Court Opinion

ID: 9853920
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:57:23.579923+00
Date Added: 2024-06-11T09:20:15.895703
License: Public Domain

Benham, Chief Justice,
dissenting.
Because I believe the majority opinion in this case misinterprets the applicable statute and is incorrect in holding that principles of equitable rescission have no place in public sector contract law, I must dissent. The essence of the majority opinion is that because this case involves a public rather than private contract, and because application of the principles of equitable rescission here would con*511flict with the statutory process for contracts with the Department of Transportation, the trial court erred in relieving MCC from its contract. The two fatal flaws in that reasoning are that there is no valid distinction to be drawn between public and private contracting with regard to this issue, and the equitable relief granted by the trial court did not conflict with the statutes that control the contracting process.
Insofar as the majority opinion’s conclusion in the first division that “MCC was not authorized to withdraw its bid without penalty once all of the bids submitted were opened,” can be read to mean MCC was not authorized unilaterally to withdraw, I must agree. However, that does not alone lead to the further conclusion that “the Code dictates that [MCC’s] bid bond be forfeited.” The majority opinion, in its next sentence, recognizes that DOT had the authority under the circumstances here to relieve MCC of its duty to perform.
The most serious flaw in the majority opinion is the attempt to distinguish First Baptist Church v. Barber Contracting Co., 189 Ga. App. 804 (377 SE2d 717) (1989), on the ground that there is some difference between public contracts and private contracts with regard to the issue here. The majority opinion cites no authority for that sweeping distinction, but asserts that equity cannot violate the express provision of a statute. Accepting that premise, that circumstance does not exist in this case. As the majority opinion recognized earlier, DOT had at least two opportunities to relieve MCC of its bid. Thus, the majority opinion’s statement that the Code requires that the bid bond be forfeited if the bid is withdrawn is not accurate: the Code permits the bond to be forfeited.
The majority is correct that it seems an undue hardship to hold a bidder liable when there has been an unintentional mistake in preparation of the bid. I do not agree, however, that such a harsh result is required in order to give legitimate effect to the Transportation Code. In its hyperbole on the subject, the majority opinion sets up the strawman of fraud, then proceeds to knock it down with the rigid application of the statute even though conceding there is no evidence of fraud in this case.
Under the precedent of First Baptist Church, supra, the trial court was correct in applying the principles of equitable rescission. Contrary to the majority opinion’s analysis, there is support for the conclusion that enforcement of the mistake would be unconscionable. The cases cited in the majority opinion deal with the unconscionability of the contract itself, and there is no issue of that in this case. What would be unconscionable, as the trial court correctly found, would be the enforcement of a contract founded on a material mistake. Although the majority opinion specifically does not deal with a situation where DOT had actual knowledge of a material miscalcula*512tion in the bid, that is what the record shows in this case: prior to selection of the lowest reliable bidder, when it had no obligation to choose MCC, DOT did so, and even after that, when DOT had the authority to relieve MCC of the contract under OCGA § 32-2-69 (d) and had knowledge of the mistake, it chose not to exercise its authority to relieve MCC. Those are just the circumstances when equity is needed to relieve one who innocently makes a mistake.
Decided September 22, 1997 —
Reconsideration denied October 31, 1997.
Thurbert E. Baker, Attorney General, Ray O. Lerer, Senior Assistant Attorney General, Cathy A. Cox-Brakefield, Assistant Attorney General, for appellant.
Porter & Barrett, Brenda K. Orrison, Smith & Fleming, Robert O. Fleming, Jr., for appellees.
Smith, Currie & Hancock, Robert B. Ansley, Jr., Robert C. Chambers, Philip E. Beck, James F. Grubiak, Oliver Hunter, amici curiae.
To apply the rigid approach fostered by the majority opinion would have a negative effect on government contracting. Bidders who are trapped in a bid that is too low because of a mistake will know they cannot escape, so they will be inclined to execute the contract and to cut their losses by cutting whatever corners they can. The impact on the public could be devastating. There is no good reason that equity cannot intervene, when as here there is no statutory impediment, to give relief to one whose mistake is being taken unfair advantage of by the other party to a contract, even when that other party is a government entity. I would affirm the trial court’s judgment and must, therefore, dissent.