Beco Const. Co., Inc. v. City of Idaho Falls
| Citation | 124 Idaho 859,865 P.2d 950 |
| Decision Date | 22 December 1993 |
| Docket Number | No. 19698,19698 |
| Parties | BECO CONSTRUCTION COMPANY, INC., an Idaho corporation, Plaintiff-Appellant, v. CITY OF IDAHO FALLS, a municipal corporation, Defendant-Respondent. Idaho Falls, April 1993 Term |
| Court | United States State Supreme Court of Idaho |
Fuller, Carr & Parry, Idaho Falls, for appellant. Mark R. Fuller, argued.
Holden, Kidwell, Hahn & Crapo, Idaho Falls, for respondent. Donald L. Harris, argued.
Beco Construction Company, Inc. (Beco) submitted the low bid on two construction projects. The City of Idaho Falls (City) rejected both of Beco's bids because of what the City deemed Beco's poor performance on an unrelated project. One of the bids was rejected on the additional ground that Beco failed to follow bid specifications. Beco appeals from the dismissal of its suit on the City's motion for summary judgment.
In 1986 and 1987, Beco submitted two construction bids on public works projects let for bid by the City. The projects on which Beco bid were the Rollandet Asphalt Overlay Project (Rollandet Project) and the Skyline Road Improvement Project (Skyline Project). Beco was the low bidder on both projects.
The City rejected Beco's two bids because of what the City considered Beco's poor performance on an unrelated project, the Bel-Aire Waterline Project (Bel-Aire Project). The Skyline Project was also rejected on the additional ground that Beco failed to follow bid specifications and submit forms for Minority Business Enterprise, Womens Business Enterprise and Equal Employment Opportunity. These forms were required by the federal government which, through the Federal Aviation Administration, was supervising and paying ninety percent of the Skyline Project.
In 1989, Beco sued the City alleging that it submitted the low bid on each project which the City rejected without reasonable or just cause. Beco alleged the City's rejection of its bids constituted bad faith. Beco later amended its complaint to include a claim that the City abused the process of the court in a civil action arising out of the Bel-Aire Project. Beco alleged the City filed a complaint and sought discovery in the Bel-Aire action for the improper purpose of substantiating a complaint against Beco pending before the Public Works Contractors State License Board (Board). 1
Beco's motion for summary judgment was denied. The trial court held that as a matter of law, state law did not preclude the City from determining whether a contractor was the "lowest responsible bidder" under I.C. § 50-341(C) 2.
The City's motion for summary judgment was granted. The trial court found that pursuant to I.C. § 6-904(3) 3, the City was Beco appeals from the order granting the City's motion for summary judgment and raises the following issues: (1) is the City "preempted" by state law from determining the "responsibility" status of a public works contractor; (2) does I.C. § 6-904(3) immunize the City from liability for abuse of process; and (3) does a cause of action for breach of the covenant of good faith and fair dealing exist in the area of public competitive bidding.
[124 Idaho 861] immune from liability for the abuse of process claim because there was no evidence that the City directed its attorney to take any action which constituted abuse of process. The trial court denied the bad faith claims on the ground that the relationship between the parties was not one which gave rise to the tort of bad faith. The trial court further held that the City properly exercised its discretion in determining that Beco was not a "responsible" bidder within the meaning of I.C. § 50-341(C) and Beco had not presented any evidence that the City abused its discretion. Finally, the trial court held that Beco's failure to complete the forms required by the Federal Aviation Administration constituted a material variance in the bid requirements for the Skyline Project and the City did not have authority to waive these requirements.
Beco argues that state law "preempts" the City from determining whether a licensed public works contractor is a responsible bidder under I.C. § 50-341. Beco acknowledges that I.C. § 50-341(C) provides that the "lowest responsible bidder" shall be awarded public works contracts. Beco contends, however, that a city does not have the authority to determine whether a contractor is responsible since a detailed statewide licensing scheme regulates who qualifies as a responsible bidder.
