Westates Const. Co. v. Sheridan County School Dist. No. 2, Bd. of Trustees, 85-141

• Decision Date: 30 May 1986
• Docket Number: No. 85-141,85-141
• Parties: 33 Ed. Law Rep. 548 WESTATES CONSTRUCTION CO., a Wyoming corporation, Appellant (Petitioner), v. SHERIDAN COUNTY SCHOOL DISTRICT NO. 2, BOARD OF TRUSTEES, Appellee (Respondent).
• Court: Wyoming Supreme Court

Page 1366

719 P.2d 1366

33 Ed. Law Rep. 548

WESTATES CONSTRUCTION CO., a Wyoming corporation, Appellant (Petitioner), v. SHERIDAN COUNTY SCHOOL DISTRICT NO. 2, BOARD OF TRUSTEES, Appellee (Respondent).

No. 85-141.

Supreme Court of Wyoming.

May 30, 1986.

John R. Vincent, Hettinger & Leedy, P.C., Riverton, for appellant.

Fred R. Dollison, Badley & Rasmussen, P.C., Sheridan, for appellee.

Before THOMAS, C.J., and ROONEY ^*, BROWN, CARDINE and URBIGKIT, JJ.

THOMAS, Chief Justice.

The primary question addressed in this appeal is whether the presence of counsel for the Sheridan County School District No. 2, Board of Trustees (Board), at a deliberative session in which the responsibility of Westates Construction Co. (Westates) to be considered as the bidder on a proposed contract for school construction was determined requires reversal of the decision of the Board pursuant to the Wyoming Administrative Procedure Act, specifically § 16-3-111, W.S.1977, as amended, or the concepts of due process of law. In addition Westates raises questions as to whether the decision of the Board is arbitrary, capricious, and an abuse of discretion because it was without the support of substantial evidence and is not otherwise in accordance with law and whether the Board's decision is arbitrary, capricious and violative of Westates' due process rights because it is not supported by adequate findings of fact. Westates appealed the Board's decision to the district court, and that decision was affirmed. In our judgment there was no reversible error in connection with the proceedings before the Board, and we affirm the judgment of the district court.

In Westates' brief as the appellant in this court three questions are stated which Westates argues should be answered affirmatively with the result that the decision of the Board would be reversed. They are stated in this way:

"A. DOES THE PRESENCE OF RESPONDENT'S COUNSEL IN THE SECRET, EXECUTIVE, DELIBERATIVE SESSION OF THE BOARD VIOLATE THE APPEARANCE OF JUSTICE AND FAIR PLAY REQUIRED BY DUE PROCESS OF LAW, THE WYOMING ADMINISTRATIVE PROCEDURE ACT, AND SECTION 16-3-111, W.S., 1977, AS AMENDED?

"B. IS THE BOARD'S DECISION ARBITRARY, CAPRICIOUS, AND AN ABUSE OF DISCRETION AS IT IS WITHOUT THE SUPPORT OF SUBSTANTIAL EVIDENCE OR OTHERWISE NOT IN ACCORDANCE WITH LAW?

"C. IS THE BOARD'S DECISION ARBITRARY AND CAPRICIOUS AND VIOLATIVE OF PETITIONER'S DUE PROCESS RIGHTS BECAUSE IT IS NOT SUPPORTED BY ADEQUATE FINDINGS OF FACT?"

The Board as appellee in this court presents this statement of its position with respect to the questions raised:

"I. THE PRESENCE OF COUNSEL WITH THE BOARD OF TRUSTEES WHILE IT DELIBERATED THE QUESTION OF APPELLANT'S 'RESPONSIBILITY' DID NOT PREJUDICE THE APPELLANT AND DID NOT VIOLATE APPELLANT'S RIGHTS TO DUE PROCESS.

"II. THE BOARD'S DECISION THAT APPELLANT WAS NOT A RESPONSIBLE BIDDER PURSUANT TO WYO.STAT. § 16-6-102 IS AMPLY SUPPORTED BY SUBSTANTIAL EVIDENCE AND IS, THEREFORE, NOT ARBITRARY, CAPRICIOUS, OR AN ABUSE OF DISCRETION.

"III. THE FINDINGS OF FACT ARE ADEQUATE AND ARE SUFFICIENTLY DEFINITE TO AFFORD THE REVIEWING COURT AN OPPORTUNITY TO DETERMINE WHETHER THEY ARE SUPPORTED BY SUBSTANTIAL EVIDENCE."

