Curtis Ambulance of Florida, Inc. v. Board of County Com'rs of Shawnee County, Kan.

• Decision Date: 18 February 1987
• Docket Number: No. 84-1892,84-1892
• Parties: CURTIS AMBULANCE OF FLORIDA, INC., Plaintiff-Appellant, v. BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF SHAWNEE, KANSAS, and Medevac Midamerica, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1371

811 F.2d 1371

CURTIS AMBULANCE OF FLORIDA, INC., Plaintiff-Appellant, v. BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF SHAWNEE, KANSAS, and Medevac Midamerica, Inc., Defendants-Appellees.

No. 84-1892.

United States Court of Appeals, Tenth Circuit.

Feb. 18, 1987.

Michael R. Glover, Wentworth & Lundin, of Phoenix, Ariz. (Larry L. Luttjohann, Waggener, Arterburn and Luttjohann, of Topeka, Kan. with him, on the brief), for plaintiff-appellant.

Thomas L. Griswold (Mark V. Parkinson, with him on the brief), Payne & Jones, of Olathe, Kansas, for Board of County Com'rs of Shawnee County, Kan., defendant-appellee.

Robert E. Duncan, II, Davis & Bennett, of Topeka, Kansas (David A. Welte and Robert L. Wehrman, Polsinelli, White & Vardeman, of Kansas City, Mo., with him on the brief), for Medevac Midamerica, Inc., defendant-appellee.

Before MOORE and ANDERSON, Circuit Judges, and JOHNSON, District Judge. ^*

STEPHEN H. ANDERSON, Circuit Judge.

Plaintiff/appellant Curtis Ambulance of Florida, Inc. ("Curtis") was the low but unsuccessful bidder for a county contract to provide residents of Shawnee County, Kansas with ambulance services. When defendant/appellee Board of County Commissioners of Shawnee County ("Board") awarded the ambulance contract to a higher bidder, defendant/appellee Medevac Midamerica, Inc. ("Medevac"), Curtis filed this action in federal district court in Kansas, claiming that the award of the contract to Medevac constituted a violation of its civil rights pursuant to 42 U.S.C. Sec. 1983, a breach of contract, and a violation of the Kansas Open Meetings Law, Kan.Stat.Ann. Secs. 75-4317 to -4320a (1984 & Supp. 1985). The district court dismissed the action upon motions filed by the Board and Medevac. Curtis appeals from that judgment of dismissal. We affirm.

BACKGROUND

On July 1, 1983, the Board issued a "Request for Quotations" ("bid solicitation") from various ambulance companies to replace the outgoing ambulance service. The bid solicitation included a detailed set of bid specifications and set forth a closing date, a pre-bid meeting, and an invitation to contact certain county officials "prior to or subsequent to the pre-bid meeting" for additional information. R.Vol. II at 410.

The bid specifications were divided into four categories of service: combined emergency and non-emergency service; emergency service only; pre-scheduled transfer and non-emergency service only; and an alternate combined emergency and non-emergency service program, in which the bidder prescribed the model of service to be provided. In addition, the specifications contained maximum rates, bidder qualifications and requirements, and provided a tax subsidy of $455,000.00 for the successful bidder. No language in the specifications required the Board to award the contract to the lowest bidder. In fact, the only language concerning the Board's evaluation of bids stated:

13. Rejection of Bids

The county reserves the right to reject any and all bids and to waive any informalities in bidding.

R.Vol. II at 428.

Four companies, including Curtis and Medevac, submitted bids on the ambulance After the bids were opened, a bid review committee appointed by the Board to review the bids determined that Medevac was the "best" bid. The Board received the written recommendation of the bid review committee at a Board meeting on August 1, 1983. The committee's recommendation made no findings but merely stated that the Medevac bid was the "best" bid and should be accepted. R.Vol. I at 24.

contract. Curtis submitted its bid on the first option, combined emergency and non-emergency service. Medevac submitted its bid on option four, the alternate combined service. The submitted bids were opened at a public meeting held at 2:00 p.m., July 28, 1983, at the Shawnee County Courthouse.

At the August 1 meeting, a member of the Board made a motion to accept Medevac's bid. Before voting on the motion, the Board allowed Medevac representatives to appear before the Board to clarify and explain their company's bid. No representatives of Curtis or the other bidders were invited to attend the meeting. After Medevac representatives appeared, the Board, by a two to one vote, awarded the contract to Medevac.

