author: SHAFFER, L,

text:
    Butler Area School District v. Einstein Academy

      C.P. of Butler County,
    no. 2001-50031.

      Michael I. Levin, for plaintiffs.

      Michael N. Onufrak, Paul A. Mooney and Alexander

      H. Lindsay, for defendant.

      Thomas W. King III, for intervenors.
    September 10, 2001
   SHAFFER, L,

PROCEDURAL HISTORY

The present action was commenced by the Butler Area School District (BASD) on July 24, 2001 when a complaint in equity was filed to prevent defendant Einstein from operating a “cyber” charter school.

On August 9, 2001 a petition for special relief was filed and presented in motion court. Einstein appeared through local counsel. On that date, a preliminary injunction was granted which enjoined Einstein from soliciting or enrolling students who would otherwise attend BASD, and further enjoined Einstein from attempting to collect bills for instruction sent to BASD in early July 2001 and continuing. A hearing on the injunction was scheduled for August 15, 2001. At the request of new counsel for Einstein, a hearing on the injunction was continued to September 7, 2001. On August 24, 2001, the Kams City Area, Mars Area and South Butler School Districts of Butler County filed petitions to intervene in this legal action and the petition for special relief. A hearing and argument on the issue of intervention was scheduled with the injunction hearing of September 7, 2001. A hearing on the injunction was held September 7,2001 and September 8, 2001.

BACKGROUND FACTS

Einstein holds a charter pursuant to the Charter School Law, 24 RS. §16-1701 et seq. as aresult of an agreement and charter dated March 20,2001 between the Morrisville Borough School District and The E-Academy Charter School (TEACH). Einstein’s founders are Mimi Rothchild and her husband, Howard Mandel. Einstein purports to be a fictitious name for a corporation named The National Organization for Children Inc., which prior to June of 2000 was called The Andrew Foundation Inc. In documents filed with the Internal Revenue Service, Miriam Mandel a/k/a Mimi Rothchild has been identified as the CEO of the National Organization for Children Inc.

In November of2000, TEACH, The E-Academy Charter School, filed an application with the Morrisville School District to become a chartered “cyber school” delivering schooling through the Internet. It is undisputed that a hearing was not held on the application within the time frame contemplated by 24 P.S. §17-1717-A. It is also noted that the fictitious name for Einstein, filed March 30, 2001, did not exist at the time of the application for charter status. The application does not reveal that the non-profit entity required by the Charter School Law is actually the National Organization for Children Inc.

On January 17,2001, at a special meeting of the board of the Morrisville School District, Ms. Rothchild presented her application. William Thompson, solicitor for the district testified that his recollection of that meeting led him to believe that Einstein had very little chance of being granted a charter.

No decision on the application was made and a second board meeting was scheduled for March 20, 2001. In the interim, the superintendent of Morrisville, Dr. John Gould, communicated on several occasions with Ms. Rothchild to refine her application to insure approval. Test demonstrations of Einstein’s software were arranged for the benefit of the Morrisville School Board members. These demonstrations were not done at public meetings.

Prior to the March 20,2001 public meeting, Dr. Gould, without board authorization, entered into negotiations with representatives from Einstein to draft a charter school agreement. Testimony established that the negotiations were only completed and the agreement finally drafted one hour before the meeting of March 20, 2001. Thus, no members of the board of directors could have reviewed the agreement prior to the meeting of March 20, 2001. The document executed on March 20, 2001 is styled “charter school agreement” rather than simply “charter.” That is presumably because, in addition to the requirements for term and form of charter enumerated in 24 P.S. § 17-1720-A, the document also contains an agreement that Einstein will pay Morrisville, in return for “services,” $200 for each student enrolled at Einstein. Using Einstein’s figures for enrollment, Morrisville stands to receive $600,000 for the school year 2001-2002 from Einstein. Additionally, in the charter agreement, Einstein has agreed to lease space and custodial services from Morrisville for $35,000 per year. To guarantee this cash stream, Einstein agreed not to seek a charter from any other school district.

Following the grant of the charter on March 20,2001, defendant finally registered its fictitious name with the Department of State (March 30, 2001). The actual fictitious name registered to the organization which was granted the charter is “TEACH (The E-Academy Charter School).” As previously stated, TEACH is the fictitious name for the National Organization for Children Inc. Again, this fact was not disclosed in the charter school agreement. Further, the “Einstein Academy Charter School” is not a registered fictitious name for any existing entity, nor is it a registered non-profit organization with the Department of State. As Einstein existed at this time period only as an idea of Howard Mandel and Mimi Rothchild, Einstein’s address is noted on the Department of State Records as the Mandel residence.

Einstein is to be run by a corporation called Tutorbots Inc. incorporated in June of 2001, as a for profit corporation and having an address at Mailbox’s, Etc., a maildrop in Jenkinstown, PA. According to the Department of State Records, Mimi Rothchild is the CEO, secretary and treasurer of Tutorbots. On August 24, 2001 Einstein and Tutorbots entered into a management contract for Tutorbots Inc. to operate the charter school. Rothchild is the sole owner of Tutorbots and her husband, Howard Mandel is the executive director.

Einstein, as fictitious name for the National Organization for Children Inc. and Tutorbots Inc. are. capitalized by personal loans for the Mandel’s relatives. Einstein had approximately $31,000 on deposit on July 31,2001. Einstein had apparently anticipated receiving $825,000 from the education department as seed money that was not forthcoming. To begin cash flow, Einstein charged an $87.00 registration fee to some students who have enrolled which may violate 24 RS. §17-1725-A. Einstein has also billed school districts, including plaintiff and intervenors herein, for June and July of2001 even though Einstein has not provided any instruction. Approximately $20,000 has been received from school districts.

On August 24, 2001 Einstein ordered $2,407,492 in computer equipment from Compaq Computers. On August 31,2001, Einstein received $506,000 from the education department. The record clearly establishes that Einstein is undercapitalized.

Einstein presently claims to have 3,000 students enrolled. Einstein also claims to have hired between 20-30 teachers, although signed contracts for only 13 were produced. Only seven teachers have been determined to be certified. The Charter School Law requires 75 percent certification. Teachers are to receive salaries ranging from $31,000 to $55,000.

Einstein also appears to be in breach of its charter agreement with Morrisville. By letter dated September 6, 2001, the solicitor for Morrisville was requesting the following from Einstein: a course study for every course; a copy of Einstein’s disciplinary code; a copy of the school calendar; copies of employment contracts with personnel and any employment policies; the names, positions, social security numbers and certification (solicitor’s emphasis) of employees; evidence of health care benefits of employees; Act 111 background checks of all employees; Einstein’s business manager or administrator; financial documents showing budget and cash flow; an audit review from a CPA; insurance coverage documentation; an accountability agreement covering pupil performance; fiscal management, 2001-2002 budget; schedule of budget meetings for 2002-2003; financial audit requirements and financial documents showing pension payments, payroll tax payments, insurance coverage and loan payments and terms.

Apparently, based upon the above letter, Morrisville had not received copies of contracts entered into by Einstein, didn’t know the board of directors, extracurricular activities, attendance taking procedures, special education audits or even Einstein’s schedule of board meetings. Einstein is scheduled to start classes on September 11, 2001.

It is with this factual background that this court must consider the application for special relief.

LEGAL ANALYSIS

The following must be demonstrated for a preliminary injunction to issue: (1) Petitioner’s right to relief is clear; (2) The injunction is necessary to prevent immediate and irreparable harm not compensable by damages; (3) Greater injury would result by refusing the injunction than by granting it; (4) The injunction restores the parties to the status quo; and (5) The activity sought to be restrained is actionable and the injunction is reasonably suited to abate such action. Singzon v. Commonwealth of Pennsylvania, Department of Public Welfare, 496 Pa. 8, 10, 436 A.2d 125, 126 (1981). The plaintiff must establish each of these elements to prevail.

1. Clear Right/Reasonable Likelihood

In its complaint, plaintiff raises the following causes of action: charter schools/cyber schools are unconstitutional; cyber schools are not authorized by the Charter School Law; Einstein was not properly chartered; Einstein is not in compliance with the Charter School Law.

The court decides the issue of clear right only with respect to the preliminary injunction and not as a disposition on the merits.

As noted by the Honorable Judge Morgan in the case of Pa. School Board Association v. Zogby, no. 213 M.D. 2001 (May 10, 2001) a trial court opinion of the Commonwealth Court, these issues raise numerous questions of first impression. However, this court is persuaded that some of plaintiff’s issues have a reasonable likelihood of success on the merits.

The Charter School Law was enacted before the explosion of Internet technology. It is doubtful that the framers of the legislation contemplated the “cyber” or Internet learning school to be within the scope of charter schools. The court found persuasive the testimony of Joseph F. Bard, executive director of the Pennsylvania Association of Rural and Small Schools, who testified that cyber schools in general, and Einstein, in particular are merely home schooling by another name and are not entitled to public money as charter schools. This court also believes that plaintiff has established a clear right to relief on the issue of whether Einstein was validly chartered by Morrisville and/or whether it is in breach of the charter agreement. There is a serious question of the propriety of Morrisville essentially selling a charter in return for “head money” per student and an exclusivity provision. Also, Einstein is obviously in breach of its charter agreement.

2. Immediate and Irreparable Harm

The BASD must also show that denial of the injunction would result in immediate and irreparable harm not compensable by damages.

