Eastern Missouri Laborers Dist. Council v. St. Louis County

• Decision Date: 14 November 1989
• Docket Number: Nos. 71633,71654,s. 71633
• Citation: 781 S.W.2d 43
• Parties: EASTERN MISSOURI LABORERS DISTRICT COUNCIL, et al., Plaintiffs-Appellants, v. ST. LOUIS COUNTY, Missouri, et al., Defendants-Respondents. John BRAWLEY, et al., Plaintiffs-Appellants, v. Gene McNARY, et al., Defendants-Respondents.
• Court: Missouri Supreme Court

Page 43

781 S.W.2d 43

EASTERN MISSOURI LABORERS DISTRICT COUNCIL, et al., Plaintiffs-Appellants, v. ST. LOUIS COUNTY, Missouri, et al., Defendants-Respondents.

John BRAWLEY, et al., Plaintiffs-Appellants, v. Gene McNARY, et al., Defendants-Respondents.

Nos. 71633, 71654.

Supreme Court of Missouri,

En Banc.

Nov. 14, 1989.

As Modified on Denial of Rehearing Dec. 12, 1989.

Jerald A. Hochsztein, Bruce S. Feldacker, St. Louis, for Eastern Missouri Laborers District Council.

Robert H. Grant, Deputy County Counselor, Andrew J. Minardi, Patricia Redington, Associate County Counselors, Thomas W. Wehrle, St. Louis County Counselor, Clayton, for St. Louis County.

J. Peter Schmitz, Robert O. Snyder, Mark A. Brittingham, St. Louis, for John Brawley et al.

Andrew J. Minardi, Associate County Counselor, Thomas W. Wehrle, St. Louis County Counselor, Clayton, for Gene McNary et al.

Gregory F. Hoffmann, St. Louis, for J.S. Alberici Const. Co. Inc. Shulamith Simon, St. Louis, for Riverport, Inc. and Riverport Assocs.

BILLINGS, Judge.

Two cases originating in St. Louis County contested the alleged illegal expenditures of public funds. The trial court sustained a motion to dismiss in the Eastern Missouri Laborers District Council case. In Brawley v. McNary, the trial court found the taxpayer plaintiffs lacked standing to bring suit, although it heard evidence and ruled the issues. The court of appeals found the respective plaintiffs lacked standing. The cases were consolidated for transfer and argument before this Court in order to clarify Missouri's law on taxpayer standing. The Court finds plaintiffs in each case have standing to bring suit as taxpayers. The Eastern Missouri Laborers case is reversed and remanded. The Brawley case is retransferred to the court of appeals for resolution of the issues.

In Eastern Missouri Laborers District Council, et al., v. St. Louis County, Missouri, et al., the Court accepts as true all properly pleaded facts, giving the averments a liberal construction, and making reasonable inferences therefrom. Madden v. C & K Barbecue Carryout, Inc., 758 S.W.2d 59, 61 (Mo. banc 1988); Stiffelman v. Abrams, 655 S.W.2d 522, 525 (Mo. banc 1983). With these tenets in mind, the facts are set out below.

A petition was filed in St. Louis County Circuit Court by St. Louis Minority Contractors, Inc., requesting an injunction prohibiting the performance of a contract entered into by the County. The petition alleged that the County violated § 50.660, RSMo 1986, and St. Louis County Revised Ordinance 107.130 by failing to use competitive bidding in selecting a construction manager for the remodeling of County office buildings. A second petition was filed as a class action by the Eastern Missouri Laborers District Council and by two of its officers individually as taxpayers. This petition requested the construction manager contract and a second contract for the removal of asbestos be enjoined, and that the named individual defendants personally reimburse the County treasury for any payments made under either contract.

Plaintiffs' petition alleges that late in 1987 or early 1988, the County invited four previously selected contractors to submit bids to perform renovation work on recently purchased buildings at 111 S. Meramec in Clayton, Missouri. The County intended to use the renovated buildings for offices and functions that were located elsewhere. The County did not advertise the contract for competitive bids and did not seek a prevailing wage determination from the Division of Labor Standards for the State of Missouri prior to inviting the companies to submit bids.

The County selected defendant Alberici from the four bidders to perform the services of construction manager. Those services included construction, supervision and solicitation of bids from subcontractors and, subsequent to review by the County, authorizing the subcontractors to proceed with various phases of work on the project. The contract price was for a fixed amount of $2,226,000. Alberici is a Missouri corporation engaged in the construction of commercial and other buildings, within and outside the state of Missouri.

