 1996, that its bid had been rejected due to its failure to comply with the bid specifications.

Despite protests from State Machinery, the drainage district approved the lease-purchase of the John Deere excavator from Norwel Equipment, and a contract was later signed on or about May 2, 1996. State Machinery instituted this litigation for injunctive relief, and in the alternative, damages, against the drainage district and its chairman. State Machinery asserted that the drainage district had been arbitrary and capricious in rejecting its bid and that the bid specifications had been narrowly drafted so as to exclude competition.

The district court, in a judgment signed on November 26, 1997, concluded that because State Machinery had failed to file its protest prior to the opening of bids, it had, under the provisions of the Louisiana Procurement Code (La. R.S. 39:1554 et seq.), waived any objections it may have had to the bid specifications. The district court further held the drainage district had not been unreasonable in its rejection of State Machinery's bid.

State Machinery subsequently appealed to this court, and in our previous opinion rendered on June 25, 1999, we reversed the decision of the district court. In said decision, we further held that the Procurement Code did not apply to this case and that the Public Bid Law controlled this case. This court concluded that the bid submitted by State Machinery was not only timely, but was also the lowest responsive bidder. Accordingly, we found that the drainage district had been arbitrary and capricious in rejecting State Machinery's bid proposal. We also held that State Machinery's petition for injunction was timely and therefore they preserved their right to damages if injunctive relief was no longer possible. Noting that the district court curtailed evidence regarding damages, we remanded the matter to the district court for further proceedings as to damages.

PROCEEDINGS IN THE DISTRICT COURT FOLLOWING REMAND

Upon remand from this court, the district court conducted a second trial on January 5, 2000, confined to the issue of damages. Upon review of the evidence, together with the arguments and memoranda of counsel, the district court held that the proper measure of the damages sustained by State Machinery was the lost profit State Machinery would have received had it been awarded the excavator contract. The district court determined this amount to be $17,000.00, and cast the drainage district with all costs. From this judgment the drainage district has appealed, *136 and State Machinery has answered the appeal seeking an increase in damages.

ASSIGNMENTS OF ERROR

In connection with its appeal in this matter, the drainage district sets forth the following issues for review by this court:

Whether the [district] court committed legal error in holding that [State Machinery] is entitled to damages as a result of a violation of the public bid law. Whether the [district] court committed legal error in holding that [State Machinery] is entitled to the profit it lost as a result of a violation of the public bid law.

As we noted, State Machinery has filed an answer to the drainage district's appeal seeking an increase in the amount of damages awarded. Specifically, State Machinery seeks damages equivalent to the difference between its bid price under a sixty-month lease-purchase arrangement and the net cost of the excavator.

DISCUSSION

In our previous opinion in this matter, this court observed as follows:

The basic statutory law governing the disposition of this case is contained within La. R.S. 38:2211 et seq., more commonly referred to as the Public Bid Law. Pursuant to La. R.S. 38:2212(A)(1)(a)(i), "all purchases [by a public entity] of any materials or supplies exceeding the sum of fifteen thousand dollars to be paid out of public funds" shall be advertised and let to the lowest responsible bidder. In discussing the Public Bid Law, the Louisiana Supreme Court stated, "[t]his statutory law is a prohibitory law, founded on public policy, which was enacted in the interest of the taxpaying public. The purpose of the law is to prevent public officials from awarding contracts on the basis of favoritism or at possibly exorbitant and extortionate prices." Airline Construction Company, Inc. v. Ascension Parish School Board, 568 So.2d 1029, 1032 (La. 1990) (citations omitted).
Earlier, in Haughton Elevator Division v. State of Louisiana Through Division of Administration, 367 So.2d 1161 (La.1979), the supreme court explained:
"[t]he statute vests in the awarding authority the power and discretion to determine the responsibility of the bidder and to reject all bids if none is satisfactory, but the law does not permit the arbitrary selection of one which is higher and the rejection of others which are lower. The discretion must be exercised in a fair and legal manner and not arbitrarily."
Haughton, 367 So.2d at 1165 (citation omitted).
The supreme court in Haughton quoted with approval Housing Authority of Opelousas, Louisiana v. Pittman Construction Company,

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818 So. 2d 133, 2000 La.App. 1 Cir. 2066, 2001 La. App. LEXIS 2678, 2001 WL 1419423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-machinery-and-equipment-sales-inc-v-livingston-parish-gravity-lactapp-2001.