State v. Lundgren Pac. Const. Co., Inc.
| Decision Date | 30 November 1979 |
| Docket Number | No. 3888,3888 |
| Citation | 603 P.2d 889 |
| Parties | STATE of Alaska, Petitioner, v. LUNDGREN PACIFIC CONSTRUCTION CO., INC., Respondent. |
| Court | Alaska Supreme Court |
Ray C. Preston, Jack McGee, Asst. Attys. Gen., Avrum M. Gross, Atty. Gen., Juneau, for petitioner.
R. R. De Young, Barokas & Martin, Anchorage, for respondent.
Roger W. DuBrock, Wade & DuBrock, Larry R. Meyer, Burr, Pease & Kurtz, Anchorage, Lawrence T. Feeney, Faulkner, Banfield, Doogan, Holmes, Juneau, for amici curiae.
Before RABINOWITZ, C. J., and CONNOR, BOOCHEVER, BURKE and MATTHEWS, JJ.
At stake in this appeal is whether a corporation which contracted with the State Department of Highways and received an adverse decision from the contracting officer after following contractual dispute provisions is entitled to bring a new suit against the state; and if not, whether the appeal from the contracting officer's decision should consist of a review on the record or a trial de novo. We hold that the proper procedure is an appeal under Appellate Rule 45 rather than a new suit. We further hold that the contractor is entitled to a de novo hearing if a hearing conforming to due process requirements was not provided by the Department or if the contract is construed as providing a de novo hearing.
On May 25, 1973, Lundgren Pacific Construction Co., Inc. entered into a contract with the State of Alaska, acting by its Commissioner of Highways, for the construction of three ferry terminals. Disputes arose over various provisions, and the contractor filed a claim seeking extra compensation. The contract is subject to the provisions of the 1972 edition of the Standard Specifications for Highway Construction, the Blue Book, which includes a section entitled "Claims for Adjustment and Disputes." The provisions of that section, which are set forth in the Appendix to this opinion, may be summarized as follows:
1. The contractor submits a written claim to the engineer, with a copy to the contracting officer (the Commissioner of Highways).
2. If the claim is not disposed of by agreement within sixty days, it is decided by the contracting officer.
3. Within thirty days from receipt of the contracting officer's decision, the contractor may request a Contract Claims Review Board 1 (CCRB) hearing. The contractor has the right to be heard and to offer evidence before the CCRB and may be represented by counsel.
4. Copies of the Board's opinion are furnished the contractor, and the contractor or the state may seek a reconsideration of the opinion within thirty days.
5. If no motion for reconsideration is filed, the Board's opinion will be the basis for the contracting officer's decision.
6. The final contracting officer's decision is then furnished to the contractor and the Attorney General's Office with notification that the administrative remedies for the claim have been exhausted.
Lundgren followed the procedure for adjustment of disputes, and a final contracting officer's decision was mailed to it on March 25, 1977. Lundgren did not seek appellate review, as such, but on November 1, 1977, filed a complaint in the superior court based upon the jurisdiction of the superior court to hear claims against the state, pursuant to AS 09.50.250. 2 The state moved to dismiss the claim because it was not filed within thirty days after the agency's decision as required by Appellate Rule 45. 3
Following oral argument, the superior court denied the Department's motion, stating that the action was a new suit and not an appeal from a prior administrative decision. The state filed a motion, nominally for reconsideration, which was on different grounds and for all intents and purposes constituted a new motion. The state no longer sought to dismiss the action, but requested the court to change its ruling and find that the Contract Claims Review Board of the Department of Highways was an administrative agency and that the proceeding was a review of an administrative agency's decision rather than a de novo proceeding. The superior court did not expressly rule on the motion for reconsideration, but according to Civil Rule 77(m), 4 by remaining silent, the court denied the motion. The state filed a petition for review of the trial court's denial of the motion; the state seeks a ruling that the CCRB's decision was an administrative agency's decision so that the action in superior court should be limited to review on the record.
The same issues have been raised in three other superior court actions involving highway construction claims. 5 The parties to those actions and the Alaska Chapter of Associated General Contractors have filed amici curiae briefs.
