Reiman Corp. v. City of Cheyenne
| Decision Date | 13 October 1992 |
| Docket Number | No. 91-269,91-269 |
| Parties | REIMAN CORPORATION, Appellant (Plaintiff), v. CITY OF CHEYENNE, Appellee (Defendant). |
| Court | Wyoming Supreme Court |
E. James Burke of Burke, Woodard & Bishop, P.C., Cheyenne, for appellant.
Alexander K. Davison and S. Gregory Thomas, City Attorney's Office, Cheyenne, for appellee.
Before MACY, C.J., and THOMAS, CARDINE, URBIGKIT * and GOLDEN, JJ.
Reiman Corporation (Reiman) filed a declaratory judgment action against the City of Cheyenne (City) after the City had awarded Reiman a construction contract on an allegedly "mistaken bid." Reiman requested the district court to declare that Reiman was entitled to withdraw/rescind its bid without forfeiture of the bid bond, or, in the alternative, to declare that Reiman was entitled to reform its bid to correct the alleged error. Following a hearing on cross-motions for summary judgment, the district court issued an order which dismissed Reiman's withdrawal/rescission claim for want of jurisdiction and granted summary judgment to the City on the reformation claim. Reiman appeals from only that portion of the district court's order which dismissed its withdrawal/rescission claim. We will reverse and remand.
The only issue properly before this court is: Whether the district court erred in dismissing Reiman's withdrawal/rescission claim on the basis that it lacked subject matter jurisdiction under the Uniform Declaratory Judgments Act.
The City published an invitation for bids for the construction of a new fire station headquarters building on October 16 and 23, 1990. The invitation for bids informed all prospective bidders that bids would be accepted until bid opening at 2:00 p.m. on November 6, 1990. Reiman submitted its bid to the City at approximately 1:50 p.m. on November 6, 1990. Reiman's bid of Approximately an hour after the bid opening, Tom Reiman (Mr. Reiman), Vice President of Reiman, allegedly discovered a clerical error of $71,000 in the computation of Reiman's bid. Mr. Reiman promptly called Marian Black, the City's Director of Purchasing, and Steve Elliott, the Project Architect, to inform them of the alleged error. Mr. Reiman also wrote a letter to the City Council, in which he explained:
$1,910,000, secured by a five percent bid bond, was low bid for the project.
I made an error in adding up my subcontractor bid column. I was adding up my subcontractor bids at approximately 1:35 p.m. when I received a return call from Bob Strasheim of Mechanical Systems concerning his bid and alternate # 3. * * * The last item I added in my "Total Sub Bid" column was line item # 12 precast for $4,000.00. When I went back to adding the column after the interruption I started at line item # 21 skylight which was below item # 20 for $4,000.00. As a result I le[f]t out the following:
Line Item # 14 *** $34,300.00
Line Item # 15 *** 1,500.00
Line Item # 16 *** 25,200.00
Line Item # 19 *** 6,000.00
Line Item # 20 *** 4,000.00
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TOTAL $71,000.00
Concluding this letter, Mr. Reiman requested that Reiman be allowed to withdraw its bid without forfeiture of the bid bond and that the contract be awarded to the next lowest bidder.
Mr. Reiman appeared before the City Finance Committee on November 21, 1990 and before the City Council on November 26, 1990. At these meetings, Mr. Reiman reiterated the circumstances leading to the allegedly "mistaken bid" and renewed Reiman's request to withdraw its bid without forfeiture of the bid bond. Both the City Finance Committee and the City Council voted to accept Reiman's bid as originally submitted. Accordingly, the City delivered to Reiman a Notice of Award and a Standard Form of Agreement Between Owner and Contractor on November 28, 1990. The Notice of Award required Reiman to, among other things, execute the contract with the City within ten days. Reiman was advised that failure to execute the contract within the ten-day period would result in a forfeiture of the bid bond. The City issued an amendment to the Notice of Award on December 4, 1990, thereby extending Reiman's time for compliance to December 26, 1990.
Reiman filed a petition for declaratory judgment and a motion for preliminary injunction against the City on December 14, 1990. Reiman requested the district court to declare that Reiman was entitled to withdraw/rescind its bid without forfeiture of the bid bond or, in the alternative, to declare that Reiman was entitled to reform its bid to correct the alleged error. Reiman also requested that the district court issue a preliminary injunction to enjoin the City from either requiring Reiman to execute the contract or from taking action to forfeit the bid bond during the pendency of the declaratory judgment action. A hearing on Reiman's motion for preliminary injunction was set for December 20, 1990.
