Robert W. Anderson Housewrecking and Excavating, Inc. v. Board of Trustees, School Dist. No. 25, Fremont County, Wyo., s. 83-138

• Decision Date: 03 May 1984
• Docket Number: 83-139,Nos. 83-138,s. 83-138
• Parties: 17 Ed. Law Rep. 1232 ROBERT W. ANDERSON HOUSEWRECKING AND EXCAVATING, INC., a corporation, Appellant (Plaintiff), v. BOARD OF TRUSTEES, SCHOOL DISTRICT NO. 25, FREMONT COUNTY, Wyoming, Appellee (Defendant). BOARD OF TRUSTEES, SCHOOL DISTRICT NO. 25, FREMONT COUNTY, Wyoming, Appellant (Defendant), v. ROBERT W. ANDERSON HOUSEWRECKING AND EXCAVATING, INC., a corporation, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 1326

681 P.2d 1326

17 Ed. Law Rep. 1232

ROBERT W. ANDERSON HOUSEWRECKING AND EXCAVATING, INC., a corporation, Appellant (Plaintiff), v. BOARD OF TRUSTEES, SCHOOL DISTRICT NO. 25, FREMONT COUNTY, Wyoming, Appellee (Defendant).

BOARD OF TRUSTEES, SCHOOL DISTRICT NO. 25, FREMONT COUNTY, Wyoming, Appellant (Defendant), v. ROBERT W. ANDERSON HOUSEWRECKING AND EXCAVATING, INC., a corporation, Appellee (Plaintiff).

Nos. 83-138, 83-139.

Supreme Court of Wyoming.

May 3, 1984.

Joel M. Vincent of Hettinger & Leedy, P.C., Riverton, for Board of Trustees, School Dist. No. 25.

F.M. Andrews, Jr. of Andrews & Anderson, P.C., Riverton, for Robert W. Anderson Housewrecking and Excavating, Inc.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and CARDINE, JJ.

CARDINE, Justice.

This is an appeal from a judgment awarding damages for breach of contract to Robert W. Anderson Housewrecking and Excavating, Inc. in the amount of $22,540 against School District No. 25, Fremont County, Wyoming. The school district appealed from the judgment and Anderson cross-appealed on the issue of damages. We will modify the judgment as to the amount of damages awarded and affirm the judgment as modified.

Appellant raises two issues on appeal.

"I. Whether the trial court's entry of judgment in favor of the plaintiff in the sum of $22,540.00 violates that rule of law that a public body may not be bound to a contract, implied from the actions or statements of its agents or officers.

"II. Whether the trial court's holding violates § 21-3-105, W.S.1977."

Appellee disagrees with the statement of the issues and rephrases it as:

"The issue in this case is not whether there was an implied contract created by the conduct of the agents or employees of the School District, but whether the School Board, by accepting an offer at a public bid letting, and communicating that acceptance to the Appellee Anderson, created a contract which could not later be revoked or rescinded."

Appellee also cross-appeals raising the issue of:

" * * * [W]hether the lower Court committed error in awarding damages of $22,540.00 to the Appellant Anderson, in view of the uncontroverted evidence of loss of profits of $98,173.75, and whether the Appellate Court should modify the Judgment to reflect the Appellant's true damages."

On July 15, 1981, the Board of Trustees of School District No. 25, Fremont County, Wyoming approved for publication the notice of an invitation to bid upon the demolition of the old Riverton High School. On August 11, 1981, the bids were opened. The low bidder was Gillingham Construction Company, Inc. of Boise, Idaho and the next low bidder was Robert W. Anderson Housewrecking and Excavating, Inc., appellee. Between the time the bids were opened and the next formal meeting of the school board, Mr. Snell, the business manager, received a call from Gillingham Construction advising they would withdraw their bid because of inability to obtain liability insurance in the State of Wyoming. Appellee, Mr. Anderson, was informed by Mr. Snell that the school district was going to accept his bid for the demolition of the school.

The next formal school board meeting was held on August 18, 1981. At that time the board, under the advice of their attorney, officially accepted the bid of Gillingham Construction Company. They then moved that the board accept the withdrawal of the bid of Gillingham Construction Company. ¹

The Board then voted to accept the bid of the second low bidder, Anderson, for the demolition of the Riverton High School. At that time a citizens group appealed to the board to save the high school building.

Anderson was then told that his bid had been accepted effective September 2, 1981, unless the citizens group developed another worthwhile use and plan to save the high school. No other use or plan to save the school was developed.

On September 8, 1981, Gillingham informed the board that his insurance company had now been certified to do business in Wyoming and that his original bid would remain open until September 17-18, 1981. At the regularly convened meeting of September 15, 1981, the board, by resolution, accepted the bid of Gillingham. The contract was signed with Gillingham September 22, 1981; on that same date, Snell informed Anderson that there had been new arrangements relative to tearing down the school and that the contract had been given to Gillingham. Anderson filed suit.

