J.F. Ahern Co. v. Wisconsin State Bldg. Com'n

• Decision Date: 07 June 1983
• Docket Number: No. 81-1274,81-1274
• Citation: 114 Wis.2d 69,336 N.W.2d 679
• Parties: , 40 A.L.R.4th 940 J.F. AHERN CO., a Wisconsin corporation, and H & H Electric Co., Inc., a Wisconsin corporation, Plaintiffs-Appellants and Cross-Respondents, v. WISCONSIN STATE BUILDING COMMISSION and Paul L. Brown, its Secretary and as an individual, and Wisconsin Department of Administration, and Robert H. Dunn, its former secretary and as an individual, Defendants-Respondents and Cross- Appellants.
• Court: Wisconsin Court of Appeals

Page 679

336 N.W.2d 679

114 Wis.2d 69, 40 A.L.R.4th 940

J.F. AHERN CO., a Wisconsin corporation, and H & H Electric

Co., Inc., a Wisconsin corporation, Plaintiffs-Appellants and Cross-Respondents, v. WISCONSIN STATE BUILDING COMMISSION and Paul L. Brown, its

Secretary and as an individual, and Wisconsin Department of

Administration, and Robert H. Dunn, its former secretary and

as an individual, Defendants-Respondents and Cross- Appellants.

No. 81-1274.

Court of Appeals of Wisconsin.

Argued July 28, 1982.

Opinion Released June 7, 1983.

Opinion Filed June 7, 1983.

Robert J. Kay and Mark C. Williamson, Madison, argued, for plaintiffs-appellants and cross-respondents; Geisler & Kay, S.C., Madison, on brief.

John C. Murphy, Asst. Atty. Gen., argued, for defendants-respondents and cross-appellants; Bronson C. La Follette, Atty. Gen., and Charles A. Bleck Asst. Atty. Gen., on brief.

Before GARTZKE, P.J., DYKMAN, J., and W.L. JACKMAN, Reserve Judge. ¹

GARTZKE, Presiding Judge.

J.F. Ahern Co. and H & H Electric Co. brought this action for declaratory judgment, challenging the defendants' actions regarding construction of a state office building in Madison, General Executive Facility II, generally known as "GEF II." The complaint as amended, adds challenges regarding another state office building, GEF III, and six other buildings. The challenges center on the State Building Commission's waiver of the competitive bidding requirements in sec. 16.855, Stats. The defendants are the Building Commission, the Department of Administration, a former DOA secretary, Robert H. Dunn, and Paul L. Brown, director of the Bureau (now Division) of Facilities Management and secretary of the commission.

Plaintiffs claim that the defendants failed to follow state law and that the powers granted to the commission improperly delegate legislative authority to it and violate the constitutional principle of separation of powers. The trial court rejected plaintiffs' contentions and dismissed the complaint. Plaintiffs appealed. The defendants raise several procedural issues in their cross-appeal, which we discuss before reaching the plaintiffs' arguments. We reach plaintiffs' arguments, and because we find they lack merit, we affirm the trial court, except as to the court's failure to dismiss the claims against Brown and Dunn.

We treat the issues raised by the parties in the following order:

1. Did the trial court lack jurisdiction for plaintiffs' failure to serve legislative committees as required by sec. 806.04(11), Stats?

2. Should the trial court have dismissed the claims against Brown and Dunn for plaintiffs' failure to serve notice on the Attorney General as required by sec. 895.45, Stats. 1975?

3. Do plaintiffs have standing?

4. Did the court abuse its discretion by allowing the plaintiffs to amend their complaint a third time?

5. Did the commission and the DOA violate sec. 13.48(10), Stats. 1977, by entering 6. Has legislative power been delegated to the commission with sufficient standards for its exercise?

contracts before final plans were completed?

7. Did the commission comply with sec. 13.48(19), Stats., when waiving the competitive bidding requirements of sec. 16.855, Stats?

8. Is the commission, a legislative committee, unconstitutionally vested with executive branch powers?

9. Are the individual defendants, Dunn and Brown, personally liable for unconstitutional and unlawful expenditure of public funds?

10. Are costs under sec. 814.04(2), Stats. 1979-80, allowable for copies of adverse examinations and a partial hearing transcript?

GENERAL BACKGROUND

The Building Commission is a legislative committee, created under subch. 11 of ch. 13, Stats., entitled "Legislative Branch." The commission possesses various powers under sec. 13.48 over the construction and use of state buildings. Those powers include authority to waive the competitive bidding law contained in sec. 16.855, Stats., on the letting of state construction contracts. Sec. 13.48(19).

September 9, 1976 the commission approved the solicitation of "design/build proposals" to construct GEF II. The design/build process utilizes an architect or engineer and a construction contractor to design and construct a building within a maximum allowed cost. The design/build process differs from the conventional procedure by which a building is first designed and contractors then submit bids to construct it, based on the plans, as provided in sec. 16.855, Stats.