The violation by Einstein of an express statutory provision, here the Charter School Law, per se constitutes irreparable harm. Pa. Public Utility Commission v. Israel, 356 Pa. 400, 52 A.2d 317 (1947). Contrary to Einstein’s arguments, this case is not about money damages. Obviously, BASD and intervenors will not suffer irreparable financial harm if an injunction is not granted. Plaintiff’s expert, Mr. Bard, testified that Einstein cannot deliver the education program it says it can. Testimony established that Einstein has only seven certified teachers. As noted above, Einstein is in serious breach of its charter agreement. Only three of the students registered for Einstein in the BASD are home schooled. The remaining students in the BASD enrolled in Einstein are regular students. Irreparable harm would result if Einstein is permitted to begin classes as scheduled on September 11, 2001, because it cannot provide a viable educational program to students currently enrolled.

3.Balancing of Harms

The harm to Einstein by preventing it from providing an education to students of the BASD and intervenors is outweighed by Einstein’s violation of its charter agreement and its apparent inability to provide education to the students of the school districts of Butler County involved herein.

4.Status Quo

The status quo is not disturbed by the continuance of the injunction. The status quo is that Einstein is presently not providing education to students in Butler County. Students presently home schooled will continue in that status. Other students enrolled at Einstein will attend their respective schools in Butler County.

5.Abatement of Actionable Activities

An equity court has broad powers of discretion in “shaping its decree and granting relief tailored to the particular circumstances of the case” pursuant to a party’s prayer for general relief. Lower Frederick Twp. v. Clemmer, 518 Pa. 313, 332, 543 A.2d 502, 512 (1988).

The continuance of the injunction will abate, for the present, Einstein providing education to the students of BASD and intervenors until such times as this court decides the merits of the pending claims.

Accordingly, the special injunctive relief granted August 9, 2001 is continued and the following order is entered:

ORDER

And now, September 10, 2001, after a hearing to determine whether the special injunctive relief granted to petitioner should be continued or dissolved, and in accordance with the opinion contemporaneously filed, it is ordered that the petition to intervene filed on behalf of the Mars Area School District, the South Butler School District and the Karns City Area School District is granted.

It is further ordered that, until further order of court, the Einstein Academy Charter School is preliminarily enjoined from providing education to students within the Butler Area School District, the Karns City Area School District, the Mars Area School District and the South Butler School District. Einstein shall not bill for any such educational services or attempt to collect any bills previously sent to the school districts.

It is further ordered that the Einstein Academy Charter School shall return any registration deposits to the students of these school districts.

      . “TEACH” is also the fictitious name for an entirely different entity registered in 1987, Thee Ecumenical Accreditation Christian Habitat.


source: Caselaw Access Project

author: McINERNEY, J,

license: Public Domain

text:
    Taylor v. SmithKline Beecham Corp.

      Stephen Sheller, for plaintiffs.

      Arthur Makadon and Leslie E. John, for defendant.
    May 7, 2001
   McINERNEY, J,

Defendant Smith-Kline Beecham Corporation appeals from this court’s refusal to strike off plaintiffs’ voluntary discontinuance.

On June 12, 2000, plaintiffs Jonathan and Lorinda Taylor commenced this action by filing a complaint. The complaint alleged that the plaintiffs were injured in various ways by a Lyme disease vaccine manufactured by defendant SmithKline Beecham Corporation. Included with the Taylors’ complaint was a civil trial cover sheet on which the plaintiffs checked a box marked “non-jury.” As a result, the case was listed in the major non-jury trials program.

After SB had answered the complaint and asserted new matter defenses, and the Taylors had replied to the new matter, but before discovery had closed, on November 17, 2000, the Taylors voluntarily discontinued this action. Three days later, on November 20,2000, the plaintiffs instituted a new suit against the same defendant on the same cause of action. In the new action, the Taylors elected to proceed before a jury. The Taylors followed this procedure because SB refused to agree to allowing the Taylors to demand a jury trial in the first action. Other than the jury trial demand, in all other material respects the first and second actions were identical.

On December 5, 2000, SB petitioned pursuant to Pa.R.C.P. 229(c) to strike the discontinuance. The Taylors responded to the petition, and on January 19, 2001, this court refused the petition. On February 5,2001, SB timely filed a notice of appeal. In response to this court’s order pursuant to Pa.R.A.P. 1925(b), on February 12, 2001, SB filed a concise statement of matters complained of on appeal. Its 1925(b) statement alleges that this court erred by failing to strike the discontinuance.

Rule 229(c) of the Pennsylvania Rules of Civil Procedure provides that a court may strike off a discontinuance to protect a party from “unreasonable inconvenience, vexation, harassment, expense or prejudice.” Pa.R.C.P. 229(c); see Fancsali v. University Health Center of Pittsburgh, 563 Pa. 439, 761 A.2d 1159, 1162 (2000). In deciding whether a party has been prejudiced by a discontinuance, courts examine, among other things, the length of time the case had been pending, the effort and expense those parties incurred in discovery, and the disadvantage imposed by the passage of additional time. See Truesdale by Truesdale v. Albert Einstein Medical Center, 767 A.2d 1060, 1063 (Pa. Super. 2001). A ruling on a petition to strike a discontinuance will not be reversed absent an abuse of discretion. See Fancsali, 761 A.2d at 1162.

In Fancsali, our Supreme Court was called upon to decide whether the trial court improperly denied the plaintiffs’ petition to discontinue their minor daughter’s action without prejudice. Fancsali, 761 A.2d at 1161. Because a minor child was a party in Fancsali, Rule 2039 required the court’s permission to discontinue the action. Id., 761 A.2d at 1162; Pa.R.C.R 2039. The court reversed the trial court, and opined that regardless whether the court is faced with a petition to discontinue an action or to strike a discontinuance, the analysis remains the same. Id., 761 A.2d at 1162. In either case, the question at bottom is whether the plaintiff has obtained “some unjust disadvantage to the defendant or some other interested party ....” Id., 761 A.2d at 1162, quoting Consolidated National Bank v. McManus, 217 Pa. 190, 191-92, 66 A. 250, 250 (1907).

The Fancsali court further admonished the courts below for having viewed as dispositive the fact that the defendants would be subject to suit for some 12 years. Id., 761 A.2d at 1163, 1164, n.6. The Minority Tolling Statute, 42 Pa.C.S. §5533(b), permitted the plaintiffs to file suit until July 16, 2010. Id., 761 A.2d at 1164. Justice Zappala, writing for the court, explained that where the statute of limitations permitted the plaintiff to reinstitute suit, the possibility that the plaintiff could yet sue for years to come was not a proper consideration. Id., 761 A.2d at 1163. Rather than being contrary to the purpose of statutes of limitation, the Minority Tolling Statute was part and parcel of the statute of limitations. As such, the delay it occasioned could not be contrary to the purpose of the limitations statutes. Id., 761 A.2d at 1164 n.6. Justice Zappala also pointed out that Pa.R.C.P. 231 (a) similarly allows a plaintiff after a discontinuance, upon payment of the costs of the first action, to commence a second action upon the same cause of action. “Far from being ... prejudicial, [the possibility of a second suit] is expressly contemplated ....” Id., 761 A.2d at 1165 n.7.

In this case, SB did not argue that it was prejudiced in any way by the Marras’ discontinuance and reinstitution of suit. Instead, it pointed to what it termed the Marras’ “insidious motive” and Brown v. Phillips, 365 Pa. 155, 159, 74 A.2d 105, 108 (1950). On those grounds, SB insisted that the discontinuance should be struck. According to SB, the insidiousness lies in the Marras’ filing a second suit demanding a jury trial. Since Rule 231 “expressly contemplate[s]” a second suit, Fancsali, supra, the Marras’ actions could hardly be termed “insidious.”

More to the point, in light of Rule 231 and the Supreme Court’s opinion in Fancsali, the discontinuance imposed no cognizable harm on SB. SB has not argued that the statute of limitations has run. The General Assembly has already determined that there is no harm in instituting a suit in the time frame involved. We are in no position to disagree. Any inconvenience SB has incurred could have been avoided by agreeing to the jury trial demand. The Marras simply have obtained no unjust advantage.

SB cites Brown v. Phillips for the proposition that discontinuing suit for the purpose of recommencing suit in a different forum is a per se cause to strike the discontinuance. Brown, however, was of a different character than the present case, and the Supreme Court’s holding was much narrower than SB would have. In Brown, the plaintiffs began suit by filing a complaint. The defendant responded, and in turn, the Browns filed an amended complaint. Id. at 157, 74 A.2d at 106. The defendant again filed a responsive pleading. Id. Eventually, the case proceeded to trial. At the close of the plaintiffs’ evidence, the defendant moved for a nonsuit. Id. at 156, 74 A.2d at 106-107. To avoid nonsuit, the plaintiffs moved for the withdrawal of a juror. Id. at 156-57, 74 A.2d at 107. The defendant did not object, and the court granted the motion and continued the case. Id. at 157, 74 A.2d at 107. The Browns then filed a second amended complaint, to which the defendant filed preliminary objections. The parties agreed that the court should sustain the preliminary objections, with leave to the plaintiffs to file a third amended complaint. Id. The third amended complaint came, and the defendant again countered with preliminary objections. Id. Those objections the court again sustained, and yet again granted the plaintiffs permission to file a fourth amended complaint within 20 days. Id. Instead of doing so, the plaintiffs instituted suit in the federal District Court for the Western District of Pennsylvania. Id. On the twenty-first day after the common pleas court’s order, the plaintiffs moved to discontinue their state court suit. The trial court granted the discontinuance. Id. The Supreme Court held that permitting the discontinuance was reversible error “after the extent of the litigation to which [the plaintiffs] had subjected the defendant in a competent and convenient jurisdiction which they voluntarily invoked.” Id. at 158, 74 A.2d at 107.

