Idaho Branch Inc. of Associated General Contractors of America, Inc. v. Nampa Highway Dist. No. 1

• Decision Date: 03 February 1993
• Docket Number: No. 19352,No. 4,4,19352
• Citation: 123 Idaho 237,846 P.2d 239
• Parties: IDAHO BRANCH, INC. OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., an Idaho corporation; Idaho Sand & Gravel Company, Inc., an Idaho corporation; Nelson-Deppe, Inc., an Idaho corporation; and Bryan C. Rambo Crushing Company, Inc., Plaintiffs-Appellants-Cross Respondents, v. NAMPA HIGHWAY DISTRICT NO. 1, a political subdivision of the State of Idaho; Canyon Highway District, a political subdivision of the State of Idaho, Defendants-Respondents-Cross Appellants, and WEST ONE BANK, IDAHO, NATIONAL ASSOCIATION, formerly known as The Idaho First National Bank, Defendant-Respondent.
• Court: Idaho Court of Appeals

Page 239

846 P.2d 239

123 Idaho 237

IDAHO BRANCH, INC. OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., an Idaho corporation; Idaho Sand & Gravel Company, Inc., an Idaho corporation; Nelson-Deppe, Inc., an Idaho corporation; and Bryan C. Rambo Crushing Company, Inc., Plaintiffs-Appellants-Cross Respondents, v. NAMPA HIGHWAY DISTRICT NO. 1, a political subdivision of the State of Idaho; Canyon Highway District No. 4, a political subdivision of the State of Idaho, Defendants-Respondents-Cross Appellants and WEST ONE BANK, IDAHO, NATIONAL ASSOCIATION, formerly known as The Idaho First National Bank, Defendant-Respondent.

No. 19352.

Court of Appeals of Idaho.

Feb. 3, 1993.

Hall, Farley, Oberrecht & Blanton, Boise, for appellants. Phillip S. Oberrecht, argued.

White, Peterson, Perry, Pruss, Morrow and Gigray, P.A., Nampa, for respondents. William F. Gigray III, Caldwell, argued.

SWANSTROM, Judge.

This is an action brought by a contractors' association and some of its members against two highway districts and a bank for declaratory and injunctive relief. The complaint alleged that the districts had violated provisions of the Idaho Constitution in financing and purchasing a rock crusher for the joint use of the districts. The trial court dismissed the action, on defendants' motions, ruling that the plaintiffs lacked standing to contest the constitutionality of the highway districts' actions in purchasing and financing the equipment. The plaintiffs appealed the order dismissing their action. The defendants cross-appealed, contending the court erred in denying their request for attorney fees. For the following reasons, we affirm.

In May, 1986, Nampa Highway District No. 1 and Canyon Highway District No. 4 (the districts) entered into a "Municipal Equipment Financing Agreement" with Idaho First National Bank (now West One Bank) to finance the purchase of a rock crusher over a six-year term. By an earlier agreement, the districts had joined together for the purpose of operating a rock crusher and related equipment to supply the gravel needs of the two districts. The commissioners of each district formed the governing board of the crushing operation, loaned specified pieces of equipment to the operation and created a joint operating fund. The budget of the joint fund for the crushing operation was to be adopted at a board meeting only after the respective public hearings and approval of each district's share of the joint venture.

Idaho Branch, Inc. of The Associated General Contractors of America, Inc., (Idaho AGC) is an Idaho non-profit cooperative association of construction contractors, whose purposes include the advancement of the general welfare of such contractors in Idaho. Idaho AGC and three of its member contractors (plaintiffs) sought to have the financing agreement between the districts and the bank invalidated. Plaintiffs alleged that the agreement violated art. 7, § 17 and art. 8, § 3 of the Idaho Constitution, dealing with limitations on county indebtedness and dedication of highway user fees to specified uses, not including the purchase of a rock crusher. ¹ They asserted that, as taxpayers, they were harmed by the action of the districts, and as competitor gravel producers, they were deprived of their right to bid on contracts to supply the gravel needs of the districts, causing them to suffer business losses. Their complaint prayed for no damages, but only for a declaratory judgment holding that the financing agreement was "void and unenforceable," for an injunction precluding the purchase of the crusher, and for attorney fees and costs.