The design/build process used in the GEF II project consisted of two phases. In the first phase, interested persons submitted proposals to cover the design and construction of an office building in accordance with a "proposal document" prepared by the Bureau of Facilities Management. The submitted proposals were evaluated by the bureau on the basis of design/build "team" experience and qualifications, the initial building cost and land cost. Based on the number of phase one proposals, two or three of the proposals were to be selected for phase two evaluation. Five design/build proposals were submitted on the GEF II project. December 21, 1976 the commission selected two proposals, those submitted by Marshall Erdman and Associates and by J.H. Findorff and Sons, to proceed to phase two and authorized the release of $80,000 of surplus building trust funds for phase two design and for environmental impact statements. The commission formally waived the competitive bidding requirements of sec. 16.855, Stats., the same day.

Phase two of the GEF II design/build selection process called for the state to enter preliminary design contracts with the two finalists, Findorff and Marshall Erdman. Contracts for the preliminary design services were dated February 8, 1977. The governor signed and approved the contracts March 30, 1977.

Plaintiffs commenced this action December 24, 1976 to enjoin the DOA from entering contracts for the design and construction of GEF II unless awarded by competitive bidding and for a judgment declaring that the commission unlawfully and unconstitutionally exercised its authority. ² In January 1977 plaintiffs amended the complaint to add a claim for damages against Dunn and Brown.

December 20, 1977 the commission authorized signing the contract for the construction of GEF II by Findorff. February 6, 1978 DOA informed Findorff by letter that the GEF II construction contract was approved and attached a copy of the contract, signed by the DOA secretary, defendant Brown, the governor and Findorff. A contract change order, authorizing the construction of two additional floors of office space, was accepted by Findorff April 12 February 9, 1979 plaintiffs filed a second amended complaint adding a claim that the commission had executed or was seeking to execute other illegal construction contracts by waiving sec. 16.855, Stats., on the GEF III project and six other projects. The trial court permitted the claim as to GEF III. September 20, 1979 the trial court granted plaintiffs leave to file a third amended complaint which incorporated the claims as to the six other projects and added an allegation that sec. 13.48, Stats., violated the separation of powers doctrine of the Wisconsin Constitution.

1978 and approved by defendant Brown April 24 and by the governor on May 12, 1978.

PROCEDURAL ISSUES

1. Notice To Legislative Committees

The Declaratory Judgments Act requires service of a copy of the petition on the Joint Committee for Review of Administrative Rules if any part of ch. 227, Stats., entitled Administrative Procedure and Review, is placed in issue. Sec. 806.04(11), Stats. It also requires service on the Joint Committee on Legislative Organization if any provision of ch. 13, Stats., entitled Legislative Branch, or ch. 227 (or other chapters) is placed in issue. ³ This requirement was created by sec. 374, ch. 449, Laws of 1977, effective August 1, 1978. Plaintiffs filed their second and third amended complaints after that date, without serving either committee.

Amended complaints supersede prior complaints. Schweiger v. Loewi & Co., Inc., 65 Wis.2d 56, 58, 221 N.W.2d 882, 884 (1974). Defendants therefore contend that the trial court lacked subject matter jurisdiction because plaintiffs failed to serve either joint committee with the second and third amended complaints. Failure to comply with the requirement of service on the attorney general in a declaratory judgment action in which a statute or ordinance is alleged to be unconstitutional has been held as fatal to the court's subject matter jurisdiction. O'Connell v. Bd. of Ed., Jt. Dist. # 10, 82 Wis.2d 728, 735, 264 N.W.2d 561, 564 (1978).

Even assuming that the requirement of service on the legislative committees is jurisdictional, plaintiffs' failure to serve the amended complaints on the committees did not result in a jurisdictional defect. Generally, a court's jurisdiction over a declaratory judgment action is determined as of the time the suit is filed, and matters occurring after such time are not considered. Forest Laboratories, Inc. v. Formulations, Inc., 299 F.Supp. 202, 212 (E.D.Wis.1969). The circuit court acquired jurisdiction over the declaratory judgment action under sec. 806.04(11), Stats. 1975, when the action was commenced. There is no indication that the requirement of service on legislative committees imposed by sec. 374, ch. 449, Laws of 1977, was intended to apply to actions pending when that law became effective.

Because we determine jurisdiction as of the time an action is commenced, it is not necessary that an amended complaint comply with subsequently imposed jurisdictional requirements. The trial court correctly denied defendants' motion to dismiss for failure to serve the legislative committees.

2. Compliance With Sec. 895.45, Stats. 1975

Brown and Dunn argue that the complaints should have been dismissed as to them because the plaintiffs failed to give notice to the Attorney General. The amended...