Riblet Tramway Co., Inc. v. Stickney

• Decision Date: 05 March 1987
• Docket Number: No. 86-214,86-214
• Citation: 523 A.2d 107,129 N.H. 140
• Parties: , 55 USLW 2518 RIBLET TRAMWAY COMPANY, INC. v. Wallace E. STICKNEY, Individually and As Commissioner of the New Hampshire Department of Transportation, et al.
• Court: New Hampshire Supreme Court

Page 107

523 A.2d 107

129 N.H. 140, 55 USLW 2518

RIBLET TRAMWAY COMPANY, INC. v. Wallace E. STICKNEY, Individually and As Commissioner of the New Hampshire Department of Transportation, et al.

No. 86-214.

Supreme Court of New Hampshire.

March 5, 1987.

McSwiney, Jones, Semple, & Douglas, Concord (Charles G. Douglas, III, on brief and orally), for plaintiff.

Stephen E. Merrill, Atty. Gen. (Bruce E. Mohl (orally), Deputy Atty. Gen., and Michael J. Walls, Asst. Atty. Gen., on brief), for the State.

BATCHELDER, Justice.

Two questions are raised by this interlocutory transfer from the Superior Court (Cann, J.): (1) Does due process under the National Constitution or the New Hampshire Constitution require that the State conduct a hearing prior to the termination of the contract between Riblet Tramway Company, Inc. (Riblet) and the State? (2) Is the State required to submit the unfinished portion of Riblet's contract to competitive bidding? We answer the first question in the negative and find the second question moot.

The transferred questions are grounded on a rather short business relationship between the State of New Hampshire in seeking to improve its downhill skiing facilities at Mt. Sunapee and Riblet in providing the engineering, work, and materials which the project required. The facts certified to this court as contained in the interlocutory transfer are briefly stated as follows. On or about June 20, 1985, John P. Chandler, Commissioner of the Department of Public Works and Highways, on behalf of the State of New Hampshire, advertised for bids for the design, manufacture and erection of three triple chairlifts, the dismantling of the three existing chairlifts and the replacement of certain equipment in the State's ski area at Mt. Sunapee State Park. Riblet was the low bidder. On September 18, 1985, the Governor and Council held a public hearing and, by a vote of four to one, accepted Riblet's bid. The approval of the Riblet bid was contingent upon Riblet securing indemnification for the State, which was secured, and final approval was given on September 25, 1985. On or about December 31, 1985, Riblet's excess liability and products liability insurance expired, and on January 15, 1986, Commissioner of the Department of Transportation Wallace E. Stickney sent a default of contract notice to Riblet on that ground. The default notice gave Riblet until 4:00 p.m. the following day to provide certificates of insurance, after which time the department would suspend all work on the project until the required insurance certificates were on file.

On January 21, 1986, after confirming that an irrevocable letter of credit in the amount of $1.5 million would be issued in favor of the State of New Hampshire in lieu of insurance, Director of Public Works and Administration Robert Dowst informed Riblet that construction could be resumed. On March 5, 1986, Riblet was sent a default of contract notice for failure to properly complete and have certified lift A. On March 18, 1986, Commissioner Stickney terminated the contract with Riblet pursuant to Section 54 thereof.

On April 23, 1986, the Commissioner of the Department of Transportation and Deputy Attorney General Mohl presented to the Governor and Council a request that the department of transportation be authorized to enter into a contract with Doppelmayr Ski Lift Co., Ltd. (Dopplemayr) to design, fabricate and erect a new Summit triple chairlift and a new North Peak triple chairlift at Mt. Sunapee State Park for a contract price of $1,533,000. The Summit and North Peak lifts constitute lifts B and C in the contract.

Authority to enter into a contract with Doppelmayr was approved by a three to two vote of the Council. The proposed contract with Doppelmayr was not subject to the competitive bidding process set forth in RSA 228:4 (Supp.1986) and RSA 228:4-a (Supp.1986), and the parties disagree over whether it should have been.

The plaintiff sued the State, seeking, inter alia, to enjoin the State from substituting another contractor for the plaintiff on the Mt. Sunapee project, a judicial determination that the State's termination of the contract was void for failure to provide due process, attorney's fees and costs under 42 U.S.C. § 1988, and an injunction against the State from awarding any contract for the completion of the work by a bidding process not in accordance with the provisions of RSA 228:4 (Supp.1986) and :4(a) (Supp.1986). The pleadings were styled as a bill in equity seeking a declaratory judgment under RSA 491:22 and injunctive relief under RSA 498:1 and as a petition for writ of certiorari, and the Master (Mayland H. Morse, Jr., Esq.) considered this case at a hearing on May 1, 1986.

