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SOMERS CONSTR. CO. v. BOARD OF EDUC. FOR THE SOUTH

September 25, 1961

SOMERS CONSTRUCTION CO., Inc., a corporation of the Commonwealth of Pennsylvania authorized to do business in New Jersey, Plaintiff,
v.
BOARD OF EDUCATION FOR the SOUTHERN GLOUCESTER COUNTY REGIONAL HIGH SCHOOL DISTRICT and Albert E. Micklewright and Robert C. Micklewright, individually and in partnership, trading as Micklewright and Mountford, Defendants



The opinion of the court was delivered by: MADDEN

Before the Court at this time are separate motions by the defendant, Board of Education for the Southern Gloucester County Regional High School District (hereinafter referred to as 'the School Board' or 'the Board of Education') and the defendants, Albert E. Micklewright and Robert C. Micklewright, individually and in partnership, trading as Micklewright and Mountford (hereinafter collectively referred to as 'the architects') to dismiss the present action against them basically upon the ground that the plaintiff has failed to state a claim upon which relief can be granted against either of them under Rules 12(b) (6) and 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. Since jurisdiction of the action is based upon diversity of citizenship the substantive law of the State of New Jersey will control. Erie Railroad Co. v. Tompkins, 1938, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188.

This suit is the result of an unsuccessful effort by the plaintiff, Somers Construction Co., Inc. (hereinafter referred to as 'Somers') to be the recipients of a contract for the construction of a new high school in the Southern Gloucester County Regional High School District. Few, if any, of the essential facts alleged by the plaintiff and giving rise to its alleged cause of action are in dispute.

 The School Board advertised for bids on the construction of a new high school in their district. All of the bids, including the plaintiff's, were received on or before August 11, 1959. Three days later the Board met to consider the bids submitted to them. Each bid consisted of a base price along with a separate price for each of twenty-five (25) different 'alternates' (such as aluminum doors, storm windows, terraza bathroom floors, etc.), any or all of which alternates the School Board reserved the right to accept or reject at its option.

 The bids submitted were tabulated by the architects and on the basis of this tabulation a contract for the erection of the school building was awarded to George H. Evans & Company as low bidder for the base did and the alternates selected. On August 16, the architects, pursuant to their authorization from the School Board, issued a letter of notice to proceed to George H. Evans & Company and work on the school was immediately commenced.

 On or about August 26, 1959, the plaintiff Somers advised the defendant-architects that there was an error in the Board's tabulations and that based upon the alternates selected the plaintiff was in fact the low bidder. On the following evening the Board of Education met and, by a resolution, purported to rescind the award of the contract to George H. Evans & Company. They then reconsidered the alternates which had been bid upon and selected all of the alternates which had previously been selected with the exception of alternate No. 14 which was for exterior aluminum doors and frames. George H. Evans & Company had bid the sum of $ 2,272 for the alternate No. 14 and the plaintiff Somers had bid the sum of $ 750. The effect of this new selection of alternates, calculated or otherwise, was to make George H. Evans & Company in fact low bidder.

 Thereafter, its protects to the Board going unheeded, the plaintiff Somers instituted an action in lieu of a prerogative writ in the Superior Court of New Jersey to test the validity of the contract awarded to Evans Construction Company. After a motion for a preliminary injunction was denied by that Court but before a final hearing was had and a decision on the merits rendered, the plaintiff voluntarily withdraw its action and suit was instituted in this Court on July 20, 1960.

 The Evans Construction Company has since completed construction of the school. The difficult problem which remains for this Court is to determine whether the defendants have by their alleged actions breached some legal duty owed to the plaintiff, which breach could justify a money judgment in the latter's favor.

 The complaint, in addition to the above facts, alleges malice on the part of both the Board of Education and the architects in depriving the plaintiff of the contract. It is broken into four separate counts. The first two counts are against the School Board and the last two are against the architects. Inasmuch as the principles of law applicable in the disposition of the defendants' motions will differ, each count will be treated separately. It hardly need be said that at this stage of the litigation the Court is not concerned with the ability of the plaintiff to sustain its allegations by proof. The sole question, as to each count, is whether the allegations therein entitle the plaintiff to the opportunity at a trial to make good its claim that the defendants have violated some legal duty owing to it. Continental Collieries v. Shober, 3 Cir., 1942, 130 F.2d 631. For the sake of clarity we will discuss the counts against each defendant in reverse order.

 The Second Count Against the Board of Education

 The second count of the complaint alleges that the 'Defendant Board of Education by its servants, agents and/or employees * * * negligently, carelessly and recklessly tabulated the bids submitted and failed to exercise that care, caution, duty and circumspect required under the circumstances * * * as a result of which the plaintiff was caused to suffer the loss of the contract and has sustained loss of profits and (other expenses) * * *.'

 This language (unlike that of the first count which is discussed infra) unmistakably sounds in tort. However, it is elementary that recovery in tort must be predicated upon the breach of some legal duty which the defendant itself, or through its agent, owes to the plaintiff. What is the precise duty which, in support of its claim, Somers alleges was owed to it by the School Board?

 The answer would appear to be either (a) the duty of a board of education itself, or through its agents, to use due care in tabulating the bids prior to a final contract selection, or, (b) the duty of a board of education to use due care in the ultimate award of the contract itself.

 If it is the former duty which the plaintiff would rely upon for recovery in tort, its complaint must fail for several reasons. First, the Court knows of no common law principle which would impose upon a municipal body such as a board of education, vis-a-vis a particular bidder, the duty to use reasonable care in tabulating a bid and which would subject it to civil liability for its failure to do so. If a duty of this nature exists it would be owed not to particular bidder but rather to the general public whose interest the board is bound by law to serve when making such awards. Malan Construction Corporation v. Board of County Road Commissioners, D.C.E.D.Mich. 1960, 187 F.Supp. 937.

 Moreover, from the standpoint of causation there is an intervening governmental act of a non-ministerial nature between the act of tabulating the bids and the resulting loss of the contract complained of here. If the ultimate award is no longer open to attack any earlier act by the Board in the chain of causation cannot itself support a cause of action against them for loss of the bid. A contrary conclusion would be quite anomalous. It would allow a party to do indirectly ...


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