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City of Durant v. Laws Construction Co.

August 20, 1998

CITY OF DURANT
v.
LAWS CONSTRUCTION COMPANY, INC.



EN Banc.

The opinion of the court was delivered by: Sullivan, Presiding Justice, For The Court:

ON MOTION FOR REHEARING

DATE OF JUDGMENT: 06/27/94

TRIAL JUDGE: HON. EUGENE M. BOGEN

COURT FROM WHICH APPEALED: HOLMES COUNTY CIRCUIT COURT

NATURE OF THE CASE: CIVIL - OTHER

MOTION FOR REHEARING FILED: 4/17/97

¶1. Motion for Rehearing granted. The original opinion in this case is withdrawn and these opinions are substituted therefor.

¶2. The City of Durant accepted a construction bid from King Metal Buildings, Inc., (herein after "King") which failed to include the contractor's Certificate of Responsibility number on the exterior of the envelope as required by Miss. Code Ann. § 31-3-21. King's bid was the lowest bid. Laws Construction Co. (herein after "Laws") had the second lowest bid. Laws objected to the bid procedure. The City attorney advised the City aldermen and the mayor that previous Mississippi Attorney General opinions stated that a contractor's bid which failed to include the certificate of responsibility number on the exterior of the envelope, but was included within the bid, was valid. The City awarded the bid to King. Laws appealed the City's decision pursuant to Miss. Code Ann. § 11-51-75.

¶3. The circuit court ruled that Miss. Code Ann. § 31-3-21 was clear and unambiguous. The circuit court ruled that § 31-3-21 required a bid to include the certificate of responsibility number on the exterior of the bid envelope. If a bid fails to follow the procedures provided in § 31-3-21, then the public agency is forbidden from opening and accepting the bid. Thus, the circuit court ruled the City violated § 31-3-21 by opening and considering King's bid. If the City had not considered King's bid, the City would have accepted Laws' bid, which was the next lowest. The circuit court determined that either Laws would be entitled to the contract or the City could have rejected all bids.

¶4. Pursuant to Miss. Code Ann. § 11-51-75, the circuit court is required to render a judgment which the municipal ought to have rendered. Thus, the circuit court would have ordered the City to not consider King's bid, and either accept the next lowest bid or reject all bids and rebid the project. However, rather than wait for a decision of the appeal, the City proceeded with the illegal award of the contract. At the initial hearing, King was substantially through with the project. Since the project was precluded from being awarded to Laws due to its substantial completion, the circuit court determined that Laws was entitled to recover damages. A hearing was conducted to determine damages. The circuit court awarded Laws a judgment against the City for $168,495.00 in compensatory damages plus $15,978.95 in costs and attorneys' fees. The City appealed to this Court.

I.

¶5. On September 2, 1993, the City of Durant, pursuant to the requirements of law, advertised and published for bidders to construct a 100,000 square foot building suitable for industrial purposes (herein after "project"), in accordance with plans and specifications developed by the City. All bids received pursuant to the advertisement were opened on October 8, 1993 at 2:00 p.m. After the deadline, the project architect, Mr. Clingan, opened the sealed bids. As he picked up each bid envelope, he read the name of the bidder and stated whether or not there was a certificate of responsibility number noted on the outside of the bid envelope, pursuant to Miss. Code Ann. § 31-3-21. Clingan did not read aloud the certificate of responsibility number itself.

¶6. King's sealed bid did not have a certificate of responsibility number noted on the outside of the envelope. Clingan announced that King's bid envelope did not have the certificate of responsibility number noted on the outside of the envelope. However, Clingan announced that he would open the envelope to see if the certificate of responsibility number was located on the bid form in the envelope since he had knowledge that King did have a certificate of responsibility number. Clingan opened the bid and announced that the certificate of responsibility number was identified in the bid. As with all the other bids, the King bid was announced and the amount was included on the bid tabulation sheet. All other bids, including Laws', included the contractor's certificate of responsibility number on the exterior of the envelope.

¶7. The bids received by the City were as follows: King Metal Buildings, Inc. $1,258,900.00

Laws Construction Co., Inc. $1,296,000.00

Harold West Contractors, Inc. $1,426,300.00

Ralph McKnight & Son Construction, Inc. $1,396,800.00

Fountain Construction Co., Inc. $1,432,000.00

Evan Johnson & Sons Construction, Inc. $1,638,990.00

Clingan announced that King was the lowest bidder. The second lowest bidder was Laws. On the evening of October 8, 1993, Laws sent a letter to the mayor of the City, the Hon. Ben § Killebrew. The letter protested the opening of King's bid since the bid violated 31-3-21. The letter also stated that Laws' bid was the lawful low bid.

¶8. On October 12, 1993, the aldermen and the mayor for the City convened. At the meeting, attorney for the City, James H. Powell, III, explained the factual background concerning the bids of the project. Powell stated that he had contacted the Mississippi Attorney General's office inquiring whether it had issued an opinion similar to this particular situation. Powell stated that the Attorney General's office sent him a copy of a letter dated September 4, 1991 from the Attorney General's office to Everett T. Sanders , concerning a bid protest similar to Laws' protest. The Attorney General's office also sent the opinions Lovell and Persons , dated June 11, 1979 and April 24, 1987, respectively. These opinions advised that under the circumstances, the City could legally award the bid to King. Richard C. Bradley, III, attorney for Laws, addressed the board of aldermen and stated that the plain language of § 31-3-21 required a bid to have the certificate of responsibility number on the exterior of the envelope in order for the City to legally open and accept a bid. Todd Bruce, a Field Representative for the State Board of Contractors for seven years, also addressed the aldermen. Bruce stated that a bid may not be opened without a certificate of responsibility number located on the exterior of the envelope. Bruce stated that he has attended many bid openings and that he always advised the public body not to open a bid envelope which did ...


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