After the hearing on the preliminary injunction before the master, the court on May 22, 1986 transferred the following questions to this court:

"A. DOES RIBLET HAVE PROPERTY AND LIBERTY INTERESTS IN THE CONTRACT WITH THE STATE UNDER THE DUE PROCESS CLAUSE OF THE FOURTEENTH AMENDMENT OF THE UNITED STATES CONSTITUTION AND PART I, ARTICLES 12 AND 15 OF THE NEW HAMPSHIRE CONSTITUTION, WHICH REQUIRES (sic) A HEARING PRIOR TO TERMINATION OF THE CONTRACT[?]

B. IS THE STATE REQUIRED TO SUBMIT TO COMPETITIVE BIDDING THE CONTRACT FOR THE COMPLETION OF ALL OR A PORTION OF THE TERMINATED CONTRACT WITH RIBLET?"

The State's attempt to expedite the completion of the Mt. Sunapee project by contracting with Dopplemayr has been delayed by the litigation, and the department of transportation has decided to rebid the work remaining under Riblet's contract on a competitive basis after the conclusion of this case. Therefore, we do not consider the second transferred question because it is moot.

The plaintiff claims entitlement to be heard prior to termination of its contract with the State and bases its claim on a right to due process of law under both the State and Federal Constitutions. The State responds to this claimed right by asserting that, in the absence of a constitutional property right intended to be created in the contract, there is none and that a lawsuit for breach of contract is the plaintiff's appropriate remedy.

We begin our analysis by considering the plaintiff's due process claim under the New Hampshire Constitution, relying on federal precedents only for guidance. See State v. Ball, 124 N.H. 226, 232, 471 A.2d 347, 351 (1983). Part I, article 15 of the New Hampshire Constitution guarantees that that no one "shall be arrested, imprisoned, despoiled, or deprived of his property, immunities, or privileges, put out of the protection of the law, exiled, or deprived of his life, liberty, or estate, but by the judgment of his peers, or the law of the land...." We have consistently interpreted " 'the law of the land' as synonymous with 'due process of law.' " Petition of Bagley, 128 N.H. 275, 282, 513 A.2d 331, 337 (1986) (citing Mayo v. Wilson, 1 N.H. 53, 54-55 (1817)).

The due process guarantee of the Federal Constitution protects, where applicable, both natural persons and corporate entities such as Riblet, see, e.g., Minneapolis & St. Louis Railway v. Beckwith, 129 U.S. 26, 28, 9 S.Ct. 207, 32 L.Ed. 585 (1889); and we will assume for the purposes of this case that the same is true under article 15. In determining whether a particular State action violates the procedural due process requirement of the State Constitution, we undertake a two-part analysis. Appeal of Catholic Medical Center, 128 N.H. 410, 416, 515 A.2d 1205 1208 (1986). First, we determine whether the challenged State action concerned a constitutionally protected interest. If so, we proceed to determine whether the action was accompanied by the "appropriate procedural safeguards." Id.; Petition of Bagley supra.

Our initial inquiry is whether there is a protected liberty or property interest at stake. Appeal of Plantier, 126 N.H. 500, 506, 494 A.2d 270, 273 (1985). Riblet argues that the State's termination of the contract deprives it of property without due process in three distinct ways: (1) by placing a continuing financial obligation on it for years after termination of the contract; (2) by effectively barring it from bidding on future contracts; and (3) by "taking" its rights in the contract without a prior hearing.

The first two arguments do not require extended analysis. The continuing financial obligation complained of stems from Riblet's contractual obligation to provide insurance for equipment installed under the contract for the "life" of that equipment. Riblet's insurance was terminated, and it provided an irrevocable letter of credit in lieu of insurance. Although it cites no authority for this assertion, Riblet claims that the State's refusal to waive performance of this costly requirement constitutes a taking of property. We cannot agree. Riblet voluntarily bound itself to this obligation when it entered the contract, and although agreeing to this aspect of the contract may seem unwise in retrospect, the State has not deprived Riblet of property by requiring it to perform its contractual obligation.

Riblet's second "property" argument is also without merit. A careful review of the record indicates that the State's termination of the contract did not bar Riblet from bidding on future State contracts. A subsequent State action denying Riblet's request for a renewal of its pre-qualification to bid does, however, prevent it from bidding on State contracts for the time being, but that is a separate issue on which it is entitled to a hearing. See N.H.Admin.Code, Tra 200 et seq. In fact, such a hearing had already been scheduled prior to oral argument in this case, but that hearing was continued at Riblet's request. Furthermore, the pre-qualification committee's decision not to renew Riblet's pre-qualification had the same effect as a decision not to grant pre-qualification. In this context, the denial of a privilege not yet given must be distinguished from the loss of a privilege...