H. Lindeman v. The Borough of Meyersdale, Somerset County

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Harold Lindeman, Jamie Livengood :

and Matthew Beeman :

: No. 2063 C.D. 2014

v. :

: Submitted: November 16, 2015

The Borough of Meyersdale, :

Somerset County, :

Appellant :

BEFORE: HONORABLE DAN PELLEGRINI, President Judge

HONORABLE MARY HANNAH LEAVITT, Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

OPINION BY

JUDGE McCULLOUGH FILED: December 30, 2015

The Borough of Meyersdale (Borough) appeals from the October 7,

2014 order of the Court of Common Pleas of Somerset County (trial court), granting

the petition of Harold Lindeman, Jamie Livengood, and Matthew Beeman

(collectively, Petitioners) for a preliminary injunction and enjoining the Borough

from moving forward on an accepted bid for the collection of municipal waste.

Facts and Procedural History

The parties have stipulated to the pertinent facts in this matter. For the

past 21 years, Harbaugh Trucking, Inc. (Harbaugh) was the exclusive garbage hauler,

both residential and commercial, for the Borough. The Borough’s last contract with

Harbaugh was set to expire on October 31, 2014. In early 2014, the Borough issued a

request for proposal (RFP) seeking bids for the collection and disposal of garbage,

ash, and rubbish for the entire Borough for the period from November 1, 2014,

through October 31, 2017. In July 2014, the Borough issued an amended RFP which

adjusted yardage specifications and included new dates for the bid deadline and the

opening of the bids. The RFP included proposal guidelines that required all costs to

be “itemized to include an explanation of all fees and costs” and reserved the

Borough’s right “to reject any or all of the bids received and to waive informalities

and minor irregularities in proposals received.” (Reproduced Record (R.R.) at 47-

48.)1 The RFP also stated that “[t]he award will be made to the responsible and

qualified offeror whose proposal, conforming to the invitation, will be most

advantageous to the Township [sic] in price for the services and other factors

considered.” (R.R. at 48.)

The RFP acknowledged that the services provided by Harbaugh since

1993 had been “satisfactory with contract compliance.” (R.R. at 49.) However, the

RFP noted that the Borough Council believed “that an open and competitive bidding

process from various vendors [was] indicated,” with the goal to “provide Meyersdale

residents and businesses with high quality, cost effective refuse services.” Id. The

RFP then specified that any bid must contain the following items:

A. Detailed plan and schedule for the pick-up and disposal

of garbage, ashes and rubbish to include specific days,

specific locations, times, etc. To include bag/can limits per

resident. To include specific requirements for bags/cans.

B. Qualifications of Vendor to provide services to

Meyersdale Borough to include licensing, certifications,

credentials and references.

1

The Borough’s reproduced record does not include the lower case “a” as required by

Pa.R.A.P. 2173.

2

C. Provide documentation certifying the vendor’s right to

use a solid waste or a combination of facilities which are

properly licensed and approved by the state of

Pennsylvania.

D. Inventory of equipment and vehicles available to be used

within Meyersdale Borough to include licensing, specific

type and number of equipment, specific types of vehicle,

preventive maintenance plan and schedule for all

equipment/vehicles.

E. Certificate of all insurance policies to include liability,

auto, workmen’s compensation.

F. Names, experience, certifications and qualifications of

workers employed by Vendor who will be providing

services to Meyersdale Borough.

G. Plan and schedule for the billing and collection of fees to

residents to include sample bills, procedure for non-

collection of fees.

H. Separate plan for the Borough to handle the billing and

collection of fees to residents.

I. Rates per month for the following services:

Cubic yard (See attached list of business)

Residential

Residential with ashes

Business (See attached list of business)

Business with ashes (See attached list of business)

Churches (See attached list of churches)

J. Plan, procedure, schedule and rates for the removal of

large bulky items, such as appliances, mattresses, furniture,

etc.

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K. Rates to include any increases for life of contract. As

well as plan to reopen contract for price negotiations.

L. Exclusive rights franchise fee that Vendor will pay to

Meyersdale Borough which will include set amount to be

paid and schedule of payment.

M. Meyersdale Borough plans to include roll off dumpsters

as part of this contract. We are requesting a bid for rates for

roll off dumpsters be included with your bid. Rates should

be listed for 10 yard, 15 yard and 30 yard dumpsters.

Include weight limits for full and time limits for use.

Include rates for any other size roll off dumpsters you may

own.

