Alamance County Board of Education v. Bobby Murray Chevrolet, Inc.

The Alamance County Board of Education and other North Carolina school boards (school boards) (plaintiffs) awarded a contract to Bobby Murray Chevrolet (Bobby Murray) (defendant) to school bus chassis. Bobby Murray is a General Motors (GM) franchisee, and the chassis were to be manufactured by GM Truck. The contract, however, described the chassis as “Chevrolet” brand. The contract established July 31, 1990 as the initial deadline for orders. The school boards, through the North Carolina Department of Administration’s Division of Purchase and Contract (the Division) complied with this deadline. On July 26, 1990, Bobby Murray was informed that the Environmental Protection Agency (EPA) was issuing new regulations prohibiting production of the type of chassis agreed to be produced by Bobby Murray in the school board contract. From mid-July to November 30, 1990, Bobby Murray also received several messages from GM Truck indicating that production of chassis could be delayed or suspended. When Bobby Murray contacted GM in mid-December 1990, it learned that all production of chassis had ceased until February or March 1991 due to unavailability of materials. At this point, production of the chassis as described in the school boards contract would be illegal due to the recent EPA regulations. Bobby Murray notified the Division on December 11, 1990 that the chassis could not be supplied. The Division then procured the chassis from an additional source and brought suit against Bobby Murray for the difference in bid prices versus actual amount spent, or $150,152.94. Bobby Murray claimed that its failure to deliver the chassis was excused by GM Truck’s breach of contract to manufacture chassis. The trial court granted the school boards’ motions for summary judgment and awarded damages of $150,152.94 plus interest. Bobby Murray appealed.