W.G. Yates & Sons Constr. Co. v. City of Waveland
| Docket Number: | 2010-CA-01799-COA Linked Case(s): 2010-CA-01799-COA ; 2010-CT-01799-SCT |
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| Court of Appeals: |
Opinion Link Opinion Date: 07-17-2012 Opinion Author: Griffis, P.J. Holding: Reversed and Remanded |
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| Additional Case Information: |
Topic: Sewer project - Competitive sealed bids - Section 31-7-3 - Resident contractor - Section 31-3-21(3) - Noncompliance with instructions - Compensatory damages - Hearing Judge(s) Concurring: Roberts, Carlton, Russell and Fair, JJ. Non Participating Judge(s): Ishee, J. Dissenting Author : Irving, P.J. Concur in Part, Concur in Result 1: Lee, C.J., Barnes and Maxwell, JJ., Concur in Part and in the Result Without Separate Written Opinion Procedural History: Admin or Agency Judgment Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 09-27-2010 Appealed from: Hancock County Circuit Court Judge: Lawrence P. Bourgeois, Jr. Disposition: AFFIRMED CITY OF WAVELAND’S DECISION TO AWARD SEWER PROJECT TO REYNOLDS, INC. Case Number: 09-0355 |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | W.G. Yates & Sons Construction Company |
RONALD G. PERESICH
GINA BARDWELL TOMPKINS
LAUREN REEDER MCCRORY |
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| Appellee: | City of Waveland, Mississippi | GARY MCKAY YARBOROUGH JR. ALFRED ZACHARIAH BUTTERWORTH |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Sewer project - Competitive sealed bids - Section 31-7-3 - Resident contractor - Section 31-3-21(3) - Noncompliance with instructions - Compensatory damages - Hearing |
| Summary of the Facts: | The City of Waveland advertised for competitive sealed bids under section 31-7-3 for a sewer project. Seven contractors submitted sealed bids for the project. On May 14, 2009, Waveland opened the sealed bids. The revised bid of Reynolds, Inc., an Indiana corporation, was $9,356,601, and the revised bid of W.G. Yates and Sons Construction Company was $9,471,859. L. Bruce Newton, the project engineer for Waveland’s sewer project, sent a letter to John T. Longo, Mayor of Waveland, and recommended the sewer project be awarded to Reynolds as the lowest and best base bid. At a Waveland Board of Aldermen meeting, representatives from Yates were in attendance. When the sewer project item was called on the agenda, William R. Purdy, an attorney for Yates, sought to be recognized on behalf of Yates. Purdy’s request to speak before the Board was denied. The Board, without discussion, voted to award the sewer project to Reynolds. After the Board completed its agenda, Purdy was permitted to speak off the record during the public comments portion of the Board meeting. Yates appealed the Board’s decision to circuit court which affirmed the decision of Waveland to award the sewer project to Reynolds. Yates appeals. |
| Summary of Opinion Analysis: | Issue 1: Resident contractor Yates argues the circuit court erred in finding Reynolds was a resident contractor under section 31-3-21(3). Under section 31-3-21(3), a non-resident contractor shall attach a copy of its state’s current law related to the treatment of non-resident contractors in that state. The purpose of this statute is to ensure Mississippi contractors will be afforded the same treatment when bidding on a project in the non-resident bidder’s state. The statute further provides that where a non-resident contractor fails to attach its state’s current law related to the state’s treatment of non-resident contractors, such bid shall be rejected. The language is mandatory that a non-resident contractor shall attach a copy of its state’s preference statute. According to Waveland, Reynolds is a wholly owned affiliate of Layne Christensen and Layne Christensen is a resident contractor under section 31-3-21(3). There is no dispute that, standing on its own, Reynolds is not a resident contractor under section 31-3-21(3). The only evidence in the record concerning Layne Christensen’s business operations in Mississippi is the affidavit of Steven F. Crooke, Senior Vice President and General Counsel for Layne Christensen and Reynolds. The circuit court found that “Layne Christensen has maintained an office in the State of Mississippi, has been qualified to do business in Mississippi[,] and has been doing business in Mississippi since 1976. As such, the Court cannot find that the City of Waveland’s decision to award the sewer project to Reynolds as a resident contractor was ‘arbitrary, capricious, discriminatory or illegal or without substantial evidential basis.’” However, the circuit court’s finding regarding Layne Christensen is not supported by substantial evidence in the record. According to the Crooke affidavit: Layne Christensen has conducted business in Mississippi since 1976, and Layne Christensen continues to operate its business in Jackson and has continuously done so since 1976. The Crooke affidavit does not contain specific evidence sufficient to show Layne Christensen has maintained a full-time office in Mississippi for two-years before January 1, 1986, as required by section 31-3-21(3). Thus, the Board’s decision to award the sewer project to Reynolds was arbitrary and capricious and not supported by substantial evidence. Issue 2: Noncompliance with instructions Yates argues that Waveland should have rejected Reynolds’s bid for non-compliance with instructions to bidders set out in Waveland’s bidding documents. This is due to the fact that Reynolds did not use bid addenda in submitting its bid and bid on the wrong size sewer pipe. A governing authority may waive a bid irregularity if the intended correction is evident on the face of the bid document. Waivers of bid irregularities are also permissible where mandatory statutory provisions are not violated; the irregularity does not in any way destroy the competitive character of the bid; the irregularity has no effect as to the amount of the bid; and the irregularity does not give one bidder an advantage or benefit over the other bidders. Waveland concedes that Reynolds submitted a bid with the wrong pipe size. Waveland asserts, however, that the change was an immaterial typographical change that did not require Waveland to reject Reynolds’s bid. Instead of making findings through its minutes on the waiver of bid irregularities, Waveland’s project engineer corrected Reynolds’s bid in the certified bid tabulation submitted to Waveland. However, this decision should have been made by Waveland’s governing authority, through its minutes, so that the decision to waive bid irregularities for a public contract was clearly detailed and open to the public. Thus, the circuit court’s decision that Waveland was not required to reject Reynolds’s bid was arbitrary and capricious and not supported by substantial evidence. Issue 3: Hearing Yates seeks remand to the circuit court for a hearing on compensatory damages. Compensatory damages under the law of contracts are the proper measure of damages for an aggrieved bidder which was entitled to the award of the contract. Thus, Yates is entitled to a hearing on damages. |
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