Pursuant to Ind.Appellate Rule 65(D),
FILED
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of Mar 29 2012, 9:20 am
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
PATRICK STERN THOMAS A. PASTORE
Indianapolis, Indiana Thomas Pastore, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
STANDARD COATING SERVICE, INC., )
)
Appellant-Plaintiff, )
)
vs. ) No. 49A02-1109-CT-922
)
WALSH CONSTRUCTION COMPANY, )
)
Appellee-Defendant. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Heather A. Welch, Judge
Cause No. 49D12-1005-CT-23989
March 29, 2012
MEMORANDUM DECISION - NOT FOR PUBLICATION
BAILEY, Judge
Case Summary
Standard Coating Service, Inc. (“Standard”) appeals from the trial court‟s order
granting Walsh Construction Company‟s (“Walsh”) motion for summary judgment on
Standard‟s claims for breach of contract and for damages as a third-party beneficiary to a
contract between Walsh and the City of Indianapolis (“the City”).
We affirm.
Issue
Standard presents two issues for our review, which we consolidate and restate as
whether the trial court erred when it granted summary judgment in favor of Walsh on
Standard‟s claims.
Facts and Procedural History
Walsh provides prime contracting services on, among others, large public works
projects. Standard provides painting, coating, and waterproofing services.
In late 2009, the City‟s Department of Public Works (“DPW”) solicited bids for
Project BE-28-002A, Wet Weather Secondary Treatment Expansion, Belmont Advanced
Wastewater Treatment (AWT) Facility (“the Project”). (Walsh App. 14.) Walsh planned to
submit a bid to serve as prime contractor on the Project.
Prime contractors for such projects, which draw money from the Clean Water and
Drinking Water State Revolving Fund, are often required to seek out as subcontractors
businesses that have been certified as Minority Business Enterprises (“MBEs”) and Women‟s
Business Enterprises (“WBEs”); such was the case here. To that end, on December 4, 2009,
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Walsh placed a classified ad in the Indianapolis Star newspaper and on the newspaper‟s
website seeking bids from certified MBEs and WBEs. Walsh also directly contacted a
number of businesses certified as MBEs and WBEs.
Among the MBEs that submitted a bid to Walsh was Standard. On December 8,
2009, Standard submitted a bid to perform waterproofing, water repellent, and coating work
for $1,759,132.00. (Standard App. 33-34; Walsh App. 11-12, 44.)
On December 10, 2009, Walsh submitted its bid to the city, in which it offered to
serve as the prime contractor on the Project for a total cost of $53,600,000. (Walsh. App. 32-
33.) Along with its bid, Walsh included U.S. Environmental Protection Agency (“EPA”)
forms 6100-3 and 6100-4. The EPA uses these forms to identify MBEs and WBEs that a
prime contractor has engaged as subcontractors. The forms Walsh submitted to the City
identified Standard as a provider of waterproofing, water repellents, and coating services.
On January 4, 2010, Patrick Stern (“Stern”), counsel for Standard, sent a letter to
Walsh observing that Walsh was the lowest bidder on the Project and that Walsh had
submitted with the bid EPA forms that designated Standard as providing waterproofing,
water repellent, and coating on the Project. Stern opined that it seemed likely that the City
would engage Walsh as prime contractor sometime in the middle of January 2010, and went
on to request that Walsh contact Standard to arrange for the completion of a purchase order
so that Standard could start work on the project. At some point, Walsh decided not to use
Standard‟s services and selected a different subcontractor for the project.
On January 13, 2010, Stern appeared on Standard‟s behalf at a meeting of the City‟s
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Commission of Public Works (“the Commission”) to request that the City delay approval of
Walsh‟s bid on the Project. Stern told the Commission that he had learned that day that
Walsh did not intend to use Standard‟s services. He went on to note that EPA form 6100-4
requires the prime contractor to designate its subcontractors under penalty of perjury, and
opined that Walsh‟s decision to use someone other than Standard should have raised
concerns with the Commission regarding Walsh‟s claimed proportions of MBE and WBE use
on the Project. After hearing from representatives of Walsh, who confirmed that they would
not use Standard on the Project, and from DPW staff, the Commission went on to approve
Walsh‟s bid.
On March 1, 2010, the City and Walsh entered into an agreement designating Walsh
as the prime contractor for the Project.
