Doyle Plumbing & Heating Co. v. Board of Education

NOS. 4-97-0198, 4-97-0274 cons.

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

DOYLE PLUMBING & HEATING COMPANY, a ) Appeal from
Delaware Corporation, ) Circuit Court of
Plaintiff-Appellee, ) Adams County
v. (No. 4-97-0198) ) No. 97CH13
THE BOARD OF EDUCATION, QUINCY PUBLIC )
SCHOOL DISTRICT NO. 172, )
Defendant-Appellant, )
and )
E.A. WAND PLUMBING & HEATING COMPANY, )
Defendant. )
----------------------------------------)
DOYLE PLUMBING & HEATING COMPANY, )
Plaintiff-Appellee, )
v. (No. 4-97-0274) )
THE BOARD OF EDUCATION, QUINCY PUBLIC )
SCHOOL DISTRICT NO. 172, )
Defendant, )
and ) Honorable
E.A. WAND PLUMBING & HEATING COMPANY, ) Mark A. Schuering,
Defendant-Appellant. ) Judge Presiding.
_________________________________________________________________

JUSTICE GARMAN delivered the opinion of the court:
Doyle Plumbing and Heating Company (Doyle), based in
Jacksonville, Illinois, submitted the lowest bid on a boiler
replacement project for the Board of Education, Quincy Public
School District No. 172 (Board), but was not awarded the
contract. Rather, the Board voted to award the contract to E.A.
Wand Plumbing & Heating Company (Wand), a corporation based in
Quincy, which bid $3,855 more than Doyle. Doyle sued Wand and
the Board, alleging a violation of section 10-20.21 of the School
Code (Code) (105 ILCS 5/10-20.21 (West 1994)), a competitive
bidding statute. The circuit court of Adams County held for
Doyle and ordered the Board to grant it the contract.The Board and Wand appeal. We affirm.
I. BACKGROUND
In the summer of 1996, the Board authorized a project
to replace the boilers in Quincy Junior High School. It hired
Architechnics, Inc., to design and coordinate the project. In
January 1997, Architechnics solicited bids in the Quincy Herald-
Whig (the local Quincy paper). Todd Moore, an engineer with
Architechnics, also contacted some firms by phone to inform them
of the project because he wanted to be sure to get more than one
bid on it. One of the contractors he contacted was Doyle. Doyle
bought the bid specifications, attended meetings in Quincy relat-
ing to the project, and decided to submit a bid, as did Wand and
three other firms.
In February, Architechnics opened and tabulated the
bids. Doyle's bid of $416,895 was the lowest, followed closely
by Wand's bid of $420,750. However, the building committee of
the Board recommended that the Board award the contract to Wand,
because of the travel time between Jacksonville and Quincy.
After he threatened litigation, Ed Doyle was allowed to
attend a special meeting of the Board on February 26. He was
allowed to make a presentation about Doyle and say why he felt it
was qualified to do the work, but was not allowed to discuss
technical aspects of the boilers; his request to have engineers
present at the meeting was denied. Ed testified Doyle had done
similar work, both installation and servicing, for a number of
other entities over a geographical area ranging from Maywood and
Melrose Park in the Chicago area to Paris, Illinois, and Terre
Haute, Indiana, in the east, to Pike County and Macomb in the
west and even into Missouri for commissioning services. He had
told the Board his response time was "well within industry stan-
dards" and service on the boilers was "so easily handled it means
nothing to take care of this job." He also noted that although
he "cannot put an 18,000[-]pound boiler in [his] truck," he could
and did take replacement scanners, programmers, pressure
controllers--"the life's breath of that system"--with him when he
made service calls. He felt Doyle had the ability to
successfully complete the project and service the boilers once
installed. He did tell the Board it could realistically take as
long as 2« hours to get someone on site in response to a service
call (even though Jacksonville is only 75 miles from Quincy),
because it could take some time to get someone on the road.