In the case presently under consideration, the Taylors have not subjected SB to anything approaching the saga the Supreme Court recounted in Brown. Certainly, the parties have completed some of the initial stages of the litigation. But whenever a plaintiff discontinues a suit, it will nearly always be the case that the parties will have completed some aspect of the process. The question is one of degree. Precisely stated, the issue is whether the parties have proceeded so far with the litigation that to discontinue it would be unreasonably inconvenient, vexatious, harassing, expensive, or prejudicial to the defendant.

SB specifically noted the Brown court’s remark to the effect that a discontinuance ought not be permitted where the only reason to discontinue is to institute suit in a different forum. In the case at bar, the second suit was instituted in the same forum. Moreover, that statement is inconsistent with the court’s more recent pronouncements in Fancsali, supra. Under Fancsali’s understanding of the relationship between Rules 229 and 231, a discontinuance for the purpose of instituting a second suit within the statute of limitations is not improper. To the extent that Brown and Yachere v. Yachere, 52 D.&C.2d 768 (Somerset Cty. 1971), on which SB also relies, hold to the contrary, we cannot agree.

For the foregoing reasons, this court’s order should be affirmed.

      . Three companion actions were filed by other plaintiffs. The companion actions share the same procedural posture as the present case, and are also before the Superior Court on appeal. Those appeals are docketed at 477 EDA 2001, 478 EDA 2001, and 479 EDA 2001.

      . As a parting shot, in a footnote on the last page of its memorandum in support of its petition, SB declares that “Local Rule §9-5.0 .. . specifically provides that ‘no continuances [shall be] granted. ’ ” There is no local rule §9-5.0, at least not in Philadelphia. So far as we can determine, SB is citing to Steven A. Arbittier et al., Philadelphia Court of Common Pleas Civil Practice Manual §9-5.0. Although widely used, that tome is not among the court’s official publications. Even if it were, section 9-5.0 is not relevant here. That portion of Mr. Arbittier’s book discusses status/trial scheduling conferences in the major non-jury program, and does not purport to be an observation of the court’s general views on continuances, or perhaps more pertinent, striking discontinuances.


author: BRENNER, Chancellor in Equity,

text:
    Solid Waste Services Inc. v. City of Allentown

      C.P. of Lehigh County,
    no. 2001-E-0059.

      Albert A. DeGennaro and William F. Fox Jr., for plaintiffs.

      Malcolm J. Gross and Frances P. Burianek, for defendant City of Allentown.

      John Stoviak, Douglas Jon Tkacik and Elizabeth Utz Witmer, for defendant Waste Management.
    April 15, 2002
   BRENNER, Chancellor in Equity,

On or about November 9, 2001, plaintiffs, Solid Waste Services Inc. d/b/a J. P. Mascaro & Sons, M. B. Investments and Francine Ambrosino commenced this equity action by filing a complaint and request for permanent injunctive relief to have the defendant, the City of Allentown, enjoined from entering into and/or carrying out a contract with defendant Waste Management of Pennsylvania Inc. Specifically, in their complaint, the plaintiffs request from this court permanent injunctive relief to invalidate the City of Allentown’s award of the solid waste collection and recycling contract to Waste Management based on five allegations of deficiencies in Waste Management’s bid and/or the City of Allentown’s compliance with the bid solicitation no. 2001-70, Municipal Solid Waste and Recycling Collection Services: (1) Waste Management improperly bid compaction-type vehicles to collect recydables; (2) Waste Management did not include a manufacturer’s delivery guarantee; (3) Waste Management did not submit a description of a safety training program with its bid; (4) Waste Management failed to identify that 50 percent of its trucks would be new and 50 percent would not be older than three years; and (5) the City of Allentown selected a one-year term for the collection of solid waste and recyclables at the city facilities in determining the low bidder.

A hearing on the plaintiffs’ preliminary injunction request was held on November 20, 2001. This court denied the plaintiffs’ petition for a preliminary injunction on the same date. Thereafter, on March 18, 2002, this court conducted a non-jury trial before the Honorable Lawrence J. Brenner. Based upon the evidence presented at the trial, the pleadings and record papers, we make the following findings.

FINDINGS OF FACT

(1) Plaintiff Solid Waste Services Inc. d/b/a J.P. Mascaro & Sons is a Pennsylvania corporation with offices located at 315 Basin Street, Allentown, Lehigh County, Pennsylvania. (N.T. 11/20/01, p. 20.) J.P. Mascaro pays the City of Allentown business privilege tax. (N.T. 11/ 20/01, pp. 22, 54; P. exhibit 1.)

(2) Pasquale N. Mascaro is the president of J.P. Mascaro and is a 20 percent shareholder in the company. (N.T. 11/20/01, pp. 17-18.)

(3) Plaintiff M.B. Investments is a Pennsylvania partnership that owns the property located at 315 Basin Street, Allentown, Lehigh County, Pennsylvania. (N.T. 11/20/ 01, pp. 18-20, 53.) M.B. Investments pays the City of Allentown real estate taxes. (N.T. 11/20/01, pp. 23, 54, 89; P. exhibit 2.)

(4) Plaintiff Francine Ambrosino is an adult individual and a taxpayer of the City of Allentown, owning real estate located at 2434 West Union Street, Allentown, Lehigh County, Pennsylvania. (P. exhibit 10; P. exhibit 11; N.T. 11/20/01, pp. 166-69.) As a resident of the City of Allentown, Ms. Ambrosino pays the annual trash and refuse collection fee of $160. (N.T. 11/20/01, p. 170.) Ms. Ambrosino is an employee of J.P. Mascaro. (N.T. 11/20/01, p. 171.)

(5) Defendant, the City of Allentown, is a third-class city organized and existing under the laws of the Commonwealth of Pennsylvania with offices located at 435 Hamilton Street, Allentown, Lehigh County, Pennsylvania, and is governed by the third-class cities code, as well as by the City of Allentown Home Rule Charter. (City of Allentown Home Rule Charter, adopted on April 23, 1996.)

(6) Defendant Waste Management is a Pennsylvania corporation with offices at 1963 Pen Argyl Road, Pen Argyl, Northampton County, Pennsylvania.

(7) Plaintiff J.P. Mascaro and defendant Waste Management are in the solid waste industry. Specifically, they engage in the collection, transportation, processing, transfer, disposal and composting of solid waste and recyclables in the private and public sectors. (N.T. 11/ 20/01, p. 18.)

(8) Since 1986, J.P. Mascara has provided such services for the City of Allentown. (N.T. 11/20/01, pp. 19, 24.) J. P. Mascara is the current contractor for the City of Allentown’s solid waste collection and recycling contract. (N.T. 11/20/01, p. 24; N.T. 3/18/02, pp. 120- 21.)

(9) The services which J.P. Mascara provides to the City of Allentown are provided pursuant to the public bidding process. (Section 1815 of the City of Allentown Home Rule Charter adopted on April 23,1996.) Specifically, where the services sought, such as municipal waste collection, are in excess of $20,000, the City of Allentown is required to solicit bids for such services and award those bids to the lowest responsible bidder. (Section 1815 of the City of Allentown Home Rule Charter adopted on April 23, 1996.)

(10) The current solid waste collection and recycling contract between the City of Allentown and J.P. Mascara expires on June 1, 2002. (N.T. 11/20/01, p. 24; N.T. 3/ 18/02, pp. 39-40.) Therefore, in August of2001, the City of Allentown advertised and issued bid solicitation no. 2001-70, municipal solid waste and recycling collection services. (P. exhibit 3; city exhibit 1; N.T. 11/20/01, p. 25.)

(11) The City of Allentown hired Wayne DeFeo, an independent consultant, in February of 2001 in order to assist in the preparation of bid solicitation no. 2001-70, municipal solid waste and recycling collection services. (N.T. 3/18/02, pp. 41-42, 130.)

(12) The main objective of the bid specifications was to attain the best solid waste collection and recycling service for the residents of the City of Allentown at the lowest cost to them. (N.T. 3/18/02, p. 41.)

(13) The City of Allentown opened the bids on October 3, 2001. (N.T. 3/18/02, pp. 54, 119; city exhibit 4.)

(14) Bids were received by the City of Allentown the first week of October of 2001. (N.T. 11/20/01, p. 25.)

(15) Waste Management, J.P. Mascaro, Raritan Valley and BESI responded to bid solicitation no. 2001-70, municipal solid waste and recycling collection services. (N.T. 11/20/01, p. 26.)

(16) Section 1.7(d) of bid solicitation no. 2001-70 states:

“All bidders shall submit with his proposal, a description of all equipment to be used in the performance of the proposed contract. Each bidder must specify the number and type of all collection truck bodies, cabs and chassis and other equipment as specified in section 4.3. The bidder shall supply detailed inventories, including photographs of the equipment currently owned or leased and all accessories by type, model, year of manufacture, and anticipated remaining useful life as of the date of the inventory sheet. All leased equipment shall be listed separately; the time remaining on each leased piece of equipment and options of renewal, where applicable, shall be stated. Complete descriptions of all new equipment to be acquired to accomplish this contract must be provided. Delivery guarantees by manufacturers shall be attached to the bid document. ” (R exhibit 3; city exhibit 1; section 1.7(d) of bid solicitation 2001-70. (emphasis supplied)

(17) The purpose of requiring a delivery guarantee to be attached to the bid documents is to assure that any new equipment that is purchased will be delivered on time prior to the performance of the contract. (N.T. 3/18/ 02, pp. 13-14.)

