City of Cheyenne v. Reiman Corp.

• Decision Date: 11 February 1994
• Docket Number: No. 93-20,93-20
• Citation: 869 P.2d 125
• Parties: CITY OF CHEYENNE, Appellant (Defendant), v. REIMAN CORP., Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 125

869 P.2d 125

CITY OF CHEYENNE, Appellant (Defendant), v. REIMAN CORP., Appellee (Plaintiff).

No. 93-20.

Supreme Court of Wyoming.

Feb. 11, 1994.

Jack Gage, and S. Gregory Thomas, City Attorney's Office, City of Cheyenne, for appellant.

E. James Burke, Burke, Woodard & Bishop, P.C., Cheyenne, for appellee.

Before MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, JJ.

THOMAS, Justice.

The issue as posed by the parties is whether a construction company that has submitted a bid to a city for the construction of a fire station should be entitled to rescind its bid without penalty because of a mistake in computing the amount of the bid. The trial court, by applying Colorado law, ruled the construction company would be entitled to rescind without incurring any penalty under the circumstances of this case. We hold the trial court erred in failing to strictly apply WYO.STAT. § 15-1-113 (1992). We affirm the summary judgment entered in favor of the contractor, however, because these parties are bound by the settlement agreement, which affords finality to the judgment of the district court without regard to whether it is legally correct. The contractor is entitled to the additional amount awarded by the trial court.

The appellant, City of Cheyenne (City), states the issue to be:

Whether the district court erred as a matter of law by granting summary judgment to Reiman.

The appellee, Reiman Corporation (Reiman), articulates the question with five sub-issues:

I. Is the low bidder on a municipal construction project entitled to rescind its mistaken bid after bid opening without penalty if:

A. The error was of a clerical nature, made without gross negligence;

B. The contractor promptly notified the city of the error;

C. The error is significant;

D. The city has taken no action in reliance upon the bid prior to being notified of the error;

E. The allowance of rescission will work no substantial hardship on the city.

This case is before the court for the second time, and the material facts may be gleaned from the earlier opinion in Reiman Corp. v. City of Cheyenne, 838 P.2d 1182 (Wyo.1992). Reiman mistakenly failed to include five items in computing the bid it submitted to the City for construction of a fire station. These items aggregated $71,000. Upon discovering the mistake, Reiman asked to withdraw its bid, which had been opened, without forfeiture of its bid bond, and requested the contract be awarded to the next lowest bidder. The City decided to accept Reiman's bid and issued a notice of award to Reiman because its bid was the lowest one submitted. Subsequently, the City amended the notice of award to extend Reiman's time for execution of the contract to December 26, 1990. Reiman was told, if it failed to execute the contract by that date, its bid bond would be forfeited.

Reiman then filed a declaratory judgment action in which it requested it either be allowed to rescind the bid or to reform the bid to include the $71,000 omitted by mistake. In addition, Reiman requested injunctive relief to prevent the City from forfeiting the bid bond or, alternatively, to excuse Reiman from the execution of the contract. Reiman's motion for injunctive relief was set for hearing on December 20, 1990 but, on that day, Reiman entered into an agreement with the City relating to the litigation. The agreement provided Reiman would withdraw its motion for a preliminary injunction; Reiman would sign the contract; and Reiman would proceed with construction of the fire station. With respect to the issue in this particular case, the agreement provided:

c. Reiman will execute the contract presented by the City and will perform the work specified in the contract. The price Reiman Corp. will be paid for the work will be either the original bid price of $1,910,000.00 or the amended bid price of $1,981,000.00 or such other price as the parties agree upon in writing.

d. If the parties cannot agree in writing as to a contract price, the price shall be determined as set forth in this Agreement based upon the decision of the District Court in the action currently pending in Laramie County District Court.

e. Although this Agreement will be binding between the parties, such litigation shall be determined without reference to this Agreement, i.e., the parties agree that this Agreement shall not be relevant evidence in determining whether Reiman was entitled to rescind its bid.

f. If Reiman prevails, and the District Court finds that Reiman is entitled to rescind its bid, Reiman shall be entitled to a contract price of $1,981,000.00.

g. If the City of Cheyenne prevails in such litigation, and the District Court finds that Reiman is not entitled to rescind its bid, the City shall be entitled to a contract price as stated in Reiman's original bid, $1,910,000.00. (Emphasis added.)

On October 7, 1991, the City filed a motion for summary judgment. Ten days later, Reiman filed its cross-motion for summary judgment. After a hearing, the district court dismissed Reiman's request to rescind its bid asserting an absence of jurisdiction, and the court granted the summary judgment motion of the City with respect to the reformation claim. The trial court found the December 20, 1990 agreement entered into by Reiman and the City rendered the rescission issue moot, and reformation was available only upon a mutual mistake by the parties.