James Citro is the chair of the building committee and
one of the members of the Board who voted in favor of giving the
contract to Wand. He testified since he knew nothing about
boilers, he was concerned about any possible impact the 1«-hour
delay would have, and what risk the Board might be taking in
giving Doyle the contract. He asked Ed at the meeting if he
would be willing to insure them against the risk of their losing
a day's state aid "or any other damage that might occur because
of that hour and a half window." When Ed responded that he did
guarantee his work, Citro clarified that he "wasn't talking about
his work; I was talking about--because he does know boilers--
anything else that might happen as a result of that hour and a
half; could he ensure [sic] us against that risk?" Citro testi-
fied that when Ed said he could not do so, his response was "if
he couldn't take that risk, why should I?" He did not ask Wand
to insure them in the event that damages were incurred because of
a delay in response to a service call; what he was asking Ed to
insure against was "the risk of the hour and a half travel time
that exists between Jacksonville and Quincy. That is the risk I
was concerned about. That's the risk that doesn't exist for
Wand, and that was the difference."
The Board gave the project to Wand, by a vote of 4 to 2
(one member not present). All of the members who voted to give
the project to Wand testified they did so because of concerns
about "serviceability." However, none of the members had any
reason to doubt Doyle was qualified to service the boilers.
Their concerns stemmed, rather, from the 1«-hour travel time
between Jacksonville and Quincy, and the possibility that the
school might have to be shut down (with a resulting loss of state
funding) because of that delay.
The circuit court held for Doyle. It found the Board
members who voted for Wand were acting in good faith, but
concluded the "discretionary power was not properly utilized,"
and it had resulted in a "manifest injustice." It granted Doyle
declaratory judgment, mandamus and a preliminary injunction, and
required the Board to award the project to Doyle, which it
declared to be "the lowest responsible bidder pursuant to stat-
ute."
II. ANALYSIS
A. The Competitive Bidding Statute
The Board was required to comply with the competitive
bidding section of the Code (105 ILCS 5/10-20.21 (West 1994)) in
awarding the contract in this case. Section 10-20.21 of the Code
provides that Boards must
"award all contracts for purchase of sup-
plies, materials or work or contracts with
private carriers for transportation of pupils
involving an expenditure in excess of $10,000
to the lowest responsible bidder, considering
conformity with specifications, terms of
delivery, quality and serviceability, after
due advertisement, [with exceptions none of
which apply in this case]." (Emphasis add-
ed.) 105 ILCS 5/10-20.21 (West 1994).
The Board admits the bid specifications made no refer-
ence to servicing of the boilers, but argues it acted within its
discretion in awarding the contract to Wand because the statute
allows consideration of "serviceability." A threshold question
is thus what "serviceability" means. Three possibilities are (a)
the contractor's ability to provide service or repairs on the
contracted-for supplies, materials or work; (b) the intrinsic
repairability of the supplies, materials or work; or (c) the
usefulness or durability of the supplies, materials or work. For
the Board to prevail, it must refer to the "service ability" of
the bidder, because so far as the record reflects Doyle and Wand
were to install identical products.
The meaning of this term was not fully briefed by the
parties. Both seem to have assumed that it refers to the
bidder's ability to provide service. We nevertheless find it is
necessary and appropriate to construe the statute before
considering the Board's argument, which is based thereon. See
J&B Steel Contractors, Inc. v. C. Iber & Sons, Inc., 162 Ill. 2d 265, 270, 642 N.E.2d 1215, 1218 (1994).
We begin with the primary rule of statutory
construction, which is to ascertain and give effect to the true
intent and meaning of the legislature. In re Application for
Judgment & Sale of Delinquent Properties for the Tax Year 1989,
167 Ill. 2d 161, 168, 656 N.E.2d 1049, 1053 (1995). The language
of the statute is generally the best indication of legislative
intent, and the terms of the statute should be given their
ordinary meaning. Tax Year 1989, 167 Ill. 2d at 168, 656 N.E.2d
at 1053. However, where the statutory language does not make the
meaning of the statute clear, a court may look beyond the
language employed and consider the purpose of the law and the
evils the law was designed to remedy. Tax Year 1989, 167 Ill. 2d
at 168, 656 N.E.2d at 1053. Statutes should also be construed in
conjunction with other statutes on the same subject. Tax Year
1989, 167 Ill. 2d at 168-89, 656 N.E.2d at 1053.