(18) Waste Management attached to the bid documents an October 2, 2001 letter delivery guarantee from Dempster Equipment, which is a manufacturer of recycling vehicles: “The following is to acknowledge that Dempster Equipment will be able to deliver six Dempster Recycle trucks to Allentown, PA by the required date to meet a June 1, 2002 start-up at that facility.” (P. exhibit 6; N.T. 11/20/01, p. 49.) In particular, Dempster Equipment manufactures the body of the vehicle. (N.T. 11/20/01, pp. 49-50, 66, 114, 128, 204.)

(19) Waste Management also attached to the bid documents an October 2, 2001 letter delivery guarantee from McNeilus Companies Inc., a manufacturer of the body of the vehicles:

“The following letter is to acknowledge that McNeilus Companies Inc. will provide delivery of eight 32 cubic yard McNeilus rear loaders and three 25 cubic yard McNeilus rear loaders to your Allentown, PA facility prior to a required contract start-up date of June 1, 2002. Purchase orders and chassis will need to be provided to McNeilus Companies Inc. no later than April 1, 2002.” (City exhibit 6.)

(20) In practice, delivery guarantees are sought from the manufacturer of the body of the vehicle and not the manufacturer of the vehicle’s chassis, as a manufacturer is not going to deliver a body without a chassis attached to it. (N.T. 3/18/02, pp. 151,169,173,175-76,200-201.) In other words, the guarantee is given for the entire vehicle and not each component part. (N.T. 3/18/02, pp. 155, 175-76, 200-201.)

(21) Section 4.2(a) of bid solicitation 2001-70 provides:

“Bidders shall submit a description of a safety training program with regard to all employees engaged in the collection or transportation of solid waste or recycling within the City of Allentown. At a minimum, a safety program shall include training components which comply with the following mandatory and industry recommended safety standards as found in the latest version of US DOT, PA DOT, OSHA and ANSI Z245 industry standards, with regard to the following training areas:
• Commercial motor vehicle operations
• Collection crew safety
• Commercial container handling
• Collection and transfer vehicles
• Unloading procedures at treatment, processing and disposal facilities.” (P. exhibit 3; city exhibit 1; section 4.2(a) of bid solicitation 2001-70.) (emphasis supplied) The aforementioned provision does not require that a complete safety plan be submitted by each bidder, but instead requires the submission of a general description of a safety plan. (N.T. 11/20/01, pp. 239, 269, 274; N.T. 3/ 18/02, pp. 145-46.) Such general language aids in opening the bidding field to a wide audience. (N.T. 11/ 20/01, p. 273; N.T. 3/18/02, p. 146.)

(22) The purpose of section 4.2(a) of bid solicitation 2001-70 was to assure that the bidders are responsible trash haulers with a concern for safety. (N.T. 11/20/01, p. 274.)

(23) In response to section 4.2(a) of bid solicitation 2001-70, Waste Management indicated:

“Attached you will find our general training guidelines for health, safety and transportation.
“A specific plan will be developed which adheres to these guidelines and is tailored to the Allentown city contract. Such plan will be submitted to the city for review and comment prior to start-up.” (P. exhibit 6; N.T. 11/20/01, p. 221.) Thereafter, Waste Management attached a two-page description of its safety plan. (P. exhibit 6; city exhibit 6.)

(24) With regard to equipment, section 4.3(b) of bid solicitation 2001-70 provides as follows:

“At the beginning of the contract period, at least one-half of the packer and recycling collection vehicles (and boxes) must not be older than three years; and one-half of the packer and recycling collection vehicles (and containers if applicable) shall be new.” (P. exhibit 3; city exhibit 1; section 4.3(b) of bid solicitation no. 2001-70.)

(25) Section 4.3(g) of bid solicitation no. 2001-70, municipal solid waste and recycling collection services, indicates that half of all designated vehicles must be new 2002 models, while the other half must not be older than 1999 models. (Section 4.3(g) of bid solicitation no. 2001-70; city exhibit 1; P. exhibit 3; N.T. 3/18/02, pp. 147, 226.) In response to this criterion, Waste Management bid nine 2002 model vehicles, four 2000 model vehicles and five 1999 model vehicles. (City exhibit 6.)

(26) Overall, one-half of the vehicles bid by Waste Management are new and one-half of the vehicles are not older than three years.

(27) Waste Management responded to the City of Allentown’s bid solicitation no. 2001-70, with a bid of $12,797,065.60. (P. exhibit 6; city exhibit 10; N.T. 3/18/ 02, pp. 55-56.) Waste Management bid compaction capable vehicles for the collection of commingled recyclables. (P. exhibit 6; N.T. 11/20/01, pp. 47-48,146; N.T. 3/18/02, p. 107.)

(28) Specifically, Waste Management’s bid provides for five Mack chassis with Recycle Pac bodies. (N.T. 11/ 20/01, pp. 48-49.) Of the five vehicles Waste Management designated in its bid for commingled recyclable collection, two of the vehicles would be new 2002 Recycle Pac II models, two of the vehicles would be 2000 Recycle Pac models and one of the vehicles would be a 1999 Recycle Pac model. (P. exhibit 6; N.T. 11/20/01, pp. 127, 206.)

(29) Recycle Pac and Recycle Pac II vehicles are designed to collect commingled recyclables and are not designed to compact solid waste. (N.T. 11/20/01, pp. 67, 74-75, 80-81,100,125,154-56,160, 192; N.T. 3/18/02, pp. 143,189.) Compaction vehicles are designed for high production, high density work and are more cost effective than non-compaction vehicles. (N.T. 11/20/01, pp. 38, 51, 81-82, 185; N.T. 3/18/02, pp. 190, 193.)

(30) Vehicles designed to collect solid waste compact materials much tighter than vehicles designed to compact commingled recyclables. (N.T. 11/20/01, pp. 160-61, 181; N.T. 3/18/02, pp. 139-41, 143.) Collecting commingled recyclables in a vehicle designed to compact solid waste would render the commingled recyclables non-marketable. (N.T. 11/20/01, p. 181; N.T. 3/18/02, pp. 139-41, 143.)

(31) J.P. Mascaro responded to the City of Allentown’s bid solicitation no. 2001-70 with a bid of $12,928,550. (N.T. 11/20/01, p. 25; city exhibit 10; N.T. 3/18/02, p. 56; city exhibit 7.) In its bid, J. P. Mascaro designated all non-compaction-type recycling vehicles. (N.T. 11/20/01, p. 37; city exhibit 7.) Non-compaction vehicles do not carry as much material and have a higher loading height. (N.T. 11/20/01, pp. 37-38, 51; N.T. 3/18/02, p. 193.) However, non-compaction vehicles are less expensive. (N.T. 3/18/02, pp. 201-203.) Currently, J.P. Mascaro does not operate any Recycle Pac or Recycle Pac II compaction-type vehicles. (N.T. 11/20/01, pp. 87, 99, 138.)

(32) Raritan Valley and IESI submitted bids to the City of Allentown designating compaction-type vehicles. (N.T. 11/20/01, pp. 26, 84, 282; N.T. 3/ 18/02, pp. 54, 56, 142; city exhibit 8; city exhibit 9.)

(33) Section 3.3(d) of bid solicitation no. 2001-70 states:

“Commingled recyclables shall be collected in closed recycling trucks and transported directly from curbside to Todd Heller Inc., Northampton, PA, 610-262-6988. A site visit by prospective bidders is recommended. Commingled recyclables may not be collected in vehicles designed to compact materials or with compaction specifications that could crush or otherwise render the recyclable material non-marketable.'’'’ (P. exhibit 3; city exhibit 1; section 3.3(d) of bid solicitation 2001-70.) (emphasis supplied)

(34) Section 4.3(g) of bid solicitation no. 2001-70 provides in pertinent part:

“Commingled recyclables may not be collected in vehicles designed to compact solid waste or with compaction specifications that could crush or otherwise render the recyclable materials non-marketable. All recycling collection vehicles shall be completely enclosed and shall be designed to prevent spillage of recyclables.” (P. exhibit 3; city exhibit 1; section 4.3(g) of bid solicitation no. 2001-70.) (emphasis supplied) On July 24,2001, the consultant, Wayne DeFeo, advised the City of Allentown that certain recycling vehicles have some light or modest compaction qualities and recommended that the aforementioned language be used in bid solicitation no. 2001-70. (N.T. 3/18/02, pp. 45, 99-100, 135-36, 138, 182-83; city exhibit 14.)

(35) Sections 3.3(d) and 4.3(g) of bid solicitation no. 2001-70 both recognize marketability of commingled recyclables as the key element. (P. exhibit 3; city exhibit 1; sections 3.3(d) and 4.3(g) of bid solicitation 2001-70.)

