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COA disagrees on damages to bidder

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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.

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  1. On a related note, I offered the ICLU my cases against the BLE repeatedly, and sought their amici aid repeatedly as well. Crickets. Usually not even a response. I am guessing they do not do allegations of anti-Christian bias? No matter how glaring? I have posted on other links the amicus brief that did get filed (search this ezine, e.g., Kansas attorney), read the Thomas More Society brief to note what the ACLU ran from like vampires from garlic. An Examiner pledged to advance diversity and inclusion came right out on the record and demanded that I choose Man's law or God's law. I wonder, had I been asked to swear off Allah ... what result then, ICLU? Had I been found of bad character and fitness for advocating sexual deviance, what result then ICLU? Had I been lifetime banned for posting left of center statements denigrating the US Constitution, what result ICLU? Hey, we all know don't we? Rather Biased.

  2. It was mentioned in the article that there have been numerous CLE events to train attorneys on e-filing. I would like someone to provide a list of those events, because I have not seen any such events in east central Indiana, and since Hamilton County is one of the counties where e-filing is mandatory, one would expect some instruction in this area. Come on, people, give some instruction, not just applause!

  3. This law is troubling in two respects: First, why wasn't the law reviewed "with the intention of getting all the facts surrounding the legislation and its actual impact on the marketplace" BEFORE it was passed and signed? Seems a bit backwards to me (even acknowledging that this is the Indiana state legislature we're talking about. Second, what is it with the laws in this state that seem to create artificial monopolies in various industries? Besides this one, the other law that comes to mind is the legislation that governed the granting of licenses to firms that wanted to set up craft distilleries. The licensing was limited to only those entities that were already in the craft beer brewing business. Republicans in this state talk a big game when it comes to being "business friendly". They're friendly alright . . . to certain businesses.

  4. Gretchen, Asia, Roberto, Tonia, Shannon, Cheri, Nicholas, Sondra, Carey, Laura ... my heart breaks for you, reaching out in a forum in which you are ignored by a professional suffering through both compassion fatigue and the love of filthy lucre. Most if not all of you seek a warm blooded Hoosier attorney unafraid to take on the government and plead that government officials have acted unconstitutionally to try to save a family and/or rescue children in need and/or press individual rights against the Leviathan state. I know an attorney from Kansas who has taken such cases across the country, arguing before half of the federal courts of appeal and presenting cases to the US S.Ct. numerous times seeking cert. Unfortunately, due to his zeal for the constitutional rights of peasants and willingness to confront powerful government bureaucrats seemingly violating the same ... he was denied character and fitness certification to join the Indiana bar, even after he was cleared to sit for, and passed, both the bar exam and ethics exam. And was even admitted to the Indiana federal bar! NOW KNOW THIS .... you will face headwinds and difficulties in locating a zealously motivated Hoosier attorney to face off against powerful government agents who violate the constitution, for those who do so tend to end up as marginalized as Paul Odgen, who was driven from the profession. So beware, many are mere expensive lapdogs, the kind of breed who will gladly take a large retainer, but then fail to press against the status quo and powers that be when told to heel to. It is a common belief among some in Indiana that those attorneys who truly fight the power and rigorously confront corruption often end up, actually or metaphorically, in real life or at least as to their careers, as dead as the late, great Gary Welch. All of that said, I wish you the very best in finding a Hoosier attorney with a fighting spirit to press your rights as far as you can, for you do have rights against government actors, no matter what said actors may tell you otherwise. Attorneys outside the elitist camp are often better fighters that those owing the powers that be for their salaries, corner offices and end of year bonuses. So do not be afraid to retain a green horn or unconnected lawyer, many of them are fine men and woman who are yet untainted by the "unique" Hoosier system.

  5. I am not the John below. He is a journalist and talk show host who knows me through my years working in Kansas government. I did no ask John to post the note below ...

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