New York State Court of Claims

New York State Court of Claims

HIGBIE v. THE STATE OF NEW YORK , #2004-030-021, Claim No. 106318


Case Information

HIGBIE COLLISION, INC. The caption has been amended to reflect the only proper defendant.
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The caption has been amended to reflect the only proper defendant.
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Signature date:
June 30, 2004
White Plains

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See also (multicaptioned case)


Higbie Collision, Inc., the Claimant herein, alleges in Claim Number 106318 that Defendant's agent, the New York State Department of Transportation, breached its towing services contract with Claimant causing Claimant to suffer financial loss. Trial of the matter was held on March 31, 2004 and April 1, 2004. This decision relates solely to the issue of liability.
Higbie Collision, Inc. (hereafter Higbie) is a New York corporation engaged in the business of towing and automotive collision repair since 1956. Charles Gandolfo, the owner of the company, testified that throughout the relevant period Higbie has maintained its principal place of business on Higbie Lane in West Islip, New York. It employs between 30 to 40 people, maintains 8 to 10 tow truck vehicles and has a facility of approximately 10,000 square feet.

From 1973 to 1997, Higbie had been the successful bidder for a contract to provide towing services to the New York State Department of Transportation (hereafter DOT) along a designated parkway area, along the southwest sector of Suffolk County. In the Invitation For Bids package prepared by the DOT's main office in Albany, the area is referred to as both Sector five parkways [Exhibit 1, pg 21] and Sector (f) [Exhibit 1, pg 27] described as Southern State Parkway, from Route 110 east to Heckscher State Park and north on Sagtikos Parkway to turnaround at south end of Sagtikos Parkway. Robert Moses Causeway from Southern State Parkway south to Ocean Parkway, including the loop, west on Ocean Parkway to Nassau-Suffolk line. All ramps at the junction of Southern State Parkway and Sagtikos Parkway are included. In addition, Sector (f) also includes all of Heckscher, Captree, Robert Moses and Gilgo State Parks. Towing at the State Parks will be under the direction of the State Park Police.

The successful bidder for this work would pay a fee to the State of New York entitling it to serve as the exclusive towing service along the designated area of the parkway. The Notice to Bidders, Information and Instruction to Bidders, attachments including a Policy Statement, standard clauses for all New York State contracts, provisions of the regulations governing highway and towing contracts, and additional requirements superceding rules and regulations contained in 17 NYCRR Part 190 contained in Exhibit 1 are documents that are incorporated into the final agreement executed by the State of New York representative and the representative of the successful towing company. [See Exhibit 2].

In December, 1996, Claimant submitted a bid for the Parkway towing contract that would commence in 1997. Around the Clock Towing, rather than Claimant, was the successful bidder for the Parkway towing contract for 1997. The term ran in renewable yearly increments up to three (3) years commencing April 1, 1997 and ending in March 2000. When Higbie submitted a bid for the Parkway towing contract commencing in April 2000, Claimant was the successful bidder.

Several bridges run along the Robert Moses Causeway between Captree Island and the mainland in West Islip. In and about 1996 the State began a rehabilitation project to reconstruct the Robert Moses Bridge system, over a period of years. A separate bid proposal for the reconstruction work was prepared and sent out by the main office of the DOT in Albany. This bid proposal contained "special specifications" dated July 22, 1996 concerning the provision of tow truck services by the successful bid contractor. [See Exhibit 5].

In December 1996 a heavy construction company, Weeks Marine, was awarded the contract for the rehabilitation of the southbound Robert Moses Bridge. This bridge lies in the same sector as that covered by the Parkway contract awarded to Around the Clock Towing in 1997, and Higbie Collision in 2000. Several lanes of travel were closed, with only one lane of travel in each direction remaining, divided by a concrete barrier, creating a dangerous situation for local municipalities in an emergency. As noted, part of the bridge construction project bid required provision of tow truck services by the contractor to be ". . . furnished by a company authorized to provide such services on the Robert Moses Causeway or by a company that meets the approval of the New York State Department of Transportation." [Exhibit 5]. The subcontracted work allowed for direct payment to the successful bidder by the entity doing the bridge construction - Weeks Marine. Claimant was aware of the bridge construction project and, indeed, sought to offer towing services as a subcontractor to Weeks Marine, submitting a proposed quote for services by letter dated January 30, 1997. [Exhibit 6]. There had been an earlier, verbal discussion of the topic between Weeks Marine and Higbie, including discussion of some figures as early as November 1, 1996 according to a memorandum dated January 29, 1997 to Higbie from Weeks Marine asking for a written quote. [Exhibit A]. Although the time frame is not completely clear, shortly thereafter Weeks Marine chose Around the Clock Towing as its towing subcontractor for the bridge.

