City of Durant, Mississippi v. Laws Construction Company, Inc. ( 1994 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 94-CA-00710-SCT
CITY OF DURANT
v.
LAWS CONSTRUCTION COMPANY, INC.
ON MOTION FOR REHEARING
DATE OF JUDGMENT: 06/27/94
TRIAL JUDGE: HON. EUGENE M. BOGEN
COURT FROM WHICH APPEALED: HOLMES COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT: JAMES H. POWELL III
ATTORNEY FOR APPELLEE: RICHARD C. BRADLEY, III
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: AFFIRMED - 8/20/98
MOTION FOR REHEARING FILED: 4/17/97
MANDATE ISSUED: 8/27/98
EN BANC.
SULLIVAN, PRESIDING JUSTICE, FOR THE COURT:
¶1. Motion for Rehearing granted. The orginial opinion in this case is withdrawn and these opinions
are substituted therefor.
¶2. The City of Durant accepted a construction bid from King Metal Buildings, Inc., (herein after
"King") which failed to include the contractor's Certificate of Responsibility number on the exterior
of the envelope as required by Miss. Code Ann. § 31-3-21. King's bid was the lowest bid. Laws
Construction Co. (herein after "Laws") had the second lowest bid. Laws objected to the bid
procedure. The City attorney advised the City aldermen and the mayor that previous Mississippi
Attorney General opinions stated that a contractor's bid which failed to include the certificate of
responsibility number on the exterior of the envelope, but was included within the bid, was valid. The
City awarded the bid to King. Laws appealed the City's decision pursuant to Miss. Code Ann. § 11-
51-75.
¶3. The circuit court ruled that Miss. Code Ann. § 31-3-21 was clear and unambiguous. The circuit
court ruled that § 31-3-21 required a bid to include the certificate of responsibility number on the
exterior of the bid envelope. If a bid fails to follow the procedures provided in § 31-3-21, then the
public agency is forbidden from opening and accepting the bid. Thus, the circuit court ruled the City
violated § 31-3-21 by opening and considering King's bid. If the City had not considered King's bid,
the City would have accepted Laws' bid, which was the next lowest. The circuit court determined
that either Laws would be entitled to the contract or the City could have rejected all bids.
¶4. Pursuant to Miss. Code Ann. § 11-51-75, the circuit court is required to render a judgement
which the municipal ought to have rendered. Thus, the circuit court would have ordered the City to
not consider King's bid, and either accept the next lowest bid or reject all bids and rebid the project.
However, rather than wait for a decision of the appeal, the City proceeded with the illegal award of
the contract. At the initial hearing, King was substantially through with the project. Since the project
was precluded from being awarded to Laws due to its substantial completion, the circuit court
determined that Laws was entitled to recover damages. A hearing was conducted to determine
damages. The circuit court awarded Laws a judgement against the City for $168,495.00 in
compensatory damages plus $15,978.95 in costs and attorneys' fees. The City appealed to this Court.
I.
¶5. On September 2, 1993, the City of Durant, pursuant to the requirements of law, advertised and
published for bidders to construct a 100,000 square foot building suitable for industrial purposes
(herein after "project"), in accordance with plans and specifications developed by the City. All bids
received pursuant to the advertisement were opened on October 8, 1993 at 2:00 p.m. After the
deadline, the project architect, Mr. Clingan, opened the sealed bids. As he picked up each bid
envelope, he read the name of the bidder and stated whether or not there was a certificate of
responsibility number noted on the outside of the bid envelope, pursuant to Miss. Code Ann. § 31-3-
21. Clingan did not read aloud the certificate of responsibility number itself.
¶6. King's sealed bid did not have a certificate of responsibility number noted on the outside of the
envelope. Clingan announced that King's bid envelope did not have the certificate of responsibility
number noted on the outside of the envelope. However, Clingan announced that he would open the
envelope to see if the certificate of responsibility number was located on the bid form in the envelope
since he had knowledge that King did have a certificate of responsibility number. Clingan opened the
bid and announced that the certificate of responsibility number was identified in the bid. As with all
the other bids, the King bid was announced and the amount was included on the bid tabulation sheet.
All other bids, including Laws', included the contractor's certificate of responsibility number on the
exterior of the envelope.
¶7. The bids received by the City were as follows:
King Metal Buildings, Inc. $1,258,900.00
Laws Construction Co., Inc. $1,296,000.00
Harold West Contractors, Inc. $1,426,300.00
Ralph McKnight & Son Construction, Inc. $1,396,800.00
Fountain Construction Co., Inc. $1,432,000.00
Evan Johnson & Sons Construction, Inc. $1,638,990.00
Clingan announced that King was the lowest bidder. The second lowest bidder was Laws. On the
evening of October 8, 1993, Laws sent a letter to the mayor of the City, the Hon. Ben Killebrew. The
letter protested the opening of King's bid since the bid violated §31-3-21. The letter also stated that
Laws' bid was the lawful low bid.