The background against which this dispute arose includes this information with respect to Westates. It is a Wyoming corporation which does business in Sheridan. It has participated in the construction of a number of public works projects in the state of Wyoming. These include the Hog Park Dam and Reservoir Enlargement, the Laramie Wastewater Treatment Facility, the Hot Springs County Counseling Center, the Northwest Community College dormitory project, the Douglas Middle School, the Natrona County Junior High School, the Basin Wastewater Treatment Plant Improvements, and the Weston County Memorial Hospital. Westates submitted a bidder's pre-qualification statement in response to a call for bids published by Sheridan County School District No. 2 for the construction of an elementary school. The function of the pre-qualification statement is to demonstrate whether a contractor has the technical ability and financial resources to perform the proposed contract. On the basis of the pre-qualification statement Westates' submission of a bid on the contract for the construction of the proposed elementary school was approved by the Board and its architects, and Westates did submit a bid.

The bids for the proposed elementary school were opened at a special meeting of the Board held in September, 1984. Westates was the apparent low bidder, but at a regular board meeting on October 3, 1984, the Board indicated that the contract would be awarded to a different construction company. Westates protested this action on the ground that it was entitled to be awarded the contract as the lowest responsible bidder. Members of the Board then evidenced concern as to whether Westates in fact was a responsible bidder and could complete the project in a satisfactory manner. These concerns were attributable to the experience of the Board with Westates on a fire code remodeling project for the School District.

In response to Westates' protest and the concerns of the Board members, a public hearing was scheduled for October 10, 1984, to resolve the matter. At that hearing Westates produced a number of witnesses with the goal of demonstrating that, despite any disappointment over which the manner in which the fire code remodeling project was accomplished, Westates should be accepted as a responsible bidder. These witnesses included a number of representatives of owners for whom Westates had performed other construction work. The Board called other witnesses to testify that the work which Westates had done on the fire code remodeling project was not acceptable and that Westates was not a responsible bidder. These latter witnesses described defective workmanship and produced during their testimony photographic exhibits demonstrating unsatisfactory work. In the course of the hearing it became apparent that the performance of the fire code remodeling project, whether the work was satisfactory, and, if not, the reasons for that were in issue. Westates produced evidence intended to establish that remodeling work is more difficult than new construction, that the completion date for the project was uncertain, and that errors in the architects' plan resulted in supply delays. All this was perceived to be necessary to show that the fire code remodeling project was an anomaly, and that otherwise Westates' reputation for performing satisfactory work on public works projects was unblemished.

After the public hearing the members of the Board went into executive session to deliberate. They requested their attorney to accompany them into the executive session to answer any legal questions that might arise. During that deliberative session both the attorney for the Board and the hearing officer were seated at the table with the members of the Board. Neither of these individuals participated in the discussion of the Board, and they had no voice in the vote which determined that Westates was not a responsible bidder, with only one member voting contrary to that determination. Depositions of the Board members demonstrate that the attorney did not comment on the evidence and that his presence had no impact on the decision. He was asked to record the findings of fact and conclusion of law which the Board enunciated in support of its position, but this request was made after the Board's decision was reached.

The Board then returned from the executive session about 2:45 A.M. on October 11, 1984. At that time the chairman read the findings of fact and conclusion of law which the Board's attorney had recorded. The formal decision of the Board is dated October 17, 1984, and it reads:

"FINDINGS OF FACT, CONCLUSION OF LAW AND DECISION OF THE BOARD

"FINDINGS OF FACT:

"1. It is the finding of the Board of Trustees that the quality and craftsmanship of the work done by Westates Construction on the fire code revision project was below industry standards.

"2. The craftsmanship involved in the installation of the doors and hardware, construction of the additional stairwell at Central School, the application of fire retardant paint, and the finish work on the fire code modification project was substandard.

"3. Westates Construction Company failed to adequately supervise the work on the fire code modification project.

"CONCLUSION OF LAW:

"Westates Construction Company is not a responsible bidder as contemplated in Wyoming Statutes § 16-6-102.

"DECISION OF THE BOARD:

"THEREFORE, the bid proposal of Westates Construction Company on the new elementary school is rejected."

Westates then filed its petition for review in the district court. The district court entered an initial order in which it found that the actions of the Board were not arbitrary, capricious or an abuse of discretion or otherwise not in accordance with law; that the actions of the Board were not contrary to constitutional right, power, privilege or immunity; that the actions of the Board were not in excess of statutory jurisdiction, authority or limitations or lacking statutory right; and that the determination of the Board was supported by substantial evidence. The district court said, "During the sixteen years on the bench this Court has not seen a more clear basis for an action taken by a Board and but for the thoughts hereinafter expressed this Court would have no problem in affirming without reservation the Board's action." The court then expressed a concern that the attorney for the Board might have in some way participated in the Board's decision. For that reason the court held the matter in abeyance until a hearing could be held to determine the question of the participation of the attorney in the Board's decision. The hearing was held and a subsequent order entered. In that order the district court found that:

"3. Counsel for the Board was...