McNichols v. City and County of Denver

• Decision Date: 20 September 1954
• Docket Number: No. 17369,17369
• Citation: 130 Colo. 202,274 P.2d 317
• Parties: William H. McNICHOLS, as Auditor of the City and County of Denver, Plaintiff in Error, v. CITY AND COUNTY OF DENVER, a Body Politic and Corporate, and Quigg Newton, as Mayor of the City and County of Denver, Defendants in Error.
• Court: Colorado Supreme Court

Page 317

274 P.2d 317

130 Colo. 202

William H. McNICHOLS, as Auditor of the City and County of Denver, Plaintiff in Error, v. CITY AND COUNTY OF DENVER, a Body Politic and Corporate, and Quigg Newton, as Mayor of the City and County of Denver, Defendants in Error.

No. 17369.

Supreme Court of Colorado, En Banc.

Sept. 20, 1954.

Ivor O. Wingren, Henry E. Lutz, Denver, for plaintiff in error.

John C. Banks, Horace N. Hawkins, Jr., Denver, for defendants in error.

HOLLAND, Justice.

At a special election held on September 9, 1952, qualified electors of the City and County of Denver authorized the issuance of general obligation bonds in the amount of $350,000 to be used for the extension, improvement and the equipping of Juvenile Hall, which had been regularly submitted to such electors. Thereafter, the bonds were sold and the proceeds placed in the treasury of the City and County of Denver.

Thereafter the Manager of Improvements and Parks published a notice to architects in 'The Daily Journal,' calling their attention to the proposed construction work and requesting that architects who might be interested to file fee schedules, a statement of their professional qualifications and other information pertaining to the proposed work. A number of architects responded by submitting fee schedules and other information.

Thereafter, and on March 20, 1953, upon the recommendation and approval of the Manager of Improvements and Parks, and under the seal of the City, the Mayor entered into an employment contract with one Stanley E. Morse, one of the architects who submitted a fee schedule for the preparation of plans for the construction contemplated. Ten days thereafter, signed copies of the contract were delivered to William H. McNichols for his counter signature and registration, as is necessary and required for compliance with the charter provisions relating to such contracts. The Auditor refused to countersign and register the contract and thereupon the City, on June 24, 1953, filed a complaint in the district court entitled, 'To Compel an Officer to Perform an Act.' The complaint contained two causes of action, the first being on the theory that it was mandatory upon the Auditor to approve any contract for architectural services entered into by the Mayor; alleging that the voters had authorized the bond issue; that the architectural contract therefor had been awarded; and the refusal of the Auditor to sign and register. The second cause of action alleged compliance with section 28 of the charter of the City and County of Denver, in that, the Mayor had advertised a notice to architects as hereinbefore set out; and that the contract had been awarded to the lowest reliable and responsible bidder for such services. Defendant Auditor answered the complaint, and as to the first cause of action incorporated a motion to dismiss on the ground that the alleged cause of action failed to state a claim upon which the relief prayed for could be granted. After argument this motion to dismiss the first cause of action was sustained against the City's contention that section 28 of the city charter related to construction contracts only and not to professional services. Defendant in answer to the second cause of action admitted the advertisement for bids and the awarding of the contract to Morse; alleged nonconformity with section 28 of the charter; and further alleged that the award to Morse 'was arbitrary and capricious and constituted an intended partiality in favor of Morse.' The answer also set out sections 28 and 139 of the charter, which are as follows:

'Sec. 28. All contracts for local improvements, and all other contracts involving expenditures under the direction of the board, shall be let by the mayor, upon recommendation of the Board, without any action of the council, except in the passage of the original ordinance authorizing the improvement of contracts. All such contracts shall be let to the lowest reliable and responsible bidder, after public advertisement by the board for not less than ten days in some newspaper of general circulation, published in the city and county. Any other mode of letting such contracts shall be illegal and void and no contract shall be made without a bond for its faithful performance, with sufficient surety or sureties, to be approved by the board, and no other surety than a surety company, approved by the board and mayor, shall be accepted. * * *.'

'Auditor

'139 General Duties.

'He shall * * * see * * * that no appropriation of funds is overdrawn or misapplied, and that no liability is incurred, money disbursed or the property of the city and county disposed of contrary to law or ordinance, and shall perform such other duties not inconsistent with the provisions of this charter, as the council may by ordinance require. * * *.'

