### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE August 20, 2003 Session J.S. HAREN COMPANY v. KELLY SERVICES, INC. Appeal from the Chancery Court for Knox County No. 147355-3 Sharon Bell, Chancellor FILED JANUARY 8, 2004 No. E2002-03116-COA-R3-CV

This appeal asserts that

the Trial Court erred in entering judgme nt against the Appellan

t/Defen dant, Kelly Service s, Inc., for brea

ch of contract. We reverse and dismiss the judgment of the Trial Court and remand. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Revers ed and Dismiss ed; Cause Remanded H OUSTON M. G ODDARD , P.J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS and D. M ICHAEL S WINEY , JJ., joined. W. Ty ler Chast

ain, Knoxvi lle, Tennessee, f or the Ap pellant, Kelly Services, I

nc. Howard Curtis Trew, Athens, Tennessee, for the Appellee, J.S. Haren Company OPINION The Appellee/Defendant, J.S. Haren Company (hereinafter “Haren” ) is a T en nessee Corporation and licensed general contr actor a part of whose business is the construction of public waste water systems. Ke

lly Services, I

nc. is in the business of providing persons to perform assignm ents on be

half of it s clients o n either a full-ti me and te

mporary basis. In June of 1999, the City of Darien, Geor gia began taking bids fo r co nstruction of improveme

nts to its sewer system. The City ’s bid procedure required that all bids on the project be submitted by 2:00 p.m on June 29, 1999. On June 22, 1999, Haren contacted Ke lly Services’ off

ice in Brunswick, Georgia, which is locate d about eighteen miles south of Darien, to have Kel l y Services’ provide a runner to deliver its bid proposal on Darie n’s sewer sy stem project to the City by th e bid deadline. Haren’s call was rec eived by one of Kelly Services’ senior supervisors who arranged to have a Kelly

Servi ces wor ker deliver the bid package a s requested. In their brie fs the parties have set

forth the details of what transpired thereafter; howeve r, for purposes of this opinion, it is sufficient to state that Haren’s bid package was not delivered by the

designa ted dead line, its bi d-2-

proposal was not accepted by the City and the sewer

construction project was awarded to another contractor. In consequence

of Kelly’s fa

ilure to make timely delivery of the bid package Hare

n filed a complaint agains t Kelly

in the Chancery

Court for McMinn County. The complaint alleg es that Haren had the lowest bid on the proposed sewer construction project and, therefore, it would have been awarded the project con tra ct if the bid package had been timely delivered. The complaint further alleges that, as a result of Kelly ’s negligence and bre ach of contract, Haren suffe red damages and losse s, includi ng lost pr ofits. The case wa s tried without a jury and the Tria

l Court entered its judgment in favor of Haren in the amount of $72,500.00. This appeal followed. Althoug h sever al issues are presented for our revie w, all but one of these are pretermitted by our decisi on herei n The sole issue we a

ddress, a s restate d, is wheth er the Tr ial Court e

rred in finding that the construction project would have been awar ded to Haren had its bid package be en delivered to the City by

the bid deadline? Our stand ard of r

eview in t his non-ju

ry case is de novo upon the rec ord of the pr oceedi ngs below and ther

e is no presumption of correctness with respect to the Trial Court' s conclusions of law. Campbell v. Florida Steel Corp. , 919 S.W.2d 26 (Tenn. 1996) and T.R.A.P. 13(d). The Tri al Cou rt's factual findings are, however, presumed to be correc t and w e must affirm such findings absent evidence preponderating to the contrary

. Union Carbide Corp. v. Huddleston , 854 S.W.2d 87 (Tenn. 1993). The record shows that the total base bid sub mi tt ed by Haren on the sewer project was $639,000.00. There were three bids submitted on the project in addition to the bid submitted by Haren. J. & H. Waterstop bid $679,236.00, Douglas Electric bid $757,8 94. 00 and Aqu a South Construction bid $784,498.00. The project contract was awarde d to J. & H. Wa terstop. Thus, it is apparent that the contra ct was awarded to the lowest b idder am ong the remainin g contr

actors. Howeve r, undispu

ted evide nce in thi s case indicates that the award of the projec tcontract was not determined by the bid a

mount alone. The may or of the

City of Darie n, David Bluestein, testified as follows as to the procedure the City follows in

determin ing who w ill be awa

rded a pr oject co ntract: A Normal ly in

the state of Georgia, when we ope n bids up, in the past on water and sewer improvements or any thing like that, our engineers are down and they take the bids ba

ck to thei r office and do a b id computation on them and check the figure s and all. Q Yes, sir.-3-

