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UNIVERSAL COMPUTER SYS. v. MEDICAL SERVS. ASSN. OF

August 15, 1979

Universal Computer Systems, Inc., Plaintiff,
v.
Medical Services Association of Pennsylvania, t/a Pennsylvania Blue Shield, Defendants.



The opinion of the court was delivered by: HERMAN

MEMORANDUM

 If alternative motions for judgment notwithstanding the verdict or for a new trial are made, the trial court should rule on both branches of the motion. There are significant substantive prerequisites to the consideration of a motion for judgment notwithstanding the verdict pursuant to Rule 50(b) of the Federal Rules of Civil Procedure. A party must make a motion for a directed verdict and a party may not base a motion for judgment notwithstanding the verdict on a ground not advanced in his motion for a directed verdict, since a motion made after the trial comes too late for possible curative action short of a new trial. Wall v. United States, 592 F.2d 154 (3d Cir. 1979). In reviewing the motion for judgment notwithstanding the verdict the Court must view the evidence most favorably to the party against whom the motion is made. Denneny v. Siegel, 407 F.2d 433 (3d Cir. 1969). We must determine whether as a matter of law the record is critically deficient of that minimum quantum of evidence from which a jury might afford relief. Vizzini v. Ford Motor Co., 569 F.2d 754, 760 (3d Cir. 1977). There exists a different standard for determining a motion for a new trial pursuant to Rule 59 of the Federal Rules of Civil Procedure. A motion for a new trial may be granted on the ground that the verdict is against the clear weight of the evidence or when necessary to prevent a miscarriage of justice. Wright & Miller, Federal Practice and Procedure: Civil § 2505.

 We will briefly recite the facts of this case construed in the light most favorable to the Plaintiff as the jury returned a verdict in favor of the Plaintiff after weighing the factual presentations of both sides.

 In July of 1975, Blue Shield solicited bids for the lease of a computer. Pursuant to the bid solicitation, Plaintiff prepared a proposal, which was required by the terms of the solicitation to be received by Blue Shield no later than 12:00 noon on August 18, 1975. Plaintiff, through its President, Warren Wilson, contacted Joel Gebert, an employee of Blue Shield and obtained Gebert's assurance that he would have the bid proposal picked up at the Allegheny Airlines ticket counter in Harrisburg on the morning of August 18, 1975 in time for the Blue Shield 12:00 noon deadline in Camp Hill. Gebert received all calls from prospective bidders and was the sole contact pursuant to the request for bids. The calls were not referred to anyone else. Pursuant to Gebert's promise, Plaintiff dispatched his bid proposal by Allegheny Airlines PDQ Service on August 18, 1975, at approximately 8:30 a.m. Wilson called Gebert again to give him the waybill number so that the proposal could be picked up per the agreement. Wilson was informed by Gebert that Gebert had changed his mind regarding his promise to pick up the bid proposal and would not do so. Wilson attempted through phone calls to Allegheny to have the proposal picked up by courier or other agents and transmitted to Defendant Blue Shield. Defendant Allegheny refused to allow any agent or courier of Plaintiff to pick up the package other than a direct employee of either Plaintiff or the consignee Blue Shield. Through the persistence of Wilson in contacting the supervisors of the airline manager an order was finally directed to the manager to release the package to a courier after 1:00 p.m. The proposal was released too late to make the required 12:00 noon deadline and was rejected by Defendant Blue Shield as untimely and was returned unopened.

 Basically the Plaintiff's argument is that if the Defendant Blue Shield had kept its promise to pick up the bid proposal, the proposal would have arrived in a timely manner for the bid opening. The position of the Plaintiff in the companion case to this one is that even If the bid proposal had not been picked up by Defendant Blue Shield, the proposal would still have timely arrived if Defendant Allegheny's airport manager had not refused to release the bid to anyone but Defendant Blue Shield or the consignor himself. The theory of the Plaintiff further is that If the bid had timely arrived, it would have been the lowest. Plaintiff further asserts that if all of these things had come to pass it would have been approved for the contract and therefore any damages recovered should equal Plaintiff's Projected profit on the contract.

 AGENCY

 The first hurdle for the Plaintiff in presenting its case against Defendant Blue Shield was to establish that a promise was made by an agent of Blue Shield who had the authority to do so. Whether or not the promise was made was clearly for the jury. Plaintiff, as was mentioned earlier in this memorandum, presented testimony through its President, Warren Wilson, that he contacted Joel Gebert, an employee of Blue Shield, and that he obtained Gebert's assurance that he would have the bid proposal picked up at the Allegheny Airlines ticket counter in Harrisburg on the morning of August 18, 1975, in time for the Blue Shield 12:00 noon bid deadline in Camp Hill. Gebert denied that he made such a commitment.

 The Court instructed the jury that Defendant Blue Shield could only act through its agents and instructed the jury that it would have to determine if Gebert was an agent of Defendant Blue Shield authorized to made such a promise, as a principal is not generally liable on account of acts committed or representations made outside the apparent scope of the agent's authority. Revere Press, Inc. v. Blumberg, 431 Pa. 370, 246 A.2d 407 (1968). Generally, and especially where there is a dispute of fact, the question of an agent's authority is for the jury. Norton v. Railway Express Agency, 412 F.2d 112 (3d Cir. 1969); Anzenberger v. Nickols, 413 Pa. 543, 198 A.2d 309 (1964); P.L.E. Agency § 178.

 Testimony developed that Gebert received all calls from prospective bidders and was the sole contact pursuant to the request for bids. The calls were not referred to anyone else, although in the actual solicitation for bids the name of Ray Eichelberger appeared and it was indicated that Eichelberger was the Blue Shield agent designated to receive the bids. Agency requires no special formalities such as a writing, and arises when one authorizes another expressly or impliedly, to act as his agent. Falconer v. Mazess, 403 Pa. 165, 168 A.2d 558 (1961). As between a principal and third persons, rights and liabilities are not limited by the agent's express or implied authority but rather by his apparent authority. PLE Agency § 95. The test has been stated to be whether a man of ordinary prudence, diligence and discretion would believe and have a right to believe that the agent has the authority he pretends to exercise. Apex Financial Corp. v. Decker, 245 Pa.Super. 439, 369 A.2d 483 (1976); Pollock Industries, Inc. v. General Steel Castings Corp., 203 Pa.Super. 453, 201 A.2d 606 (1964).

 The Defendant Blue Shield asserts that there is an essential flaw in the authority of Gebert to act as an agent in that to do what Gebert is alleged to have said he would do would be an improper preference. The federal procurement regulations which were applicable to this bid submission provided:

 
"1-2.301 Responsiveness of bids.
 
(a) To be considered for award, a bid must comply in all material respects with the invitation for bids so that, both as to method and timeliness of submission and as to the substance of any resulting contract, all bidders may stand on an equal footing and ...

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