On December 20, 1990, Reiman and the City entered into an agreement which provided, among other things, that Reiman would withdraw its pending motion for a preliminary injunction, that the declaratory judgment action would remain pending, and that Reiman would sign the contract and proceed with construction. The agreement provided that the contract price would be determined as follows:
d. If the parties cannot agree in writing as to a contract price, the price shall be determined as set forth in this Agreement based upon the decision of the District Court in the action currently pending in Laramie County District Court.
* * * * * *
f. If Reiman prevails, and the District Court finds that Reiman is entitled to rescind its bid, Reiman shall be entitled to a contract price of $1,981,000.00.
g. If the City of Cheyenne prevails in such litigation, and the District Court finds that Reiman is not entitled to rescind Following discovery proceedings, the City filed a motion for summary judgment in the underlying declaratory judgment action on October 7, 1991. Reiman responded with a cross-motion for summary judgment on October 17, 1991. A hearing was then held after which the district court issued an order on October 24, 1991. The district court dismissed Reiman's withdrawal/rescission claim for want of jurisdiction and granted summary judgment to the City on Reiman's reformation claim. The district court specifically determined that the withdrawal/rescission issue was rendered moot by the parties' agreement of December 20, 1990 and that reformation was available only in instances of mutual mistake. This appeal ensued.
its bid, the City shall be entitled to a contract price as stated in Reiman's original bid, $1,910,000.00.
On appeal, Reiman challenges only that portion of the district court's order which dismissed its withdrawal/rescission claim. Reiman contends that the district court erred in determining that the withdrawal/rescission claim failed to present a justiciable controversy within the meaning of the Uniform Declaratory Judgments Act. Reiman concedes that withdrawal/rescission of its bid is no longer an option, but contends that a justiciable controversy remains in that resolution of the withdrawal/rescission claim will have the collateral effect of establishing the contract price. Thus, the crux of the instant case concerns whether, as a jurisprudential matter, the district court erred in dismissing Reiman's rescission/withdrawal claim on the ground that the parties' December 20, 1990 agreement had rendered the issue moot. Resolution of this issue requires that we examine the policies underlying both the Uniform Declaratory Judgments Act and the doctrine of justiciability to determine if this is a proper case for judicial action.
The Uniform Declaratory Judgments Act dispelled the myth that the judicial arm of government could be extended only to redress prior wrongdoings (corrective justice). Edwin M. Borchard, The Declaratory Judgment--A Needed Procedural Reform (Part I), 28 Yale L.J. 1, 2 (1918). The Act is founded upon the premise that society is disturbed not only when legal rights are violated, but also when they are placed in serious doubt or uncertainty. Id. Consequently, the Act establishes a procedural vehicle whereby litigants may approach the court for a declaration of their "rights, status and other legal relations whether or not further relief is or could be claimed" (preventive or corrective justice). Wyo.Stat. § 1-37-102 (1988). Edson R. Sunderland captured the essence of the effect of the declaratory judgment on the administration of justice by explaining that, before the advent of the declaratory judgment, "courts were employed only as repair shops; since that time they have operated as service stations." Edson R. Sunderland, A Modern Evolution in Remedial Rights,--The Declaratory Judgment, 16 Mich.L.Rev. 71, 77 (1917).
The stated purpose of the Uniform Declaratory Judgments Act is "to settle and to afford relief from uncertainty and insecurity with respect to legal relations * * *." Wyo.Stat. § 1-37-114 (1988). The Act is to be liberally construed to this end. Id.; Brimmer v. Thomson, 521 P.2d 574, 577 (Wyo.1974) (). Expounding upon the purpose underlying the Act, Professor Borchard has succinctly stated:
As a measure of preventive justice, the declaratory judgment probably has its greatest efficacy. It is designed to enable parties to ascertain and establish their legal relations, so as to conduct themselves accordingly, and thus avoid the necessity of future litigation.
Although the Uniform Declaratory Judgments Act is to be liberally construed to the end that courts may declare "rights, status and other legal relations whether or not further relief is or could be claimed," the Act does not expand the jurisdiction A justiciable controversy is defined...
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