Under the provisions of Appellate Rules 23 and 24, we granted review because the superior court's order involves a controlling question of law as to which there is substantial ground for difference of opinion, and an immediate review may materially advance the ultimate termination of the litigation. The order is of such substance and importance as to justify deviation from normal appellate procedure.
Since the state no longer seeks dismissal of the complaint as being untimely filed, our opinion shall be limited to the issues of whether the procedure is in the nature of an appeal or a new action, and, if it is an appeal, whether it will be resolved on the basis of the record before the CCRB or by a trial de novo.
WHETHER A CHALLENGE OF A CCRB DECISION IS AN ADMINISTRATIVE
Our prior decisions clearly indicate that the procedure should be treated as an appeal. The seminal case is Keiner v. City of Anchorage, 378 P.2d 406 (Alaska 1963). After various inspections of Keiner's building, the city manager of Anchorage issued an order for its demolition. Keiner filed objections, and then a public hearing was held by the city council acting as a board of adjustment. The board found the building to be a fire and health hazard and provided by an ordinance for its removal.
Keiner appealed to the superior court requesting a de novo hearing on the matter and a jury trial. The court denied the requests and affirmed the board's decision based on the record of the proceedings.
On appeal, this court affirmed, referring to AS 22.10.020(a) and former Civil Rule 107(a). 378 P.2d at 410 n.12. AS 22.10.020(a) states in part:
(H)earings on appeal from a formal order or judgment of a subordinate court or administrative agency shall be on the record unless the superior court, in its discretion, grants a trial de novo, in whole or in part.
Former Civil Rule 107(a) provided that appeals from the magistrate courts were on the record unless the superior court, in its discretion, granted a trial de novo in whole or in part.
Keiner, like Lundgren, contended that the board decision was not that of an administrative agency and that AS 22.10.020(a) refers only to agencies created by the legislature. We concluded that the term "administrative agency" should be construed broadly to include the board of adjustment since it was in fact performing administrative functions. 378 P.2d at 410.
Similarly, the Contract Claims Review Board and the Commissioner of Highways, acting for the Department of Highways, perform an administrative function when they review the claims of the contractor.
This is in accord with Professor Davis' classic definition:
An administrative agency is a governmental authority, other than a court and other than a legislative body, which affects the rights of private parties through either adjudication or rule making.
1 K. Davis, Administrative Law Treatise § 1.01 at 1 (1958) (footnote omitted).
We were also concerned in Keiner with due process requirements. We stated:
The board made its findings only after due notice and full opportunity to be heard; the conduct of the hearing was consistent with the essentials of a fair trial; there is no assertion that the board was anything but impartial; and a complete record of the proceedings was kept so that the reviewing court was able to determine that there was no substantial failure to observe applicable rules of law and procedure, and that in all other respects Keiner was afforded a fair hearing. This satisfies the procedural requirements of due process of law.
378 P.2d at 409-10 (footnote omitted). We shall further discuss the requirements of due process later in this opinion. Whether or not those requirements were met, however, does not alter the fundamental source of the dispute proceedings or render them something other than administrative in nature.
Subsequent to our decision in Keiner, we promulgated Appellate Rule 45 specifying the procedure to be followed on appeals to the superior court from the district court and administrative agencies. 6 The rule stated that it superseded all other procedural methods specified in statutes for appeals from administrative agencies to the courts. 7 Since the CCRB's decision is an administrative decision, a challenge to that decision is an administrative appeal and therefore governed by Appellate Rule 45.
In Winegardner v. Greater Anchorage Area Borough, 534 P.2d 541 (Alaska 1975), we had occasion to discuss the applicability of Appellate Rule 45 to an appeal taken from a decision of the Greater Anchorage Area Borough Assembly, sitting as the board of equalization. AS 29.53.140(f) provides that a party is entitled to a trial de novo on appeal from a determination of a board of equalization. The superior court held that Appellate Rule 45 governed and that a trial de novo was not permitted.
Winegardner contended that the board of equalization was not an administrative agency. We had little trouble, based on Keiner, in reaching the conclusion that the board was an administrative agency within the meaning of Appellate Rule 45. 534 P.2d at 544-45.
Nevertheless, we concluded that the right to a trial de novo conferred by AS 29.53.140(f) was a...
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