The dictionary definition of "serviceability"--its
"ordinary meaning"--is "fitness to give service: usefulness for
a purpose: wearing quality: durability, serviceableness."
Webster's Third New International Dictionary 2075 (1986); see
also Merriam Webster's Collegiate Dictionary 1070 (10th ed. 1996)
(no definition for "serviceability," but notes it is the noun
form of "serviceable," which is defined as "1: helpful, useful
2: fit for use"). A plain reading of the term thus rules out
option (b), above, that it refers to the intrinsic repairability
of the supplies, materials or work. It could obviously refer to
the usefulness or durability of the supplies, materials or work.
But it could also refer to the bidder's ability to provide
service, since serviceability can mean "fitness to give service,"
and "service" can mean "repair or provide maintenance for"
(Webster's Third New International Dictionary 2075 (1986)).
Since neither of these meanings is ruled out by the context in
which the term is used, we must turn to other sources to
ascertain the legislature's intent.
Other Illinois "lowest responsible bidder" statutes
allow consideration of "serviceability." See 30 ILCS 505/6(a)
(West 1994) (Illinois Purchasing Act); 30 ILCS 510/2 (West 1994)
(State Paper Purchasing Act); 70 ILCS 1205/8-1(c) (West 1994)
(Park District Code); 70 ILCS 2305/11 (West 1994) (North Shore
Sanitary District Act); 70 ILCS 2405/11 (West 1994) (Sanitary
District Act of 1917); 110 ILCS 805/3-27.1 (West 1994) (Public
Community College Act). Although the legislature has not defined
the term in any of these other statutes, some of them do provide
indicators as to its meaning. Section 2 of the State Paper
Purchasing Act provides that the determination of who is the
lowest responsible bidder must "include a consideration of his
conformity with specifications of terms of delivery and the
quality and serviceability of his product." (Emphasis added.)
30 ILCS 510/2 (West 1994). In this statute, "serviceability"
refers to the product being supplied, rather than the supplier's
ability to provide repairs or maintenance. The two sanitary
district statutes also use "serviceability" to refer to products.
See 70 ILCS 2305/11 (West 1994); 70 ILCS 2405/11 (West 1994)
(both allow the decision maker to consider the "serviceability of
the articles supplied"). This supports the conclusion that it
was also used to refer to products in the Code.
Consideration of the purpose of section 10-20.21 also
supports the conclusion that the term refers to the supplies,
materials or work, rather than the bidder. The purpose of
competitive bidding statutes is "'inviting competition, to guard
against favoritism, improvidence, extravagance, fraud and
corruption and to secure the best work or supplies at the lowest
price practicable.'" Court Street Steak House, Inc. v. County of
Tazewell, 163 Ill. 2d 159, 165, 643 N.E.2d 781, 784 (1994),
quoting 10 McQuillin on Municipal Corporations 29.29, at 375 (3d
ed. 1966); see also Smith v. Intergovernmental Solid Waste
Disposal Ass'n, 239 Ill. App. 3d 123, 139-40, 605 N.E.2d 654,
664-65 (1992), quoting 10 G. O'Gradney & C. Miller, McQuillin on
Municipal Corporations 29.29, at 375 (3d rev. ed. 1990)
(hereinafter McQuillin); Compass Health Care Plans v. Board of
Education, 246 Ill. App. 3d 746, 751, 617 N.E.2d 6, 9 (1992);
O'Hare Express, Inc. v. City of Chicago, 235 Ill. App. 3d 202,
208, 601 N.E.2d 846, 850 (1992); Smith v. F.W.D. Corp., 106 Ill.
