State ex rel. Fahlgren Martin, Inc. v. McGraw

Decision Date23 November 1993
Docket NumberNo. 21820,21820
Citation190 W.Va. 306,438 S.E.2d 338
CourtWest Virginia Supreme Court
PartiesSTATE of West Virginia ex rel. FAHLGREN MARTIN, INC., Petitioner Below, Appellee, v. Darrell V. McGRAW, Jr., Attorney General of the State of West Virginia, Respondent Below, Appellant, Chuck Polan, Secretary of the Department of Administration of the State of West Virginia; and Ron Riley, Director of the Purchasing Division of the Department of Administration of the State of West Virginia, Respondents Below, Appellees.

Silas B. Taylor, Deputy Atty. Gen., Charleston, for appellant.

Larry A. Winter, David D. Johnson, III, Spilman, Thomas & Battle, Charleston, for appellee, Fahlgren Martin, Inc.

Clarence E. Hall, II, Pros. Atty. of Boone County, Sp. Atty. Gen. of State of WV, Madison, and Richard M. Riffe, Asst. Pros. Atty. of Boone County, Madison, and Diana Stout, Gen. Counsel to the Dept. of Admin. of State of WV, Charleston, for appellees, Chuck Polan and Ron Riley.

Syllabus by the Court

1. West Virginia Code § 5A-3-13 (1993) provides that "[c]ontracts shall be approved as to form by the attorney general. A contract that requires more than six months for its fulfillment shall be filed with the state auditor."

2. "The powers and duties of the Attorney General are specified by the constitution and by rules of law prescribed pursuant thereto." Syllabus point 1, Manchin v. Browning, 170 W.Va. 779, 296 S.E.2d 909 (1982).

3. The West Virginia Constitution and W.Va.Code § 5A-3-13 (1993) grant the Attorney General the duty to approve a contract as to form only. If a contract is legal, then he is required by statute to approve the contract as to form, regardless of any perceived wrongful acts. The Attorney General can list perceived illegalities, in writing, for the Purchasing Division and the Prosecuting Attorney to deal with once the contract is returned to Purchasing's office. The Attorney General cannot hold a contract in his office awaiting the outcome of a trial, investigation, or other proceedings. The Attorney General has no investigative powers in connection with the contract. He cannot sue on the contract on behalf of the State unless otherwise authorized by statute.

4. The term "form," as used in W.Va.Code § 5A-3-13 (1993), means the legality of all the matters contained in the contract document as it relates to the Constitution, statutes, and the contract law of this State. The term "form" does not include any matters extrinsic to the actual contract.

5. In order for a petition for a writ of mandamus to be upheld, three requirements must first be met. The relator must show "(1) a clear right to the relief sought; (2) a legal duty on the part of the respondent to do the thing relator seeks; and (3) the absence of another adequate remedy." Syllabus point 2, in part, Myers v. Barte, 167 W.Va. 194, 279 S.E.2d 406 (1981).


This case is before the Court on the petition of the appellant, Attorney General Darrell McGraw, in which he submits that the writ of mandamus granted by the Circuit Court of Kanawha County on June 14, 1993, should be overturned. This case revolves around the bidding process for the advertising and related services contract for the West Virginia Lottery during 1993. Also at issue, although indirectly, is the 1991 Lottery advertising contract.

In order to address the issue of mandamus, we must first look at the circumstances surrounding the 1991 contract. In response to the Lottery's newspaper advertisements requesting bids for the 1991 Lottery advertising contract, six advertising agencies presented proposals to a seven-member evaluation committee in April, 1991. The evaluation committee was chaired by the Deputy Director of Marketing for the West Virginia Lottery, Tamara L. Gunnoe, several Lottery employees, an independent consultant, and an employee of Scientific Games, Inc., which was under contract to supply the Lottery with the lottery games.

Although the evaluation committee was to use a scoring system for each of the presenting agencies, subsequent information reveals that Fahlgren Martin, Inc., was not the recipient of the best score nor the lowest bidder. There was evidence that the Director of the Lottery, Elden "Butch" Bryan, had ordered the committee to make certain they recommended Fahlgren Martin, Inc., as the most "responsible" bidder to the Lottery Commission. Nonetheless, through various maneuverings and intentional misrepresentations by the evaluating committee and the Lottery Director, Fahlgren Martin, Inc., was awarded the bid.

