Achen-Gardner, Inc. v. Superior Court In and For County of Maricopa
| Decision Date | 21 May 1992 |
| Docket Number | ACHEN-GARDNE,No. CV-90-0404-PR,INC,CV-90-0404-PR |
| Citation | 839 P.2d 1093,173 Ariz. 48 |
| Parties | , an Arizona corporation, Petitioner, v. SUPERIOR COURT of the State of Arizona, In and For the COUNTY OF MARICOPA, the Honorable David L. Roberts, a Judge thereof, Respondent Judge, CITY OF CHANDLER, a municipal corporation, and Jeri-Co Group, Inc., an Arizona corporation, Real Parties in Interest. |
| Court | Arizona Supreme Court |
The City of Chandler (Chandler) and Jeri-Co Group, Inc. (Jeri-Co) petition for review of the court of appeals' opinion granting special action relief to Achen-Gardner, Inc. (Achen-Gardner). Achen-Gardner v. Superior Court, 167 Ariz. 536, 809 P.2d 961 (Ct.App.1990). We granted review to determine the relationship between Arizona's competitive bidding laws (A.R.S. § 34-101 et seq.) and Arizona's development agreement law (A.R.S. § 9-500.05), an issue of first impression. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5, and Rule 8, Ariz.R.P.Spec. Act., 17B A.R.S.
In June 1989, Chandler and D.W.C. Commercial Properties (D.W.C.) entered into a development agreement (Agreement) pursuant to A.R.S. § 9-500.05, which authorizes municipalities to make agreements with prospective developers regarding various conditions and terms of the development, including "the financing of public infrastructure and subsequent reimbursements over time." A.R.S. § 9-500.05(F)(1)(g). D.W.C. agreed to develop a retail commercial facility, Sun Tech Center (Sun Tech), and to "cause" certain street improvements made necessary by Sun Tech's development "to be performed." 1 Pursuant to the Agreement, Chandler was to reimburse D.W.C. for the cost of these off-site street improvements from the sales taxes collected from Sun Tech's retail tenants. The contract requires Chandler to pay D.W.C. eighty percent of all sales taxes resulting from the "(i) operation of any Wal-Mart store ... and (ii) operation of any retail stores which are located upon the Property and have a size of at least 20,000 square feet of gross leasable area." Chandler's obligation to make payments was to cease upon full reimbursement but, in any event, no later than December 31, 1992.
The Agreement further provided that D.W.C. was to award the contract for the off-site improvements "to [the] lowest reasonable bidder; if for some reason Developer rejects bid, then Developer pays the difference between lowest bid and bid selected." Chandler's reimbursement obligation was thus limited to the amount of the lowest reasonable bid whether or not that bid was accepted. D.W.C. subsequently assigned its interest in the Agreement to Jeri-Co and is not a party to this action.
In November 1989, Achen-Gardner received a "Notice of Call for Bids," on City of Chandler letterhead, requiring that bids for performing the off-site improvements be submitted to the Chandler purchasing office no later than December 18, 1989. A representative of Achen-Gardner attended a pre-bid conference at the Chandler purchasing office, and Achen-Gardner later submitted a timely bid. When the bids were opened, Achen-Gardner's bid of $394,553.87 was approximately $31,000 lower than the only other bid. Chandler's engineer recommended to Jeri-Co that it award the contract to Achen-Gardner, and Chandler informed Jeri-Co that, pursuant to the Agreement, Jeri-Co would be reimbursed for the off-site improvements only up to the $394,553.87 bid by Achen-Gardner, regardless of who ultimately performed the work.
Jeri-Co refused to award the contract to Achen-Gardner and eventually decided to perform the work itself. After several attempts to obtain the contract, Achen-Gardner brought a special action in superior court seeking an order enjoining the actions of Chandler and Jeri-Co and awarding the contract to Achen-Gardner. The superior court denied Achen-Gardner relief, explaining that "[n]o reason has been shown as to why the developer must comply with the competitive bidding statute in awarding the contract." The court stated that "the City and the public are protected by the bidding procedures used because reimbursement is limited to the amount of the low bid." Minute Entry, April 13, 1990, at 2.
