Universal Computer Systems, Inc. v. Medical Services Association of Pennsylvania

Medical Services Association of Pennsylvania (Blue Shield) (defendant) sought bids for the lease of a computer. Blue Shield employee, Joel Gebert, acted as a liaison between all of the prospective bidders and Blue Shield. The deadline for the submission of bids was August 18, 1975. Universal Computer System (Universal) (plaintiff) contacted Gebert and asked if he would pick up Universal’s bid from the airport on the day that bids were due. Gebert said yes and then on August 18 when Universal’s bid arrived at the airport, Gebert informed Universal that he would no longer be able to pick it up. Universal subsequently lost the contract with Blue Shield and sued for breach based on a theory of promissory estoppel. The jury found for Universal and awarded damages of $13,000. Blue Shield filed a motion for judgment non obstante veredicto (n.o.v.) and a motion for a new trial. The court granted Blue Shield’s motion for judgment n.o.v. stating that the jury could not have found that Universal reasonably relied on Gebert’s authority to make any promises because the bidding invitation was subject to federal regulations. However, the trial court denied the motion for a new trial stating that the jury’s damage award was reasonable. Universal appealed the court’s grant of the motion for judgment n.o.v. and Blue Shield cross-appealed the court’s denial of their motion for a new trial.