In April, 1993, the Director of the Lottery, Elden "Butch" Bryan, was indicted on five felony counts by a federal grand jury. Among other counts, Bryan was indicted for federal mail fraud, which set out that the purpose of the scheme underlying the alleged mail fraud was to award the advertising contract for the Lottery to Fahlgren Martin, Inc., and to "subvert and conceal the results of a West Virginia Lottery bid and evaluation process to achieve that end." Following testimony that Bryan ordered that the bid results be falsified, he was convicted on five felony counts.

Immediately prior to the indictments, the 1993 Lottery advertising contract came up for the bidding process. There is no evidence that there was any irregularity in awarding the 1993 contract. However, two of the three Lottery employees who comprise the 1993 bid evaluation committee also were involved in the illegal 1991 evaluation process, as well as the same Lottery Director. In the 1993 process, Fahlgren Martin, Inc., received the highest score. Thereafter, a bid justification slip was prepared on March 17, 1993, by the Lottery Commission and the Purchasing Division of the Department of Administration. The bid justification slip stated that, in reliance upon documents submitted by the Lottery, the Purchasing Division "finds the scores to be mathematically correct and to have been submitted in accordance with purchasing regulations. Therefore we concur that the contract award be made to Fahlgren Martin, Inc."

On March 19, 1993, Administration Assistant Director Curtis formalized the Purchasing Division's approval by executing the first page of the purchase order. That purchase order and the underlying documents were forwarded to the Attorney General for his review, pursuant to W.Va.Code § 5A-3-13 (1993). The Code section requires that the Attorney General approve the contract as to form. While that review process was underway, the indictments discussed above were returned.

Thereafter, on May 5, 1993, the Attorney General advised Mr. Polan, Secretary of the Department of Administration, and Mr. Riley, the Supervisor of the Department of Purchasing, a division of the Department of Administration, that approval of the 1993 contract would be withheld pending resolution of the federal indictment against Bryan. The Attorney General stated that "until the criminal issue has been resolved ... it would be remiss of this office to approve the contract and the purchase change request for the fiscal year 1993."

On May 14, 1993, Fahlgren Martin, Inc., filed a petition for a writ of mandamus in the Circuit Court of Kanawha County. On May 14, 1993, a show cause order was entered by the Circuit Court of Kanawha County, returnable June 11, 1993. In the petition before this Court, Fahlgren Martin, Inc., noted that the Attorney General then attempted to initiate massive discovery concerning the procurement of both the 1991 and 1993 contracts. "Specifically, [Attorney General] McGraw attempted to take the depositions of numerous persons, both parties and nonparties, and to compel the production of voluminous documents. Although [Attorney General] McGraw states that Fahlgren Martin, Inc., 'consistently opposed [his] efforts to develop the pertinent facts' Fahlgren Martin, Inc., actually sought only to prohibit discovery by [Attorney General] McGraw concerning evidence which was immaterial to the mandamus proceeding below." On June 4, 1993, Fahlgren Martin, Inc.'s motion to prohibit or limit discovery was granted by the circuit court. Thus, Attorney General McGraw was forbidden by the Circuit Court of Kanawha County from engaging in discovery pertaining to the process of the evaluation of bids for the 1991 or the 1993 contract.

On June 11, 1993, a hearing was held on Fahlgren Martin, Inc.'s petition for a writ of mandamus. Fahlgren Martin, Inc., contends that at that hearing, the evidence presented by Attorney General McGraw pertained only to the issue of whether the Attorney General was entitled to withhold approval of the form of the 1993 contract pending a full blown investigation by his office concerning the legality of the procedures used in the awarding of that contract. The Attorney General's office was permitted to proffer that evidence, which included an avowal as to the substance of anticipated testimony.

On June 14, 1993, the circuit court entered the order from which the Attorney General appeals, granting the peremptory writ of mandamus as prayed for by Fahlgren Martin, Inc. 1 The writ of mandamus commanded the Attorney General to approve the 1993 contract as to form and required both Mr. Riley and Mr. Polan to finalize and give full force and effect to the 1993 contract with Fahlgren Martin, Inc. On June 15, 1993, the Attorney General filed a motion for a stay of execution pending appeal, which was granted by this Court. For reasons set forth below, we affirm the June 14, 1993, order of the Circuit Court of Kanawha County granting Fahlgren Martin, Inc.'s petition for a writ of mandamus.

The procedure to provide services to the State by contract is set forth in W.Va.Code § 5A-3-1 et seq. (1993). West Virginia Code § 5A-3-10 provides for the purchase and contract for commodities, printing, and services based, if possible, on competitive bids, when contracts exceed ten thousand dollars. West Virginia...

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