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OSIRIS ENTERPRISES v. BOROUGH OF WHITEHALL

November 8, 2005.

OSIRIS ENTERPRISES and ANTONIO F. MOSCATIELLO, Plaintiffs,
v.
BOROUGH OF WHITEHALL, HAROLD L. BERKOBEN, KATHLEEN N. DePUY, PHILIP J. LAHR, ROBERT J. McKOWN, GLENN P. NAGY, ANDREW SAKMAR, ADAM J. BARONE, JAMES F. NOWALK, LINDA J. BOOK, JOHN A. WOTUS, THOMAS OZEMO, JAMES R. DUFFY, JAMES E. LEVENTRY and MARILYN F. MOORE, in their individual capacities, Defendants.



The opinion of the court was delivered by: WILLIAM STANDISH, Senior District Judge

MEMORANDUM

I

Before the Court are the parties' cross-motions for summary judgment pursuant to Fed.R.Civ.P. 56. For the reasons set forth below, plaintiffs' motion for summary judgment will be denied and defendants' cross-motion for summary judgment will be granted.

  II

  For purposes of the present motions, the undisputed facts, as well as the procedural history of this case and related cases, may be summarized as follows:

  On May 24, 2001, defendant Borough of Whitehall ("Borough") issued a notice to bidders seeking proposals for the reconstruction of storm sewers in the Oakridge Drive section of the Borough ("the Oakridge Drive Project"). The notice provided in pertinent part:

 
"Proposals to receive consideration must be accompanied by an executed Non-Collusion Affidavit in the form provided by the Borough of Whitehall. All bidders must be PennDOT pre-qualified and must submit their PennDOT Pre-Qualification Certificates and the non-collusion affidavit with their bid or the bid will be considered void."
In response to the notice to bid, Oakdale Construction Corporation ("Oakdale Construction") submitted a bid in the amount of $955,450, and plaintiff Osiris Enterprises ("Osiris"), which is owned by plaintiff Antonio F. Moscatiello ("Antonio Moscatiello"), submitted a bid in the amount of $978,760. Two other companies submitted bids that were in excess of $1,000,000.

  Pursuant to the requirements of the notice to bid, Oakdale Construction submitted a PennDOT Pre-Qualification Certificate with its bid. Although the certificate was expired,*fn1 Oakdale Construction included a letter with its bid indicating that it was in the process of updating its PennDOT Pre-Qualification Certification. Osiris had submitted a valid PennDOT Pre-Qualification Certificate with its bid for the Oakridge Drive Project. Thus, Osiris was the lowest bidder that met all of the requirements in the Borough's notice to bid.

  During a public meeting on August 1, 2001, over the adamant protests of plaintiffs, Borough Council extended the time limit for submission of bids on the Oakridge Drive Project to enable the project to be awarded to Oakdale Construction. During the August 1, 2001 meeting, Borough Council also voted unanimously to "debar" Osiris from bidding on future Borough construction projects due to Osiris's alleged status as a "non-responsible" bidder. (Dfs' Appendix, Exh. C). The declaration that Osiris was a non-responsible bidder purportedly was based on a dispute that had arisen in 1995 concerning Osiris's performance of a Borough construction project in 1993. The dispute resulted in the Borough filing suit against Osiris. The matter ultimately was settled with no determination of fault on the part of Osiris.

  Shortly after the August 1, 2001 debarment of Osiris from bidding on future Borough construction projects, Franco Moscatiello, the father of Antonio F. Moscatiello, filed a complaint in equity against the Borough in the Court of Common Pleas of Allegheny County, Pennsylvania in his capacity as a Borough taxpayer, and the action was assigned docket number GD 01-15729 ("Case No. GD 01-15729"). In Case No. GD 01-15729, Franco Moscatiello sought (a) to enjoin the Borough from awarding the Oakridge Drive Project to Oakdale Construction and (b) to compel the Borough to award the project to Osiris. (Dfs' Motion to Dismiss, Exh. A).

  On September 26, 2001, following a hearing, the Honorable David S. Cercone (now a member of this Court) issued findings of fact, conclusions of law and the following decree nisi in Case No. GD 01-15729:
DECREE NISI
1. The Borough of Whitehall is hereby enjoined from awarding the within contract to Oakdale Construction Corporation, based upon Oakdale Construction Corporation's failure to comply with a mandatory pre-requirement in order to submit a valid bid.
2. The Borough is enjoined from considering Oakdale Construction Corporation's bid as that bid was void based upon Oakdale's failure to comply with a mandatory requirement of the notice to bid.
3. The Borough of Whitehall is not enjoined from determining that Osiris Enterprises is not the lowest responsible bidder.
4. The Borough of Whitehall did not abuse its discretion in determining that Osiris Enterprises was not the lowest responsible bidder.
5. The Borough of Whitehall's determination that Osiris Enterprises was not the lowest responsible bidder was not arbitrary and capricious nor was it made in bad faith, and that determination may stand.
6. Plaintiff has failed to meet its (sic) burden of showing that the Borough acted arbitrarily and capriciously.
(Dfs' Motion to Dismiss, Exh. B).

