The Michigan Court of Appeals recently issued a decision in the case of Cedroni vs. Tomblinson Harburn Assoc., which may impact how Architects and Engineers evaluate contractors and make recommendations to Owners concerning to whom the Owner should award the contract.
In Cedroni the Court of Appeals held that a contractor who was the low bidder on the project but was awarded the contract could sue the Architect who recommended to the Owner that the bid be rejected because the contractor was not “responsible” contractor. The court emphasized that the submission of the lowest bid, alone, was inadequate to sustain plaintiff's suit. The Court held that absent sufficient additional evidence on relevant award criteria, there would be no valid business expectancy.
Nevertheless, the Court went on to hold that Plaintiff, Contractor submitted evidence sufficient to create a factual dispute as to whether defendant architect's conduct was intentional and improper, motivated by malice and not legitimate business reasons. This coupled with a showing that the contractor was a qualified contractor created an issue to be decided by a jury.
The court did emphasize that the exercise of professional business judgment in making recommendations as to government contracts and projects must be afforded some level of protection and deference. But the court would not preclude litigation where "there exists evidence suggesting that the ostensible exercise of professional business judgment is in reality a disguised and veiled attempt to intentionally and improperly interfere with the contractual or expectant business relationship of others."
The result of this case if that if an architect, engineer or other consultant is inclined to recommend that a bid be rejected because of the lack of experience of the bidder, problems with the contractor on previous jobs or bid irregularities that documentation of the concerns and careful wording of the position of the A/E be undertaken.
We of course would be happy to assist you in how to approach such situations.