The districts and the bank answered the complaint and subsequently filed motions to dismiss, asserting that the plaintiffs failed to state a claim upon which relief could be granted. I.R.C.P. 12(b)(6). After extensive discovery, plaintiffs moved for summary judgment, supporting the motion with affidavits, exhibits and deposition testimony. A hearing was held on all pending motions. In support of their motions to dismiss, the districts argued that plaintiffs had no standing to pursue their action for a declaratory judgment. The trial court agreed. The court reasoned "that neither Article 8, § 3 nor Article 7, § 17 of the Idaho Constitution protects the interests sought to be protected by the Plaintiffs." The court granted the districts' motion to dismiss and entered an order dismissing the action on grounds that the plaintiffs lacked standing. ² Accordingly, the court did not reach the merits of the plaintiffs' motion for summary judgment. The plaintiffs appealed.

The standard for reviewing a Rule 12(b)(6) dismissal is the same standard applicable to motions for summary judgment. I.R.C.P. 12(b), 56; Miles v. Idaho Power Co., 116 Idaho 635, 637, 778 P.2d 757, 759 (1989); Tomchak v. Walker, 108 Idaho 446, 700 P.2d 68 (1985). "The nonmoving party is entitled to have all inferences from the record viewed in his favor and only then may the question be asked whether a claim for relief has been stated." Miles v. Idaho Power Co., 116 Idaho at 637, 778 P.2d at 759. We will review freely any statements of law and the conclusion that the facts shown did not entitle the contractors to any relief. Staggie v. Idaho Falls Consol. Hospitals, Inc., 110 Idaho 349, 351, 715 P.2d 1019, 1021 (Ct.App.1986). Where, as here, we are dealing with facts of peculiar constitutional significance, i.e., standing, we will evaluate the entire record independently to assure a proper application of constitutional principles. IDAHO APPELLATE HANDBOOK Standards of Appellate Review § 3.3.6.1 (Idaho Law Foundation, Inc. 1985).

The contractors argue that the trial court should have determined that they had standing under art. 7, § 17 and art. 8, § 3. In addition to claiming a generalized harm common to all taxpayers, the contractors alleged that the specialized harm which they suffered as a result of the districts' action was a loss of business opportunity and revenues from future contracts to sell gravel to the districts. They contend that the trial court's ruling that they had no standing was contrary to Miles v. Idaho Power Co., supra, which requires only a specialized and peculiar injury to confer standing upon a taxpayer to challenge governmental action.

Plaintiffs have brought this action within the framework of the (Idaho) Uniform Declaratory Judgment Act. Certain sections of the Act are pertinent to the issue of "standing." Idaho Code § 10-1202 provides that "[a]ny person ... whose rights, status or other legal relations are affected by a ... contract ... may have determined any question of construction or validity arising under the ... contract ... and obtain a declaration of rights, status or other legal relations thereunder." The general power of the courts to declare rights, status, and other legal relations is not limited by the enumeration of specific subjects for declaratory judgment relief which will terminate an actual controversy or remove an uncertainty. I.C. § 10-1205. However, a court may refuse to render a declaratory judgment or decree if the judgment would not terminate the uncertainty or controversy giving rise to the proceeding. I.C. § 10-1206. The Act is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations, and is to be liberally construed and administered. I.C. § 10-1212. Finally, the Act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of the states which enact it, and to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees. I.C. § 10-1215.

As shown above, to have standing a plaintiff must show the existence of an actual controversy which can be resolved or terminated by the action. I.C. §§ 10-1205, -1206. In Harris v. Cassia County, 106 Idaho 513, 681 P.2d 988 (1984), the Idaho Supreme Court summarized the elements or criteria of a "justiciable controversy" taken from Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617 (1937), saying "we will apply these criteria in conjunction with pertinent Idaho case law cited infra." 106 Idaho at 516, 681 P.2d at 991 (citations omitted).

A "controversy" in this sense must be one that is appropriate for judicial determination.... A justiciable controversy is thus distinguished from a difference or dispute of a hypothetical or abstract character; from one that is academic or moot.... The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests.... It must be a real and substantial controversy admitting of specific relief through a decree of conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.

Harris v. Cassia County, 106 Idaho at 516, 681 P.2d at 991. Our Supreme Court reiterated a previous holding that the right sought to be protected by a declaratory judgment "may invoke either remedial or preventive relief; it may relate to a right that has either been breached or is only yet in dispute or a status undisturbed but threatened or endangered; but, in either or any event, it must involve actual and existing facts." 106 Idaho at 516-17, 681 P.2d at 991-92 (citations omitted).

A more recent discussion of "standing" is found in Miles v. Idaho Power Co., supra. There, a challenge was made to the standing of a utility ratepayer who had brought a declaratory judgment action challenging the constitutionality of a contract between the utility and the State of Idaho, in which the utility agreed to relinquish certain of its water rights. Again, primarily, the Idaho Supreme Court looked for guidance to federal decisions and to its own prior decisions. The Court noted that the doctrine of standing focuses on the party seeking relief and not on...