(36) On September 13, 2001, the City of Allentown issued an addendum number 2 in order to clarify certain issues. (City exhibit 1.) One issue that arose dealt with the collection of recyclables:

“Question: Section 3.3d of the instructions for bidding — recycling trucks — with regard to compaction, clarification is needed on compaction specifications that are acceptable. We currently use compaction vehicles for recycling collection.
“Answer: As stated in section 4.3g, ‘Commingled recyclables may not be collected in vehicles designed to compact solid waste or with compaction specifications that could crush or otherwise render the recyclable materials non-marketable. ’ Todd Heller Inc., our designated market for commingled recyclables, will not accept compacted recyclables. Compaction capable vehicles are permitted for paper collections.” (City exhibit 1; city exhibit 3.) The addendum contains a clause that states, “[t]he provisions of this addendum shall take precedence over all other contract documents whenever they conflict.” (City exhibit 1, city exhibit 3; N.T. 11/20/01, pp. 223-24; N.T. 3/18/02, pp. 49-50, 53.) Addendum no. 2 was generated as a result of questions that arose from the mandatory pre-bid conference held on September 6, 2001, at which all prospective bidders for the municipal solid waste and recycling contract were required to appear.

(37) The City of Allentown wanted to prohibit a contractor from utilizing rear load compacting garbage vehicles to collect the City of Allentown’s commingled recyclables. (N.T. 11/20/01, pp. 236, 249; N.T. 3/18/02, pp. 43, 46, 136.) The desired prohibition stemmed from the fact that the compaction rate on a garbage truck is substantially greater than the compaction force on a recycling vehicle. (N.T. 3/18/02, pp. 139-41, 143, 189.) Indeed, the compaction rate on a garbage truck would render the commingled recyclables non-marketable. (N.T. 11/20/01, pp. 249-50; N.T. 3/18/02, pp. 139-41, 143.)

(38) However, in bid solicitation no. 2001-70, the City of Allentown did not want to prevent the contractor from utilizing recycling vehicles with modest compaction capabilities that do not crush the commingled recyclables to the degree that they are rendered non-marketable. (N.T. 11/20/01, p. 236; N.T. 3/18/02, pp. 143, 191.)

(39) The City of Allentown has contracted with Todd Heller Inc. to accept the commingled recyclables that are collected from the City of Allentown. (N.T. 11/20/ 01, pp. 75-76, 177.)

(40) Todd Heller Inc. accepts commingled recyclables that are collected in a Recycle Pac and Recycle Pac II compaction vehicle. (N.T. 11/20/01, pp. 76,178; N.T. 3/ 18/02, p. 221.) Crushed plastics are still marketable (N.T. 11/20/01, pp. 158, 180; N.T. 3/18/02, p. 191). There is always some degree of glass breakage, as breakage occurs even in open non-compaction vehicles. (N.T. 11/ 20/01, pp. 158-59, 181-82, 188; N.T. 3/18/02, p. 144.)

(41) The marketability of materials coming out of a Recycle Pac compaction vehicle and the older style vehide is basically equivalent. (N.T. 11/20/01, pp. 182-83; N.T. 3/18/02, pp. 144, 191.)

(42) The lowest bid will be determined by the total of the base bid and any options selected by the City of Allentown at the time of award. (P. exhibit 3; city exhibit 1; section 1.13(c) of bid solicitation no. 2001-70.)

(43) The base bid includes curbside solid waste collection and disposal and curbside recycling collection. (N.T. 11/20/01, pp. 31, 104, 252-53.)

(44) Optional services include yard waste collection, mayfair, wine/dine, sportsfest, collection of trash and recyclables from city facilities and on-call dumpsters. (P. exhibit 3; city exhibit 1; section 3.5(a)-(f) of bid solicitation no. 2001-70; N.T. 11/20/01, pp. 255-56.)

(45) Waste Management was the lowest bidder. (N.T. 3/18/02, pp. 55-56, 111.) In fact, Waste Management’s bid was $131,484.40 lower than J. P. Mascaro’s bid for the municipal solid waste and recycling collection services. (City exhibit 10; N.T. 3/18/02, p. 57.)

(46) On October 18, 2001, the City of Allentown awarded the solid waste collection and recycling contract to Waste Management, for a two-year term, commencing on June 1,2002. (N.T. 11/20/01, pp. 34,214; P. exhibit 7; city exhibit 11; city exhibit 12.)

(47) The City of Allentown chose a one-year term for the city facility trash and recycling collection service option. (N.T. 11/20/01, pp. 34, 214; P. exhibit 7.)

(48) The reason the City of Allentown chose a one-year term for the city facility trash and recycling service option was that the City of Allentown wanted to study whether it could internally handle the city facility trash and recycling collection on a more cost efficient basis than under the public contract. (N.T. 11/20/01, pp. 214-15.)

(49) Bid solicitation no. 2001-70 does not require the City of Allentown to award a service option for the same term as the base contract. Instead, section 1.13(b) of bid solicitation no. 2001-70 confers to the City of Allentown the right to award or reject any and all options:

“1.13 Award criteria
“(a) The city reserves the right to reject any and all offers and to waive informalities and minor irregularities in offers received.
“(b) The city reserves the right to award, or reject any or all options. The city also reserves the right to award options and/or contract extensions at a later date to the successful bidder.
“(c) The lowest bid will be determined by the total of the base bid and any options selected by the city at the time of award.
(d) The city, at its discretion only, may, at its option, add services to or delete services at any time from the work provided by this contract as may serve its best interest. The resulting increase or decrease will be negotiated between the contractor and the city.” (City exhibit 1; P. exhibit 3; section 1.13 of bid solicitation no. 2001-70.) (emphasis supplied) In fact, the City of Allentown has the right to award options at a later date and to add or delete services from the contract at any time as may serve the interests of the City of Allentown. (P. ex-Mbit 3; city exhibit 1; section 1.13(d) of bid solicitation no. 2001-70.)

(50) Furthermore, the use of the one-year city facility trash and recycling service option term to determine bid prices was applied uniformly to all four bidders.

(51) Even if the City of Allentown had chosen a two-year term for the city facility trash and recycling service option, Waste Management would still have been the lowest bidder. (Waste Management exhibit 3; N.T. 11/ 20/01, p. 218.)

CONCLUSIONS OF LAW

(1) Waste Management’s bid did not identify improper veMcles for use in the recycling program. The designation by Waste Management of the Recycle Pac and Recycle Pac II vehicles for the collection of commingled recydables is in accordance with the City of Allentown’s bid solicitation no. 2001-70, municipal solid waste and recycling collection services, and does not constitute a bid defect.

(2) Waste Management attached all required manufacturer delivery guarantees necessitated by section 1.7(d) of bid solicitation no. 2001-70, municipal solid waste andrecycling collection services, as section 1.7(d) of bid solicitation no. 2001-70 does not require delivery guarantees from the manufacturers of the chassis.

(3) Waste Management’s bid contained a description of a safety training program that complies with section 4.2(a) of bid solicitation no. 2001-70, municipal solid waste and recycling collection services.

(4) Waste Management properly identified one-half of the vehicles bid as new and one-half of the vehicles as not older than three years, in compliance with section 4.3(b) of the City of Allentown’s bid solicitation no. 2001-70, municipal solid waste and recycling collection services.

(5) Waste Management’s bid fully complied with the City of Allentown’s bid solicitation no. 2001-70, municipal solid waste and recycling collection services.

(6) Waste Management was the lowest responsible bidder.

(7) The City of Allentown’s award of a one-year term for the city facility trash and recycling service option was appropriate and within its discretion.

(8) The City of Allentown acted in good faith and in the best interests of the municipality in awarding the solid waste collection and recycling contract to Waste Management.

(9) The City of Allentown did not abuse its discretion in awarding the solid waste collection and recycling contract to Waste Management.

(10) No competitive advantage was conferred to Waste Management as a result of the City of Allentown’s bid solicitation no. 2001-70, municipal solid waste and recycling collection services.

(11) Plaintiffs have not sustained their burden in establishing that a permanent injunction is warranted.

DISCUSSION

Initially this court notes that a court may grant the extraordinary relief of a permanent injunction only where the rights of the plaintiffs are clear and free from doubt and the harm the plaintiffs seek to remedy is great and irreparable. Kimmel v. Lower Paxton Twp., 159 Pa. Commw. 475, 481, 633 A.2d 1271, 1274 (1993). In addition, a court may enjoin the award of a public contract when material irregularities are shown in the bidding process. American Totalisator Co. Inc. v. Seligman, 489 Pa. 568, 576-77, 414 A.2d 1037, 1041 (1980).

Further, this court recognizes that there is a presumption that the public officials charged with the duty of awarding a contract acted in good faith and in the best interest of the municipal authority in making the award, and such award will not be set aside except upon clear proof of an abuse of discretion or a purely arbitrary execution of the municipality’s duties or functions. A. Pickett Construction Inc. v. Luzerne County Convention Center Authority, 738 A.2d 20, 24 (Pa. Commw. 1999); Kimmel, 159 Pa. Commw. at 481, 633 A.2d at 1274. This heavy burden of proving that the municipal authorities abused their discretion and did not act in good faith or in the best interests of the municipality in awarding a contract is on the party challenging the award. J.J.D. Urethane Co. v. Montgomery County, 694 A.2d 368, 370 (Pa. Commw. 1997). Moreover, in reviewing the acts of a municipal authority, judicial discretion may not be substituted for administrative discretion. American Totalisator Co., 489 Pa. at 575, 414 A.2d at 1041. With these standards in mind, we address plaintiffs’ request for permanent injunctive relief.

