Byrne & Jones Enters., Inc. v. Monroe City R-1 Sch. Dist.

• Decision Date: 26 July 2016
• Docket Number: No. SC94680,SC94680
• Citation: 493 S.W.3d 847
• Court: Missouri Supreme Court
• Parties: Byrne & Jones Enterprises, Inc. d/b/a Byrne and Jones Construction, Appellant, v. Monroe City R-1 School District, Respondent.

493 S.W.3d 847

Byrne & Jones Enterprises, Inc. d/b/a Byrne and Jones Construction, Appellant,

v.Monroe City R-1 School District, Respondent.

No. SC94680

Supreme Court of Missouri, en banc .

Opinion issued July 26, 2016

Byrne & Jones was represented by W. Dudley McCarter and Andrew Kriegshauser of Behr, McCarter & Potter PC in St. Louis, (314) 862-3800.

School District was represented by Ira M. Potter of Affinity Law Group LLC in St. Louis, (314) 872-3333.

PATRICIA BRECKENRIDGE

, CHIEF JUSTICE

Byrne & Jones Enterprises, Inc. d/b/a Byrne and Jones Construction filed an action against Monroe City R-1 School District and members of the Board of Education of Monroe City R-1 School District (collectively, the school district) alleging that it was denied a fair and equal opportunity to compete in the bidding process for a public works contract to build an athletics stadium because of collusion and favoritism between the school district and another bidder, ATG Sports, Inc. The trial court dismissed Byrne & Jones' petition after finding that Byrne & Jones, as an unsuccessful bidder, lacked standing to challenge the award of the contract because it did not bring the action as a taxpayer or in the interest of the public. Byrne & Jones appealed, asserting that it has standing to challenge the school district's award of the contract because, as a participant in the competitive bidding process, it has a right to a fair and equal opportunity to compete for public contracts.

The trial court erred in dismissing Byrne & Jones' petition because competitive bidding procedures for public contracts ensure that all who wish to bid have a fair and equal opportunity to compete in a field without favoritism or collusion. Unsuccessful bidders, therefore, have an interest in having a fair and equal opportunity to compete in the bidding process. Accordingly, because Byrne & Jones alleged that it was denied a fair and equal opportunity to compete in the bidding process for the athletics stadium, Byrne & Jones had standing to challenge the award of the contract to ATG Sports.

Nevertheless, the trial court did not err in dismissing Byrne & Jones' petition because Byrne & Jones is not entitled to the relief requested in its petition. Byrne & Jones' request for injunctive relief is moot in that, at the time of oral argument, the school district had let the contract to ATG Sports, which completed the athletics stadium that is now in use. Furthermore, Byrne & Jones is not entitled to its bid preparation costs because section 177.086.2¹ does not create a cause of action for, or authorize the recovery of, such damages. Accordingly, this Court affirms the trial court's judgment dismissing Byrne & Jones' petition.

Factual and Procedural Background²

In 2013, the school district began planning to build a new athletics stadium at Monroe City High School. The school district subsequently contacted ATG Sports about the proposed stadium and requested ATG Sports' assistance in designing the project. Throughout 2013, the school district emailed and had meetings with ATG Sports about the stadium project. Over the course of its communications with the school district, ATG Sports submitted unsealed plans and drawings of the proposed stadium to the school district and drafted the request for proposals that the school district later used to solicit bids for the project.

In the request for proposals, the school district sought base bids on the project as well as bids on 13 possible alternates or enhancements to the project. Byrne & Jones and ATG Sports were the only bidders on the project.

Byrne & Jones submitted the lowest base bid as well as the lowest total bid when factoring in all 13 of the proposed enhancements to the project. When the school district selected only seven of the 13 alternates, however, ATG Sports' total bid was the lowest. In January 2014, the school district awarded the contract to ATG Sports.

On March 25, 2014, Byrne & Jones filed a declaratory judgment action against the school district. In count I of its petition,³ Byrne & Jones alleged that the bidding procedures utilized by the school district did not allow all bidders a fair opportunity to compete on equal terms with ATG Sports. Byrne & Jones further alleged that the school district violated the competitive bidding process prescribed by law when it colluded with and acted with favoritism toward ATG Sports. In its prayer for relief, Byrne & Jones sought to enjoin the school district from entering into any contract with ATG Sports and requested an award of its costs, attorney fees, and bid preparation costs in connection with the project.

The school district, subsequently, filed a motion to dismiss the petition. In its motion, the school district claimed that, as an unsuccessful bidder, Byrne & Jones lacked standing to challenge the award of the contract to another bidder because Byrne & Jones had no vested or protectable interest in the award of the contract. Byrne & Jones filed suggestions in opposition arguing that an unsuccessful bidder has standing to challenge a contract if the bidding procedures did not afford all bidders a fair and equal opportunity to compete.