(R.R. at 49-50.)

The Borough received five bids, including one from Harbaugh and

another from Burgmeier Hauling (Burgmeier). The Borough rejected Harbaugh’s as

non-compliant with the RFP. Specifically, the Borough found that Harbaugh’s bid

did not include proper pricing or an itemized explanation of all fees and costs, did not

state disposal rates for the container sizes requested in the RFP, and included disposal

services that were not requested in the RFP. The Borough ultimately recognized

Burgmeier as the lowest responsible bidder and awarded Burgmeier the contract.

On September 2, 2014, Petitioners, all tax-paying residents of the

Borough, filed a petition for preliminary injunction with the trial court seeking to

enjoin the Borough from entering into a contract with Burgmeier. Petitioners alleged

that Burgmeier was not the lowest responsible bidder. The Borough filed an answer

denying this allegation. The parties thereafter filed a stipulation with the trial court

stating that the facts necessary to decide the case could be derived from the amended

RFP and the respective bids of Harbaugh and Burgmeier. The parties also sought the

permission of the trial court to forego oral argument and submit written briefs, which

the trial court granted. By order dated September 26, 2014, the trial court admitted

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the stipulation and directed the parties to file their respective briefs on or before

October 1, 2014.

Trial Court Opinion

Following the submission of these briefs, by order dated October 7,

2014, the trial court granted Petitioners’ petition for a preliminary injunction. The

trial court further directed the Borough to terminate its contract with Burgmeier and

to accept Harbaugh’s bid.2 In an accompanying opinion, the trial court did not

address the necessary elements for a preliminary injunction, nor did the trial court

explain how Petitioners satisfied these elements. Instead, the trial court began its

analysis by setting forth the legal standard relative to municipal contracts and

proceeded to address the substantive issues regarding the bids of Harbaugh and

Burgmeier.

The trial court first noted that section 1402(a) of the Borough Code

requires that all contracts in excess of $18,500.00 be awarded to the “lowest qualified

and responsible bidder.” 8 Pa.C.S. §1402(a). The trial court referenced the following

standard, derived from our Supreme Court’s decision in Kratz v. City of Allentown,

155 A. 116, 117 (Pa. 1931), to determine which party is the “lowest qualified and

responsible bidder”:

The statute provides that municipal contracts be let to the

lowest responsible bidder, but the courts have uniformly

held that the question of who is the lowest responsible

bidder is one for the sound discretion of the proper

municipal authority, and does not necessarily mean the one

whose bid on its face is lowest in dollars, but includes

2

By including these directives, the trial court effectively transformed its order from one

granting preliminary injunctive relief to a final order granting permanent injunctive relief.

5

financial responsibility, also integrity, efficiency, industry,

experience, promptness, and ability to successfully carry

out the particular undertaking, and that a bond will not

supply the lack of these characteristics. At the same time, it

is held that to award the contract to a higher bidder

capriciously without a full and careful investigation is an

abuse of discretion which equity will restrain. Where a full

investigation discloses a substantial reason which appeals to

the sound discretion of the municipal authorities they may

award a contract to one not in dollars the lowest bidder.

The sound discretion, which is upheld, must be based upon

a knowledge of the real situation gained by a careful

investigation.

(Trial court op. at 3) (citations omitted).

The trial court concluded that Harbaugh was a qualified and responsible

bidder, noting that the record was “absolutely void of any reason why Harbaugh’s bid

was not accepted based on any of the factors outlined in Kratz” and that the RFP

itself recognized that Harbaugh’s performance over the years had been “satisfactory.”

(Trial court op. at 4.) The trial court also concluded, after reviewing the bids and

conducting its own mathematical calculations, that Burgmeier’s bid would cost

Borough residents and businesses in excess of $100,000.00 more than Harbaugh’s bid

over the term of the contract. The trial court rejected the Borough’s argument that

Harbaugh’s flat-rate bid of $10,475.00 per month in the event the Borough performs

the billing was ambiguous.

Additionally, after analyzing the bids of Harbaugh and Burgmeier, the

trial court concluded that the former complied with the RFP, while the latter did not.

