Quality Towing v. City of Myrtle Beach

• Decision Date: 21 May 2001
• Docket Number: No. 25293.,25293.
• Court: South Carolina Supreme Court
• Parties: QUALITY TOWING, INC., Appellant, v. CITY OF MYRTLE BEACH and William D. Stephens, Respondents.

345 S.C. 156

547 S.E.2d 862

QUALITY TOWING, INC., Appellant, v. CITY OF MYRTLE BEACH and William D. Stephens, Respondents.

No. 25293.

Supreme Court of South Carolina.

Heard February 7, 2001.

Decided May 21, 2001.

Rehearing Denied June 21, 2001.

Robert C. Childs, III and Laura W.H. Teer, both of Mitchell, Bouton, Yokel & Childs, of Greenville, for appellant.

James B. Van Osdell and Charles B. Jordan, Jr., both of Van Osdell, Lester, Howe & Jordan, P.A., of Myrtle Beach, for respondents.

TOAL, Chief Justice:

Quality Towing, Inc. ("Quality") appeals the Special Referee's Order finding in favor of the City of Myrtle Beach ("City").

FACTUAL/PROCEDURAL BACKGROUND

Quality is a South Carolina corporation engaged in the business of towing vehicles in the Myrtle Beach area. On June 13, 1995, the City Council of Myrtle Beach enacted Ordinance 950613-36 ("1995 Ordinance") which instructed the City Manager to contract with one or more wrecker services to provide towing services for the City. Prior to the issuance of the Ordinance, the City operated a Rotation List whereby the City rotated among qualified wrecker services when the City needed vehicles towed. Vehicles towed by the City included City owned vehicles, vehicles illegally parked or abandoned, and privately owned vehicles whose owners had requested the City to tow their vehicle. Under the Rotation List, participants executed yearly contracts which terminated on July 31 of each year. Quality had been one of the wrecker services on the City's Rotation List, which was repealed by the 1995 Ordinance.

Under the 1995 Ordinance, the City was required to bid the contract using requests for proposals ("RFP"). According to the RFP, the City would use six weighted criteria to evaluate each proposal: price, equipment, facilities, reputation, ability to perform, and insurance. The City Manager formed a review committee ("Committee") to evaluate the proposals submitted in response to the RFP. The Committee consisted of City employees, but not City Council members, with prior experience with the local towing companies and/or experience in the procurement process. The Committee was instructed to evaluate each of the proposals and to advise and aid the City Manager in his determination of which proposal best met the City's requirements.

Quality submitted a proposal on September 11, 1995. Three other towing companies also submitted a proposal. The Committee held a meeting on September 26, 1995, where the proposals were discussed. The RFP stated the Committee would inspect the premises of the proposers on October 2, 1995. Quality was advised on that day its premises would not be inspected because the Committee had determined its proposal was non-responsive. The only facility inspected on October 2, 1995, was Auto Body Works.

The City Manager, once aware Quality's proposal was deemed non-responsive, overruled the Committee on this issue, and instructed the Committee to consider the merits of Quality's proposal. Quality's facilities were inspected on December 13, 1995. However, the Committee, pursuant to the time frame established in the RFPs, met on October 12, 1995, and decided to recommend Auto Body Works for the contract. Therefore, the Committee's recommendation was made two months prior to the inspection of Quality's facilities.

The City Manager testified that, after reviewing the Committee's recommendation, he decided to award the contract to Auto Body Works. The contract with Auto Body Works was approved by the City Council at its January 9, 1996, meeting.

On February 16, 1996, Quality filed a complaint against the City and its risk manager William D. Stephens (collectively referred to as the "City") concerning the award of the exclusive contract to another wrecker service. In its complaint, Quality sought an injunction and claimed: (1) the Ordinance was in violation of its civil rights under 42 U.S.C. § 1983 and S.C.Code Ann. § 16-5-60 (Supp.2000); (2) the Ordinance constituted an unlawful trust, monopoly, and restraint of trade; (3) the Ordinance amounted to an inverse condemnation of Quality's property rights; (4) the City acted negligently in its actions; and (5) the City violated South Carolina's Freedom of Information Act¹ ("FOIA").

On June 19, 1997, the lower court granted the City summary judgment on Quality's causes of action for illegal restraint of trade and negligence. On August 27, 1997, the court granted the City summary judgment on Quality's inverse condemnation claim. An order granting a separate trial on the non-jury issues was filed April 7, 1998, and an Order of Reference was filed on May 20, 1998 appointing a special referee.

