Kuhn Construction Company v. Department of Transportation

EFiled: Aug 31 2016 02:29PM EDT
Transaction ID 59496894
Case No. 12629-VCS
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
417 S. State Street
JOSEPH R. SLIGHTS III Dover, Delaware 19901
VICE CHANCELLOR Telephone: (302) 739-4397
Facsimile: (302) 739-6179
Date Submitted: August 30, 2016
Date Decided: August 31, 2016
Edward Seglias, Esquire Ann C. Cordo, Esquire
Robert K. Beste, Jr., Esquire Jennifer R. Noel, Esquire
Cohen, Seglias, Pallas, Department of Justice
Greenhall & Furman, P.C. 820 North French Street, 6th Floor
1007 Orange Street, Suite 1130 Wilmington, DE 19801
Wilmington, DE 19801
Re: Kuhn Construction Company v. Department of Transportation
C.A. No. 12629-VCS
Dear Counsel:
On August 18, 2016, the Court issued a Letter Opinion in which it granted
Kuhn Construction Company’s application for a temporary restraining order.1 The
Court’s Order restrained the Delaware Department of Transportation (“DelDOT”)
from awarding a public bid contract for a construction project (“the project”) to
any entity other than Kuhn pending discovery and preliminary injunction
proceedings that will address: (1) whether Kuhn included a statutorily required
1
Kuhn v. Dep’t of Transp., 2016 WL 444075 (Del. Ch. Aug. 18, 2016).
Kuhn Construction Company v. Department of Transportation
C.A. No. 12629-VCS
August 31, 2016
Page 2
“bid bond” with its bid for the project; and (2) if so, whether DelDOT improperly
rejected Kuhn’s conforming bid (the lowest of the bids submitted). The Court
declined to enter a mandatory injunction requiring DelDOT to rebid the project,
however, because it determined that DelDOT’s violation of 29 Del. C.
§ 6962(d)(8)(a) (“Section 6962”) by reading Kuhn’s bid before confirming
whether it contained the necessary bid bond did not justify mandatory injunctive
relief.
Even though it prevailed on its request for a temporary restraining order,
Kuhn has now petitioned this Court to certify an expedited interlocutory appeal of
that portion of the Court’s decision denying Kuhn’s request that DelDOT be
directed to rebid the project. DelDOT opposes the petition.
Delaware Supreme Court Rule 42(b)(i) provides that “[n]o interlocutory
appeal will be certified by the trial court or accepted by [the Delaware Supreme]
Court unless the order of the trial court decides a substantial issue of material
importance that merits appellate review before a final judgment.” Instances where
the trial court certifies an interlocutory appeal “should be exceptional, not routine,
because [interlocutory appeals] disrupt the normal procession of litigation, cause
Kuhn Construction Company v. Department of Transportation
C.A. No. 12629-VCS
August 31, 2016
Page 3
delay, and can threaten to exhaust scarce party and judicial resources.”2 For this
reason, “parties should only ask for the right to seek interlocutory review if they
believe in good faith that there are substantial benefits that will outweigh the
certain costs that accompany an interlocutory appeal.”3 When certifying an
interlocutory appeal, “the trial court should identify whether and why the likely
benefits of interlocutory review outweigh the probable costs, such that
interlocutory review is in the interests of justice. If the balance is uncertain, the
trial court should refuse to certify the interlocutory appeal.”4
The Court has entered a temporary restraining order that preserves the status
quo for a period sufficient to allow Kuhn to establish a factual record in support of
its claim that it included a bid bond with its bid for the project. If Kuhn
demonstrates a reasonable probability it will prove that fact at trial, the Court has
already advised the parties that it will enter a preliminary injunction precluding
DelDOT from awarding the contract for the project to anyone else pending trial. If
2
Supr. Ct. R. 42(b)(ii).
3
Id.
4
Supr. Ct. R. 42(b)(iii).
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C.A. No. 12629-VCS
August 31, 2016
Page 4
Kuhn prevails at trial, then the Court will order that DelDOT award the contract for
the project to Kuhn. All of this will occur in short order as the Court has granted
Kuhn’s request for expedited proceedings.
What Kuhn proposes now is a piecemeal approach to the litigation that will
not advance the interests of justice but will increase costs and burdens.5 If the
Court enters a final judgment that Kuhn is not entitled to relief on its claim that
DelDOT wrongfully rejected Kuhn’s conforming low bid, then Kuhn will have an
opportunity to present to the Supreme Court on direct appeal any appellate issues
relating to that determination along with its argument that this Court erred by not
entering a mandatory injunction requiring DelDOT to rebid the project as a remedy
for DelDOT’s violation of Section 6962 by reading Kuhn’s bid before ascertaining
whether it contained a bid bond.6 Of course, if Kuhn prevails on its conforming
5
Krahmer v. Christie’s Inc., 2006 WL 4782303, at *1 (Del. Ch. June 15, 2006) (denying
certification upon noting that “[c]ertification would likely result in the piecemeal appeal
of factually and legally related issues and would be contrary to the interest of justice and
the orderly procession of matters before this court.”).
6
To address its claim of urgency, Kuhn can seek an injunction pending appeal if it can
demonstrate that the balance of equities and other criteria justify that relief, Ct. of Ch.
R. 62(c), and request expedited scheduling of its direct appeal if it can demonstrate “good
cause.” Supr. Ct. R. 25(e).
Kuhn Construction Company v. Department of Transportation
C.A. No. 12629-VCS
August 31, 2016
Page 5
bid claim, then its statutory argument will be moot and the Supreme Court’s
consideration of that issue will have to await another day and another appeal
(unless, of course, DelDOT takes an appeal in which case Kuhn may raise the issue
on cross-appeal). What is not justified here, however, is for Kuhn to get an
indefinite extension of the temporary restraining order while it appeals only a
portion of the Court’s order, particularly when it succeeded in having the Court
preserve the status quo by preventing DelDOT from moving forward with the
project so that it could attempt to prove that its bid included the bond required by
Section 6962.7
Under these circumstances, I cannot certify that the likely benefits of
interlocutory review outweigh the probable costs. Accordingly, the petition for
certification of an interlocutory appeal is denied.
IT IS SO ORDERED.
Very truly yours,
/s/ Joseph R. Slights III
7
Kuhn certainly is free to withdraw its claim that it submitted a conforming bid, in which
case the Court will enter a final order denying its statutory claim from which a direct
appeal may be taken.