When that choice was made by the contractor, Higbie understood that to mean that because Around the Clock Towing was providing the Parkway towing services, it was selected to provide the bridge towing services. Certainly, it would be logical for Weeks Marine to choose the service that had been granted the Parkway bid, since coordination of which trucks would be allowed where would be less cumbersome. As a practical matter, if the tow trucks allowed on the bridge were from the same company as the tow trucks allowed on the Parkway, then, for example, there would be no necessity for the bridge trucks to turn over their cargo once off the bridge. But practicality is not always the measure for when contractual rights are granted.

As noted by Susan Fischer - who appears to have been the individual in charge of coordinating or overseeing towing services along the Parkway for the local DOT - in a memorandum dated March 10, 2000 directed to Barry Galowin, the Group Director for Highway Maintenance for the DOT, ". . . Our contract[1] gives sole rights for towing to our franchise tow company, except when the Department deems it necessary - for public safety - to allow someone else on the parkway to do the towing. The construction contractor can sub this out to whoever (sic) they want (as long as it meets with constructions approval) BUT: . . . the contractor must enter and exit by way of the Parkway exit closes to the construction site. The construction tow company cannot travel on the Parkway . . . all towed vehicles, as per construction specs, were to be towed to a staging area . . . If the area is on the parkway, the Parkway tow company must be called to tow the vehicle off the Parkway . . . If the area is off the Parkway the motorist (sic) can call anyone they want." [Exhibit 4].

In that same memorandum Ms. Fischer notes that she had "contacted construction" when she learned of the bridge project, to advise them of the Parkway towing contracts, and to work out the protocol to be used as described above to avoid conflicts. In her testimony, she clarified that when she spoke of "contacting construction", she is talking about notifying the DOT engineer-in-charge of the project of the towing companies.

It also appears, however, that Ms. Fischer notified Weeks Marine of what company would be providing Parkway services both in 1997 and in 2000, according to the March 10, 2000 memorandum, saying: ". . . Well, we are at the end of another Parkway Towing Contract. Only this time Around the Clock has lost the contract to Higbie. Charlie Gandolfo, from Higbie, called me to see if I could ‘get him the bridge'. I reminded him of what happened last time around and told him I would do the same thing that I did then . . . advise construction of the change in contractors. Anything more I cannot do. This wasn't enough for Charlie, so Wednesday he called Gary Simpkins (MO Procurement) Saying he would like some support from the Department in getting Weeks Marine to hire him . . . " [Exhibit 4].

In a memorandum dated April 20, 1999, Weeks Marine asked for a quote from Higbie for the bridge towing work. [Exhibit B]. Sometime thereafter Weeks Marine again chose Around the Clock Towing, rather than Higbie, as its subcontractor for towing services on the bridge, despite Higbie's position as the successful bidder on the Parkway towing service contract commencing in April, 2000. Ms. Fischer wrote a memorandum to the New York State Police dated June 2, 2000 "to clarify the respective responsibilities"[2] of the towing service providers on the Parkway and on the bridge.

Michael Irslinger, the owner of Around the Clock Towing, and Charles Gandolfo both testified that when making their bid for the Parkway towing contract they incorporated the revenues they anticipated from also obtaining the bridge towing subcontract in calculating how high the number should be that they would offer to pay for the franchise. Mr. Gandolfo indicated that he bid a higher number for the 2000 Parkway towing contract based upon his anticipation that he would also secure the bridge contract.

The bridge under construction was closed from September 8, 1997 until June 30, 2000. Mr. Gandolfo indicated that he had never had a contract terminated for regulatory violations or "in the public interest" as described in the regulations, or received pro rata reimbursement based upon such termination. [See generally 17 NYCRR §190.7].

Other than Mr. Gandolfo, Ms. Fischer and Mr. Irslinger, no other witnesses testified on Claimant's direct case. The State did not call any witnesses.
General Municipal Law §103 governs the letting of public contracts. The public policy interest served by the statute is ". . . to assure the prudent and economical use of public moneys for the benefit of all inhabitants of the state and to facilitate the acquisition of facilities and commodities of maximum quality at the lowest possible cost." General Municipal Law §100-a. Services are procured for the public good, not to enrich the successful bidder. See Matter of Statewide Roofing v Eastern Suffolk Bd. of Coop. Educ. Servs., First Supervisory District of Suffolk County, 173 Misc 2d 514, 516 (Suffolk Sup Ct 1997). Statutes requiring such competitive bidding are to be construed and administered with sole reference to the public interest. Matter of Construction Contrs. Assn. of Hudson Val. v Board of Trustees, Orange County Community Coll., 192 AD2d 265 (2d Dept 1993). Generally, if a party with standing wants to challenge an administrative determination, a special proceeding, rather than a claim alleging damages, would be the route to seek redress for a perceived wrong. See generally Civil Practice Law and Rules Article 78. A contractor may simply not sue for lost profits, or for violations of the bid process, based upon these discretionary governmental functions. See Matter of Carroll-Ratner Corp. v City Manager of New Rochelle, 54 Misc 2d 625, affd 36 AD2d 795 (2d Dept 1971).