The plaintiffs request from this court permanent injunctive relief to invalidate the City of Allentown’s award of the solid waste collection and recycling contract to Waste Management based on five allegations of deficiencies in Waste Management’s bid and/or the City of Allentown’s compliance with the bid solicitation no. 2001-70, municipal solid waste and recycling collection services:

Firstly, plaintiffs argue that Waste Management’s bid is fatally flawed because Waste Management intends to utilize compaction-type vehicles for the collection of the commingled recyclables, in contravention of section 3.3(d) of bid solicitation no. 2001-70. Section 3.3(d) of bid solicitation no. 2001-70 states:

“Commingled recyclables shall be collected in closed recycling trucks and transported directly from curbside to Todd Heller Inc., Northampton, PA, 610-262-6988. A site visit by prospective bidders is recommended. Commingled recyclables may not be collected in vehicles designed to compact materials or with compaction specifications that could crush or otherwise render the recyclable material non-marketable. ” (P. exhibit 3; city exhibit 1; section 3.3(d) of bid solicitation no. 2001-70.) (emphasis supplied) Specifically, Waste Management’s bid provides for five Mack chassis with Recycle Pac bodies. (N.T. 11/20/01, pp. 48-49.) Of the five vehicles Waste Management designated in its bid for commingled recyclable collection, two of the vehicles would be new 2002 Recycle Pac II models, two of the vehicles would be 2000 Recycle Pac models and one of the vehicles would be a 1999 Recycle Pac model. (P. exhibit 6; N.T. 11/20/01, pp. 127, 206.) Recycle Pac and Recycle Pac II vehicles are specifically designed to collect commingled recyclables and not to compact solid waste. (N.T. 11/20/ 01, pp. 67, 74-75, 80-81, 100, 125, 154-56, 160, 192; N.T. 3/18/02, pp. 143, 189.)

Plaintiffs argue that the Recycle Pac and the Recycle Pac II are “vehicles designed to compact materials” and thus are prohibited from use in the City of Allentown’s solid waste collection and recycling contract pursuant to section 3.3(d) of bid solicitation no. 2001-70. Plaintiffs further contend that J. P. Mascaro was at a disadvantage when it bid all non-compaction vehicles in response to bid solicitation no. 2001-70, since compaction vehicles are designed for high production, high density work and are more cost effective than non-compaction vehicles. (N.T. 11/20/01, pp. 38,51, 81-82,185; N.T. 3/18/02, pp. 190, 193.) We cannot agree with plaintiffs’ arguments.

The phrase “vehicles designed to compact materials” embodied in section 3.3(d) of bid solicitation no. 2001-70 cannot be read in a vacuum, as the plaintiffs desire to so do. Section 3.3(d) states that “commingled recyclables may not be collected in vehicles designed to compact materials or with compaction specifications that could crush or otherwise render the recyclable material non-marketable.” (Section 3.3(d) of bid solicitation no. 2001-70.) (emphasis supplied) Moreover, section 4.3(g) of bid solicitation no. 2001-70 provides in pertinent part:

“Commingled recyclables may not be collected in vehicles designed to compact solid waste or with compaction specifications that could crush or otherwise render the recyclable materials non-marketable. All recycling collection vehicles shall be completely enclosed and shall be designed to prevent spillage of recyclables.” (P. exhibit 3; city exhibit 1; section 4.3(g) of bid solicitation no. 2001-70.) (emphasis supplied) This language was recommended to the City of Allentown on July 24, 2001, by Wayne DeFeo, an independent consultant, because certain recycling vehicles have some light or modest compaction qualities. (N.T. 3/18/02, pp. 45,99-100,135-36, 138, 182-83; city exhibit 14.)

Furthermore, on September 13,2001, the City of Allentown issued an addendum no. 2 in order to clarify certain issues. (City exhibit 1.) One issue that arose dealt with the issue of the collection of recyclables:

“Question: Section 3.3d of the instructions for bidding — recycling trucks — with regard to compaction, clarification is needed on compaction specifications that are acceptable. We currently use compaction vehicles for recycling collection.
“Answer: As stated in section 4.3g, ‘Commingled recyclables may not be collected in vehicles designed to compact solid waste or with compaction specifications that could crush or otherwise render the recyclable materials non-marketable. ’ Todd Heller Inc., our designated market for commingled recyclables, will not accept compacted recyclables. Compaction capable vehicles are permitted for paper collections.” (City exhibit 1; city exhibit 3.) Addendum no. 2 was generated as a result of questions that arose from the mandatory pre-bid conference held on September 6, 2001, at which all prospective bidders for the municipal solid waste and recycling contract were required to appear.

The purpose of addendum no. 2 was to clarify and explain what vehicles were permitted in the collection of commingled recyclables in the City of Allentown. The record evidence revealed that the City of Allentown wanted to prohibit a contractor from utilizing rear load compacting garbage vehicles to collect the City of Allentown’s commingled recyclables. (N.T. 11/20/01, pp. 236, 249; N.T. 3/18/02, pp. 43, 46, 136.) The desired prohibition stemmed from the fact that the compaction rate on a garbage truck is substantially greater than the compaction force on a recycling vehicle. (N.T. 3/18/02, pp. 130-41, 143, 189.) Indeed, the compaction rate on a garbage truck would render the commingled recyclables non-marketable. (N.T. 11/20/01, pp. 249-50; N.T. 3/18/ 02, pp. 139-41, 143.)

However, in bid solicitation no. 2001-70, the City of Allentown did not want to prevent the contractor from utilizing recycling vehicles with modest compaction capabilities that do not crush the commingled recyclables to the degree that they are rendered non-marketable. (N.T. 11/20/01, p. 236; N.T. 3/ 18/02, pp. 143, 191.) Sections 3.3(d) and 4.3(g) of bid solicitation no. 200170 and addendum no. 2 all recognize marketability of commingled recyclables as the key element. (P. exhibit 3; city exhibit 1; city exhibit 3; sections 3.3(d) and 4.3(g) of bid solicitation no. 2001-70.) There is no blanket prohibition against all compaction vehicles. In fact, three of the four bidders designated compaction vehicles for the collection of commingled recyclables. (N.T. 11/20/01, pp. 26, 84, 282; N.T. 3/18/02, pp. 54, 56, 142; city exhibit 8; city exhibit 9.)

The City of Allentown has contracted with Todd Heller Inc. to accept the commingled recyclables that are collected from the City of Allentown. (N.T. 11/20/01, pp. 75-76, 177.) Todd Heller Inc. accepts commingled recyclables that are collected in Recycle Pac and Recycle Pac II compaction vehicles. (N.T. 11/20/01, pp. 76,178; N.T. 3/18/02, p. 221.) Crushed plastics are still marketable. (N.T. 11/20/01, pp. 158,180; N.T. 3/18/02, p. 191.) There is always some degree of glass breakage, as breakage occurs even in open non-compaction vehicles. (N.T. 11/20/01, pp. 158-59,181-82,188; N.T. 3/18/02, p. 144.) The marketability of materials coming out of a Recycle Pac compaction vehicle and the older style vehicle is basically equivalent. (N.T. 11/20/01, pp. 182-83; N.T. 3/ 18/02, pp. 144, 191.)

A plain reading of sections 3.3(d), 4.3(g) and addendum no. 2 clearly indicates that compaction vehicles with modest compaction capabilities that do not crush the commingled recyclables to the degree that they are rendered non-marketable are acceptable in bid solicitation no. 2001-70. Consequently, Waste Management’s designation of the Recycle Pac and Recycle Pac II vehicles, with modest compaction capabilities, for the collection of commingled recyclables, complies with all requirements of bid solicitation no. 2001-70.

Next, plaintiffs allege that Waste Management failed to comply with bid solicitation no. 2001-70 by neglecting to supply delivery guarantees by the truck chassis manufacturers. While it is true that Waste Management did not provide delivery guarantees by the manufacturers of the chassis, we cannot agree with plaintiffs’ contention that said failure constitutes a bid defect.

Initially we note that section 1.7(d) of bid solicitation no. 2001-70 states:

“All bidders shall submit with his proposal, a description of all equipment to be used in the performance of the proposed contract. Each bidder must specify the number and type of all collection truck bodies, cabs and chassis and other equipment as specified in section 4.3. The bidder shall supply detailed inventories, including photographs of the equipment currently owned or leased and all accessories by type, model, year of manufacture, and anticipated remaining useful life as of the date of the inventory sheet. All leased equipment shall be listed separately; the time remaining on each leased piece of equipment and options of renewal, where applicable, shall be stated. Complete descriptions of all new equipment to be acquired to accomplish this contract must be provided. Delivery guarantees by manufacturers shall be attached to the bid document.” (P. exhibit 3; city exhibit 1; section 1.7(d) of bid solicitation no. 2001-70.) (emphasis supplied) The purpose of requiring a delivery guarantee to be attached to the bid documents is to assure that any new equipment that is purchased will be delivered on time prior to the performance of the contract. (N.T. 3/18/ 02, pp. 13-14.)

In response to section 1.7(d) of bid solicitation no. 2001-70, Waste Management attached to the bid documents an October 2,2001 letter delivery guarantee from Dempster Equipment which is a manufacturer of recycling vehicles: “The following is to acknowledge that Dempster Equipment will be able to deliver six Dempster recycle trucks to Allentown, PA by the required date to meet a June 1, 2002 start-up at that facility.” (P. exhibit 6; N.T. 11/20/01, p. 49.) In particular, Dempster Equipment manufactures the body of the vehicle. (N.T. 11/20/ 01, pp. 49-50, 66, 114, 128, 204.)

