Balfour Beatty Const. v. Dept. of Transp.

• Decision Date: 20 September 2001
• Parties: BALFOUR BEATTY CONSTRUCTION, INC., Petitioner, v. DEPARTMENT OF TRANSPORTATION, Respondent.
• Court: Pennsylvania Commonwealth Court

783 A.2d 901

BALFOUR BEATTY CONSTRUCTION, INC., Petitioner, v. DEPARTMENT OF TRANSPORTATION, Respondent.

Commonwealth Court of Pennsylvania.

Argued June 7, 2001.

Decided September 20, 2001.

James E. Moye, Maitland, FL, for petitioner.

Stephen S. Stokwitz, Harrisburg, for respondent.

Before SMITH, Judge, KELLEY, Judge, and JIULIANTE, Senior Judge. SMITH, Judge.

Balfour Beatty Construction, Inc. (Balfour) has filed a petition for review from the decision of a Hearing Officer of the Department of Transportation (Department) that granted a Department motion and dismissed Balfour's appeal and request for a hearing from the Department's suspension of Balfour as a prequalified contractor and denied Balfour's alternative request to treat the appeal as one properly filed nunc pro tunc.¹ Balfour also filed an Application for Summary Relief asserting that the Department lacked jurisdiction because Balfour was not a "contractor" as defined in the regulations when the suspension was imposed and the dismissal was an improper final determination outside the context of a proposed report. The Department has filed a motion to quash reasserting various jurisdictional challenges.

Balfour states the following questions involved in this appeal. They are: (1) whether the notice of suspension was adequate under 67 Pa.Code § 457.13(g), where it was not sent by both regular and certified mail and it did not identify specific acts or incidents; (2) whether the suspension was invalid where no findings of fact supported it; (3) whether a reply pursuant to 67 Pa.Code § 457.13(h) was a mandatory prerequisite to a hearing request; (4) whether the time for requesting a suspension hearing runs from the notice that the suspension has been imposed rather than notice that it might be imposed; (5) whether the denial of a request for a hearing nunc pro tunc was an abuse of discretion; (6) whether a three-month suspension of a contractor's license is an adjudication pursuant to 2 Pa.C.S. § 101, such that suspension without a hearing violates Section 504 of the Administrative Agency Law, 2 Pa. C.S. § 504, and due process; (7) whether the opportunity to submit information under 67 Pa.Code § 457.13(g) is an adequate substitute; and (8) whether the dismissal is void where the Hearing Officer was a supervisor of the individuals and office prosecuting the action.

I

Balfour's petition for review states that Balfour is a general contractor that was prequalified by the Department. In September 1996 Balfour and the Department entered into a contract for the widening of State Route 300 and State Route 30, together with construction of certain interchanges and bridges in Lancaster County, Contract No. 087313, which was for approximately forty-eight lane miles. As a result of delays and changes in the project Balfour and the Department each asserted various claims pending before the Board of Claims. On or about June 2, 2000, the Department sent a letter by certified mail, return receipt requested, to Balfour's office in Atlanta, Georgia, regarding the suspension. Although a receptionist signed the return receipt on June 7, 2000, the official to whom the letter was addressed, Adrian Greenhalgh, Senior Vice President, later filed an affidavit stating that he did not receive it and that it had not been found after a search of the offices. He stated also that they did not find any copy delivered by regular mail and that on the day the receptionist signed the return receipt the offices were visited by an FBI agent, who was serving a civil subpoena, which caused a considerable amount of confusion among Balfour employees.²

Balfour did not respond to the June 2, 2000 letter, and on July 11, 2000 the Department sent another letter, which informed Balfour that the Department had made Balfour the subject of debarment proceedings.³ On July 25, 2000, Balfour filed a "Notice of Appeal/Request for Hearing" pursuant to 67 Pa.Code § 457.14(a), which appealed from the debarment and requested a debarment hearing and also appealed from the suspension. The Department filed a motion to dismiss Balfour's appeal and request for hearing insofar as they related to the June 2, 2000 notice of suspension (not to the debarment), asserting that the Hearing Officer lacked jurisdiction to consider the suspension because Balfour had not submitted information pursuant to 67 Pa.Code § 457.13(h). That section provides:

(h) Reply to suspension. A contractor, subcontractor or individual suspended by the Department may, within 21 days after the suspension mailing date, submit, in person, in writing, or through a representative, information in opposition to the suspension. Upon review of the information or the completion of an investigation, or both, the Department will notify the contractor, subcontractor or individual whether the suspension shall be continued or withdrawn or whether debarment proceedings will be initiated.

