Scott v. Buhl Joint School Dist. No. 412

• Decision Date: 19 May 1993
• Docket Number: No. 20173,No. 412,412,20173
• Citation: 123 Idaho 779,852 P.2d 1376
• Parties: , 83 Ed. Law Rep. 460 Doug SCOTT and Katie Scott, doing business as West Valley Bus Company, Plaintiffs-Appellants-Cross Respondents, v. BUHL JOINT SCHOOL DISTRICT NO. 412; Buhl Joint School District Board of Trustees; Leonard Crismor, Armand Eckert, Lee Popplewell, Dr. Dan Nofziger, and Mary Lou Pierce, in their capacity as trustees of the Buhl Joint School District; and Eugene Pyles, in his capacity as superintendent of the Buhl Joint School District; and Mayflower Contract Services, Inc., an Indiana Corporation, Defendants-Respondents-Cross Appellants. Boise, March 1993 Term
• Court: Idaho Supreme Court

Page 1376

852 P.2d 1376

123 Idaho 779, 83 Ed. Law Rep. 460

Doug SCOTT and Katie Scott, doing business as West Valley Bus Company, Plaintiffs-Appellants-Cross Respondents, v. BUHL JOINT SCHOOL DISTRICT NO. 412; Buhl Joint School District Board of Trustees; Leonard Crismor, Armand Eckert, Lee Popplewell, Dr. Dan Nofziger, and Mary Lou Pierce, in their capacity as trustees of the Buhl Joint School District No. 412; and Eugene Pyles, in his capacity as superintendent of the Buhl Joint School District No. 412; and Mayflower Contract Services, Inc., an Indiana Corporation, Defendants-Respondents-Cross Appellants.

No. 20173.

Supreme Court of Idaho,

Boise, March 1993 Term.

May 19, 1993.

Elam, Burke & Boyd, Boise, for appellants. Peter C.K. Marshall argued.

Green Law Offices, Ctd., Boise, for respondent school districts. Cumer L. Green argued.

Hawley, Troxell, Ennis & Hawley, Boise, for respondent Mayflower. Merlyn W. Clark argued.

McDEVITT, Chief Justice.

STATEMENT OF FACTS

In March of 1992, Buhl advertised for bids for a pupil transportation contract, pursuant to I.C. § 33-1510. The Scotts submitted the only bid, totalling $453,565.96. Buhl rejected this bid, and it readvertised for bids. In its bid solicitation, Buhl reserved the right to "accept or reject or to select any portion thereof any or all bids and to waive any technicality." Further, the bid form provided by Buhl had separate lines for bids for each transportation route. Mayflower submitted a bid for $392,111.07, and the Scotts submitted a bid for $404,078.76. Mayflower conditioned its bid "upon the award of all school bus routes to Mayflower Contract Services." Although Mayflower's overall bid was lower than the Scotts' bid, the Scotts bid lower on four transportation routes, routes 9, 10, 13, and 14. Buhl awarded the pupil transportation contract to Mayflower.

PRIOR PROCEEDINGS

A. The Summary Judgment:

On June 8, 1992, the Scotts filed a complaint against Buhl and Mayflower. In their complaint, the Scotts listed five causes of action: (1) for a declaratory judgment declaring the bidding process to be invalid; (2) for an injunction to stop the respondents from proceeding with the contract, or, in the alternative, to award the contract to West Valley; (3) for mandamus, awarding the contract to West Valley, or, in the alternative, to relet the bid; (4) for violation of statutory duties pursuant to I.C. § 33-1510; and (5) for violation of 42 U.S.C. § 1983. The Scotts also asked for attorney fees under the private attorney general doctrine and 42 U.S.C. § 1988. On June 12, 1992, Buhl filed an answer to the Scotts' complaint. Among other things, Buhl responded that it did not have sufficient information regarding the Scotts' allegation of taxpayer standing ¹, and that it had reserved the right to accept or reject any portion of a bid. Buhl requested a dismissal with prejudice and attorney fees and costs. Mayflower filed its answer on June 24, 1992, and it denied the Scotts' allegation of taxpayer standing.

On June 29, 1992, Mayflower filed motions to dismiss for lack of standing and for summary judgment. In its motion for summary judgment, Mayflower requested that the court rule, as a matter of law, that it was appropriate for Buhl to reject all bids, that it was within Buhl's discretion to accept Mayflower's bid, notwithstanding any irregularities, and that all claims be dismissed. Buhl and the Scotts also filed motions for summary judgment on the same day.

On July 20, 1992, the court issued its opinion and order regarding the cross-motions for summary judgment and Mayflower's motion to dismiss for lack of standing. The court granted respondents' motions for summary judgment and Mayflower's motion to dismiss for lack of standing. Regarding taxpayer standing, the court identified a two-prong inquiry:

[I]n order for the plaintiffs to have standing in this case as taxpayers, they must demonstrate a right to relief under either of the following scenarios. [scenario 1] The plaintiffs must set forth sufficient evidence of an injury in fact, uncommon to other similarly situated taxpayers, wherein they would acquire a personal stake in the outcome of this controversy, Greer v. Lewiston Golf & Country Club, Inc., 81 Idaho 393, 397, 342 P.2d 719, 722 (1959); or [scenario 2], in the alternative, they must show that the School District and Mayflower engaged in an illegal act of such a nature as to "imperil the public interest or work public injury." Pflueger v. City and County of Honolulu, 5 Hawaii App. 13, 15, 674 P.2d 1019, 1021 (1984); Iuli v. Fasi, 62 Hawaii 180, 184, 613 P.2d 653, 656 (1980).

