Pioneer Co. v. Hutchinson

• Decision Date: 19 December 1975
• Docket Number: No. 13561,13561
• Citation: 220 S.E.2d 894,159 W.Va. 276
• Court: West Virginia Supreme Court
• Parties: The PIONEER COMPANY, a corporation, v. The Honorable John G. HUTCHINSON, Mayor of the City of Charleston, West Virginia.

Page 894

220 S.E.2d 894

159 W.Va. 276

The PIONEER COMPANY, a corporation, v. The Honorable John G. HUTCHINSON, Mayor of the City of Charleston, West Virginia.

No. 13561.

Supreme Court of Appeals of West Virginia.

Dec. 19, 1975.

Syllabus by the Court

1. Statutes and ordinances which require contracts to be awarded to the lowest responsible bidder are enacted for the benefit of the public, to protect public coffers, and confer no rights upon individual contractors.

2. An unsuccessful bidder has no standing to prosecute an action for an injunction to enjoin a proposed violation of a statute or ordinance requiring contracts to be awarded to the lowest responsible bidder, except where he seeks such relief as a taxpayer.

3. 'On appeal of a case involving an action covered by the Rules of Civil Procedure, this Court will disregard and regard as harmless any error, defect or irregularity in the proceedings in the trial court which does not affect the substantial rights of the parties.' Point 2, Syllabus, Boggs v. Settle, 150 W.Va. 330, 145 S.E.2d 446 (1965).

4. 'The determination of whether a party is indispensable under the provisions of Rule 19(a) of the West Virginia Rules of Civil Procedure is in the sound discretion of the trial court. Generally, a court must consider whether: (1) The interest of the absent party is distinct and severable; (2) in the absence of such party, the court can render justice between the parties before it; (3) the decree made will, in the absence of such party, have no injurious effect on the interest of such absent party; (4) the final determination will, in the absence of such party, be consistent with equity and good conscience, but each case must be considered on the basis of its peculiar facts, and the principal limitation on the court's discretion is whether, under the particular facts of each case, absent parties will be adversely affected by nonjoinder.' Point 1, Syllabus, Dixon v. American Industrial Leasing Co., W.Va., 205 S.E.2d 4 (1974).

5. Statutes and ordinances which require public officers or a public tribunal to award a contract to the 'lowest responsible bidder' vest wide discretion in officials.

6. A court will not ordinarily interfere with the action of a public officer or tribunal clothed with discretion, in the absence of a clear showing of fraud, collusion or palpable abuse of discretion.

7. 'In the construction of statutes, where general words follow the enumeration of particular classes of persons or things, the general words, under the rule of construction known as Ejusdem generis, will be construed as applicable only to persons or things of the same general nature or class as those enumerated, unless an intention to the contrary is clearly shown.' Point 2, Syllabus, Parkins v. Londeree, 146 W.Va. 1051, 124 S.E.2d 471 (1962).

8. Only personal representatives or persons serving in a similar fiduciary capacity are exempt from the bond requirements of W.Va.Code, 53-5-9.

9. When an injunction is awarded which is final in nature, bond is required under the provisions of W.Va.Code, 53-5-9, until the time for appeal has expired or the appellate process is concluded.

10. While Rule 24 of the West Virginia Rules of Civil Procedure provides for the intervention of parties upon a timely application, the timeliness of any intervention is a matter of discretion with the trial court.

Jackson, Kelly, Holt & O'Farrell, Forrest H. Roles and Roger A. Wolfe, Charleston, for appellant.

Steptoe & Johnson, Charles W. Yeager, Charleston, for appellee.

FLOWERS, Justice:

The Pioneer Company, a corporation, was the low bidder on a sewer construction contract advertised by the City of Charleston. When the city council voted to award the contract to Lester Construction Company, the second lowest bidder, Pioneer filed a civil action in the Circuit Court of Kanawha County against John G. Hutchinson, Mayor of the City of Charleston. Pioneer sought to compel the mayor to execute the construction contract with it and to enjoin him from entering into such a contract with any other bidder. The trial court defined the issues as whether the plaintiff was a 'responsible bidder' and was a taxpayer with standing to maintain the action. The court refused to consider the City of Charleston and Lester Construction Company as indispensable parties and found that the plaintiff was a 'responsible bidder' with standing to bring the action. Having found Pioneer to be a 'responsible bidder,' the court held that the city was guilty of a palpable abuse of discretion in awarding the contract to other than the lowest bidder, Pioneer.