In support of the above argument, Beco cites authority which discusses preemption within the context of conflicting state and local regulations. We find Beco's recitation of this authority unavailing in light of the fact that I.C. § 50-341, and the statutes contained in the Public Works Contractors License Act, Title 54, Chapter 19, Idaho Code (the "Act") are all state statutes. As to possible conflicts or inconsistencies between laws passed by the same governmental entity, the doctrine of preemption does not apply. Nevertheless, we will address the issue, as framed by Beco, by analyzing the relationship between I.C. § 50-341 and the Act.
Idaho Code § 50-341 is the competitive bidding statute applicable to all cities in the state of Idaho. This statute requires a city to award a public works contract "to the lowest responsible bidder" when the contract amount exceeds five thousand dollars or ten thousand dollars if for equipment. I.C. § 50-341(B)-(C).
In Seysler v. Mowery, 29 Idaho 412, 416-17, 160 P. 262, 263 (1916), the Court considered the statutory predecessor to I.C. § 50-341 4. This statute provided that a city shall make all contracts for improvements "with the lowest and best responsible bidder." The Court discussed the rationale of the legislature in enacting this statute:
It was manifestly the purpose of the legislature, in enacting the foregoing provisions, to procure competitive bidding for contracts for making public improvements of the kind here under consideration and thereby to safeguard public funds and prevent favoritism, fraud and extravagance in Id. at 416-17, 160 P. at 263.
[124 Idaho 862] their expenditure, and it is equally clear that it was the legislative intent that a contract of the kind here proposed to be entered into must not be let to any other than the lowest bidder unless some fact, or facts, exist by reason of which a bid, other than the lowest, has been made by one who is, even though higher in price, the best responsible bidder.
Seysler acknowledged that the governing board of a municipality may exercise discretion in selecting the "lowest responsible bidder" or "lowest and best bidder" so long as the entity awarding the contract does not "exercise the discretion entrusted arbitrarily, and without reason reject the lowest bid and accept a higher one." 29 Idaho at 417, 160 P. at 263, citing Caldwell v. Village of Mountain Home, 29 Idaho 13, 156 P. 909 (1916).
The rationale of Seysler is equally applicable to the statute in its present form and is not diminished by the difference between the language of the former statute which provides that a contract should be awarded to the "lowest and best responsible bidder" and the language of the current statute which provides for the award of a contract to the "lowest responsible bidder." Any distinction between this subtle difference in wording was abrogated by the reliance of the Court in Seysler on Caldwell and two extra-jurisdictional cases which discuss awarding bids to the lowest responsible bidder.
The general subject of the Act, adopted by the legislature in 1941, is contained in the title of the bill which enacted the legislation. The pertinent parts of this title are as follow:
to provide for the regulation and licensing of [public works] contractors; making it unlawful to engage in public works contracting without a license; prescribing exemptions; creating a public works contractors state license board; ... providing the qualifications of public works contractors; providing the method of issuance, renewal, suspension and revocation of licenses and procedure therefor[e]....
1941 Idaho Sess.Laws, ch. 115, p. 212; see also Idaho Const. art. 3, § 16 (); State v. O'Bryan, 96 Idaho 548, 555, 531 P.2d 1193, 1200 (1975) ().
The Act has at various times been amended since its inception in 1941. The general subject matter identified in the title has, however, remained unchanged and we find nothing in the general subject matter which conflicts with a city determining whether a contractor is responsible under I.C. § 50-341.
Beco argues that certain statutes within the Act conflict with allowing a city to determine whether a contractor is responsible under I.C. § 50-341. Specifically, Beco identifies I.C. §§ 54-1902, -1904, -1907, -1910,
-1915 to -1919 and -1926 as obviating the need for a city to determine whether a contractor is responsible.
The relevant portions of these statutes, as identified by Beco, are as follows: (1) I.C. § 54-1902 provides that it is unlawful to engage in the business of a public works contractor without a license; (2) I.C. § 54-1904 describes the different classes of licenses including a class "AAA" license awarded to "[a]ny contractor whose qualifications, ability and responsibility to execute contracts for public works involving any estimated cost of more than $1,000,000 ..."; (3) I.C. § 54-1907 describes the duties and powers of the Public Works Contractors State License Board, namely the administration of the Act; (4) I.C. § 54-1910 empowers the Board to investigate,...
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