As to scenario 1, the court concluded that the Scotts did not have taxpayer standing because they did "not suffer an injury that is not common to other similarly situated taxpayers." The court reasoned that, like all taxpayers, the Scotts actually benefitted from Buhl awarding the contract at a lower price.

As to scenario 2, the court further divided its taxpayer standing analysis. First, the court analyzed whether Buhl engaged in illegal acts regarding the bidding process. "Illegal acts" would consist of Buhl's "circumvention of state statutes by proof of irregularities in the bidding process." In this respect, the court rejected the Scotts' argument that the specific language of I.C. § 33-1510 required that it be awarded the transportation contract after the submission of its first bid. The court reasoned that the Scotts' reading of the statute would destroy its "viability," ruling that "I.C. § 33-1510 must be 'construed with the primary purpose of best advancing the public interest,' " quoting Platt Elec. Supply, Inc. v. City of Seattle, 16 Wash.App. 265, 270, 555 P.2d 421, 426 (1976), review denied, 89 Wash.2d 1004 (1977), and that school districts have discretion to reject bids if they are not the best bargain for the tax dollar. In support, the court cited cases from other jurisdictions that dealt with "similar language as that found in I.C. § 33-1510." In conclusion, the court stated that "in the absence of fraud, collusion, favoritism, extravagance or corruption, the scale must [be] tipped in favor of the 'primary purpose' of giving the public the best bargain for its tax dollars."

Scenario 2, part 2, dealt with whether the bid specifications "undermined the object and integrity of the competitive bidding process, or that there was proof of favoritism," quoting Unisys Corp. v. Department of Labor, 220 Conn. 689, 693, 600 A.2d 1019, 1023 (1991). In this regard, the court ruled that the specific language in Buhl's bid proposal did not mandate that the bids be "stand-alone" bids or forbid "package" bids. Further, the court rejected the Scotts' argument that Buhl's prior practice of specifically requiring "stand-alone" bids weighed in favor of that interpretation where this current bid proposal did not contain that requirement.

The court also ruled that the Scotts did not have standing as "disappointed bidders," and it rejected their 42 U.S.C. § 1983 claim, ruling that "the Scotts had no protectable property interest in their bid."

The Scotts filed a motion for reconsideration, and the court issued its opinion and order on the Scotts' motion for reconsideration on July 29, 1992. On reconsideration, the Scotts argued that since their second bid was lower than Mayflower's bid regarding four particular bus routes, they should have been awarded the contract for those routes as the "lowest responsible bidder." The court rejected this argument, once again focusing upon the discretion of the board of trustees to select a bid that best fit the public interest.

On July 29, 1992, summary judgment was entered in favor of Buhl and Mayflower, and against the Scotts.

B. Respondents' Request For Attorney Fees And Costs:

On July 24, 1992, Buhl filed a memorandum of costs and attorney fees. Buhl requested the court award it (1) costs as a matter of right in the amount of $33.00; (2) discretionary costs (including lodging, copying, long distance telephone charges, and telefax charges) in the amount of $1,049.94; and (3) attorney fees in the amount of $16,107.50, pursuant to I.C. § 12-120 and I.R.C.P. 54 because the lawsuit resulted from a commercial transaction. On July 28, 1992, Mayflower filed a memorandum of costs and claim for attorney fees. Mayflower requested the court to award it (1) costs as a matter of right in the amount of $33.00; (2) discretionary costs (including the use of "Lexis," which is a computer service for legal research) in the amount of $249.87; and (3) attorney fees in the amount of $13,292.87.

On October 13, 1992, the court issued its opinion and order regarding respondents' requests for attorney fees and costs. The court awarded costs as a matter of right to both respondents. It denied attorney fees pursuant to I.C. §§ 12-120(3) and 12-121, finding that "the dispute between the Scotts and the defendants did not involve a commercial transaction integral to the Scotts' claim," citing Brower v. E.I. DuPont DeNemours & Co., 117 Idaho 780, 792 P.2d 345 (1990), and Idaho Newspaper Found. v. City of Cascade, 117 Idaho 422, 788 P.2d 237 (Ct.App.1990), and that "the case involved legal matters that were complex and not easily resolved." Finally, the court denied the discretionary costs requested by Buhl and Mayflower because, while the costs were necessary, they were not exceptional, but merely "part and parcel of the overhead involved in prosecuting or defending a case in a modern law office."

C. Notices Of Appeal:

On September 4, 1992, the Scotts filed a notice of appeal pursuant to I.A.R. 11(c)(1), appealing from the court's July 29, 1992 summary judgment. Buhl, on November 5, 1992, and Mayflower, on November 18, 1992, filed notices of cross-appeal, appealing from the court's October 13, 1992 order denying attorney fees and discretionary costs.

On appeal, the parties raise the following issues:

ISSUES ON APPEAL

I. Did the district court...