Plaintiffs' petition also alleged the County entered into a $60,000 contract with Mathes Asbestos Services, Inc., to remove asbestos from the buildings in issue. This contract was also awarded without advertising for competitive bids or requesting prevailing wage determinations. On February 12, 1988, plaintiffs notified the County in writing that the contract for asbestos removal was in violation of §§ 50.660 and 290.250, RSMo 1986, and Title I, Chapter 107 of the St. Louis County Revised Ordinances 107.130 (1974), regulating competitive bidding practices. The letter informed the County that the asbestos contract was void under the law and any payment on the contract could not be made with county funds. The letter gave defendants notice they would be held personally liable for any such payments.

Missouri's Division of Labor Standards issued a prevailing wage determination for the renovation of the buildings in issue on March 1, 1988. Plaintiffs notified the County on March 29, 1988, that in addition to receiving the prevailing wage determination, the construction manager contract needed to be let for competitive bidding. On April 7, 1988, the County Council authorized the contract for construction manager services with Alberici. Plaintiffs allege that although the wage determination was received before the contract was officially authorized, the parties had committed themselves before receipt of the wage determination.

Motions to dismiss were filed by the County and by Alberici. Both motions were sustained. The court of appeals affirmed the trial court's judgment, finding that the petition failed to state a claim for which relief could be granted and holding that the plaintiffs lacked standing to bring suit.

John Brawley, et al. v. Gene McNary, et al., centered around the County's use of funds appropriated from the St. Louis County Convention and Tourism Fund to purchase 102 acres of land on which to build a domed stadium. Additional moneys were also appropriated by the County from the Transportation Trust Fund for construction of a flood control system near the 102-acre site. Plaintiffs allege the appropriations of these funds were illegal.

From 1976 until 1984, St. Louis County collected a 3% tourism tax based on charges for hotel and motel rooms in the county. The tax, paid by transient guests of the hotels and motels, went into the "Convention and Tourism Fund" established by county ordinance in 1975. The fund's purpose was to adopt plans, policies and programs to promote the convention and tourism business. The county discontinued the tax when it was superseded by § 67.619.5(2), RSMo 1986.

On November 26, 1985, the St. Louis County Council passed a series of four ordinances pertaining to the funds in issue. The first ordinance declared that the funds remaining unexpended in the St. Louis County Convention and Tourism Fund were no longer needed for the purpose for which they were raised. One million dollars was then transferred from the fund into the County's General Revenue Fund. The second ordinance appropriated $1,000,000 from the General Revenue Fund to the Special Projects Account, which would be used to purchase the 102-acre site for the stadium from Riverport, Inc. The next ordinance appropriated $3,000,000 from the Transportation Trust Fund and transferred it to the Transportation Highway Fund for contribution to the construction of the flood control system in the area around the proposed stadium. The Transportation Trust Fund is a special fund generated from a sales tax of one half of one percent of the receipts of all county retail sales of tangible personal property or taxable services. The final ordinance authorized County Executive Gene McNary to purchase the land from Riverport, Inc., for $1,000,000 and authorized the County to use up to $3,000,000 to construct a levee, relief wells and pumping station for flood protection of the Earth City Expressway, the stadium and related facilities.

Plaintiffs filed a petition as taxpayers seeking an injunction against the defendants from going forward with their plans. They also sought the imposition of a "constructive trust" on the 102-acre tract bought pursuant to the ordinances and an equitable lien upon the remaining property owned by defendant Riverport, Inc., benefitted by the construction. The defendants asserted plaintiffs lacked standing to file the petition. Nevertheless, the trial court heard the case on its merits. The lower court found the plaintiffs lacked standing but also made findings of fact and conclusions of law on all the issues presented at trial. Plaintiffs appealed the trial court's judgment and the court of appeals affirmed solely on the basis of standing. Relying on Brock v. City of St. Louis, 724 S.W.2d 721 (Mo.App.1987), the court stated plaintiffs failed to show any special injury, in the form of an increase in their tax burden, and therefore lacked standing.

The Court must initially review these cases on the taxpayer standing issue. Regardless of an action's merits, unless the parties to the action have proper standing, a court may not entertain the action. State ex rel. Williams v. Mauer, 722 S.W.2d 296, 298 (Mo. banc 1986). Standing requires that a party seeking relief have a legally cognizable interest in the subject matter and that he has a threatened or actual injury. Metro Auto Auction v. Director of Revenue, 707 S.W.2d 397, 400 (Mo. banc 1986).

The right of a taxpayer, on behalf of himself and other taxpayers similarly situated, to bring an action to enjoin the illegal expenditure of public funds...