On August 25, 1983, the Board and Medevac executed a contract for the provision by Medevac of ambulance services to Shawnee County. The contract provided, among other things, that the Board would (1) hold Medevac harmless from certain losses of revenue, (2) hold Medevac harmless from costs of litigation from third party challenges to Medevac's right to execute the contract, (3) allow Medevac to substitute a letter of credit for surety, (4) allow for options to extend the contract, and (5) "entertain an application by Medevac for the issuance of Industrial Revenue Bonds ... for the purchase of equipment or other lawful purposes...." R.Vol. I at 41.

Upon receiving the contract, Medevac applied for the issuance of industrial revenue bonds to finance the purchase of equipment. Medevac, the Board, and other public officials initiated appropriate procedures, conducted hearings, and drafted resolutions. Ultimately, bond counsel deemed the issuance of bonds clouded as a result of threatened litigation by Curtis. Consequently, Medevac abandoned its pursuit of that financing alternative and sought instead the issuance of "no-fund" warrants. The Board filed an appropriate application with the State Board of Tax Appeals and passed Resolution No. 83-149 authorizing $444,739 to be obtained from no-fund warrants for the purchase of ambulance equipment. At the time Resolution 83-149 was passed, the Board appointed Medevac's legal counsel as the Board's representative to the Civic Center Board.

Curtis was notified by letter of Medevac's selection. Following notification of the contract award to Medevac, Curtis commenced this action. The district court granted the defendants' motion to dismiss for failure to state a claim upon which relief could be granted. Curtis Ambulance of Florida, Inc. v. Board of County Comm'rs, Civ. No. 83-4366 (D.Kan. March 9, 1984). This appeal followed.

Curtis contends that the bidding and contracting procedure employed by the Board "turned into an unmitigated sham," R.Vol. I at 3, and that the Board's awarding the contract to Medevac amounted to a "sweetheart contract," R.Vol. I at 18. It claims that the Board "predetermine[d]" the award of the contract as evidenced by the Board's "waiving" and "changing" of bid specifications and agreeing to "improperly equip and subsidize [Medevac's] entire operation from the ground up." R.Vol. I at 3-4. Based on these and similar allegations, Curtis asks us to find the Board's conduct "arbitrary, capricious, and fraudulent," Brief of Appellant at 22, in breach of Curtis' constitutional and contractual rights, and in violation of the Kansas Open Meetings Laws.

In reviewing the grant of a motion to dismiss, we must take as true all well-pleaded allegations in the plaintiff's complaint and we must indulge all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974);

                Mitchell v. King, 537 F.2d 385 (10th Cir.1976);  Dewell v. Lawson, 489 F.2d 877 (10th Cir.1974).  "[A] complaint should not be dismissed for failure to state a claim unless it appears beyond all doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."   Scheuer, 416 U.S. at 236, 94 S.Ct. at 1686 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957));  Kennedy v. Meacham, 540 F.2d 1057 (10th Cir.1976).  With this standard in mind, we examine the propriety of the district court's dismissal of Curtis' complaint
                

I. DUE PROCESS

Curtis contends that as the "lowest responsible bidder" it had a constitutionally protected property interest in being awarded the contract. Reply Brief of Appellant at 4. It further contends that it was deprived of that property interest without due process when the Board awarded the contract to a higher bidder, Medevac. Curtis argues that the process due in this case was the non-arbitrary exercise of discretion by the Board in awarding the contract.

Our analysis of Curtis' due process claim requires us to examine the following issues: (1) the general legal standards applicable to a due process claim; (2) the extent to which courts have been willing to recognize the existence of a constitutionally protected property interest in the context of bidding for governmental contracts; (3) whether Curtis can claim any such property interest by virtue of any state or local laws, rules, resolutions, or regulations applicable to the bidding process in this case, including any "mutually explicit understandings" between Curtis and the Board; and (4) having concluded that the Board's Home Rule Resolution 80-139 is the most relevant local rule which might provide Curtis with the property interest it seeks, whether the bidding procedure here was subject to that Resolution or whether, because the provision of ambulance services involves the provision of professional services, the award of the contract here is exempt from the application of that Resolution. For the reasons set forth in this opinion, we conclude that ambulance services are professional services and therefore exempt from the bidding procedures of Resolution 80-139. Because we further find that no other local or state rule, regulation, law, or case authority mandates that the ambulance contract at issue here be awarded to the lowest responsible bidder, we hold that Curtis had no constitutionally protected property interest in the award of the contract.

A. Legal Standards Applicable to Due Process Claims.

To prevail on its due process claim Curtis must prove that it had a definite liberty or property interest and that such interest was, under color of state law, abridged without appropriate process....