On May 28, 2010, Standard filed suit against Walsh, alleging breach of contract and
seeking damages as a third-party beneficiary of Walsh‟s agreement with the City. After
several enlargements of time, Walsh answered the complaint on August 30, 2010.
On March 15, 2011, Walsh moved for summary judgment, seeking dismissal of the
suit. After the trial court granted an enlargement of time in which to respond to the summary
judgment motion, Standard filed its response on May 16, 2011. On July 14, 2011, Walsh
replied to Standard and moved to strike numerous paragraphs of the affidavit of Arun Das
(“Das”), Standard‟s President, which Standard submitted in support of its opposition to the
summary judgment motion.
On July 18, 2011, the trial court conducted oral argument on the motions and granted
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Standard additional time in which to respond to Walsh‟s motion to strike certain of
Standard‟s designated materials. Standard filed its response on July 27, 2011, and further
moved to strike certain materials Walsh had designated in support of its motion for summary
judgment and in its reply to Standard.
On August 18, 2011, the trial court granted Walsh‟s motion to strike, denied
Standard‟s motion to strike, and went on to grant summary judgment in favor of Walsh.
This appeal followed.
Discussion and Decision
Standard of Review
Standard appeals the trial court‟s order granting summary judgment to Walsh. We
review a summary judgment order de novo, Murphy v. Curtis, 930 N.E.2d 1228, 1232 (Ind.
Ct. App. 2010), trans. denied, and we are bound by the same standard as the trial court.
Coca-Cola Co. v. Babyback‟s Intern., Inc., 841 N.E.2d 557, 561 (Ind. 2006). Summary
judgment is appropriate only where “the designated evidentiary matter shows that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” Ind. Trial Rule 56(C). We consider only those materials the parties
designated in support of their submissions to the trial court. Gunkel v. Renovations, Inc., 822
N.E.2d 150, 152 (Ind. 2005). We construe all factual inferences in favor of the non-movant,
and likewise resolve any question as to the existence of a material issue in the non-movant‟s
favor. Murphy, 930 N.E.2d at 1228.
The moving party bears the burden of making a prima facie showing that there is no
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genuine issue of material fact and that it is entitled to judgment as a matter of law. Dreaded,
Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1270 (Ind. 2009). Once the movant
satisfies that burden, the burden shifts to the non-movant to designate and produce evidence
showing the existence of a genuine issue of material fact. Id. We may affirm a grant of
summary judgment on any legal basis supported by the materials submitted to the trial court.
Melton v. Ousley, 925 N.E.2d 430, 437 (Ind. Ct. App. 2010).
Standard’s Breach of Contract Claim
Standard first contends that the trial court erred because it improperly concluded that
there was no contract between it and Walsh. Whether a contract exists is a question of law.
Fiederlein v. Boutselis, 952 N.E.2d 847, 856 (Ind. Ct. App. 2011). The basic requirements
for a contract are offer, acceptance, consideration, and a meeting of the minds between the
contracting parties “on all essential elements or terms” of the transaction. Id. (quoting
DiMizio v. Romo, 756 N.E.2d 1018, 1022 (Ind. Ct. App. 2001) (quotation marks and
citations omitted), trans. denied). “[A] meeting of the minds of the contracting parties,
having the same intent, is essential to the formation of a contract.” Ochoa v. Ford, 641
N.E.2d 1042, 1044 (Ind. Ct. App. 1994). Whether the parties intended to contract is a
question of fact “to be determined from all the circumstances.” Id.
Walsh concedes that Standard‟s bid was an offer for waterproofing, water repellent,
and coating services on the Project. Thus, we turn to whether Walsh accepted Standard‟s
offer. On this point, Standard contends that while Walsh did not communicate directly its
acceptance of Standard‟s offer, Walsh nonetheless accepted Standard‟s offer by naming
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Standard in the EPA forms that accompanied Walsh‟s bid to the City.
This court has previously addressed a situation in which an offeror sought to bind a
party that did not communicate acceptance of an offer in Mueller v. Karns, 873 N.E.2d 652
(Ind. Ct. App. 2007). In Mueller, Karns provided consulting services and later extended an
offer by letter setting forth payment terms, which the offeree conservatorship rejected in a
telephone conversation one week after Karns‟s letter‟s designated start date for the
agreement. Id. at 655-56. Karns argued, and the trial court agreed, that the conservatorship
had accepted Karns‟s offer by remaining silent until after the designated effective date. Id. at
656. We reversed, observing that “Karns did not tell the Conservatorship that it could
manifest acceptance … by remaining silent, nor did he provide a clear and timely mechanism
for rejecting the offer or his services,” and that, indeed, Karns had already rendered his
services before tendering the letter. Id. at 658.
