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STATE OF MICHIGAN
COURT OF APPEALS


JO-DAN, LTD. and JOE E. MCLEMORE, Plaintiffs-Appellees/Cross-Appellants, v DETROIT BOARD OF EDUCATION, Defendant-Appellant/Cross-Appellee.

UNPUBLISHED July 14, 2000

No. 201406 Wayne Circuit Court LC No. 95-509281-NZ

Before: Bandstra, C.J., and Whitbeck and Talbot, JJ. PER CURIAM. The Detroit Board of Education ("Board") appeals as of right from a jury verdict and a single $7,600,000 award in favor of plaintiffs Joe McLemore and Jo-Dan, Ltd. We affirm. I. Factual Background This case revolves around the Board's conduct in 1985 and 1986 while investigating Jo-Dan's eligibility for a contract to provide Detroit Public Schools with milk, juice, and ice cream under a program that favored Detroit-based, minority-owned businesses employing minorities or Detroit Public School students and graduates. The investigation commenced only after the Board President, Harold Murdock, accused Jo-Dan and McLemore of being a "black front" for Borden Dairy and, therefore, ineligible to receive a contract with the school district. At the time Murdock made this accusation, and while Murdock was president of the Board, Jo-Dan's chief competitor, Zuhair "Steve" Asmar, owner of Metro Institutional Food Service, was allegedly paying bribes to Murdock. This alleged bribery scheme did not form the basis for this suit; rather, it was based on the Board's subsequent conduct toward McLemore and Jo-Dan, including an allegedly harassing/sham investigation and hearing. In April 1984, McLemore contacted the Food Services Department at the Detroit Public School System requesting the opportunity to bid on food contracts. Even though McLemore qualified under the preferences for minority-owned businesses, he ultimately secured a contract for the 1984 1985 school year worth approximately $800,000 to provide milk and juice because he was the low bidder even without the preferences. According to Jacqueline Tomlin, Gloria Oana, Howard Briggs, and Judith Penney, staff in the Food Services Department, McLemore and his unincorporated business -1

provided exemplary services under this contract. To Tomlin, Oana, and Briggs, this was quite a contrast to their experience with other vendors. With the 1984-1985 school year an apparent success, McLemore incorporated Jo-Dan in March 1985 and the corporation submitted bids to deliver milk (and other dairy products) and juice for the 1985-1986 school year. With most other bidding businesses eliminated for various reasons, C.F. Burger was the lowest bidder with Jo-Dan in second place in terms of the price it would charge to provide the Detroit Public School System for milk and juice. The Food Services Department recommended that Jo-Dan receive a contract worth more than $2,000,000, or about fifty-seven percent of the milk and juice the Detroit Public School System planned to purchase for the school year, because Jo-Dan had "performed very well" in the previous year. The Food Services Department approved C.F. Burger Co. for the remaining forty-three percent of the contract, worth approximately $1,500,000. These recommendations, which the Food Services Department made in July 1985, then went to the EEO for the next step in bidding process. According to the minutes of the EEO's Procurement and Purchasing Committee meeting held on August 19, 1985 to recommend which business should receive contracts for the 1985-1986 school year, EEO staff verified that Jo-Dan was a minority-owned business and qualified for "preferred" status. Rather than simply proceeding to the merits of the bid, Board President Murdock asked Ferd Hall, director of the EEO, to clarify Jo-Dan's ownership status. According to the minutes, Hall reportedly told the individuals at the meeting:

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Michigan Law