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11/17/95 SODERLUND BROTHERS v. CARRIER CORPORATION

November 17, 1995

SODERLUND BROTHERS, INC., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,
v.
CARRIER CORPORATION, A DELAWARE CORPORATION, DEFENDANT-APPELLEE, CITY OF CHICAGO, A MUNICIPAL CORPORATION, DEFENDANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE ARTHUR A. SULLIVAN, JR., JUDGE PRESIDING.

As Corrected November 21, 1995.

The Honorable Justice Gordon Delivered The Opinion OF The Court: Cousins, Jr., P.j., and McNULTY, J., concur.

The opinion of the court was delivered by: Gordon

JUSTICE GORDON DELIVERED THE OPINION OF THE COURT:

Plaintiff, Soderlund Brothers, Inc. (Soderlund), appeals from an order granting summary judgment to defendant, Carrier Corporation (Carrier), and from a subsequent order denying plaintiff's motion to reconsider. The counts in plaintiffs' amended complaint for declaratory judgment and other relief that were brought against Carrier *fn1 presented claims for defamation (count II), tortious interference with prospective economic advantage (count III) and commercial disparagement (count IV). The count that is the subject of the instant appeal is count III. *fn2

Soderlund and Carrier competitively bid on a five-year contract with the City of Chicago to maintain the air conditioning equipment at O'Hare Airport. That equipment included four 2,000 ton Carrier air conditioners; one 137.5 ton Carrier air conditioner; and one 4,000 ton Carrier air conditioner. As part of the bid process, bidders were required to provide proof of at least 5 years' experience with maintenance, repair and service of air conditioning machines and equipment of similar type and design to those that were the subject of the contract; resumes of three personnel having a minimum of 6 years' experience, who would be selected to perform the contract work, including a full description of their work experience and references; names and addresses of qualified service engineering personnel in the bidder's direct employ who would be available to analyze complex unusual equipment problems; and proof of ability to stock spare parts within 30 days of the contract award. Special conditions of the contract prohibited substitution of personnel without prior consent by the Commissioner of the Department of Aviation and prohibited subcontracting more than 25% of the work to be performed under the contract.

Soderlund alleged that it was low bidder on the contract and that the City thereafter sought verification of its qualifications. On November 23, 1983, William R. Spicer, Acting Purchasing Agent for the City, requested information including the names, qualifications and experience of Soderlund's officers and key personnel; a list of jobs similar in magnitude that have been successfully performed in the past; and the percentage of work that Soderlund intended to perform under the contract. Soderlund responded on December 1, 1983 by identifying the names of three individuals who would perform the contract work; by providing the names of similar jobs it had performed; and by stating that it planned to perform 100% of the work under the contract. Soderlund's response did not include resumes of or references for the named personnel nor did it include names of individuals to contact regarding the similar jobs.

On December 13, 1983 Spicer wrote to Soderlund requesting further references or proof that Soderlund had experience in the maintenance and retubing of large air conditioning systems similar to those at O'Hare. Soderlund's letter dated January 2, 1984 listed several of its accounts (without references) and requested a meeting with City engineers to discuss the qualifications of Soderlund's mechanics. In that letter Soderlund also stated that it would subcontract the retubing component of the contract to "one of a number of reliable companies who specialize in this type of procedure."

By letter dated February 3, 1984, Spicer requested cost estimates used by Soderlund in preparing its proposal, particularly with respect to fixed costs of materials anticipated for tube replacement and for stock. Spicer concluded the letter by stating that "[a] decision regarding the acceptance of your proposal will be made following our receipt of the above requested information." On February 24, 1984, Soderlund wrote to Spicer stating that it would not provide the cost breakdown requested because that information, if disclosed to the City, would be accessible to Soderlund's competitors and "could lead to the loss of future projects as a result of others knowing our bidding procedures." Soderlund also stated that "any parts required for this job will either be stocked on the job site or are readily available from the Carrier parts division in Syracuse, New York." Soderlund assured Spicer that the specified work would be performed according to standard industry practice and that Soderlund was more than qualified to carry out the terms of the agreement.

In a letter dated March 16, 1984 (the "March 16th letter"), Carrier's attorney, Larry Selander, wrote to Spicer concerning Soderlund's bid. It is this letter which is the subject of the instant litigation. In that letter, Selander indicated that Carrier personnel contacted several entities identified as references in Soderlund's January 2, 1984 letter and listed 14 discrepancies concerning information Soderlund provided with respect to those entities. Selander also made the following statements, referred to later in this opinion by number, which Soderlund argues were false and misleading:

(1) "We note that Soderlund has been in existence for only five years." (Alluding to Soderlund's claim that it had been in existence for 35 years.)

(2) "We are not aware of any resumes having been submitted to show the six years of experience on the part of Soderlund's personnel as required under the specifications."

(3) "We question whether Soderlund has the experience required with large air conditioning systems similar to those at O'Hare."

(4) "Thus, Soderlund essentially admits a lack of experience in this area."

(5) "Our client [Carrier] informs us that *** the re-tubing portion of the contract constitutes 40 percent of the job overall, and we have been informed that Soderlund has refused to break down its bid to show the percentage attributed to re-tubing. Accordingly, Soderlund's bid does not meet the specifications on sub-contracting."

(6) "We suggest that the latter alternative does not meet the specification requirements. In addition, we question whether Soderlund would be capable of covering the cost of these materials within 30 days of the award of contract."

(7) "It is Carrier's position that the above related information requires that Soderlund's bid be rejected."

In response to Carrier's March 16th letter, Soderlund wrote to the City on March 26, 1984 and on March 28, 1984 and included therein a more detailed account of its prior work experience and explained the difficulties it encountered in obtaining that information. Soderlund also reiterated that it had been in existence for 35 years. On May 1, 1984, Soderlund wrote to Spicer summarizing the reasons Soderlund should be awarded the contract and seeking a final decision from the City. A final letter was sent by Soderlund to Spicer on August 22, 1984. On September 7, 1984, Spicer wrote to Soderlund advising that the City had not accepted its bid and that the bid ...


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