App. 3d 429, 431, 436 N.E.2d 35, 36 (1982). This purpose would
clearly not be served by interpreting "serviceability" to refer
to the bidder's ability to provide maintenance on the supplies,
materials or work when the contract makes no reference to
service. That interpretation would stifle competition because it
would protect favoritism. The shield of serviceability could be
raised in defense of any contract being awarded to a local
bidder, so long as it is possible that some maintenance or
repairs might be required at some point in the future. No
contractor would bid on out-of-town projects if it could lose the
contract just because it was farther away than a local bidder,
i.e., simply because it was from out of town.
This does not not mean that the Board acted improperly
or was motivated by favoritism in this case. The circuit court
explicitly found the Board members were acting in good faith, and
we do not question that determination. But this interpretation
of "serviceability" could lend itself to future abuse.
Interpreting "serviceability" as referring to the
usefulness or durability of the supplies, materials or work, on
the other hand, would promote the purpose of the statute.
Although bid specifications "should be stated as definitely as is
practicable," they should not be so specific as to preclude
competition because only one firm can feasibly comply with them.
See McQuillin 29.53, at 444. Allowing the decision maker to
consider durability and usefulness in the interstices of the
specifications will prevent this result and, thus, foster
competition. McQuillin observes:
"Where the thing sought to be purchased
or contracted for is not entirely subject to
exact specification, as where there are a
number of different kinds in the market all
meeting the requirements to a greater or less
degree, the officers should consider the
quality and utility of the thing offered, and
its adaptability to the purpose for which it
is required." (Emphasis added.) McQuillin
29.75, at 518.
"[S]erviceability," as used in section 10-20.21 of the
Code, refers to the durability or usefulness and fitness of the
supplies, materials or work on which bids are solicited. 105
ILCS 5/10-20.21 (West 1994). Therefore, the argument of the
Board that this term allows consideration of the response time of
a bidder (when no such requirement is included in the bid
specifications) fails.
The Board has relied heavily in its argument on Court
Street Steak House. The competitive bidding statute at issue in
Court Street Steak House required a county to award contracts to
the "'lowest responsible bidder,'" taking into account "'the
qualities of the articles supplied, their conformity with the
specifications, their suitability to the requirements of the
county and delivery terms.'" Court Street Steak House, 163 Ill. 2d at 163, 643 N.E.2d at 783, quoting Ill. Rev. Stat. 1991, ch.
34, par. 5-1022(2)). The court stated it was acceptable for
Tazewell County to accept a bid that was not the lowest because
the second-lowest bidder had a training program for the mentally
handicapped (Court Street Steak House, 163 Ill. 2d at 168, 643
N.E.2d at 785), which the county could have considered because of
the statutory reference to "suitab[ility] to the requirements of
the County" (Court Street Steak House, 163 Ill. 2d at 167, 643
N.E.2d at 784-85).
The above analysis does not control this case. First,
it concerned a different term in a different statute. Also, as
was observed in Justice Heiple's concurrence, this entire analy-
sis was dictum. Court Street Steak House, 163 Ill. 2d at 173,
643 N.E.2d at 787-88 (Heiple, J., concurring). The court defined
the issues before it in that case as "(1) whether the County's
determination of the lowest responsible bidder is subject to
mandamus, and (2) whether lost profits are available to an unsuc-
cessful bidder as a remedy for violation of the statute." Court
Street Steak House, 163 Ill. 2d at 163, 643 N.E.2d at 783. It
answered both questions in the negative (mandamus was unavailable
because the contract period had already expired (Court Street
Steak House, 163 Ill. 2d at 168, 643 N.E.2d at 785) and lost
profits were not recoverable under the statute for policy reasons
(Court Street Steak House, 163 Ill. 2d at 170, 643 N.E.2d at
786)), which controlled the result. The remaining analysis is
dictum and not controlling precedent. See Holton v. Memorial
Hospital, 176 Ill. 2d 95, 138, ___ N.E.2d ___, ___ (1997)
(Heiple, J., specially concurring), citing Geer v. Kadera, 173 Ill. 2d 398, 414, 671 N.E.2d 692, 699 (1996).