A Then they recommend to the city who the l ow bidd er was and who they recommend. Q And I guess th at gets back to

my q uestion; p rovided t he number s work out , in general is the contract awa rded to the lowest bidder? A Right, the one thing is the bid package, oka y, at the bottom of

the adverti sement it s tates: Th e City of Darien r eserve s the rig

ht to reje ct any

or all bids in the way form - - Q Could you repea

t that, sir? A The City

of Darie n reser ves the r ight to r eject a ny o r all bids. Q Okay. In g eneral

based on you r some nin eteen y

ears of experience wit

h th e city and with letting of c ontracts, are the awards give n to the lowest bidder? A Normally we g

ive it to the lowest bidd er. But we, but ou

r engineers usu ally check o ut the com

panies to advise uson that. Q Yes, sir , by

that they check th e refe rences ? A Yes, sir, references; y

es, sir. Q And, of course, a part

of any proje ct and I believe it was a pa

rt of this o ne, is that the contractor has to provide a performanc e bond and a pay ment bond? A Yes, sir. Q So provided

the partic ular contr

actor prov ides both o

f those bonds a nd th e references check

out , if that contractor is the lowest bidder, that contrac tor usual ly receives the bid? A Yes, sir.

.... Q Now, Mayor

Bluestein - - A Yes, sir. Q - - based on y our many y ears of service for the City of Darienand experience withprior bid proposals and the awarding of public contra cts, assuming that

the1 Although not no ted b y Ke lly Servic es in its brie f, it is our determination that acknowledgment of this oversi ght is app rop riate to this o pinio n. -4- references for J.S. Haren Company checked out okay and that the required bonds were likewise okay, and the bid from that c ompany was the lowes t bid , is there any reason that J.S. Haren would not have been awarded the contract you can think of? A No, sir. Q And assum

ing those same cir cumstanc es, sir, w ould it be y our opin ion as mayor of the City

of Darie n that J.S. Ha

ren Comp any would h ave received that bid as the lowest bidder? A Yes, sir. Q I’m s orry , let me re

phrase t hat. Would have been awarded that contract as the lowest bidder? A Yes, sir. (Emphasis added.) According to this test

imony of May or Blue stein a c ontract

or had to fulfill thr ee requ irements in order to be awarded the sewer construction project contract by the City. Such cont

ractor must have had the lo west bid, m ust have p

rovid ed per formance and pay ment bonds and must have had satisfactory

references as determined by the City’s consulting

engineers. While it appears from the record that Har en did have the lowest bid on the project, we find no evidence that Haren provided performance

and payment bonds or tha tHaren provided referenc es that would have been satisfactory to the consulting engineers upon whose rec ommendation the City relied in making its dec ision. Despite Mayor B luestein’s testimony, Haren a rgues that the o nly

bond that w as requi

red to accompany

its bid proposal was a bid bond which it did submit. While the City’s invitation /a dvertisement f

or bids does not appear to require that any bond, other than a bid bond, accompany

the bid pr

oposal it does state

that “[t]o qu alify

to bid a ce

rtified s t atem ent from the Bi dder’ s bonding

company shall ac company

the Bid B ond statin g that th e Bidde r can sub mit a Performance Bond to the Owner within ten days of awa

rd of Contract.” We find no evidence that such a statement was included in the bid proposal submitted by Hare n 1 . Furthermore, Haren does notaddress May or Bluestein’s testimony that a n award of the contract was also contingent upon the references of

the bidding contractor being satisfactory to the City’s consulting engineers. We find no evidence that the engineers would ha ve approved reference s submitted by Haren. The Trial Court found that “it is more likely than not under the evidence that the p lain tiff would have been awarded

the bid.” We respe ctfully disagree that the record be fore us shows that-5-

there is sufficient proof to support that finding. Accordingly , whatever damages Har en suffered

as a result of the fact that its bid was not submitted by the City’s deadline are

speculative and uncertain. In a breach of contract action such as this one speculative damages are not recove rable. Nashland Associate s v. Shuma te , 730 S.W.2d 332 (Tenn. Ct. App. 1987). For the foregoi n g reasons the judgment of the Trial Court is reve rsed and dismissed. The cause is remanded

for collection of costs below which are, as ar e costs of appeal, adjudg ed aga

inst J. S. Ha re n C om pa ny.

_________________________________________ HOUSTON M. GODDARD, PRESIDI NG JUDGE