ILNews

COA disagrees on damages to bidder

Back to TopE-mailPrintBookmark and Share

Indiana Court of Appeals judges disagreed today whether a company should be entitled to damages when it lowered its bid for work at a state-run hospital based on fraudulent information from another bidder.

Judges Edward Najam and Terry Crone affirmed the award of damages to Liberty Healthcare Corp. in its suit against Columbus Medical Services Organization for tortious interference with a business relationship, and for treble damages, attorneys' fees, and costs under the Crime Victims Relief Act.

Liberty and Columbus were bidding for the provision of psychiatric medical staffing services at Logansport State Hospital, which is owned by the state. At the time of the bidding, Liberty had been providing services at the hospital. During the request for proposal process, Columbus made misrepresentations and claimed doctors who worked for Liberty expressed interest in working for Columbus under the proposal. Columbus never spoke to these doctors.

As a result of a similar evaluation by the state, it requested Liberty and Columbus submit a second Best and Final Offer; Liberty had lowered its bid in order to win the contract. Columbus came in with the lower price and was awarded the contract. After the fraud was discovered, Liberty entered into a contract with the state, but was stuck at the lower bid price from the second Best and Final Offer. Liberty claimed that if it hadn't been for Columbus' fraud, it would have won the contract earlier on with a higher bid.

In Columbus Medical Services Organization LLC v. Liberty Healthcare Corp., No. 82A04-0808-CV-466, the majority agreed with the trial court's calculation of $486,497 in lost profits directly related to Columbus' fraudulent behavior. The specific amount was based on testimony from Liberty's CFO, who based his testimony on the mathematical calculation of the difference between the profits that would have been realized under the first BAFO and the profits realized under the contract that was eventually accepted by the state. The majority also acknowledged that it wasn't possible to calculate the damages with absolute certainty, but noted that tort damages don't require absolute certainty.

Chief Judge John Baker disagreed with his colleagues, believing the damage award to Liberty is too speculative. The trial court attempted to right the wrongs committed by Columbus, but there's no way of knowing what would have happened if Columbus hadn't committed fraud, been eliminated sooner, or not even participated.

"I also believe that the result reached by the majority leads to bad public policy. No one held a gun to Liberty's proverbial head and forced it to lower its bid. Liberty chose to do so. Admittedly, its decision was based on faulty, likely fraudulent, information, but it was a choice, nonetheless," he wrote.

As a matter of public policy, courts shouldn't award damages to a company that decided it was able and willing to lower its bid on a project, even if that decision was based on a competitor's fraud, he continued.

The chief judge concurred with the majority's conclusion that the Crime Victims Relief Act applied to Liberty. He would reverse the damages award, order a nominal damages award of $1 to Liberty, treble it under the CVRA to $3, and affirm the award of $473,468.04 for attorneys' fees and litigation expenses.

ADVERTISEMENT

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. @BryanJBrown, You are totally correct. I have no words, you nailed it.....

  2. You have not overstated the reality of the present situation. The government inquisitor in my case, who demanded that I, on the record, to choose between obedience to God's law or man's law, remains on the BLE, even an officer of the BLE, and was recently renewed in her contract for another four years. She has a long history in advancing LGBQT rights. http://www.realjock.com/article/1071 THINK WITH ME: What if a currently serving BLE officer or analogous court official (ie discplinary officer) asked an atheist to affirm the Existence, or demanded a transsexual to undergo a mental evaluation to probe his/her alleged mindcrime? That would end a career. The double standard is glaring, see the troubling question used to ban me for life from the Ind bar right here: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners (see page 8 of 21) Again, what if I had been a homosexual rights activist before law school rather than a prolife activist? A gay rights activist after law school admitted to the SCOTUS and Kansas since 1996, without discipline? A homosexual rights activist who had argued before half the federal appellate courts in the country? I am pretty certain that had I been that LGBQT activist, and not a pro-life activist, my passing of the Indiana bar exam would have rendered me an Indiana attorney .... rather than forever banished. So yes, there is a glaring double standard. And some are even beyond the reach of constitutional and statutory protections. I was.

  3. Historically speaking pagans devalue children and worship animals. How close are we? Consider the ruling above plus today's tidbit from the politically correct high Court: http://indianacourts.us/times/2016/12/are-you-asking-the-right-questions-intimate-partner-violence-and-pet-abuse/

  4. The father is a convicted of spousal abuse. 2 restaining orders been put on him, never made any difference the whole time she was there. The time he choked the mother she dropped the baby the police were called. That was the only time he was taken away. The mother was suppose to have been notified when he was released no call was ever made. He made his way back, kicked the door open and terrified the mother. She ran down the hallway and locked herself and the baby in the bathroom called 911. The police came and said there was nothing they could do (the policeman was a old friend from highschool, good ole boy thing).They told her he could burn the place down as long as she wasn't in it.The mother got another resataining order, the judge told her if you were my daughter I would tell you to leave. So she did. He told her "If you ever leave me I will make your life hell, you don't know who your f!@#$%^ with". The fathers other 2 grown children from his 1st exwife havent spoke 1 word to him in almost 15yrs not 1 word.This is what will be a forsure nightmare for this little girl who is in the hands of pillar of the community. Totally corrupt system. Where I come from I would be in jail not only for that but non payment of child support. Unbelievably pitiful...

  5. dsm 5 indicates that a lot of kids with gender dysphoria grow out of it. so is it really a good idea to encourage gender reassignment? Perhaps that should wait for the age of majority. I don't question the compassionate motives of many of the trans-advocates, but I do question their wisdom. Likewise, they should not question the compassion of those whose potty policies differ. too often, any opposition to the official GLBT agenda is instantly denounced as "homophobia" etc.

ADVERTISEMENT