Marshall v. Pasadena Unified School Dist.

• Decision Date: 29 June 2004
• Docket Number: No. B160520.,B160520.
• Citation: 15 Cal.Rptr.3d 344,119 Cal.App.4th 1241
• Court: California Court of Appeals Court of Appeals
• Parties: Paul G. MARSHALL, Jr. et al., Plaintiffs and Respondents, v. PASADENA UNIFIED SCHOOL DISTRICT, Defendant and Appellant; Hayward Construction Company, Inc., Real Party in Interest.

15 Cal.Rptr.3d 344

119 Cal.App.4th 1241

Paul G. MARSHALL, Jr. et al., Plaintiffs and Respondents, v. PASADENA UNIFIED SCHOOL DISTRICT, Defendant and Appellant Hayward Construction Company, Inc., Real Party in Interest.

No. B160520.

Court of Appeal, Second District, Division 3.

June 29, 2004.

As Modified on Denial of Rehearing July 28, 2004.

Gibbs, Giden, Locher & Turner, Sharon Suarez, Peter F. Lindborg and Michael I. Giden, Los Angeles, for Appellant.

No appearance for Respondents.

Kevin T. Snider, Escondido; and David Romney, Pasadena, for René Amy and Schoolhouse Alliance, as Amici Curiae, on behalf of Respondents.

Monteleone & McCrory and Joseph A. Miller, Los Angeles, for Real Party in Interest.

KLEIN, P.J.

Defendant and appellant Pasadena Unified School District, a California public school district (the District), appeals a judgment granting a petition for writ of mandate filed by plaintiffs and respondents Paul G. Marshall, Jr. (Marshall) and PW Construction, Inc. (PW) (collectively, petitioners).

The District awarded a construction contract pursuant to an emergency resolution which enabled it to dispense with public bidding. The trial court set aside the District's action, finding no emergency existed.

The essential issue presented is what constitutes an emergency which allows a school district to bypass regular competitive bidding procedures.

Public Contract Code section 20113 allows a school district in an "emergency" to "[m]ake a contract ... for the performance of labor and furnishing of materials or supplies ... without advertising for or inviting bids."¹ Section 1102 states: "`Emergency,' as used in this code, means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services." Because section 1102 defines "emergency" for purposes of the entire Public Contract Code, its definition must be read into section 20113.

Here, there was no "sudden, unexpected occurrence" that posed a clear and imminent danger requiring prompt action to protect life, health, property or essential public services. (§ 1102.) The purported emergency herein stemmed from the District's decision to terminate a prior construction contract for its own convenience. That event did not constitute an emergency within the meaning of section 1102. The judgment is affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

1. The original contract and its termination.

In September 2000, the District publicly advertised for bids for a project to modernize Longfellow Elementary School. The project called for (1) upgrading the electrical and plumbing systems and installing new heating, ventilation and air conditioning in a 92-year-old building, which contains 35 classrooms, and (2) constructing a new building to house six classrooms.

B.F. Construction, Inc. (BFCI) submitted a bid for the project and was determined to be the lowest responsible bidder. On November 29, 2000, the District entered into a $5,987,500 contract with BFCI to do the work.

On December 20, 2001, BFCI wrote a letter to the District stating, inter alia: "BFCI is concerned because the project is at a standstill. [¶] One of the problems is that change orders are being `piecemealed' and unilaterally reduced by [the construction manager]. Additionally, BFCI is not being compensated for delays, and was directed to proceed on change orders, for which it was not paid. [¶] ... [¶] Due to the numerous changes, be advised that we are unable to proceed effectively after January 7, 2002.[¶] ... It is our opinion that this project should be terminated for convenience by the owner, redrawn, reengineered, and put out for rebid as a possible solution for [the District] to straighten out the balance of the project."

On February 1, 2002, the District invoked its express contractual right to terminate its contract with BFCI for the convenience of the District.

2. The dispute between BFCI and the District over the terminated contract.

The contract between BFCI and the District provided that in the event of a termination for convenience, BFCI would be entitled to payment for "Work actually performed and in place as of the effective date of such termination...." BFCI submitted a claim to the District seeking payment of about $1.7 million. The District disputed the claimed amount.

On April 9, 2002, BFCI submitted a formal claim to the District pursuant to Government Code section 910 et seq. On May 16, 2002, BFCI assigned its claim against the District to Marshall. Marshall had been the vice-president of BFCI and was now the president of PW, a general contractor.

