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Santucci Const. Co. v. County of Cook

JULY 12, 1974.

SANTUCCI CONSTRUCTION CO., PLAINTIFF-APPELLEE,

v.

COUNTY OF COOK, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. DANIEL A. COVELLI, Judge, presiding.

MR. PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

This is an appeal by defendant from a decree rescinding a contract bid submitted by plaintiff and ordering the return of the $75,000 bid deposit, together with interest. The issues presented for review are whether (1) the bid was the result of a mistake which justified rescission; (2) a presumption was raised against plaintiff because certain witnesses were not produced who allegedly were essential to its claim of mistake; (3) defendant was aware that a mistake was made; and (4) the court's award of interest was proper.

In November, 1966, defendant advertised for bids concerning the construction of the main drain of the Dan Ryan Expressway, and on December 14, 1966, plaintiff and three other construction companies submitted bid proposals. With its bid, plaintiff tendered a $75,000 deposit which was subject to forfeiture and retention by defendant in the event plaintiff was low bidder and failed to execute the contract.

Plaintiff's bid was $1,095,842, and the bids by the other three contractors were in the amounts of $1,693,353.85; $1,719,770; and $1,827,904.90. Each bid was required to specify a price for 7,132 lineal feet of drainpipe. In this regard, plaintiff's bid price, including labor, was $108.50 per lineal foot, with the other three contractors specifying $169.00, $180.00 and $200.00 respectively. The total price submitted by plaintiff for this item was $773,822 (its original estimate was $1,290,892); whereas, the prices specified by the other three contractors were $1,205,308; $1,283,760 and $1,426,400.

At the trial, Glenn Frederichs, Assistant Superintendent of Highways for defendant, testified that its cost estimate for the drainpipe, including labor, was $197.45 per lineal foot, with a total estimated cost of $1,408,213.40. He also testified that the county's estimate for the cost of the entire project was $1,937,856.40. When plaintiff refused to enter into a contract for the project, bids were again requested and submitted, with the low bid of $1,596,554 obtaining the contract.

Richard Cramer, head of the Estimating Division of defendant, testified that the county's estimated cost for the pipe was $125.00 per lineal foot to which was added labor and material charges to obtain its estimated price of $197.45 per lineal foot. He testified it was his impression that plaintiff's bid of $108.50 per lineal foot was "cheap, low."

Carlo Santucci, General Manager of plaintiff, testified that on December 14, 1966, the day the bid was submitted, he was returning with Nicholas Santucci, President of plaintiff, from Indiana where they had been for two days and, upon radioing his office, he was informed that plaintiff was the low bidder on the project and that there had been a large discrepancy in bids. When he arrived at the company office, he examined the bid sheets and discovered that the original and intended material cost for the pipe of $142.75 per foot had been scratched out, and the figure of $74.00 had been substituted. He testified he could not buy the pipe for the latter figure and that before he went to Indiana the $142.75 cost figure had been used in their estimate, and he did not become aware of the substitution until his return. He also stated that plaintiff's estimator, Geza Zoltani, who had prepared the bid, had made the change.

Geza Zoltani testified that Nicholas Santucci, on the morning of December 14, 1966, told him to alter the bid so that it totaled approximately $1,095,000. He stated Nicholas Santucci was not out of town on that date and that he (Nicholas Santucci) had signed the bid book in the morning before his (Zoltani's) submission of the bid. He denied telling Carlo Santucci that he received a telephone bid from a supplier of drainpipe, offering a 50% discount. He admitted that he lost his pension rights when he left plaintiff to work for another contractor, and he denied, in the presence of Carlo Santucci and John Durgom, that he said he would testify in favor of plaintiff if his pension rights were reinstated.

John Durgom, president of Durgom Concrete Pipe Company, testified he had submitted an estimate to plaintiff of approximately $145.00 per lineal foot for the drainpipe in question. He was present in the hall outside the courtroom when Geza Zoltani told Carlo Santucci something like, "If you say that I get my pension, I can say what you want me to say in court."

Carlo Santucci was recalled and testified that Zoltani approached him in the courthouse and said, "I am unhappy about losing my profit sharing and if there was something I (Carlo Santucci) could do to get him his profit sharing, that he could see that this case went in our favor." He also testified that he and Nicholas Santucci on the morning of December 14, 1966, were in Terre Haute, Indiana and that when he returned to the company office, Zoltani told him he had changed the price of the pipe after a phone call from Vulcan Materials, giving a 50% discount on the cost of the pipe. The practice of obtaining quotations by telephone was customary.

It further appears that on December 15, 1966, plaintiff sent a letter to defendant requesting that the bid be withdrawn; that defendant accepted plaintiff's bid on January 3, 1967, and when plaintiff refused to enter into a contract, that defendant retained plaintiff's bid deposit.

The trial court found that (1) plaintiff had made a mistake in the amount of its bid; and (2) defendant should have known that a mistake had been made. It rescinded the bid proposal and ordered that the $75,000 deposit be returned to plaintiff together with interest from December 15, 1966 to April 27, 1970, the date of the first hearing.

OPINION

Defendant first contends that plaintiff failed to sustain its burden of showing that a mistake justifying rescission had been made. It argues that if there was an error in the bid, it was the result of poor business judgment ...


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