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Alva Electric, Inc. v. Evansville-Vanderburgh School Corp.

Supreme Court of Indiana

May 1, 2014

ALVA ELECTRIC, INC., ARC CONSTRUCTION CO., INC., DANCO CONSTRUCTION, INC., DEIG BROS. LUMBER & CONSTRUCTION CO., INC., EMPIRE CONTRACTORS, INC., PEYRONNIN CONSTRUCTION CO., INC., ANDWINK CONSTRUCTION, INC., Appellants (Plaintiffs below),
v.
EVANSVILLE-VANDERBURGH SCHOOL CORPORATION AND EVSC FOUNDATION, INC., Appellees (Defendants below)

Page 264

Appeal from the Vanderburgh Circuit Court, No. 82C01-1102-PL-78. The Honorable Gregory Alan Smith, Special Judge. On Petition To Transfer from the Indiana Court of Appeals, No. 82A01-1201-PL-2.

ATTORNEYS FOR APPELLANTS ALVA ELECTRIC, INC., ET AL.: Jon Laramore, April E. Sellers, Shiv Ghuman O'Neill, Faegre Baker Daniels LLP, Indianapolis, Indiana; A.J. Manion, Manion Stigger, Evansville, Indiana; Tony Wayne Fehrenbacher, Evansville, Indiana.

ATTORNEYS FOR APPELLEE EVSC FOUNDATION, INC.: Richard T. Mullineaux, Crystal G. Rowe, William F. English, Kightlinger & Gray, LLP, New Albany, Indiana.

ATTORNEYS FOR APPELLEE EVANSVILLE-VANDERBURGH SCHOOL CORPORATION: Patrick A. Shoulders, Robert L. Burkhart, Dirck H. Stahl, Ziemer Stayman Weitzel & Shoulders, LLP, Evansville, Indiana.

Rucker, Justice. Dickson, C.J., and David, Massa and Rush, JJ., concur.

OPINION

Page 265

Rucker, Justice.

In this case we are asked to decide whether the specific procedure employed by a school corporation to renovate one of its buildings violated Indiana's Public Work Statute and if so, whether certain participants in the renovation violated Indiana's Antitrust Act. We determine that under the facts presented, the Public Work Statute was violated but the Antitrust Act was not.

Background

Indiana, like other states, has enacted statutes governing the way certain public entities must select contractors for publicly funded construction jobs. These statutes are designed " to safeguard the public against fraud, favoritism, graft, extravagance, improvidence and corruption, and to insure honest competition for the best work or supplies at the lowest reasonable cost." Angel v. Behnke, 166 Ind.App. 541, 337 N.E.2d 503, 509 (Ind. 1975) (quotation omitted). Such statutes generally provide that public construction contracts exceeding certain dollar amounts must be awarded through a public bidding process. One of Indiana's primary competitive bidding statutes, the Public Work Statute, is codified at Indiana Code sections 36-1-12-1 through 21 and provides (with certain exceptions not relevant here) that " all public work performed or contracted for by . . . political subdivisions . . . and . . . their agencies" shall be subject to specific bidding procedures and must comply with numerous regulations and specifications. Ind. Code § 36-1-12-1(a). Contracts for the construction or renovation of school buildings typically must comply with the competitive bidding requirements applicable to public works construction contracts. See Brooks v. Gariup Constr. Co., 722 N.E.2d 834, 839 (Ind.Ct.App. 1999), trans. denied; Sch. City of Gary, Ind. v. Cont'l Elec. Co., 149 Ind.App. 416, 273 N.E.2d 293, 296 (Ind.Ct.App. 1971). See also 2008 Ind. Op. Att'y Gen. No. 5, (2008) (citing I.C. § § 36-1-2-10,-13) (footnote omitted) (" School corporations are political subdivisions for purposes of the public work statute." )

One mechanism for enforcing the Public Work Statute is available through the Public Lawsuit Statute--Indiana Code chapter 34-13-5--which permits " citizens or taxpayers" of a municipality " to bring an action questioning the validity or construction of any public improvement by the municipality." Shook Heavy & Envtl. Constr. Grp. v. City of Kokomo, 632 N.E.2d 355, 357, 358 (Ind. 1994) (applying predecessor to chapter 34-13-5). In addition Indiana Code section 24-1-2-7--contained in the Indiana Antitrust Act--" confers on private individuals the right to challenge the award of a government contract where the governmental entity and successful bidder have engaged in collusion or fraud." Id. at 358 (citation omitted).

Facts and Procedural History

Facing a $6.5 million cut in state funding defendant Evansville-Vanderburgh School Corporation (" School Corporation" ) determined that it could, over time, reduce its operating ...


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