A partial stipulation of facts was entered into. The stipulation as to what had occurred, and which has hereinbefore generally been cited, is now of no particular consequence, except the stipulation that the Manager of Improvements and Parks duly advertised for bids; that ten architects responded, and the bids and amounts thereof are attached to the stipulation. These bids ranged from a low fee of 4 1/2% to a high fee of 6% of the amount to be expended. Morse's bid was 5.95%.

The written recommendations of the Manager of Improvements and Parks is as follows:

'Recommendations

'1. It would obviously take some time and a lot of study for any of these proposers, except Morse, to become sufficiently acquainted with this job to turn out thoroughly competent plans. If this work is rushed, or if mistakes occur, or for any other reason, the difference in fees might be more than offset by added construction costs--some $4,500 is involved.

'2. While most of the proposers are competent and reputable, they have expressed ideas which are at variance with Gilliam's requirements; they might or might not be amenable to his ideas.

'3. Morse appears to be the 'lowest reliable and responsible bidder' in the sense that he is best qualified by his work with Gilliam during the past year.'

After delivery of the contract to the Auditor, he refused to approve the contract on the ground that the requirements of section 28 of the charter had not been complied with.

At the time of the trial on January 12, 1954, the only witnesses were Manager Campbell and Mr. Morse for the plaintiff, and a stipulation as to what Mr. McNichols would testify on behalf of defendant was used, due to the fact that McNichols was ill at the time and not available as a witness. The essential part of McNichols' testimony would have been to the effect that Campbell, the Manager of Improvements and Parks, in a letter to one of the competitor bidders, had recognized that section 28 of the charter would have to be amended in order to obviate the effect of two decisions of the Supreme Court of Colorado relating to the awarding of architectural contracts in order that the awarding authorities would have a freer hand in such matters; further that he concluded that the awarding constituted an intentional and predetermined favoritism to Morse at the instance of the Judge of the juvenile court; and that the advertisement for competitive bids was a sham procedure violating the substance and spirit of section 28 of the charter.

At the conclusion of the trial the court took the matter of the second cause of action under advisement and later in a lengthy finding of fact and conclusion of law entered judgment for plaintiff City, which was a direction to the Auditor to forthwith countersign and register the contract. The substance of this finding of fact was that in the exercise of discretion the Manager of Improvements and Parks acted in good faith without any taint of fraud and recommended the letting of the contract to the lowest responsible bidder. The Auditor now seeks review of that judgment on the following grounds:

'Concise Summary of Argument

'1. The award rests solely on the Manager's recommendation to the Mayor, and not on later attempts of the Manager at self-justification, either by testimony in this case or otherwise.

'2. The Auditor's refusal to approve the contract must be judged as of the time he acted and the information then before him.

'3. The Manager has certain discretion but that discretion must not be arbitrary, capricious nor from motives of favoritism, and not abused.

'4. The award of the contract in this case to Morse rested altogether on the latter's personal acceptability to Juvenile Judge Gilliam, the other bidders being equally competent and reputable.

'5. The Manager disregarded all tests and standards as to who was or might have been the lowest reliable and responsible bidder within the purview of Section 28 of the Charter, in favor of the one who was most amendable [amendable] to Judge Gilliam's 'ideas' 'and by his work with Gilliam during the past year.'

'6. Morse was briefed and trained for the work long in advance of the authorization of the project. The nine other bidders were out before they ever entered the contest. There was no competitive bidding.

'7. The Manager applied the dollar test, and none other, to all of the five 6% bidders who were 5/100ths of 1% higher than Morse and arbitrarily disregarded all of their bids. He applied no tests at all to the four bidders who were lower than Morse dollarwise. The only test he applied to Morse was his acceptability to Judge Gilliam.'

It appears that Judge Gilliam, judge of the juvenile court, had long advocated the need of the improvements here involved; that he had some far-reaching ideas concerning the same; that Morse, the architect, had concerned himself about the matter sufficiently to have many conferences with Judge Gilliam and between the two of them had arrived at some conclusions and plans that would necessitate the expenditure of approximately $600,000; it also appears that Judge Gilliam talked with the...