Regarding Burgmeier’s bid, the trial court stated that it did not include the required

documentation under Item C certifying its “right to use a solid waste or a

combination of facilities which are properly licensed and approved by the state of

Pennsylvania.” (R.R. at 49.) Regarding Harbaugh’s bid, the trial court stated that,

contrary to the Borough’s determination, Harbaugh included an exhibit which met the

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requirements of Item M by setting forth rental charges for 4, 8, 10, 15, 20, and 30-

yard dumpsters. Next, the trial court concluded that insofar as Harbaugh’s bid set

forth a flat-rate fee of $10,475.00 per month, it complied with the “separate plan”

requirement in Item H in the event the Borough does the billing. Finally, the trial

court concluded that Harbaugh’s bid complied with Item L by stating that no

franchise fee would be payable for regular monthly collections should the Borough

do the billing, but that it would pay 5% of all fees generated from other services, such

as roll-off boxes, dumpsters, extra pickups, and demolition removal.

Motion for Reconsideration

The Borough thereafter filed a motion for reconsideration with the trial

court, reiterating its argument that Harbaugh was not the lowest responsible bidder

because Harbaugh’s bid failed to conform to the RFP. The Borough also

acknowledged the flaw in Burgmeier’s bid as recognized by the trial court and

suggested that it should be allowed to reject all bids and re-bid the contract.

Petitioners filed an objection alleging that the Borough’s motion for reconsideration

was improper and simultaneously filed an answer denying the material allegations of

the Borough’s motion. Petitioners also contended in their answer that the Borough’s

motion raised issues and requested relief, i.e., to re-bid the contract, which were not

raised or requested below, and hence, are now waived. By order dated December 3,

2014, the trial court sustained Petitioners’ objection and struck the Borough’s motion

for reconsideration.3 However, while this motion was pending, on November 6,

2014, the Borough filed a notice of appeal with the trial court.4

3

The trial court issued an opinion explaining that the Borough’s motion raised issues

regarding Harbaugh’s bid that were considered and rejected in its original opinion, as well as other

issues, including Harbaugh’s bid was beyond the scope of the RFP and that it should be able to

(Footnote continued on next page…)

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Discussion

On appeal,5 the Borough argues that the trial court erred as a matter of

law in: concluding that Harbaugh was the lowest responsible bidder; determining that

it did not have the right to reject any and all bids; and expanding the scope of the RFP

from a curb side residential and business service to include demolition removal and

other services not solicited in the RFP. However, before we reach the merits of these

arguments, we must address Petitioners’ argument that the Borough is precluded

from raising any issues on appeal because it did not file a motion for post-trial relief

with the trial court.

Motion for Post-Trial Relief

Petitioners correctly note that failure to file a motion for post-trial relief

results in a waiver of all issues for appellate review and requires that the appeal be

dismissed. Borough of Harveys Lake v. Heck, 719 A.2d 378, 380 (Pa. Cmwlth.

(continued…)

reject all bids, that were waived because they were not raised below and only first raised in the

motion for reconsideration. (Supplemental Reproduced Record (S.R.R.) at 11b-27b.)

4

The trial court did not issue a further opinion in support of its order under Pa.R.A.P.

1925(a), but instead relied on its previous opinions.

5

Our standard of review of a trial court’s decision to grant or deny a preliminary injunction

is highly deferential. Summit Towne Centre, Inc. v. Shoe Show of Rocky Mount, Inc., 828 A.2d 995,

1000 (Pa. 2003). As such, “we do not inquire into the merits of the controversy, but only examine

the record to determine if there were any apparently reasonable grounds for the action of the court

below. Only if it is plain that no grounds exist to support the decree or that the rule of law relied

upon was palpably erroneous or misapplied will we interfere with the decision of the [trial court].”

Id.

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1998). However, a motion for post-trial relief is not necessary when appealing an

order granting or denying a preliminary injunction; rather, this order is appealable as

of right. See Pennsylvania Rule of Appellate Procedure (Pa.R.A.P.) 311(a)(4)

(appeal may be taken as of right from “[a]n order that grants or denies, modifies or

refuses to modify, continues or refuses to continue, or dissolves or refuses to dissolve

an injunction . . . .”); Beaver County v. David, 83 A.3d 1111, 1113 (Pa. Cmwlth.),

appeal denied, 93 A.3d 464 (Pa. 2014) (order granting preliminary injunction is

appealable as of right under Pa.R.A.P. 311(a)(4)).