B. Other Points Raised on Appeal
The Board has alleged several other errors in the
circuit court proceedings, which may be dealt with briefly.
First, the Board's argument that the circuit court erred in
denying its motion for a directed finding at the close of Doyle's
evidence is based on its erroneous assumption about the meaning
of "serviceability" and, accordingly, fails. Second, the circuit
court's refusal to strike paragraph 20 of count I of the
complaint is moot, because the court granted no relief based on
this paragraph. Third, the alleged error in granting the
temporary restraining order (TRO) is moot and untimely. See
Harper v. Missouri Pacific R.R. Co., 264 Ill. App. 3d 238, 242-
43, 636 N.E.2d 1192, 1196-97 (1994) (a TRO becomes moot once it
has expired); Stocker Hinge Manufacturing Co. v. Darnel
Industries, Inc., 94 Ill. 2d 535, 545, 447 N.E.2d 288, 293 (1983)
(if not appealed before hearing on a preliminary injunction, a
TRO "merge[s] with the preliminary injunction" or becomes "func-
tus officio"); Williams v. Nagel, 251 Ill. App. 3d 176, 179, 620 N.E.2d 1376, 1378 (1993) (since a TRO is appealable under Supreme
Court Rule 307(d) (134 Ill. 2d R. 307(d)), a party must appeal a
TRO within the time limit therein (two days) or lose his right to
do so).
Nor did the circuit court err in granting Doyle manda-
mus despite its finding the members of the Board acted in good
faith. Good-faith reliance on an incorrect understanding of the
law is not inconsistent with an abuse of discretion, and bad
faith need not be found for a court to reverse a decision under a
competitive bidding statute. See McQuillin 29.83, at 538-39.
Finally, the circuit court's discussion of the
impropriety of Board member Citro's request of a guarantee is
simply an alternate basis for the court's holding in favor of
Doyle. We need not reach this issue as we have already affirmed
the circuit court's conclusion on other grounds.
C. Supplement to Record
In our analysis of this case we have not relied on the
transcript of a May 5 hearing before the circuit court with which
Doyle has moved to supplement the record on appeal. The motion
is denied. Although a court may take judicial notice of its own
acts in the same case (see In re A.T., 197 Ill. App. 3d 821, 834,
555 N.E.2d 402, 411 (1990)), the trial court obviously did not
have this transcript before it when it made its March 27 ruling.
The general rule is that "material which was not part of the
court record or considered by the trial court is not part of the
record on appeal and should not be considered by the appellate
court." Smith v. First National Bank, 254 Ill. App. 3d 251, 258,
624 N.E.2d 899, 905 (1993). There is no reason to deviate from
that rule in this case.
III. CONCLUSION
The Board did not have any concern about the product
the lowest bidder would supply, nor about its ability to
successfully complete every task required in the bid
specifications. Its only justification for its decision to grant
the boiler installation contract to an entity other than that
which submitted the lowest bid is that the lowest bidder is from
out of town (75 miles away, directly connected by a four-lane
highway), which would increase response time on service calls.
The Board admits that there was no response time requirement in
the bid specifications and that in fact the installer was not
even required to provide service on the boilers (except for a
standard one-year warranty clause). Its only argument for
considering response time is a reference to "serviceability" in
the relevant competitive bidding statute. However, as we have
determined, this term does not refer to the ability of a bidder
to repair or maintain products, services or work, but rather
simply allows the Board to consider the usefulness for its
purposes of the products, services or work the bidder offers to
supply, when the bid specifications have, in the interest of
promoting competitive bidding, failed to make an exact
specification.
For the reasons above stated, we affirm the judgment of
the circuit court of Adams County.
Affirmed.
STEIGMANN, P.J., and GREEN, J., concur.