Richardson v. Canton Farm Equipment, Inc., 89-CA-0217

• Decision Date: 26 August 1992
• Docket Number: No. 89-CA-0217,89-CA-0217
• Citation: 608 So.2d 1240
• Parties: David RICHARDSON, J.L. McCullough, Karl Banks, J.S. Harris, Jr., Individually, and in Their Capacity as Supervisors of Madison County, Mississippi; and Tubb-Williamson, Inc. v. CANTON FARM EQUIPMENT, INC.
• Court: Mississippi Supreme Court

Page 1240

608 So.2d 1240

David RICHARDSON, J.L. McCullough, Karl Banks, J.S. Harris,

Jr., Individually, and in Their Capacity as

Supervisors of Madison County, Mississippi; and Tubb-Williamson, Inc. v. CANTON FARM EQUIPMENT, INC.

No. 89-CA-0217.

Supreme Court of Mississippi.

Aug. 26, 1992.

Stanley F. Stater, III, Stater Law Office, Canton, for appellee.

Mike C. Moore, Atty. Gen., Larry E. Clark, Asst. Atty. Gen., Leslie Scott, Jackson, for amicus curiae.

En Banc.

ROBERTSON, Justice, for the court:

I.

This case makes its second appearance before the Court. What was only alleged before is now clear: ultimately, that the behavior of four members of the Madison County Board of Supervisors is what our state purchasing laws at their core were designed to prevent. Four times the Board of Supervisors advertised for bids for the purchase of two backhoes, and four times someone outbid the vendor the Supervisors were determined to buy from. Finally, the Supervisors, on a pretext, accepted the higher bid and purchased the backhoes they had in fact been using for some six months.

We hold the Supervisors liable for actual losses their conduct has caused the county, for penal damages, and other incidentals. We hold the vendor as well for all sums it received under the unauthorized contracts.

On cross-appeal, we hold the Supervisors liable for Plaintiffs' reasonable and necessary attorneys' fees and legal expenses.

II.

Formally, these proceedings date back to October 2, 1984, when Canton Farm Equipment, Inc. (sometimes "Canton"), Plaintiff below and Appellee here, filed its complaint in the Chancery Court of Madison County, Mississippi. Canton Farm Equipment is a Mississippi corporation, domiciled and having its principal place of business on Highway 22 West in Canton, Mississippi. The complaint names as Defendants, David Richardson, J.L. McCullough, Karl Banks and J.S. Harris, Jr., individually and in their capacity as duly elected and serving Supervisors of Madison County, Mississippi. These four Supervisors are Appellants here and are sometimes hereinafter referred to as "the Supervisors." Also named as a Defendant was Tubb-Williamson, Inc., (sometimes "T-W") 2700 Lakeland Drive, Jackson, Mississippi 39208, a corporation engaged in business as a heavy equipment dealer.

At some time on or before February 14, 1984, District Three Supervisor David Richardson went to the place of business of Tubb-Williamson, Inc., and arranged to have a Case backhoe delivered to his district. Shortly thereafter, a Tubb-Williamson salesman approached J.L. McCullough, District Five Supervisor, and, by late February or early March of 1984, a second backhoe had been delivered, this time to District Five.

For several months, Madison County used the two backhoes in Districts Three and Five respectively as though they had already been purchased. Finally, on April 19, 1984, the Board of Supervisors authorized advertisement for bids for the purchase of two backhoes, the bids to be received on May 18, 1984. Without question, Canton outbid Tubb-Williamson on both backhoes. The Supervisors, however, rejected these first bids because of "improper specifications" and ordered new bids to be submitted on June 15, 1984. Again, Canton had the low bid but, upon examination, it was discovered the specifications for District Three and District Five had been reversed and this second set of bids was rejected.

The Board authorized a third advertisement for bids on the backhoes to be returned on July 27, 1984. This advertisement was made in a different newspaper than the first two advertisements. On this occasion, only one bid was received, that of Canton Farm Equipment. The Board took the bid under advisement and at a meeting on August 20, 1984, voted to reject it. On this occasion, the Board determined to switch to a cash purchase and adopted the following resolution:

WHEREAS, said bids were taken under advisement and after the discussion of said bid, Mr. Richardson motioned seconded by Mr. McCullough, that said bids be rejected for the lease-purchase method as advertised because both Supervisors now desire to make a cash purchase of said backhoes and the Board further directed the attorney, Mr. Montgomery, to pursue the legal alternatives to borrow the necessary funds for the cash purchase of said backhoes, and

Further, the Board directed the Clerk to re-advertise for the cash purchase of backhoes as prescribed by law, said advertisement to reas (sic) as follows,.... (Emphasis supplied)

Pursuant to this resolution, the clerk prepared the advertisement for publication but neglected to provide that the Board was accepting only cash purchase bids. This advertisement was published on August 29, 1984, and on September 5, 1984, in the Twin-City Madison County Press. It stated as follows:

Notice is hereby given that the Board of Supervisors of Madison County, Mississippi, acting for and on behalf of all of the Supervisors District Number III of said county and state, will receive sealed bids at the Courthouse Annex in the Town of Canton, Mississippi, until 10:00 o'clock a.m. on Friday, the 14th day of September, 1984, for the lease purchase by it for and on behalf of the aforementioned Supervisor's Districts for the following described property or supplies to wit: ONE NEW OR SLIGHTLY USED RUBBERTIRED BACKHOE SPECIFIED AS FOLLOWS:.... (Emphasis supplied)

The advertisement for "two new or slightly used rubbertired backhoes" is understandable in that by this time, the two Tubb-Williamson backhoes had been in use by the Supervisors in Districts Three and Five for some six months.

At the time, no one noticed the discrepancy between the "lease" purchase advertisement and the minutes authorizing only a "cash" purchase. For District Three, the bids submitted for a 36 month lease purchase contract were:

Canton Ford Tractor [Canton Farm Equipment, Inc.] $885.29 per month

Tubb-Williamson Co. $888.70 per month

Canton was the apparent low bidder by some $3.41 per month.

For District Five, the bids submitted for a 36 month lease purchase contract were:

Canton Ford Tractor [Canton Farm Equipment, Inc.] $752.91 per month

Tubb-Williamson Co. $775.09 per month

Canton was the apparent low bidder by some $22.18 per month.

On September 24, 1984, the Supervisors considered the bids and, upon motion duly made and seconded, determined to accept the Tubb-Williamson lease purchase bid for each backhoe. The Supervisors' minutes acknowledged that "dollar-wise" Canton "submitted the lowest bid for each backhoe" but further recited that the bid would be awarded to Tubb-Williamson for five reasons: "(1) lower maintenance costs, (2) better quality equipment, (3) operators familiar with equipment, (4) equipment demonstrated and used on jobsite and (5) more durable equipment." See Miss.Code Ann. Sec. 31-7-13(d) (Supp.1991). Noticeably, the minutes do not suggest that the Canton bids failed to conform with specifications in the advertisement.

Understandably miffed, Canton immediately commenced this civil action by filing its complaint in the Chancery Court of Madison County, Mississippi. ¹ In essence, Canton charged the Supervisors had engaged in a concerted course of conduct to acquire the Tubb-Williamson backhoes in disregard of statutorily-mandated purchasing requirements. See Miss.Code Ann. Secs. 19-13-17 and 31-7-13 (Supp.1991). The complaint demanded that the Supervisors reimburse the county for all sums illegally spent and that the Court assess penal damages and attorneys fees. Canton named Tubb-Williamson as well, demanding that the contracts of sale be held for naught. The matter was transferred to the Circuit Court of Madison County, Mississippi, which dismissed it on an assortment of preliminary grounds. On appeal, we held (1) the Circuit Court had subject matter jurisdiction, (2) the complaint stated a claim upon which relief could be granted, and (3) that Canton as both an aggrieved bidder and a taxpayer had standing to bring the action. Canton Farm Equipment v. Richardson, 501 So.2d 1098 (Miss.1987) ("Canton I "). We remanded for further proceedings.

On Canton's motion, the Circuit Court entered partial summary judgment against the Supervisors and Tubb because the lease purchase bid advertisement was not authorized; hence, the Supervisors had no valid power to accept any bid, much less that of Tubb-Williamson. The Court later noted:

The minutes of said Board directed that the advertisement for bids for the purchase of the backhoes be for cash. This Court holds to this ruling and further rules that the said Board could not have legally accepted the bid of either bidder.

The Court thereafter enlarged the grounds of its ruling.

Tubb-Williamson, Inc. delivered the backhoes some six months before the acceptance of the bids.... [T]he Board advertised for the purchase of the backhoes four times. Each time dollar wise the plaintiff, Canton Farm Equipment, Inc., was the low bidder and on the third time was the only bidder. It was only after the fourth bid that the Board tried to justify the high bid dollar wise. This Court is not criticizing the reasons [as such] given for taking Tubb-Williamson, Inc.'s bid. This Court is of the opinion that the reasons given could be valid reasons, but looking at the whole picture, it appears that the Board of Supervisors was determined that Tubb-Williamson, Inc. be awarded the sale....

The Court then made clear it rested its holding that the Tubb-Williamson bids and contracts were void not just on the technical discrepancy between the cash purchase minutes and the lease purchase advertisement.

This Court ... would have to have his head in the sand not to know that once road equipment is delivered to a supervisor's district prior to receiving the bid that the Board of Supervisors is going to see that the dealer who delivers the equipment is awarded the bid.

In fact this is so well known in the industry, there is seldom another bid...