Waste Management also attached to the bid documents an October 2, 2001 letter delivery guarantee from McNeilus Companies Inc., a manufacturer of the body of the vehicles:

“The following letter is to acknowledge that McNeilus Companies Inc. will provide delivery of eight 32 cubic yard McNeilus rear loaders and three 25 cubic yard McNeilus rear loaders to your Allentown, PA facility prior to a required contract start-up date of June 1,2002. Purchase orders and chassis will need to be provided to McNeilus Companies Inc. no later than April 1, 2002. (City exhibit 6.)

The evidence presented at the time of trial revealed that in practice, delivery guarantees are sought from the manufacturer of the body of the vehicle and not the manufacturer of the vehicle’s chassis. (N.T. 3/18/02, pp. 151, 169, 173, 175-76, 200-201.) The rationale behind this practice is that a manufacturer is not going to deliver a body without a chassis attached to it. (N.T. 3/18/02, pp. 151, 169, 173, 175-76, 200-201.) In other words, the guarantee is given for the entire vehicle and not each component part. (N.T. 3/18/02, pp. 155, 175-76, 200-201.)

Indeed, bid solicitation no. 2001-70 does not require a delivery guarantee from the manufacturer of each component of the vehicles. Instead, a delivery guarantee for the entire vehicle is sought through the manufacturer of the body of the vehicle. Consequently, section 1.7(d) of bid solicitation no. 2001-70 merely requires delivery guarantees from the manufacturers of the bodies and not each component part, including chassis. (P. exhibit 3; city exhibit 1; section 1.7(d) of bid solicitation no. 2001-70.) Therefore, Waste Management’s bid complies with the purpose and the letter of section 1.7(d) of bid solicitation no. 2001-70.

Next, plaintiffs argue that Waste Management’s bid did not comply with section 4.2(a) of bid solicitation no. 2001-70 dealing with a safety training program. Specifically, section 4.2(a) of bid solicitation no. 2001-70 provides:

“Bidders shall submit a description of a safety training program with regard to all employees engaged in the collection or transportation of solid waste or recycling within the City of Allentown. At a minimum, a safety program shall include training components which comply with the following mandatory and industry recommended safety standards as found in the latest version of US DOT, PA DOT, OSHA and ANSI Z245 industry standards, with regard to the following training areas:
• Commercial motor vehicle operations
• Collection crew safety
• Commercial container handling
• Collection and transfer vehicles
• Unloading procedures at treatment, processing and disposal facilities.” (P. exhibit 3; city exhibit 1; section 4.2(a) of bid solicitation no. 2001-70.) (emphasis supplied) A plain reading of the aforementioned unambiguous provision indicates that bid solicitation no. 2001-70 does not require that a complete safety plan be submitted by each bidder. (Section 4.2(a) of bid solicitation no. 2001-70; N.T. 11/20/01, pp. 239, 269, 274; N.T. 3/18/ 02, pp. 145-46.) Instead, section 4.2(a) of bid solicitation no. 2001-70 only requires the submission of a general description of a safety plan. (Section 4.2(a) of bid solicitation no. 2001-70; N.T. 11/20/01, pp. 239, 269, 274; N.T. 3/18/02, pp. 145-46.) Such general language aids in opening the bidding field to a wide audience while still assuring that the bidders are responsible trash haulers with a concern for safety. (N.T. 11/20/01, pp. 273-74; N.T. 3/18/02, p. 146.)

In response to section 4.2(a) of bid solicitation no. 2001-70, Waste Management indicated:

“Attached you will find our general training guidelines for health, safety and transportation.
“A specific plan will be developed which adheres to these guidelines and is tailored to the Allentown city contract. Such plan will be submitted to the city for review and comment prior to start-up.” (P. exhibit 6; N.T. 11/20/01, p. 221.) Thereafter, Waste Management attached a two-page description of its safety plan. (P. exhibit 6; city exhibit 6.) Waste Management’s submission complied with the purpose and the clear requirement language of section 4.2(a) of bid solicitation no. 2001-70.

Next, in their amended complaint, plaintiffs allege that Waste Management’s bid is defective because it failed to comply with section 4.3(g) of bid solicitation no. 2001-70. In particular, plaintiffs claim that Waste Management failed to identify one-half of its vehicles as new as required by section 4.3(g) of bid solicitation no. 2001-70. This court finds plaintiffs’ argument to be factually flawed.

We note that section 4.3(b) of bid solicitation no. 2001-70 provides as follows:

“At the beginning of the contract period, at least one-half of the packer and recycling collection vehicles (and boxes) must not be older than three years; and one-half of the packer and recycling collection vehicles (and containers if applicable) shall be new.” (P. exhibit 3; city ex. 1; section 4.3(b) of bid solicitation no. 2001-70.) A plain reading of section 4.3(g) of bid solicitation no. 2001-70, municipal solid waste and recycling collection services, indicates that half of all designated vehicles must be new 2002 models, while the other half must not be older than 1999 models. (Section 4.3(g) of bid solicitation no. 2001-70; city exhibit 1; P. exhibit 3; N.T. 3/18/02, pp. 147, 226.)

In response to this criterion, Waste Management bid nine 2002 model vehicles, four 2000 model vehicles and five 1999 model vehicles. (City exhibit 6.) Specifically, Waste Management bid two new 2002 Mack LE613 chassis with Recycle Pac II bodies, seven new 2002 Mack MR688S chassis with McNeilus bodies, two 2000 model Mack LE613 chassis with Recycle Pac bodies, one 2000 model Rat Pack rear loader, one 2000 model Mack MR688S chassis with McNeilus body, one 1999 model Mack LE613 chassis with Recycle Pac body, three 1999 model Mack MR688S chassis with Dempster body and one 1999 model Mack chassis with stake body. (City exhibit 6.) Consequently, Waste Management’s bid complies with section 4.3(g) of bid solicitation no. 2001-70 in that one-half of the vehicles bid by Waste Management are new and one-half of the vehicles are not older than three years.

Even assuming, arguendo, that any of the aforementioned four allegations of error was determined to be a bid defect in Waste Management’s submission, the City of Allentown’s award of the solid waste collection and recycling contract to Waste Management should not be set aside and invalidated. Indeed, section 1.13(a) of bid solicitation no. 2001-70 specifically confers to the City of Allentown the right to waive informalities and minor irregularities in the offer. (Section 1.13(a) of bid solicitation no. 2001-70.)

Furthermore, this court is mindful of the fact that underlying the competitive bidding process is the requirement of bid responsiveness which assures equal footing among competing bidders in furtherance of core legislative objectives. Gaeta v. Ridley School District, 567 Pa. 500, 788 A.2d 363, 367 (2002). “Fairness lies at the heart of the [competitive] bidding process and all bidders must be confronted with the same requirements and be given the same fair opportunity to bid in free competition with each other.” Shaeffer v. City of Lancaster, 754 A.2d 719, 723 (Pa. Commw. 2000). This requirement for competitive bidding exists to invite competition and “to guard against favoritism, improvidence, extravagance, fraud and corruption in the award of municipal contracts.” Conduit & Foundation Corp. v. City of Philadelphia, 41 Pa. Commw. 641, 646, 401 A.2d 376, 379 (1979).

However, the Pennsylvania Supreme Court recently has held that a municipality has the discretion to accept a non-compliant bid so long as the bid defect is a mere irregularity that does not deprive the municipality of adequate assurance that the contract will be fulfilled and the bidder does not receive a competitive advantage by its non-compliance. Gaeta, 788 A.2d at 367-68; Rainey v. Borough of Derry, 163 Pa. Commw. 606, 614, 641 A.2d 698, 702 (1994). Indeed, the Pennsylvania Supreme Court recognized that municipal authorities are afforded latitude by the courts when “confronted with a non-compliant bid that it might choose to consider to achieve effective utilization of the public fisc.” Gaeta, 788 A.2d at 367. In the present case, Waste Management did not receive a competitive advantage over the other bidders by its alleged failure to comply with section 1.7(d) (delivery guarantees), section 4.2(a) (description of safety plan) and/or section 4.3(b) (age of equipment). In fact, plaintiffs failed to allege any facts to support such a contention. At most, this is a case of “mis-descriptions” that had no effect on the bidding process.

Finally, the plaintiffs contend that the City of Allentown abused its discretion and violated bid solicitation no. 2001-70 when, in determining the lowest bidder, it selected a one-year term for an optional service while using a two-year term for the base contract period. Specifically, plaintiffs argue that the City of Allentown erred when, in awarding the contract to Waste Management, the City of Allentown selected a one-year term for the optional service of city facilities trash and recycling collection. We do not find that the City of Allentown abused its discretion.

