Grant v. Board of Regents of Universities and State Colleges of Arizona

• Decision Date: 20 October 1982
• Docket Number: No. 15839,15839
• Citation: 133 Ariz. 527,652 P.2d 1374
• Parties: , 7 Ed. Law Rep. 719 James GRANT, Joe Stertz, Alan Bandler, Paul Rosensteel and Gary R. Lisk, Plaintiffs-Appellants, v. The BOARD OF REGENTS OF the UNIVERSITIES AND STATE COLLEGES OF ARIZONA, a body corporate; Ralph M. Bilby, a member of the Arizona Board of Regents; Rudy E. Campbell, a member of the Arizona Board of Regents; Esther N. Capin, a member of the Arizona Board of Regents; Earl H. Carroll, a member of the Arizona Board of Regents; Thomas Chandler, a member of the Arizona Board of Regents; Dwight W. Patterson, a member of the Arizona Board of Regents; Dr. William Payne, a member of the Arizona Board of Regents; Sidney S. Woods, a member of the Arizona Board of Regents; Jack Penick, individually and in his capacity as Administrative Vice President of Arizona State University; John Schwada, individually and in his capacity as President of Arizona State University; George W. Morrell, individually and in his capacity as Director of Purchasing for Arizona State University; Steve Colby, individually and in his capacity as Controller of Arizona State University; Henry Spomer, individually and in his capacity as Assistant Controller of Arizona State University; Russ Nelson, individually and in his capacity as Assistant Controller of Arizona State University; Beta Sigma Corporation, an Arizona corporation, Defendants-Appellees.
• Court: Arizona Supreme Court

Page 1374

652 P.2d 1374

133 Ariz. 527, 7 Ed. Law Rep. 719

James GRANT, Joe Stertz, Alan Bandler, Paul Rosensteel and Gary R. Lisk, Plaintiffs-Appellants, v. The BOARD OF REGENTS OF the UNIVERSITIES AND STATE COLLEGES OF ARIZONA, a body corporate; Ralph M. Bilby, a member of the Arizona Board of Regents; Rudy E. Campbell, a member of the Arizona Board of Regents; Esther N. Capin, a member of the Arizona Board of Regents; Earl H. Carroll, a member of the Arizona Board of Regents; Thomas Chandler, a member of the Arizona Board of Regents; Dwight W. Patterson, a member of the Arizona Board of Regents; Dr. William Payne, a member of the Arizona Board of Regents; Sidney S. Woods, a member of the Arizona Board of Regents; Jack Penick, individually and in his capacity as Administrative Vice President of Arizona State University; John Schwada, individually and in his capacity as President of Arizona State University; George W. Morrell, individually and in his capacity as Director of Purchasing for Arizona State University; Steve Colby, individually and in his capacity as Controller of Arizona State University; Henry Spomer, individually and in his capacity as Assistant Controller of Arizona State University; Russ Nelson, individually and in his capacity as Assistant Controller of Arizona State University; Beta Sigma Corporation, an Arizona corporation, Defendants-Appellees.

No. 15839.

Supreme Court of Arizona,

In Division.

Oct. 20, 1982.

Lewis & Roca by John P. Frank, Charles G. Case, III, and Foster Robberson, Phoenix, for plaintiffs-appellants.

Robert K. Corbin, Atty. Gen. by Anthony B. Ching, Asst. Atty. Gen., Phoenix, for defendants-appellees Bd. of Regents.

Jennings, Strouss & Salmon by Timothy W. Barton, Phoenix, for defendant-appellee Beta Sigma Corp.

HAYS, Justice.

This is an action brought by appellants as taxpayers of Arizona to enjoin payment of money by the Arizona Board of Regents under a contract alleged to be illegal in violation of A.R.S. § 34-201. The appellants brought suit pursuant to A.R.S. § 35-213. The trial court granted summary judgment for the Board of Regents. We affirm the summary judgment in favor of the Board of Regents, although we reach this result for reasons different from those of the trial court.

We have jurisdiction pursuant to A.R.S. § 12-2101 and 17A A.R.S. Rules of Civil Appellate Procedure, rule 19(e).

The appellants seek to enjoin expenditures by the Board of Regents in connection with the installation of a new sound system at Grady Gammage Auditorium on the theory that such expenditures violate the Arizona force account law. Section 34-201(C) requires that construction and alteration of any public building, exceeding five thousand dollars in total cost, be advertised for bids by private contractors rather than done by the state's own employees. It is uncontroverted that the labor for the installation of the sound system was done by employees of Arizona State University and that the cost of the project exceeded five thousand dollars.

In accordance with the statutory requirement of A.R.S. § 35-213, the appellants requested the attorney general of the state of Arizona to enjoin the expenditure of funds on this project. The attorney general declined appellants' request and appellants subsequently filed this suit.

Evidence at the preliminary injunction hearing established that the money spent on the sound system originated from either of two "local" sources, the Gammage Auditorium Account which is funded from student registration and tuition fees and ticket sales, and the Facilities Development Account, also funded from student fees. The fees retained in these "local" accounts are not reported to the state legislature.

The trial court held that an action will not lie under A.R.S. § 35-213 to recover allegedly illegal expenditures from funds to which the plaintiffs have not contributed. The court apparently considered Smith v. Graham County Community College Dist., 123 Ariz. 431, 600 P.2d 44 (App.1979), to be dispositive.

In Smith, the plaintiffs, the Associated General Contractors of America, sought to enjoin the Community College District from making alterations of the roof of a campus building without having the work done by a licensed contractor. The plaintiffs contended that the college district had failed to comply with the Arizona force account law. The Court of Appeals held that because the plaintiffs were not taxpayers in the community college district they did not have standing to bring the action. "Because the theory allowing the taxpayer to maintain a suit is based upon his equitable ownership of the fund and his liability to replenish the public treasury for an insufficiency caused by misappropriation, we believe that the connection of the Associated General Contractors of America with the community college district is too remote." 600 P.2d at 46. Appellants urge us not to read into A.R.S. § 35-213 this common-law taxpayer standing requirement for maintaining a suit to challenge expenditures from state funds. We find that Smith is distinguishable and not controlling because that action was not brought under A.R.S. § 35-213. The common-law requirement that the plaintiff contribute to the fund which he challenges is expressly dispensed with by the language of A.R.S. §§ 35-212-213.

Arizona Revised Statutes, § 35-212, ^* gives the attorney general of Arizona the power to bring an action in the name of the state to enjoin the illegal payment of state money or to recover such money if already paid. Arizona Revised Statutes, § 35-213(A), provides that

"[i]f for sixty days after request made by a taxpayer of the state in writing, the attorney general fails to institute such an action as provided in § 35-212, any taxpayer of the state may institute the action in his own name and at his own cost with the same effect as if brought by the attorney general."

These statutes authorize any taxpayer to bring an action, after making...