On July 31, 2002, Marshall, as BFCI's assignee, filed suit against the District.²

3. Pursuant to an emergency resolution, the District awards a contract for completion of the work to Hayward.

On April 1, 2002, two months after the District terminated its contract with BFCI, the District's Board of Education (Board) adopted an emergency resolution to award a contract for completion of the modernization project at Longfellow Elementary School to Hayward Construction Co. (Hayward).

The resolution included the following recitals: "WHEREAS, the Completion of the Project was scheduled for August 28, 2002 and is falling behind schedule everyday; and, [¶] WHEREAS, the current Codes governing the Letting of Public Contracts requires a process that will add an estimated Sixty (60) to Ninety (90) days to Award a Contract to resume the work and follow through to completion of the Project at Longfellow; and, [¶] WHEREAS, these delays represent a serious impediment to the District's ability to make the necessary transition to appointing another General Contractor in a timely manner in order to attempt to bring the Project back to schedule and deliver the Project on time for the beginning of the 2002-03 School Year; and, [¶] WHEREAS, the inability to utilize the modernized/new classrooms will impact instruction/curriculum, and the unfinished structures, open trenches and materials represent serious safety concerns, and, [¶] NOW, THEREFORE, BE IT RESOLVED, that the Board of Education of [the District] [does] hereby authorize the Award of Contract M-020301/5363Y in the amount of $3,952,804.00 to Hayward Construction Co. for completion of the Phase I Modernization Project at Longfellow ... on [an] emergency basis without the formal Public Bid and Award process."

The Los Angeles County Superintendent of Schools subsequently approved the emergency resolution awarding the contract to Hayward. (§ 20113, subd. (a).)

4. Marshall and PW bring a petition for writ of mandate to enjoin the District from making any payments to Hayward and to require the District to advertise publicly for bids to complete the work.

On June 3, 2002, Marshall and PW filed a petition for writ of mandate (Code Civ. Proc., § 1085), alleging the District's award of the contract to Hayward was unlawful in that no "emergency" existed which would allow the District to avoid compliance with section 20111, subdivision (b),³ and the District had failed to comply with all procedures necessary to enter into a contract on an emergency basis as set forth in section 22050.⁴ Marshall and PW sought to preclude the District from making any payments to Hayward and to require the District to advertise publicly for bids to complete the project and award the contract to the lowest responsible bidder.⁵

5. The District's opposition to the petition.

In opposition, the District asserted its invocation of the emergency exception was a discretionary legislative act which was subject to deferential review for an abuse of discretion. The District argued it properly invoked the emergency exception to public bidding pursuant to section 20113, and the definition of emergency in section 1102 does not apply to school districts or to section 20113.

The District further contended Marshall and PW were manipulating the court system by filing their petition for the sole purpose of gaining leverage in Marshall's negotiations with the District on the BFCI claim.

In opposition to the petition, the District also submitted a declaration by Edward A. Celaya (Celaya), the District's director of facilities. Celaya asserted the termination of the BFCI contract had resulted in an "instruction/curriculum emergency" as well as a safety emergency because the site contained "unsupervised locations containing construction debris [which] would pose a safety threat to the student population."

Hayward, as the contractor selected by the District to complete the project and a real party in interest, filed an opposition joining in the District's papers.

6. Trial court's ruling.

On June 21, 2002, the matter came on for hearing. The trial court granted the petition, ruling as follows:

"It is undisputed that the District failed to comply with the competitive bidding and public advertisement requirements set forth in the Public Contract Code. The District's assertion that its termination of the original contact with BF Construction constituted and gave rise to an emergency is unconvincing. The District has failed to present substantial evidence of an `emergency' as defined by Section 1102 or by any other definition of emergency, such that the exception afforded by Section 20113 would apply.

"Moreover, the District's claim that the construction site creates a danger and inconvenience to students is belied by the fact that it waited almost four months before finding a substitute contractor for the completion of the project. Why didn't the District advertise for public bidding in February or March, after terminating the contract with BF Construction, knowing it takes 60 to 90 days for the public bidding process?

"THEREFORE, IT IS HEREBY ORDERED that the District must publicly advertise for bids to complete the work on the project known as Phase I Modernization at Longfellow...