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John Rocchio Corp. v. Pare Engineering Corp.

Supreme Court of Rhode Island

February 13, 2019

John Rocchio Corporation
v.
Pare Engineering Corporation.

          Providence County Superior Court PC 16-4079 Michael A. Silverstein Associate Justice.

          For Plaintiff: Gregory J.Acciardo, Esq. Mal A. Salvadore, Esq.

          For Defendant: Brian C. Newberry, Esq. Adam Benevides, Esq.

          Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia JJ.

          OPINION

          Gilbert V. Indeglia Associate Justice.

         The plaintiff, John Rocchio Corporation (Rocchio), appeals from a final judgment of the Superior Court granting summary judgment in favor of the defendant, Pare Engineering Corporation (Pare). This matter came before the Court on December 6, 2018, pursuant to an order directing the parties to appear and show cause why the issues raised should not be summarily decided. After considering the arguments set forth in the parties' memoranda and at oral argument, we are convinced that cause has not been shown and further argument or briefing is not required to decide this matter. Accordingly, we affirm the judgment of the Superior Court.[1]

         I

         Facts and Travel

         On June 5, 2015, the Warwick Sewer Authority (the WSA) entered into an agreement with Pare for consulting and engineering services relating to a sewer infrastructure expansion project that the WSA planned to complete. That agreement required Pare to provide certain pre-bid services, which included preparing requests for proposal (RFP) that would serve as the basis for the state-law-mandated bidding process for potential general contractors.[2] Pare completed this task, and the WSA ultimately received bids from five companies: D'Ambra Construction Corp., Inc., ET&L Corp., Hart Engineering Corp. (Hart), DiGregorio, Inc. (DiGregorio), and Rocchio. The bids were opened and read aloud during a public ceremony at Warwick City Hall on April 22, 2016. Rocchio was the low bidder at $2, 318, 285, which was approximately $147, 000 less than the next-lowest bid, which was submitted by DiGregorio.

         On April 27, 2016, Pare prepared and delivered a memorandum to Janine Burke-Wells, the executive director of the WSA, containing Pare's review and recommendations regarding the bidding process. In that memorandum, Pare provided a review of the submissions of the two lowest bidders, Rocchio and DiGregorio, which included a notation regarding the failure of Rocchio and Hart to include certain required EPA forms in their bids.[3] Pare concluded its recommendation by stating:

"Based upon the review of the bids it appears that [Rocchio] should be disqualified, at the discretion of the WSA, for failing to include the required EPA forms 6100-3 and 6100-4 as required by page 2 of Attachment F: Good Faith Efforts, in Section 00830 of the Project Specifications. Based on interviews with the Contractors and their references, and Pare's understanding of the Contractor's capabilities from previous experience, Pare is not aware of any reasons why the Contract should not be awarded to either [Rocchio] or [DiGregorio]. Pare is aware [Rocchio] has previously completed work for the WSA, which could be considered by the WSA when evaluating the Contractor's qualifications."

         At a WSA board meeting on April 28, 2016, pursuant to Burke-Wells's request, the board tabled the bid selection until the May 2016 meeting. However, prior to that April 28, 2016 board meeting, Burke-Wells had met with the president of Rocchio, "as a professional courtesy[.]" In a letter dated May 2, 2016, the president thanked Burke-Wells for meeting with him and provided the two required EPA forms that had been previously omitted from Rocchio's bid.

         The next WSA board meeting was held on May 19, 2016. The minutes of that meeting reflect that the board discussed and reviewed the reports of Pare and Burke-Wells. Moreover, the minutes also indicate that Burke-Wells "asked that the Board reject [Rocchio's] low bid and award a contract to DiGregorio, Inc. * * *." In her memorandum to the board dated May 19, 2016, Burke-Wells explained the reasoning for her recommendation. She noted that Rocchio and Hart originally failed to submit the required EPA forms; however, she went on to explain that Rocchio eventually provided the WSA with the EPA forms but that there were "several irregularities" in that submission. Burke-Wells also referenced prior projects that Rocchio had performed for the WSA, which involved conflicts regarding change orders and increased project costs above Rocchio's original bid on those projects. In her deposition, Burke-Wells testified that her recommendation to the board was based on "[m]ainly performance and [her] concern * * * with some attention to detail, but that was not the ultimate reason. The ultimate reason was the research [she] had been doing with past experience on projects with the [WSA]."

         Also at the board meeting on May 19, one of the board members stated that he understood Burke-Wells's recommendation as being based on the WSA's experience with prior work performed by Rocchio. According to the meeting minutes, Burke-Wells "concurred" and further added that "the EPA forms are important as well, and (failure to submit) disqualifies the bidder." Another board member moved to award the contract to DiGregorio and explained that his recommendation was "based entirely on the submission of qualifying documents" and that, if the board was "going to have qualifications for bid submittal, WSA should abide by those qualifications." The board then unanimously approved the motion to award the contract to DiGregorio.

         On August 29, 2016, Rocchio filed the instant action in Providence County Superior Court, asserting claims against Pare for interference with prospective contractual relations (Count I); negligence (Count II); and breach of contractual obligations due to Rocchio as a third-party beneficiary of the contract between the WSA and Pare (Count III).[4] Pare ultimately moved for summary judgment on all counts, arguing that the project award to DiGregorio was based on the recommendation of Burke-Wells and the vote of the WSA board. Pare maintained that it did not act in a way as to intentionally interfere with Rocchio's prospective contractual relations, pointing out that it had no interest whatsoever in which company was ultimately awarded the bid. Pare further averred that Rocchio could not produce evidence demonstrating that Pare's recommendation to Burke-Wells was the proximate cause of the rejection of Rocchio's bid by the WSA, and it further argued that the economic loss doctrine barred Rocchio's claim. Finally, Pare posited that Rocchio was an incidental beneficiary of Pare's contract with the WSA, rather than an intended beneficiary, and, as such, was not entitled to bring a claim for breach of contract against Pare.

         In opposition, Rocchio argued that the economic loss doctrine would not bar a negligence claim concerning professional services. Moreover, Rocchio claimed that Pare was negligent in failing to specify the required EPA forms when it prepared the RFP and that Pare was further negligent in recommending that the WSA board reject Rocchio's bid. Rocchio additionally contended that it was an intended beneficiary of the agreement between Pare and the WSA and that holding ...


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