Ferguson Mechanical v. Dept. of Pub. Works

• Decision Date: 26 June 2007
• Docket Number: No. 17685.,17685.
• Citation: 282 Conn. 764,924 A.2d 846
• Court: Connecticut Supreme Court
• Parties: FERGUSON MECHANICAL COMPANY, INC. v. DEPARTMENT OF PUBLIC WORKS.

924 A.2d 846

282 Conn. 764

FERGUSON MECHANICAL COMPANY, INC. v. DEPARTMENT OF PUBLIC WORKS.

No. 17685.

Supreme Court of Connecticut.

Argued March 6, 2007.

Decided June 26, 2007.

Lawrence G. Rosenthal, with whom was Marci J. Silverman, Hartford, for the appellant (plaintiff).

Drew S. Graham, assistant attorney general, with whom were George E. Finlayson, assistant attorney general, and, on the brief, Richard Blumenthal, attorney general, for the appellee (defendant).

NORCOTT, KATZ, PALMER, VERTEFEUILLE and ZARELLA, Js.

NORCOTT, J.

The principal issue in this appeal is whether a subcontractor that was listed in a general contractor's successful bid for a government building project may seek judicial review of its subsequent substitution in an awarded bid. The plaintiff subcontractor, Ferguson Mechanical Company, Inc., appeals¹ from the judgment of dismissal by the trial court rendered in favor of the defendant, the state department of public works (department), on the ground that the court lacked subject matter jurisdiction over the action because the plaintiff had no standing to bring an appeal under the Uniform Administrative Procedure Act (UAPA), General Statutes § 4-166 et seq. We affirm the judgment of the trial court.

The record reveals the following relevant facts and procedural history. On May 4, 2005, the department opened and solicited competitive bids for construction work on the science center and classroom building at Eastern Connecticut State University. The plaintiff, a mechanical contractor licensed by the state of Connecticut, supplied subcontract bids to several general contractors that were submitting bids for the project in the amount of $12.2 million for the mechanical and heating, ventilation and air conditioning (HVAC) portion of the project. The responsible low bidder, O and G Industries, Inc. (O & G), listed the plaintiff as its HVAC subcontractor.² On July 12, 2005, the department presented O & G with a contract for the project and requested that O & G submit executed subcontract agreements for each of the listed subcontracts in its bid proposal, pursuant to the requirements of General Statutes § 4b-96.³ Three days later, O & G submitted a subcontract proposal to the plaintiff that included the statutorily mandated form plus four riders defining the scope and terms of the work to be completed.

The plaintiff objected to rider A, which required that (1) the plaintiff obtain surety bonds for the payment and performance of the work, provided that O & G would pay the plaintiff up to 1.8 percent of the total value of the subcontract for the cost of the bonds, and (2) the value of the bond would be determined by the invoice from the bonding company to the plaintiff's insurance broker, rather than by the invoice from the plaintiff's insurance broker to the plaintiff. The plaintiff and O & G negotiated the terms of the subcontract over the course of several weeks, and as of August 11, 2005 they had reached an agreement on the terms of the subcontract with the exception of O & G's requirement that the plaintiff submit the cost of the performance and payment bonds via invoice from the bonding company to the plaintiff's insurance broker. The plaintiff refused to provide the documentation, claiming that the requested document was not under its control because its insurance broker had refused to provide the invoice. On August 11, 2005, O & G sent to the department a request to substitute another subcontractor for the plaintiff for "good cause," pursuant to General Statutes § 4b-95 (c),⁴ due to the plaintiff's refusal to sign the subcontract. The plaintiff received no notice of O & G's request until August 17, 2005, when the department authorized the substitution.

On August 24, 2005, the plaintiff filed a petition with the department, pursuant to the regulations adopted under General Statutes § 4b-100 (b),⁵ protesting the department's action. On September 29, 2005, the department held an informal conference, at which the plaintiff and O & G outlined their positions regarding the alleged violation of the competitive bidding statutes, specifically §§ 4b-95 and 4b-96. The presiding officer at the conference denied the plaintiff's bid protest petition in a ruling dated October 25, 2005, and three days later, the plaintiff filed a written appeal from that ruling with James T. Fleming, the department's commissioner (commissioner). The commissioner upheld the decision of the presiding officer and denied the plaintiff's appeal on November 21, 2005.