Trial was to the court; and, at the conclusion, judgment was entered for appellee Anderson in the amount of $22,540.

I

Appellant raises the issue of whether a public body may be bound to an implied contract and whether § 21-3-105, W.S.1977, ² was violated. Appellee contends that the issue is not whether there was an implied contract, but whether there was an express contract which was breached by the school board. These arguments are interrelated and, therefore, will be discussed together.

Appellant contends that a municipal corporation cannot be bound by a contract which is made by its officers if the agent had no authority to enter into a contract. Twitchell v. Bowman, Wyo., 440 P.2d 513 (1968). The members of a board cannot act as individuals to bind an agency because the board must act as a body to validly act for and obligate the agency by an express contract. George W. Condon Co. v. Board of County Com'rs of Natrona County, 56 Wyo. 38, 103 P.2d 401 (1940). Persons who deal with school districts are charged with a duty of ascertaining that the person with whom they are dealing possesses legal authority to bind the school district. Porta House, Inc. v. Scottsdale Auto Lease, Inc., 120 Ariz. 115, 584 P.2d 579 (1978). The general rule is that a municipal corporation is not bound by a contract which is made in its name by one of its officers or a person in its employ if the officer or employee had no authority. 56 Am.Jur.2d Municipal Corporations § 504. Where a municipal contract is void because it is opposed to a mandtory statute, no contract or benefit can be implied. A public body cannot do indirectly what it is without power to do directly. Town of Worland v. Odell & Johnson, 79 Wyo. 1, 329 P.2d 797 (1958); Kurz v. City of Sheridan, Wyo., 489 P.2d 621 (1971). A school board cannot act outside of its statutory authority. School District No. 69 of Maricopa Cty. v. Altherr, 10 Ariz.App. 333, 458 P.2d 537 (1969). A person is charged with the notice of the limitations of a school district in its power to contract. Sibert v. Community College of Flathead Cty., 179 Mont. 188, 587 P.2d 26 (1978).

Several of the cases cited by appellant as authority are easily distinguished from the present situation. There is no allegation in this case that the school board was acting outside of its statutory authority, nor that it was without power to enter into this type of contract. We note that on occasions, courts will find an implied contract in situations where the actual authority of the public agent was defective if the contract was one within the authority of the public agency. Barendregt v. Walla Walla School Dist. No. 140, 26 Wash.App. 246, 611 P.2d 1385 (1980). However, we do not feel it necessary to resolve the question of whether or not a public agency can be bound by an implied contract because, after a careful review of the record, we find an express contract was created.

There is not a conflict in the facts, but there is a conflict in the interpretation of the facts as to whether they constituted a contract. We must

" * * * give to the evidence of the successful party every favorable inference which may be reasonably and fairly drawn from it. * * * " Crockett v. Lowther, Wyo., 549 P.2d 303, 308 (1976).

We also give deference to the findings of the trial judge because,

" * * * where the existence and not the validity or construction of a contract or the terms thereof is the point in issue, and the evidence is conflicting or admits of more than one inference, it is for the jury or other trier of the facts to determine whether the contract did in fact exist * * *." 17A C.J.S. Contracts § 611.

Therefore, using these standards, we look to the applicable law of contracts and the record to analyze whether an express contract was created.

Whether a contract has been entered into depends upon the intent of the parties and is a question of fact. Prince Enterprises, Inc. v. Griffith Oil Co., Inc., 8 Kan.App.2d 644, 664 P.2d 877 (1983). A contract assumes the meeting of minds and an agreement on a thing to be done. Crockett v. Lowther, supra. See Cave Construction, Inc. v. United States, 387 F.2d 760 (10th Cir.1967). A municipal corporation is bound by its contracts to the same extent as a natural person would be, provided that the contract is one it could legally make. The Law of Municipal Corporations, 5 McQuillin § 19.39 (1981).

The legal requirements regarding the school district's actions are set forth in § 21-3-105, W.S.1977, supra fn. 2. Therefore, we must decide (1) if there was a legally convened meeting of the school board; (2) if the resolution passed by the board acted as an acceptance of Anderson's bid offer; (3) if an oral contract would bind the school district; and (4) if these questions are answered in the affirmative, does the board have discretion to withdraw its acceptance.

At the August 18, 1981 school board meeting, the board discussed the demolition of the high school building. ³ Resolution 322 was proposed at the meeting of August 18, 1981. At that time a citizens group addressed the board with an appeal to save the old high school building and motion 322 was withdrawn. Motion 323 was proposed and passed. Resolution 323 stated that:

"323 Moved by Mr. Tippets that in view of the fact that Gillingham Construction is unable to honor their commitment to demolish the old high school building, that the board award the bid to Mr. Bob Anderson of Denver, CO, base bid of $93,220.00 and alternate # 1 bid of $19,480.00 with a completion time of 30...