On April 13, 1999, a hearing was held before the special referee on Quality's cause of action challenging the validity of the ordinance and contract, and on the cause of action concerning alleged violations of the FOIA. By Order dated May 17, 1999, the special referee found in favor of the City. Quality appealed and the issues before this Court are:

I. Did the special referee err in holding the Committee/ Municipal staff meetings are not subject to FOIA?

II. Did the special referee err in finding the City Council's executive session of January 9, 1996, did not violate FOIA?

III. Did the special referee err in determining the contract award was not a franchise?

IV. Did the special referee err in denying Quality's inverse condemnation claim?

V. Did the special referee err in finding the Ordinance is valid and does not deprive Quality of its due process rights?

VI. Did the special referee err in finding there was no impropriety in the bidding or award process?

VII. Did the special referee err in finding the three-year term of the contract was not impermissibly long?

VIII. Did the special referee err in finding the Committee did not violate the City and State Procurement Code?

LAW/ANALYSIS

I. The Freedom of Information Act (FOIA) and the Review Committee

Quality argues the special referee erred in finding the Committee set up by the City Manager to review the proposals was not subject to FOIA. We agree.

The special referee held the Committee meetings in which the members reviewed the proposals were not subject to FOIA. The special referee ruled the Committee was not a "public body" as defined in FOIA since it was formed for the sole purpose of aiding the City Manager in his determination of which wrecker service should receive the contract. The referee specifically held, "This committee, composed entirely of the City's employees and reporting only to the City Manager, was not a committee, subcommittee, or advisory committee of City Council." We find the referee erred in his holding. The plain language of the statute, as well as the purpose behind FOIA as set forth by the legislature, leads to the conclusion that the Committee is a "public body" subject to FOIA.

FOIA is remedial in nature and should be liberally construed to carry out the purpose mandated by the legislature. South. Carolina Dep't of Mental Health v. Hanna, 270 S.C. 210, 241 S.E.2d 563 (1978). When adopting FOIA, the legislature stated "it is vital in a democratic society that public business be performed in an open and public manner." S.C.Code Ann. § 30-4-15 (Supp.2000).

FOIA defines "public body" as:

any state board, commission, agency, and authority, and public or governmental body or political subdivision of the State, including counties, municipalities, townships, school districts, and special purpose districts ... including committees, subcommittees, advisory committees, and the like of any such body by whatever name known.

S.C.Code Ann. § 30-4-20(a). This Court does not need to look any further than the language of the statute to find the Committee was subject to FOIA. Miller v. Doe, 312 S.C. 444, 441 S.E.2d 319 (1994) ("If a statute's language is plain and unambiguous and conveys a clear and definite meaning, there is no occasion for employing the rules of statutory interpretation. The court has no right to look for or impose another meaning.").

The fact that the City Manager, and not the City Council, created the Committee and no council member served on the Committee, is not enough to remove the Committee from the definition of "public body" as stated in FOIA. First, it does not matter that the members of the Committee are not members of the parent body. See 1984 S.C. Op Atty Gen., No. 84-281. Second, the Committee was set up to give advice to the City Manager, and ultimately the City Council. It is clear from the minutes of the City Council meeting and the testimony of Thomas Leath, City Manager, the Committee's selection process and recommendation went directly to the City Council.²

Furthermore, the legislature amended the definition of "public body" in 1987 by adding the phrase "including committees, subcommittees, advisory committees, and the like of any such body by whatever name known." Clearly, the legislature intended for "advisory" bodies, such as the Committee set up by the City Manager to advise him and the City Council, to be covered by the definition. Finally, the Committee was formed to help determine the award of a City contract. This contract entailed the expenditure of public funds. Because the Committee was not open to the public, Quality was unable to learn its bid had been termed non-responsive and to respond to the Committee's concerns. The Committee made its decision to recommend Auto Body Works to the City in secret. FOIA was enacted to prevent the government from acting in secret. South Carolina Tax Comm'n v. Gaston Copper Recycling Corp., 316 S.C. 163, 447 S.E.2d 843 (1994). In addition, the City has advanced no valid reason to hold the meetings and discussions of the Committee concerning a public contract in private. This kind of secret determination is exactly what FOIA was designed to prevent.

The City also argues the Committee was not performing a "government function", but rather a "proprietary or...