On May 22, 2014, the trial court entered its judgment sustaining the school district's motion to dismiss. The trial court determined that a low bidder has no standing under section 177.086, the school district's competitive bidding procedures, to challenge the award of a contract to another bidder because the statute is clearly intended to safeguard the interest of the public, not the individual bidders. Therefore, the trial court concluded that Byrne & Jones lacked standing in that it was bringing the action as an unsuccessful bidder, not as a representative of Monroe City R-1 School District taxpayers.

Byrne & Jones appeals. After an opinion by the court of appeals, the case was transferred to this Court. Mo. Const. art. V, sec. 10

.

Standard of Review

This Court reviews the grant of a motion to dismiss de novo . Ambers – Phillips v. SSM DePaul Health Ctr. , 459 S.W.3d 901, 905 (Mo. banc 2015)

. “In reviewing the dismissal of a petition, the sole issue to be decided is whether, after allowing the pleading its broadest intendment, treating all facts alleged as true and construing all allegations favorably to the plaintiff, the plaintiff is entitled to relief.” Doss v. Doss , 822 S.W.2d 427, 428 (Mo. banc 1992). “This Court must affirm the dismissal if it can be sustained on any ground supported by the motion to dismiss.” Beck v. Fleming , 165 S.W.3d 156, 158 (Mo. banc 2005).

Standing of Unsuccessful Bidders

Byrne & Jones argues that it has standing to challenge the award of the contract to ATG Sports because it was denied a fair and equal opportunity to compete in the bidding process. To bring an action in a Missouri court, a party must have standing. Le b eau v. Commissioners of Franklin Cnty., Missouri , 422 S.W.3d 284, 288 (Mo. banc 2014)

. Standing is a threshold issue and “a prerequisite to a court's authority to address substantive issues.” S.C. v. Juvenile Officer , 474 S.W.3d 160, 163 (Mo. banc 2015). Standing is a necessary component of a justiciable case that must be established prior to adjudication of a case's merits. Schweich v. Nixon , 408 S.W.3d 769, 774 (Mo. banc 2013). Moreover, “[s]tanding is an antecedent to the right to relief.” Manzara v. State , 343 S.W.3d 656, 659 (Mo. banc 2011). Therefore, prior to addressing the merits of Byrne & Jones' claim and whether it was entitled to the requested relief, this Court must first determine whether Byrne & Jones had standing.

“In the context of a declaratory judgment action, the plaintiff must have a legally protectable interest at stake in the outcome of the litigation.” Id.

A plaintiff has a legally protectable interest if “the plaintiff is directly and adversely affected by the action in question or if the plaintiff's interest is conferred by statute.” Id. (internal quotation omitted). “Missouri requires that a complainant be within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question to bring an action thereunder.” Weber v. St. Louis Cnty. , 342 S.W.3d 318, 323 (Mo. banc 2011).

Byrne & Jones asserts that it was denied a fair and equal opportunity to compete in the bidding process for the school district's athletics stadium project. Section 177.086 sets out the competitive bidding procedures for all school districts regarding facility construction expenditures. Section 177.086.1 requires school districts constructing facilities that exceed $15 thousand dollars to publicly advertise for bids “once a week for two consecutive weeks, in a newspaper of general circulation ... located within the city in which the school district is located.” All bids submitted to the school district must be sealed and in writing. Section 177.086.3. The school district cannot entertain bids that are not in “accordance with the specifications furnished by the district and all contracts shall be let to the lowest responsible bidder complying with the terms of the letting, provided that the district shall have the right to reject any and all bids.” Section 177.086.2. Under this competitive bidding scheme, the school district reserves the right to reject any and all bids, including the lowest bid submitted. State ex rel. Page v. Reorganized Sch. Dist. R – VI of Christian Cnty. , 765 S.W.2d 317, 321 (Mo.App.1989)

; La Mar Constr. Co. v. Holt Cnty, R – II Sch. Dist. , 542 S.W.2d 568, 570 (Mo.App.1976)

. Nevertheless, “rejection of the lowest bid must not be made fraudulently, corruptly, capriciously or without reason,” and “officials must exercise and observe good faith and accord all bidders just consideration, avoiding favoritism and corruption.” La Mar , 542 S.W.2d at 571.

The trial court determined that Byrne & Jones lacked standing because an unsuccessful bidder has no standing under the competitive bidding procedures set out in section 177.086...