Mechanical Contractors Strike Out on Fees

Kegler Brown Construction Newsletter

In a long running legal battle with the University of Cincinnati involving unbid work on a "lease-leaseback" project, the Mechanical Contractors have sought not only to have their principle vindicated but also to recover their attorney's fees or other monetary damages.

An earlier Court of Appeals decision suggested that some sort of money damages were appropriate and remanded the case back to the Court of Claims who subsequently ruled that no money damages were proven in this case.

The second Tenth District Court of Appeals decision rendered on April 10, 2003 (No. 02AP-689) found that (1) "reliance" for a promissory estoppel claim was lacking because the University did not represent that competitive bidding would apply norwas there a court ruling declaring the unbid process illegal; (2) that the prior declaratory judgment statute did not entitle one to attorney's fees; and (3) while attorney's fees might potentially be recoverable against the State under R.C. § 2335.39 that opportunity was lost when these fees were not sought within 30 days after final judgment, thereby denying any recovery of monetary damages to the successful litigants.

In conclusion, the Court of Appeals, repeated that "monetary damages may potentially be available as a remedy where injunctive relief no longer provides a practical remedy to disappointed bidders" but warned:

"it may be problematic for bidders to actually recover such monetary damages, as this case demonstrates. We caution that the most appropriate and effective relief available in such situations is for bidders to seek early injunctive relief to enforce the competitive bidding laws, even though such injunctive relief was concededly ineffectual here due to the unique facts and procedural complexities of this case."

This case re-emphasized the great difficulty presented in bid challenge cases, particularly the difficulty in receiving any sort of compensation should the contract be unlawfully denied the disgruntled bidder. Prompt action is always required to seek injunctive relief.