Preliminary/Permanent Injunction

We now turn to the merits. As noted above, Petitioners initiated this

matter by filing a motion with the trial court seeking a preliminary injunction

enjoining the Borough from entering into a contract with Burgmeier. A court may

grant a preliminary injunction only where the moving party establishes the following

elements: (1) the injunction is necessary to prevent immediate and irreparable harm

that cannot be adequately compensated by damages; (2) greater injury would result

from refusing an injunction than from granting it, and, concomitantly, the issuance of

an injunction will not substantially harm other interested parties in the proceedings;

(3) the injunction will properly restore the parties to their status as it existed

immediately prior to the alleged wrongful conduct; (4) the party seeking the

injunction is likely to prevail on the merits; (5) the injunction is reasonably suited to

abate the offending activity; and (6) the injunction will not adversely affect the public

interest. Dragani v. Borough of Ambler, 37 A.3d 27, 31 (Pa. Cmwlth.), appeal

denied, 49 A.3d 444 (Pa. 2012). “For a preliminary injunction to issue, every one of

the prerequisites must be established; if the petitioner fails to establish any one of

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them, there is no need to address the others.” County of Allegheny v. Commonwealth,

544 A.2d 1305, 1307 (Pa. 1988).

Moreover, a preliminary injunction is intended to preserve the status quo

and prevent imminent and irreparable harm that might occur before the merits of the

case can be heard and determined. After a preliminary injunction is awarded or

denied, the case proceeds for a final hearing on the merits. Soja v. Factoryville

Sportsmen’s Club, 522 A.2d 1129, 1131 (Pa. Super. 1987). The preliminary

injunction proceeding is distinct from the final hearing on the merits. Kee v.

Pennsylvania Turnpike Commission, 743 A.2d 546, 549 (Pa. Cmwlth. 1999). Indeed,

it is well established that separate standards govern a request for a preliminary

injunction and a request for permanent injunctive relief: a preliminary injunction

looks for the presence of imminent, irreparable harm, whereas a permanent injunction

is warranted if no adequate remedy at law exists for a legal wrong.6 City of Chester

v. Chester Redevelopment Authority, 686 A.2d 30, 35 (Pa. Cmwlth. 1996), appeal

denied, 695 A.2d 787 (Pa. 1997). Consequently, we have held that it is inappropriate

for a court to treat a hearing for a preliminary injunction as a final hearing and as a

basis for a permanent injunction, unless the parties stipulate to the contrary. Kee;

Berger by & through Berger v. West Jefferson Hill School District, 669 A.2d 1084

(Pa. Cmwlth. 1995).

As noted above, the trial court did not address the necessary elements for

a preliminary injunction in its opinion, nor did it explain how Petitioners satisfied

each of these elements in this case. Additionally, the stipulation executed by

Petitioners and the Borough merely addresses the controlling facts in this matter and

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A court’s final disposition of a request for permanent injunctive relief is independent of its

determination relating to preliminary injunctive relief and the denial of the latter does not foreclose

an order for a permanent injunction. Soja.

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makes no mention of treating the preliminary injunction proceedings as a final

hearing on the merits for the purpose of entering permanent injunctive relief.

Nevertheless, the trial court engaged in a substantive analysis of the bids of Harbaugh

and Burgmeier and ultimately directed the Borough to terminate its contract with

Burgmeier and to accept Harbaugh’s bid, effectively granting permanent injunctive

relief. Such relief was clearly not appropriate given the stage of the proceedings

before the trial court. Furthermore, the trial court’s complete lack of analysis of the

necessary elements relative to preliminary injunctive relief precludes this Court from

conducting any meaningful review of the trial court’s decision. As we recently noted

in Riverfront Development Group, LLC v. City of Harrisburg Zoning Hearing Board,

109 A.3d 358, 370 (Pa. Cmwlth. 2015), where a record is not adequate for appellate

review, a remand is necessary for a zoning hearing board “to develop the record and

make the necessary findings.” Similarly, here, a remand is necessary for the trial

court to make appropriate findings regarding the requisite elements for a preliminary

injunction.

Accordingly, the order of the trial court is vacated and the matter is

remanded to the trial court for further findings consistent with this opinion.

________________________________

PATRICIA A. McCULLOUGH, Judge

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IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Harold Lindeman, Jamie Livengood :

and Matthew Beeman :

: No. 2063 C.D. 2014

v. :

:

The Borough of Meyersdale, :

Somerset County, :

Appellant :

ORDER

AND NOW, this 30th day of December, 2015, the order of the Court

of Common Pleas of Somerset County (trial court), dated October 7, 2014, is

hereby vacated. The matter is remanded to the trial court for further findings

consistent with this opinion.

Jurisdiction relinquished.

________________________________

PATRICIA A. McCULLOUGH, Judge