On December 6, 2005, the plaintiff appealed from the commissioner's decision to the trial court, pursuant to General Statutes § 4-183. The plaintiff also filed applications for a stay and for a temporary injunction to enjoin the department from allowing the substitution of another subcontractor for the plaintiff. The department filed a motion to dismiss the complaint and applications for lack of subject matter jurisdiction. In its motion to dismiss, the department claimed that the trial court lacked subject matter jurisdiction over the plaintiff's claim because: "(1) the [s]tate is immune from suit under the doctrine of sovereign immunity; (2) a subcontractor has no standing to challenge the [s]tate's approval of [O & G's] request for subcontractor substitution; and (3) the [department's] action is not a `final decision in a contested case' and therefore the [p]laintiff does not have standing to pursue its claim under the UAPA." The trial court granted the motion to dismiss the administrative appeal, after finding that the plaintiff was not an aggrieved person authorized to bring an appeal under the UAPA, and rendered judgment accordingly. This appeal followed.

On appeal, the plaintiff claims that the trial court improperly dismissed the appeal because it failed to distinguish the plaintiff's status as a listed, successful bidder from that of a disappointed, unsuccessful bidder which would have no standing to bring an appeal.⁶ Specifically, the plaintiff argues that its status as a listed subcontractor in a successful bid imparts upon it a statutory entitlement akin to a property interest, which means that it has suffered an injury that makes it classically aggrieved. The department argues in response that (1) the plaintiff, as a listed subcontractor, has no more standing to challenge public bid awards than a disappointed bidder, (2) the plaintiff is not aggrieved by an agency's final decision, so the trial court lacked jurisdiction to hear its appeal, and (3) the plaintiff's claim is barred by the doctrine of sovereign immunity. We agree with the department's second argument, namely, that the plaintiff was not aggrieved because of the lack of a final decision, and we, therefore, affirm the judgment of the trial court.⁷

We begin our analysis with the subject matter jurisdiction claim and the applicable standard of review. "We have long held that because [a] determination regarding a trial court's subject matter jurisdiction is a question of law, our review is plenary. . . . Moreover, [i]t is a fundamental rule that a court may raise and review the issue of subject matter jurisdiction at any time. . . . Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it. . . . [A] court lacks discretion to consider the merits of a case over which it is without jurisdiction. . . ." (Citation omitted; internal quotation marks omitted.) Peters v. Dept. of Social Services, 273 Conn. 434, 441, 870 A.2d 448 (2005). "There is no absolute right of appeal to the courts from a decision of an administrative agency. . . . The UAPA grants the Superior Court jurisdiction over appeals of agency decisions only in certain limited and well delineated circumstances. . . . Judicial review of an administrative decision is governed by . . . § 4-183(a) of the UAPA, which provides that [a] person who has exhausted all administrative remedies . . . and who is aggrieved by a final decision may appeal to the superior court. . . . A final decision is defined in § 4-166(3)(A) as the agency determination in a contested case. . . ." (Citations omitted; internal quotation marks omitted.) Lewis v. Gaming Policy Board, 224 Conn. 693, 699-700, 620 A.2d 780 (1993).

A contested case is defined in § 4-166(2) as "a proceeding . . . in which the legal rights, duties or privileges of a party are required by state statute or regulation to be determined by an agency after an opportunity for hearing or in which a hearing is in fact held. . . ."⁸ (Emphasis added.) "Not every matter or issue determined by an agency qualifies for contested case status. . . . [W]e have determined that even in a case where a hearing is in fact held, in order to constitute a contested case, a party to that hearing must have enjoyed a statutory [or regulatory] right to have his legal rights, duties or privileges determined by that agency holding the hearing. . . . In the instance where no party to a hearing enjoys such a right, the Superior Court is without jurisdiction over any appeal from that agency's determination." (Citation omitted; internal quotation marks omitted.) Lewis v. Gaming Policy Board, supra, 224 Conn. at 700, 620 A.2d 780.

"A party seeking review of a state agency's action, therefore, must establish more than aggrievement (injury in fact); he must establish that the injury resulted from a final decision in a contested case." Ardmare Construction Co. v. Freedman, 191 Conn. 497, 503, 467 A.2d 674 (1983). Our courts have had ample opportunity to construe the definition of "contested case."⁹ "The test for determining contested case status has been well established and requires an inquiry into three criteria, to wit: (1) whether a legal right, duty or privilege is at issue, (2) and is statutorily [or regulatorily] required to be determined by the agency, (3) through an opportunity for hearing or in which a hearing is in fact...