Initially this court notes that bid solicitation no. 2001-70 does not require the City of Allentown to award a service option for the same term as the base contract. Furthermore, section 1.13 of bid solicitation no. 2001-70 sets forth the criteria for awarding the contract:

“1.13 Award criteria
“(a) The city reserves the right to reject any and all offers and to waive informalities and minor irregularities in offers received.
“(b) The city reserves the right to award or reject any or all options. The city also reserves the right to award options and/or contract extensions at a later date to the successful bidder.
“(c) The lowest bid will be determined by the total of the base bid and any options selected by the city at the time of award.
“(d) The city, at its discretion only, may, at its option, add services to or delete services at any time from the work provided by this contract as may serve its best interest. The resulting increase or decrease will be negotiated between the contractor and the city.” (City exhibit 1; P. exhibit 3; section 1.13 of bid solicitation no. 2001-70.) (emphasis supplied) Indeed, section 1.13(b) of bid solicitation no. 2001-70 grants to the City of Allentown the right to award or reject any and all options.

Moreover, the City of Allentown has the right to award options at a later date and to add or delete services from the contract at any time as may serve the interests of the City of Allentown. (P. exhibit 3; city exhibit 1; section 1.13(d) of bid solicitation no. 2001-70.) Testimony revealed that the reason the City of Allentown chose a one-year term for the city facility trash and recycling service option was that the City of Allentown wanted to study whether it could internally handle the city facility trash and recycling collection on a more cost efficient basis than under the public contract. (N.T. 11/20/01, pp. 214-15.) No evidence was proffered by the plaintiffs to suggest that the one-year term was not in the best interests of the City of Allentown. Bid solicitation no. 2001-70 confers to the City of Allentown broad discretion and wide latitude in its selection process. Therefore, the city had the right to select a one-year term for the city facility trash and recycling service option, while choosing a two-year term for the base contract and the other options.

Furthermore, it should be noted that even if the City of Allentown had chosen a two-year term for the city facility trash and recycling service option, Waste Management would still have been the lowest bidder. (Waste Management exhibit 3; N.T. 11/20/01, p. 218.) Also of importance, the use of the one-year option term to determine bid prices was applied uniformly to all four bidders. Therefore, Waste Management did not receive any competitive advantage by the City of Allentown’s choice of the term of this option. Therefore, the City of Allentown did not abuse its discretion in finding Waste Management to be the lowest responsible bidder.

Based on the foregoing, this court finds that the plaintiffs have failed to establish that the City of Allentown manifestly and flagrantly abused its discretion or acted in bad faith by awarding the solid waste collection and recycling contract to Waste Management. Accordingly, plaintiffs’ request for permanent injunctive relief to invalidate the City of Allentown’s award of the solid waste collection and recycling contract to Waste Management is denied. This court will not disturb the City of Allentown’s determination that Waste Management is the lowest responsible bidder.

DECREE NISI

Now April 15, 2002, after a non-jury trial conducted before the undersigned on March 18, 2002, and upon consideration of the record, the findings of fact and conclusions of law filed by the parties and after oral argument on April 8, 2002, and for the reasons expressed in the accompanying adjudication, it is hereby decreed that this decree is entered in favor of defendants, City of Allentown and Waste Management of Pennsylvania Inc., and against plaintiffs, Solid Waste Services Inc. d/b/a J.P. Mascaro & Sons M. B. Investments and Francine Ambrosino.

It is further decreed that plaintiffs’ request for permanent injunctive relief to invalidate the City of Allentown’s award of the solid waste collection and recycling contract to Waste Management of Pennsylvania Inc. is denied.

It is further decreed that this decree shall become final unless post-trial motions are filed pursuant to Pennsylvania Rule of Civil Procedure 227.1(c)(2) within 10 days of the filing of the adjudication in the within matter.

      . On December 19, 2001, the plaintiffs filed an amended complaint.

      . The entire record from the preliminary injunction hearing held on November 20,2001, was incorporated into the record of the non-jury trial by stipulation of all the parties. (N.T. 3/18/02, pp. 6-7.)

      . Specifically, Waste Management bid two new 2002 Mack LE613 chassis with Recycle Pac II bodies, seven new 2002 Mack MR688S chassis with McNeilus bodies, two 2000 model Mack LE613 chassis with Recycle Pac bodies, one 2000 model Rat Pack rear loader, one 2000 model Mack MR688S chassis with McNeilus body, one 1999 model Mack LE613 chassis with Recycle Pac body, three 1999 model Mack MR688S chassis with Dempster body and one 1999 model Mack chassis with stake body. (City exhibit 6.) Therefore, Waste Management proposed a total of nine 2002 model vehicles, four 2000 model vehicles and five 1999 model vehicles.

      . Section 815(F) of the City of Allentown’s Home Rule Charter and section 1.18 of bid solicitation no. 2001-70, municipal solid waste and recycling collection services, provide for a resident preference in its bidding process. (City of Allentown Home Rule Charter, adopted on April 23, 1996; R exhibit 3; city exhibit 1; section 1.18 of bid solicitation no. 2001-70). J. P. Mascaro received a $2,500 credit as an in-city bidder. (N.T. 11/20/01, pp. 31, 35, 218-19.)

      . To find otherwise would lead to an absurd result.

      . Plaintiffs did not present evidence at the hearing on the preliminary injunction or at the non-jury trial in support of this allegation.

      . A municipality is precluded from waiving the requirements of a bid where the requirements are the subject of legislative pronouncement particularizing the manner in which the contract is to be made. Gaeta, 788 A.2d at 368. In the case at hand, the bid requirements challenged by the plaintiffs are not required by any statute or ordinance and the plaintiffs do not assert such a proposition.

      . The beneficiaries of the award of the contract are the citizens of Allentown who will benefit not only from the cost savings, but also from the quality of service as reflected in the laudatory comments of the surrounding communities that have switched from J. P. Mascaro to Waste Management. (City exhibit 10.)


author: ACKERMAN, J.,

text:
    Young v. Zitomer

      Robert Ross, for plaintiff.

      Kevin H. Wright, for defendants.
    September 3, 2002
   ACKERMAN, J.,

This is an appeal by Allegheny University Hospitals-Hahnemann Division, Allegheny United Hospitals Inc. and Allegheny Health, Education and Research Foundation, based upon an order of this court granting delay damages in the sum of $3,410,236.99.

The Allegheny defendants argue as follows:

(1) Rule 238 is unconstitutional;

(2) Plaintiff delayed trial by not filing expert reports until the date required by the court’s case management order; and

(3) Delay damages should not run against the Allegheny defendants until one year from the date they were served with plaintiff’s complaint.

First, the constitutionality of Rule 238 is a well-settled issued. The Pennsylvania Supreme Court has long held that Rule 238 “is not unconstitutional.” Costa v. Lauderdale Beach Hotel, 534 Pa. 154, 159, 626 A.2d 566, 568 (1993). In Costa, the court specifically held that Rule 238: does not violate the substantive due process and equal protection guarantees of the United States and Pennsylvania Constitutions; does not exceed the court’s rule-making authority; does not prevent defendants from exercising their right to defend themselves in court; and is substantially and rationally related to the Commonwealth’s legitimate goals. Id., 534 Pa. at 159-61, 626 A.2d at 568-71. The Supreme Court’s holding in Costa is consistent with the holding of the United States Third Circuit Court of Appeals in Knight v. Tape Inc., 935 F.2d 617 (3d Cir. 1991), wherein the court held that Rule 238 did not violate substantive due process and equal protection rights and was rationally related to the Commonwealth’s legitimate interest in expeditiously settling meritorious tort claims.

Second, plaintiff never delayed the trial of this case and defendants are not entitled to a “tolling” of the delay damages period. The Allegheny defendants argue that the delay damages period was tolled until plaintiff served her expert reports. Pursuant to the case management order in this case, plaintiff’s expert reports were due to be served on defense counsel on or before November 6, 2000. Plaintiff’s expert reports were, indeed, served on defense counsel by that date. This case thereafter proceeded to trial without any delay by plaintiff. Contrary to the position taken by the Allegheny defendants, there is no provision in Rule 238 requiring the tolling of the delay damages period until expert reports are served. Nor have the Allegheny defendants cited any case law to support their position. The only tolling period under the Rule occurs if a written settlement offer is made that is more than 125 percent of the verdict or if the plaintiff caused a delay of the trial. Neither of these conditions precedent to the tolling of the delay damages period occurred in this case.

Lastly, the Allegheny defendants contend that delay damages should not begin to run until one year after they were served with the complaint, not one year after the other defendants were first served. The Allegheny defendants are incorrect. Initially, all of the defendants who went to verdict were found to be joint tort-feasors and jointly and severally liable for the entire amount of the verdict. The law of this Commonwealth holds that tortfeasors, who are jointly and severally liable for the entire amount of the verdict, are jointly and severally liable for all delay damages. See Wirth v. Miller, 398 Pa. Super. 244, 580 A.2d 1154 (1990); Tindel v. SEPTA, 385 Pa. Super. 94, 560 A.2d 183 (1989). Thus, it does not matter when the delay damages period began to run against the Allegheny defendants because, as a result of their joint and several liability, they are liable for the entire amount of delay damages- assessed against all defendants. Moreover, Rule 238 makes it clear that delay damages begin to run against all defendants one year from the date that the first defendant was served with process. See Pa.R.C.P. 238(a)(2)(ii) (“damages for delay shall be awarded for the period of time . . . from a date one year after the date original process was first served in the action up to the date of the award, verdict or decision.”). In fact, the comment to Rule 238 provides an illustration showing how delay damages are calculated against all defendants from one year after the first defendant was served. See Pa.R.C.P. 238, explanatory comment — 1998. Accordingly, the delay damages period in the instant case begins to run one year from the date the first defendant was served, not one year from the date the Allegheny defendants were served.

No error was committed by this court in its order granting delay damages.