In reaching our decision in Mueller, we relied upon the Restatement (Second) of
Contracts, which states in relevant part:
Where an offeree fails to reply to an offer, his silence and inaction operate as
an acceptance in the following cases only:
(a) Where an offeree takes the benefit of offered services with reasonable
opportunity to reject them and reason to know that they were offered with the
expectation of compensation.
(b) Where the offeror has stated or given the offeree reason to understand that
assent may be manifested by silence or inaction, and the offeree in remaining
silent and inactive intends to accept the offer.
(c) Where because of previous dealings or otherwise, it is reasonable that the
offeree should notify the offeror if he does not intend to accept.
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Restatement (Second) of Contracts § 69(1).
Here, Standard submitted an offer to Walsh in the form of a subcontractor‟s bid.1
Walsh in turn submitted its bid to the City, in which it included two EPA forms that named
Standard as an MBE with whom Walsh expected to do business in the event the City
accepted the bid. Walsh‟s bid to the City included three statements that “[n]o contracts have
been made at this time, however, see attached Bidders List for subcontractors which we have
acquired quotes from.” (Walsh App. 99, 100.) It is unclear whether Walsh informed
Standard directly that it would not accept Standard‟s bid before the City approved Walsh‟s
bid at the Commission meeting on January 13, 2010. It is clear, however, that Standard was
aware before the meeting began that Walsh had decided not to use Standard‟s services, as
Stern informed the Commission that it was Walsh‟s decision that prompted his appearance
before the Commission to recommend that it delay acceptance of Walsh‟s bid.
As in Mueller, Walsh responded to Standard first with silence, and then rejection.
Neither Standard nor Walsh designated any evidentiary matter that would give rise to an
inference that Standard informed Walsh that Walsh‟s silence would amount to acceptance.
Cf. Restatement (Second) of Contracts § 69(1)(b). Thus, we cannot conclude that Walsh‟s
silence in response to Standard‟s offer gives rise to an inference that Walsh‟s silence
amounted to acceptance of Standard‟s bid.
Nor does the concept underlying subsection 69(1)(a) of the Restatement—that an offer
1
Ordinarily, submission of a bid is not the same as an offer to contract. See infra. Walsh‟s brief on appeal
appears to concede that the bid was an offer, and we therefore accept this characterization for purposes of
rendering an opinion in this case.
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is accepted when the offeree “takes the benefit of services” after having an opportunity to
reject them and knowing that the offeror expects payment for those services—avail Standard.
A bid is ordinarily, at most, “an offer creating the power of acceptance.” I.C.C. Protective
Coatings, Inc. v. A.E. Staley Mfg. Co., 695 N.E.2d 1030, 1035 (Ind. Ct. App. 1998), trans.
denied. Bids are “often described as a „preliminary negotiation‟” and … a purchase order
from a bid‟s recipient “usually constitutes an offer.” Id. (quoting 1 ARTHUR L. CORBIN, A
COMPREHENSIVE TREATISE ON THE WORKING RULES OF CONTRACT LAW 22
(1963)).
The only evidentiary material designated to the trial court that provides any of the
terms of Standard‟s bid to Walsh are EPA form 6100-3 and Das‟s affidavit, which specify the
types of services Standard offered to provide and the price, but nothing else.2 Further,
according to Das‟s affidavit, Standard requested a purchase order from Walsh in anticipation
of beginning work on the Project, but Walsh never provided one. At most, Standard‟s bid
amounted to an offer that was not accepted in the manner specified by Standard—the
submission of a purchase order.3 Thus, we cannot conclude that Standard‟s bid amounted to
anything other than an offer, and indeed, we question whether the designated materials
amount even to that.
Nor can we conclude that Walsh accepted the benefit of Standard‟s services as
2
Das‟s affidavit indicates that Standard submitted a copy of the bid along with its complaint. While we find
the complaint in Standard‟s appendix, we find no copy of the bid in any of the materials submitted to the trial
court or to this court.