Achen-Gardner then filed a petition for special action in the court of appeals, which accepted jurisdiction and reversed the decision of the superior court. The court of appeals held that the off-site improvements were "structures," and therefore the project was subject to Arizona's competitive bidding laws. Achen-Gardner, 167 Ariz. at 539-44, 809 P.2d at 964-69. The court enjoined Chandler from reimbursing Jeri-Co for the off-site improvements unless Jeri-Co complied with the competitive bidding law. The court also awarded Achen-Gardner its costs and attorneys' fees. Id. at 545, 809 P.2d at 970.
Chandler and Jeri-Co petitioned this court to review the court of appeals' opinion. We granted review to resolve the following issues:
1. Whether the off-site improvements in question are "structures" for the purpose of Arizona's competitive bidding laws, A.R.S. § 34-101 et seq.;
2. Whether the off-site improvements are part of the private development or are a public street improvement undertaken by Chandler and thereby subject to the competitive bidding requirements of A.R.S. § 34-201;
3. Whether the court of appeals, in holding that the requirements of Title 34 apply to development agreements entered into pursuant to A.R.S. § 9-500.05, misinterpreted and improperly applied the public policy underlying competitive bidding statutes.
Competitive bidding is required only when mandated by statute. Hertz Drive-Ur-Self Sys. v. Tucson Airport Auth., 81 Ariz. 80, 84, 299 P.2d 1071, 1075 (1956); 10 Eugene McQuillin, LAW OF MUNICIPAL CORPORATIONS § 29.31 (3rd ed. 1990) (hereinafter McQuillin ). Whether competitive bidding is required thus depends on the "proper construction of the applicable law." 10 McQuillin § 29.32.
Arizona's competitive bidding statutes provide, with certain exceptions, that "[e]very agent 2 shall, upon acceptance and approval of the working drawings and specifications, publish a notice to contractors of intention to receive bids and contract for the proposed work...." A.R.S. § 34-201(A). Although the statutes do not specify what type of work qualifies as "proposed work," the statutes do offer some indication of the definition of "proposed work." Section 34-102(A), relating to the employment of architects and engineers for public works projects, refers to construction of "building or structure, or additions to or alterations of existing buildings or structures." (Emphasis added.) Similarly, § 34-201(C), providing one exception to the public bidding requirements, refers to "[a]ny building, structure, addition or alteration...." (Emphasis added.)
We believe that A.R.S. §§ 34-201 and 34-102 must be construed together "in order to derive [their] true meaning." Secrist v. Diedrich, 6 Ariz.App. 102, 105-06 & n. 1, 430 P.2d 448, 451-52 & n. 1 (1967). From the plain language of the statutes, we conclude that proposed work encompasses at least buildings and structures. See id. at 106, 430 P.2d at 452 (); see also § 34-202(A) ().
In its petition for review, Chandler appears to agree that the competitive bidding laws apply to buildings and structures, but argues--along with amicus Arizona League of Cities and Towns (the League)--that the court of appeals erred in concluding that the street improvements in question are structures. We disagree.
Chandler criticizes the court of appeals' reliance on Secrist for the proposition that landscaping was covered by the competitive bidding law. See Achen-Gardner, 167 Ariz. at 540, 809 P.2d at 965. Chandler is correct that the court of appeals in Secrist expressly refrained from "pass[ing] upon whether the 'landscaping' work ... constitutes the construction of a '... building or structure....' " Secrist, 6 Ariz.App. at 106, 430 P.2d at 452. In addition, we agree with Chandler that City of Phoenix v. Wittman Contracting Co., 20 Ariz.App. 1, 509 P.2d 1038 (1973), a case interpreting the "public funds" language in A.R.S. § 34-241, does not help to determine whether the off-site improvements at issue are structures.
We believe, however, that the court of appeals correctly concluded that the term "structure" includes the road construction involved in the off-site improvements. The legislature used the term "building" as well as the term "structure" in the competitive bidding laws. Obviously, therefore, a structure must mean something different than merely a "building." As the court of appeals identified, courts in other states have interpreted structure in various...
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