To look only at the four corners of the documents comprising the Parkway towing contract between Claimant and Defendant would be to examine their agreement in a vacuum. Certainly those documents do not by their terms specifically exclude the Robert Moses Bridge area from the portion of the parkway Claimant successfully bid upon for the towing contract commencing April 1, 2000. By somewhat strained reference, and in the argument presented by Defendant, authority for summary exclusion of the bridge portion from the total parkway area can be inferred from the public safety and emergency provisions of the regulations that are incorporated in the Parkway contract and governing Parkway towing in Nassau and Suffolk Counties; [See Exhibit 1; 17 NYCRR §§190.7[3] and 190.8[4] ]; and the Court could interpret the contract in this fashion. Indeed, in addition to drafting what are essentially nonnegotiable contracts for highway towing and construction projects, the DOT is broadly empowered by statute and by its regulations to take whatever steps it deems necessary in the public interest and in reaction to a given emergency.

If Claimant were an inexperienced company, the Court might alternatively find that the inferential leaps required to interpret the contract Claimant was a party to as superceded, somehow, by these public interest concerns, and the additional bridge contract as too extreme. The Court does not have to reach that far, however, because Claimant, quite simply, is not an inexperienced company ignorant of the overlapping contracts. Claimant was clearly aware of the bridge construction project and the separate contractual obligations involved in that project. The fact that Claimant's owner assumed that winning the bid for the parkway towing contract would "get him the bridge," is hardly chargeable to the State, when it is the bridge construction company that determines which qualified towing company performs the towing services the contractor is required to provide to fulfill its contract obligations to the State.

The State is protected by immunity for uniquely governmental functions or actions or decisions requiring the exercise of discretion. Negligent performance of a governmental function, such as the protection and safety of the public, cannot result in liability without the demonstration of a "special relationship" between the injured party and the State. See generally Sebastian v State of New York, 93 NY2d 790, 793 (1999); D'Avolio v Prado, 277 AD2d 877, 878-879 (4th Dept 2000). The Court does not find that any "special relationship" was created by State action or inaction, or by Ms. Fischer's gratuitous involvement in conveying public information to Weeks Marine.

Finally, the evidence does not support Claimant's broader contention that the State, presumably through Ms. Fischer, had established a course of dealing by "intervening" with the general bridge contractor in the selection of the bridge tower in 1996, creating a justifiable reliance on the part of Higbie that success as the Parkway tower automatically entitled the Parkway tower to the bridge towing as well. It was not justifiable reliance - but rather wishful thinking - on the part of Higbie when it made its Parkway bid for the 2000 Parkway towing contract, based upon the evidence presented herein, that it would additionally acquire the towing subcontract controlled by Weeks Marine based upon the prior situation in 1996. Additionally, Higbie cannot claim, based on these facts, that it was unaware that there was a separate, albeit overlapping, contract applicable to the bridge towing. It appeared to be negotiating with the State and Weeks Marine simultaneously both in 1996 and in 1999, yet is heard now to complain that the bid contract has an incorrect description. At best, what this might present is a contract that may be voidable for indefiniteness, not breach.

In this case, Claimant has failed to meet its burden of establishing that the Defendant breached its towing contract by a preponderance of the evidence, requiring dismissal of the claim.

All trial motions not otherwise disposed of are hereby denied and Claim Number 106318 is hereby dismissed.

Let judgment be entered accordingly.

June 30, 2004
White Plains, New York

Judge of the Court of Claims

[1] The Parkway towing contract.
[2] All quotations are to trial notes or audiotapes unless otherwise indicated.
[3] 190.7(b) Termination in the public interest. The Department of Transportation is empowered to terminate any contract at any time without a specific finding of regulatory violation whenever it believes that the public interest or safety would better be served by such termination. However, in such case, the department shall refund to contractor, on a pro rata basis, that portion of the fee paid by the contractor for the period of termination.
[4] 190.8 Emergency situations. The Department of Transportation or police authority shall, whenever public safety requires, allow other towing services on the parkways. In addition, the department can require any contractor to provide service on a segment immediately adjacent to the segment authorized in his contract, on a temporary basis, when public safety requires. Collisions resulting in the disabling of numerous vehicles, floods or other catastrophes, and for other good cause, shall be sufficient grounds to allow towing by operators without contracts during such periods.