From an order granting Pioneer the mandatory and prohibitory injunctive relief prayed for, the mayor prosecutes this appeal. The mayor's assignments of error are predicated upon the foregoing rulings and additionally upon the action of the trial court in permitting I. V. Cunningham to intervene and in refusing to require an injunction bond.

After the appeal to this Court was granted, the appellant was further granted leave to move to reverse the judgment of the circuit court, pursuant to the provisions of W.Va.Code, 58-5-25, and Rule IX of the Rules of this Court.

The dispute here began in October, 1974, when the City of Charleston advertised for bids on a storm sewer construction project in the Garrison Avenue area of the city. On November 15, 1974, the bids were opened and the results certified by a firm of consulting engineers. The plaintiff corporation's bid was $1,392,200. The next lowest bidder was Lester Construction Company at $1,400,440. The two bids differed by $8,240 or approximately six-tenths of one percent.

After the bids had been opened and the results certified, it came to the attention of city officials that the ownership of Pioneer had been placed in issue by an action filed in the Circuit Court of Kanawha County on November 20, 1974, styled I. V. Cunningham v. Dean Lewis, et al. The verified complaint in considerable detail alleged that Lewis had defrauded Cunningham of his interest in the stock of Mountain State Construction Company, Black, Inc., The Pioneer Company and Concrete Supply Company. These corporations were a part of a complicated corporate structure owned jointly by Lewis and Cunningham and operated principally by Lewis. Both Lewis and Pioneer were made parties defendant. The complaint prayed for injunctive relief and the appointment of a receiver. On November 20, 1974, the Circuit Court of Kanawha County issued a temporary injunction. The injunction effectively restrained Lewis from operating the companies whose ownership was in question, including The Pioneer Company. That injunction was dissolved on December 6, 1974, for failure of the plaintiff Cunningham to post the requisite $1,000,000 bond.

In addition to the litigation concerning the ownership of The Pioneer Company, the city had information concerning the possible default on a dam construction project in Virginia by Mountain State Construction Company, a company of which Mr. Lewis was also the president and which used equipment owned by The Pioneer Company.

As a consequence of the city's uncertainty about Pioneer, a 30-day extension of the bid period was requested. Within 10 days both Pioneer and Lester notified the city of their approval of the extension. This extended the award deadline to February 14, 1975.

From November 20, 1974, until February 3, 1975, the city attempted to obtain information which would clarify the status of The Pioneer Company. Tom Blair, a consulting engineer on the project, talked with Lewis concerning the problems raised by the law suit. Blair recommended that city officials award the contract to the low bidder 'because he really wasn't in a position to do anything else.'

The information gleaned by city officials was presented to the finance committee of the city council on February 3, 1975. The committee after about thirty minutes discussion voted unanimously to recommend the bid of Lester Construction Company. Upon the recommendation of the finance committee, the city council, with both bids before it, and after some questioning of the finance chairman about the recommendation, voted unanimously to award the contract to Lester and authorized the mayor to execute the contract.

On February 5, 1975, The Pioneer Company filed a civil action in the Circuit Court of Kanawha County, alleging it was the lowest responsible bidder and that the city council had acted in violation of the governing ordinance, Code of Charleston, West Virginia, Article 35, Sections 1 and 9. ¹ An amended complaint was subsequently filed by Pioneer in its capacity as a taxpayer and in behalf of other taxpayers similarly situated.

The mayor sought dismissal of the complaint on the grounds that the complaint failed to state a cause of action, failed to join the City of Charleston and Lester Construction Company as indispensable parties, and was prosecuted by a plaintiff who had no standing to sue. The motion to dismiss was overruled by the trial court.

A hearing on the application for the injunction was subsequently held. The evidence presented by the plaintiff established that the company was qualified by experience, personnel, equipment, and financial stability to perform the duties under the contract. The evidence further established that the corporation was qualified and able to furnish a performance bond to secure performance of its contractual duties. The plaintiff presented evidence that it had completed all of its contracts on schedule or ahead of schedule.

It was uncontested by the mayor that Pioneer was a taxpayer in the City of Charleston and that, except for the doubts about Pioneer's responsibility created by the I. V. Cunningham litigation, Pioneer was otherwise a qualified bidder.

In defense of the position that Pioneer was not a 'responsible' bidder, the mayor presented the testimony of Hugh Bosely, city manager, and Joe S. Smith, chairman...