3
Because Walsh in its appellee brief appears to concede that Standard‟s bid constituted an offer, we do not
reach the question of whether Standard‟s bid was an offer giving rise to the power of acceptance, or merely
a bid as contemplated in I.C.C., supra.
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contemplated by Restatement subsection 69(1)(a). Standard contends that it is entitled to
damages for Walsh‟s breach when Walsh refused to use Standard‟s services on the Project.
Yet Standard provided no services in this regard. Nor is there any evidence tending to give
rise to an inference that Walsh accepted Standard‟s services in the form of a bid for which
Walsh would have had reason to know Standard expected compensation for the bid itself.
This is, again, unlike Mueller, where Karns provided consulting services before reaching an
agreement on his compensation for those services. Here, there is no evidence that Standard
provided any compensable service to Walsh, nor does Standard contend that its bid was such
a service.
Simply put, Standard, having been frustrated in its efforts to obtain work on the
Project as a subcontractor to Walsh, seeks recovery on a breach of contract claim by insisting
that a prime contractor‟s communication of a subcontractor‟s offer in a bid amounts to
acceptance of that offer. We decline to reach Standard‟s desired conclusion. The trial court
did not err when it granted Walsh‟s motion for summary judgment on Standard‟s breach of
contract claim.
Standard‟s Third-Party Beneficiary Claim
Standard also seeks recovery as a third-party beneficiary of the agreement between the
City and Walsh, a claim the trial court also dismissed upon summary judgment.
A third-party beneficiary may directly enforce a contract between other parties.
Eckman v. Green, 869 N.E.2d 493, 496 (Ind. Ct. App. 2007), trans. denied. To do so, the
claimed third-party beneficiary must show that 1) the parties to the contract clearly intended
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to benefit the third-party claimant, 2) a duty was imposed upon one of the contracting parties
favoring the third party, and 3) performance of the contract terms is necessary to render to the
beneficiary the direct benefit intended by the contracting parties. Id. The “controlling
factor” in a determination of whether a third party is a beneficiary of a contract is “[t]he
intent of the parties to benefit the third party,” which may be shown either by naming the
third party or by other evidence. R.R. Donnelley & Sons Co. v. North Texas Steel Co., 752
N.E.2d 112, 122 (Ind. Ct. App. 2001), trans. denied.
Here, the City and Walsh entered into the agreement for Walsh‟s services as prime
contractor on the Project on March 1, 2010. This was nearly two months after Walsh
communicated to Standard that it had rejected its bid and the Commission meeting at which
Walsh announced this to the City. Standard acknowledged this rejection when Stern told the
Commission that he was present at the meeting on Standard‟s behalf because Walsh had
decided not to engage Standard for the Project. Standard‟s appearance before the
Commission in turn made the City aware of Standard‟s claims, which the City apparently
disregarded in deciding to approve Walsh‟s bid. Moreover, the agreement between the City
and Walsh includes Provision 6.11, which states, “[a]ll Work performed by Subcontractors
shall be pursuant to an appropriate agreement between [Walsh] and the Subcontractor which
specifically binds the Subcontractor to these General Conditions and the applicable terms and
conditions of all other Contract Documents.” (Walsh App. 19.) There is no evidence that
Walsh and Standard entered into any such agreement.
Thus, the designated materials show that Standard submitted a bid, some portion of
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which Walsh included in its proposal to the City on December 10, 2009, but later rejected in
January 2010. Standard acknowledged that rejection through its subsequent actions,
including its appearance before the Commission on January 13, 2010. Walsh did not engage
Standard in an agreement contemplated by Provision 6.11 of the contract between Walsh and
the City. Even drawing all inferences in Standard‟s favor, there is no material issue with
respect to Standard‟s claim that it was a third-party beneficiary to the contract between Walsh
and the City. The designated materials do not give rise to an inference that Walsh and the
City intended to make Standard a third-party beneficiary to their agreement. The trial court
therefore did not err when it concluded that Walsh was entitled to summary judgment on
Standard‟s third-party beneficiary claim.
Conclusion
There is no material issue as to whether Walsh breached a contract between itself and
Standard when it rejected Standard‟s bid on the Project. Nor is there a material issue as to
whether Standard was a third-party beneficiary to the contract between Walsh and the City.
Thus, the trial court did not err when it granted summary judgment to Walsh and against
Standard.
Affirmed.
BAKER, J., and DARDEN, J., concur.
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