The Department contended that Balfour's attempt to challenge the suspension was untimely and should be dismissed. On September 21, 2000, Balfour filed a Request for Appeal to be Treated as Appeal Nunc Pro Tunc. By Memorandum Opinion and Order of September 26, 2000, the Hearing Officer concluded that Department regulations provide for appeal from an action of debarment but not from a suspension, that Balfour's reply to the suspension notice was untimely and that no compelling reason had been shown to permit filing a nunc pro tunc reply.

Balfour filed a petition for review with this Court from that order. Balfour thereafter filed an Application for Summary Relief in which it sought to raise new issues, which it characterized as being jurisdictional. This application averred that because Balfour's prequalification expired on June 30, 2000 it was no longer a "contractor" as defined in the regulations on that date, and the Department could not suspend it and that the dismissal was improper because it was not done as part of a required "proposed report" of a presiding officer after a hearing. The Department filed its Reply to Petitioner's Application and its Motion to Quash. By order of May 7, the Court directed that supplemental briefs be filed on the Department's motion and that it be argued with the merits. The Court's review is limited to determining whether the necessary findings of fact are supported by substantial evidence and whether there was a constitutional violation or an error of law. Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704.

II

The Court turns first to the Department's Motion to Quash the Application for Summary Relief and the Application, as these could be dispositive. The Department raised various challenges to the Court's jurisdiction to hear this matter in its Preliminary Objections, in its main brief and in its Motion to Quash. As Balfour points out, several of the Department's arguments were rejected when the Court denied the Department's first motion to quash. The Court notes, however, that Pa. R.A.P. 123(e) provides for consideration by the full Court of actions of a single Judge, and the Court has held that the law of the case doctrine will not preclude reconsideration by the full Court on a question of subject matter jurisdiction, even when there has been no formal request for reconsideration. Hughes v. Pennsylvania State Police, 152 Pa. Cmwlth. 409, 619 A.2d 390 (1992).

The Department contends first in its Supplemental Brief in Support of Motion to Quash that the appeal was untimely under 67 Pa.Code § 457.13(h). As noted above, the Department's letter of June 2, 2000 provided notice of a suspension for three months commencing June 26, 2000. The regulation at 67 Pa.Code § 457.13(h) provides for a "reply" to a notice of suspension within twenty-one days of mailing. The Department asserts that under this provision Balfour was required to file an appeal on or before June 23, 2000. The Department stresses that a petitioner must exhaust administrative remedies before the right of judicial review arises. Canonsburg General Hosp. v. Department of Health, 492 Pa. 68, 422 A.2d 141 (1980) (dismissing action in mandamus in this Court for failure to pursue available administrative remedies).

The Court agrees with Balfour, however, that the plain language of 67 Pa.Code § 457.13(h) indicates that the filing of information under the reply procedure is optional. The regulation does not require the filing of information, and it is not in the nature of a rule to show cause, accompanied by notice that factual allegations may be deemed to be admitted if they are not challenged. Whether reply information is filed or not, the Department's investigation is to continue, culminating in a later decision on continuation of the suspension. See 1 Pa.Code §§ 35.14 and 35.37 and 67 Pa.Code § 491.9; Zimmerman v. Foster, 152 Pa.Cmwlth. 84, 618 A.2d 1105 (1992) (granting summary judgment where insurance agent failed to file a timely response to an order to show cause clearly stating that failure to respond would result in deemed admission of factual allegations). Balfour's failure to file a reply within twenty-one days of the June 2, 2000 letter did not preclude it from seeking review.

III

Next the Department argues that the Court lacks jurisdiction because Balfour did not exhaust administrative remedies in that it filed a petition for review with this Court rather than an appeal to the Secretary of Transportation. Balfour argues in its Reply Brief that there are exceptions to this requirement. In St. Clair v. Pennsylvania Board of Probation and Parole, 89 Pa.Cmwlth. 561, 493 A.2d 146 (1985), the Court discussed a major exception commonly known as the "constitutional attack." To come within this narrow exception a party must show that a challenged statute or regulation clearly and unambiguously violates a constitutionally secured right; there must be more than a mere allegation of a constitutional question. St. Clair. The Court agrees that Balfour's...