  On June 20, 2002, plaintiffs filed this civil action against the Borough and the following individuals: Harold L. Berkoben ("Berkoben"), Kathleen N. DePuy ("DePuy"), Philip J. Lahr ("Lahr"), Robert J. McKown ("McKown"), Glenn P. Nagy ("Nagy"), Andrew Sakmar ("Sakmar"), Adam J. Barone ("Barone"), James F. Nowalk ("Nowalk"), Linda J. Book ("Book"), John A. Wotus ("Wotus"), Thomas Ozemo ("Ozemo"), James R. Duffy ("Duffy"), Ruthann Omer ("Omer"), James E. Leventry ("Leventry"), Thomas Hudzema ("Hudzema") and Marilyn F. Moore ("Moore"). Plaintiffs asserted claims under Section 1983 of the Civil Rights Act of 1871 ("Section 1983"), 42 U.S.C. § 1983, and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., as well as claims under state law for violation of various Pennsylvania statutes, breach of contract, false light and surcharge. Plaintiffs' claims in this case arise out of Borough Council's August 1, 2001 declaration that Osiris was a non-responsible bidder, which precluded Osiris from bidding on future Borough construction projects, including the Oakridge Drive Project which ultimately was awarded to Oakdale Construction.*fn2

  Defendants moved to dismiss plaintiffs' complaint in this case based on the doctrines of res judicata and collateral estoppel and for failure to state a claim upon which relief may be granted under Fed.R.Civ.P. 12(b)(6). By memorandum and order dated March 12, 2004, defendants' motion was granted in part and denied in part. With respect to defendants' res judicata/collateral estoppel argument, which was based on the findings of fact, conclusions of law and decree nisi issued by Judge Cercone on September 26, 2001 in Case No. GD 01-15729, the Court concluded that Judge Cercone's findings of fact, conclusions of law and decree nisi did not constitute a final judgment on the merits because the grant or denial of a preliminary injunction is not a judgment on the merits. Therefore, the doctrines of res judicata and collateral estoppel were inapplicable. As to defendants' motion to dismiss plaintiffs' complaint under Fed.R.Civ.P. 12(b)(6), the Court (a) granted the motion with respect to plaintiffs' Section 1983 claim against the individual defendants in their official capacities; (b) granted the motion with respect to plaintiffs' Section 1983 claim against Omer and Hudzema based on insufficient allegations regarding their direction, actual knowledge and acquiescence in the challenged actions;*fn3 (c) granted the motion without prejudice with respect to plaintiffs' RICO claim; and (d) granted the motion with respect to plaintiffs' state law claims. Thus, the only remaining claim in this case is plaintiffs' Section 1983 claim against the Borough and against Berkoben, DePuy, Lahr, McKown, Nagy, Sakmar, Barone, Nowalk, Book, Wotus, Ozemo, Duffy, Leventry and Moore in their individual capacities.*fn4 On July 14, 2003 (after the complaint in this action was filed but prior to the disposition of defendants' motion to dismiss), plaintiffs filed an action against all of the defendants in this case in the Court of Common Pleas of Allegheny County, Pennsylvania, and the action was assigned docket number GD 03-12928 ("Case No. GD 03-12928"). In addition to the factual allegations set forth in the complaint filed in this case (regarding the declaration that Osiris was a non-responsible bidder for purposes of future Borough construction projects and the failure of Osiris to be awarded the Oakridge Drive Project), plaintiffs' complaint in Case No. GD 03-12928 included factual allegations regarding (a) three other Borough construction projects which were not awarded to Osiris as a result of the August 1, 2001 declaration that Osiris was a non-responsible bidder,*fn5 and (b) a complaint filed by Franco Moscatiello against the Borough and A. Merante Contracting, Inc. in the Court of Common Pleas of Allegheny County, Pennsylvania, which was assigned docket number GD 03-005416 ("Case No. GD 03-005416").*fn6 (Dfs' Appendix, Exh. A). Plaintiffs' complaint against defendants in Case No. GD 03-12928 asserted claims of interference with contractual relations (Count I), interference with prospective economic advantage (Count II) and defamation (Count III).

  On August 18, 2003, defendants filed preliminary objections to plaintiffs' complaint in Case No. GD 03-12928, and, on October 1, 2003, the Honorable W. Terrence O'Brien entered an order which (a) dismissed, with prejudice, the claims asserted by plaintiffs against the Borough, Leventry, Moore, Duffy, Omer, Hudzema and Nowalk;*fn7 (b) directed plaintiffs to file an amended complaint setting forth with more specificity the conduct of each remaining defendant; and (c) directed plaintiffs to combine their claims for ...


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