Reiman appealed the dismissal of its rescission claim by the district court. This court reversed and remanded the case to the district court "for a declaration as to whether a public bid may be withdrawn/rescinded, under the circumstances of this case, without forfeiture of the bid bond." Reiman, 838 P.2d at 1188.

When the district court considered the case on remand, it granted summary judgment to Reiman on its claim for rescission and awarded the disputed $71,000 to Reiman for a total contract price of $1,981,000. The district court adopted the criteria articulated in Powder Horn Constructors, Inc. v. City of Florence, 754 P.2d 356 (Colo.1988). It ruled:

In Wyoming, a bidder is entitled to rescission of its mistaken bid if: (1) the mistake is of a clerical or mathematical nature, (2) the mistake was made in good faith, (3) the mistake was made without gross negligence, (4) the mistake relates to a material aspect of the bid, and (5) the public authority did not rely to its detriment on the mistaken bid prior to the letting of the contract.

The district court found that, in accordance with the criteria, Reiman had made a clerical error, in good faith, without gross negligence, with respect to a material aspect of its bid, and the City did not rely to its detriment on the mistaken bid prior to the letting of the contract. The City then took this appeal.

We hold the determination of the trial court with respect to the right to rescind the bid is clearly erroneous. The resolution is controlled by WYO.STAT. § 15-1-113 (1992). The pertinent provisions of that statute state:

(c) The contract shall be let to the lowest bidder who shall be determined qualified and responsible in the sole discretion of the governing body. The governing body may reject all bids submitted if it finds that none of them would serve the public interest.

* * * * * *

(f) In advertising for any bid, the forms of guarantee required under this section and approved by the city or town shall be specified. In addition, bidders shall be required to accompany each bid with a bid bond or if the bid is one hundred thousand dollars ($100,000.00) or less, any other form of bid guarantee approved by the city or town, equal to at least five percent (5%) of the total bid amount, with sufficient surety and payable to the city or town. The bid guarantee shall be forfeited as liquidated damages if the bidder, upon the letting of the contract to him, fails to enter into the contract within thirty (30) days after it is presented to him for that purpose or fails to proceed with the performance of the contract. * * * All bids shall be numbered consecutively before they are opened and no further bids may be received after the advertised time of opening bids and any bid is publicly opened. * * * No bid may be considered unless accompanied by a bid guarantee in the required amount.

* * * * * *

(o) Any contract made in violation of the provisions of this section is void, and any money paid on account of the contract by the city or town may be recovered without restitution of the property or benefits received or retained. (Emphasis added.)

For some forty years, this court has espoused and followed, frequently, the rule that we do not resort to rules of statutory construction and interpretation when the language of a statute is plain and unambiguous. E.g., Thunder Basin Coal Co. v. Study, No. 93-45, 1994 WL 2811 (Wyo. Jan. 7, 1994); Wyoming State Tax Comm'n v. BHP Petroleum Co., Inc., 856 P.2d 428 (Wyo.1993); Jackson State Bank v. King, 844 P.2d 1093 (Wyo.1993); Hasty v. Hasty, 828 P.2d 94 (Wyo.1992); Phillips v. Duro-Last Roofing, Inc., 806 P.2d 834 (Wyo.1991); Vandehei Developers v. Public Serv. Comm'n of Wyoming, 790 P.2d 1282 (Wyo.1990); Halliburton Co. v. McAdams, Roux & Assoc., 773 P.2d 153 (Wyo.1989); NL Industries, Inc. v. Dill, 769 P.2d 920 (Wyo.1989); Belle Fourche Pipeline Co. v. State of Wyoming, Envtl. Quality Council, 766 P.2d 537 (Wyo.1988); Wyoming Ins. Dept. v. Avemco Ins. Co., 726 P.2d 507 (Wyo.1986); Thomson v. Wyoming In-Stream Flow Comm., 651 P.2d 778 (Wyo.1982); State, ex rel. Fawcett v. Bd. of County Comm'rs of Albany County, 73 Wyo. 69, 273 P.2d 188 (1954). An unequivocal corollary of that rule is, if the statute is determined to be plain and unambiguous, the words used are to be given their plain and ordinary meaning. BHP Petroleum Co., Inc.; Wyoming Game and Fish Comm'n v. Thornock, 851 P.2d 1300 (Wyo.1993); Vandehei. Our reading of WYO.STAT. § 15-1-113 leads to the ineluctable conclusion that the statute is plain and unambiguous,...