¶8. On October 12, 1993, the aldermen and the mayor for the City convened. At the meeting,
attorney for the City, James H. Powell, III, explained the factual background concerning the bids of
the project. Powell stated that he had contacted the Mississippi Attorney General's office inquiring
whether it had issued an opinion similar to this particular situation. Powell stated that the Attorney
General's office sent him a copy of a letter dated September 4, 1991 from the Attorney General's
office to Everett T. Sanders, concerning a bid protest similar to Laws' protest. The Attorney
General's office also sent the opinions Lovell and Persons, dated June 11, 1979 and April 24, 1987,
respectively. These opinions advised that under the circumstances, the City could legally award the
bid to King. Richard C. Bradley, III, attorney for Laws, addressed the board of aldermen and stated
that the plain language of § 31-3-21 required a bid to have the certificate of responsibility number on
the exterior of the envelope in order for the City to legally open and accept a bid. Todd Bruce, a
Field Representative for the State Board of Contractors for seven years, also addressed the aldermen.
Bruce stated that a bid may not be opened without a certificate of responsibility number located on
the exterior of the envelope. Bruce stated that he has attended many bid openings and that he always
advised the public body not to open a bid envelope which did not have a certificate of responsibility
number located on the exterior of the envelope. Clingan was also present. Clingan stated that he had
checked the prospective bidders with the State Board of Contractors to verify whether each
contractor had a certificate of responsibility number. Prior to opening the bids, Clingan stated that all
bidders held valid certificates.
¶9. The board of aldermen adopted a resolution that the project be awarded to King. The minutes of
the meeting of October 12, 1993, were approved by the mayor on the evening of October 19, 1993.
After the mayor's approval, Laws filed a bill of exceptions with the City at 8:00 p.m. on October 19,
1993, pursuant to § 11-51-75 for the purpose of appealing the City's action. The mayor amended and
signed the bill of exceptions on October 22, 1993. The city clerk transmitted the bill of exceptions to
the Clerk of the Circuit Court of Holmes County. The Circuit Court of Holmes County held a hearing
in Greenwood, Leflore County, Mississippi on January 21, 1994, before the Honorable Eugene
Bogan, Circuit Judge.
¶10. At the appeal hearing, the circuit court granted the joint motion of the Mississippi State Board
of Contractors and the Associated Builders and Contractors to file an amicus curiae brief.
¶11. On February 17, 1994, Judge Bogan entered a partial judgement and issued findings of fact and
conclusions of law. The circuit court ruled in favor of Laws and the position taken by the State Board
of Contractors. The circuit court ruled that Miss. Code Ann. § 31-3-21 was clear and unambiguous.
The circuit court ruled that § 31-3-21 required a bid to include the certificate of responsibility number
on the exterior. If a bid fails to follow the procedures provided in § 31-3-21, then the public agency is
forbidden from opening and accepting the bid. Thus, the circuit court ruled that the City violated §
31-3-21 by opening and considering King's bid. The City concedes that if it had not considered King's
bid, the City would have accepted Laws' bid, which was the next lowest. Furthermore, the City
conceded that it would have accepted Laws' bid and awarded Laws the contract for the Project if the
City had neither opened nor considered King's bid. The circuit court determined that Laws would be
entitled to the contract or the City could have rejected all bids.
¶12. Pursuant to Miss. Code Ann. § 11-51-75 (1972), the circuit court is required to render a
judgement which the municipal ought to have rendered. Thus, the circuit court would have ordered
the City to not consider King's bid, and either accept the next lowest bid or reject all bids and rebid
the project. However, rather than wait for a decision of the appeal, the City proceeded with the illegal
award of the contract. At the time of the initial hearing, King was substantially through with the
project. Since the project was precluded from being awarded to Laws due to its substantial
completion, the circuit court determined that Laws was entitled to recover damages. The circuit
court ordered discovery on the issue of damages until March 10, 1994.
¶13. A hearing was conducted to determine damages on June 21, 1994, in Greenville, Mississippi. The
circuit court awarded Laws a judgement against the City for $168,495.00 in compensatory damages
plus $15,978.95 in costs and attorney' s fees. The City appeals to this Court.
II.
WHETHER THE CIRCUIT COURT CORRECTLY RULED THAT THE CITY OF
DURANT IMPROPERLY OPENED, IMPROPERLY CONSIDERED, AND
IMPROPERLY ACCEPTED THE BID OF KING METAL BUILDINGS, INC., AND
WAS IN VIOLATION OF § 31-3-21(1)&(2)?
¶14. The crux of the case sub judice centers on Miss. Code Ann. § 31-3-21 (Supp. 1997), which
reads in pertinent part:
(1) It shall be unlawful for any person who does not hold a certificate of responsibility issued
under this chapter, or a similar certificate issued by another state recognizing such certificate
issued by the State of Mississippi, to submit a bid, enter into a contract, or otherwise engage in
or continue in this state in the business of a contractor, as defined in this chapter. Any bid
which is submitted without a certificate of responsibility number issued under this chapter
and without that number appearing on the exterior of the bid envelope, as and if herein
required, at the time designated for the opening of such bid, shall not be considered further,
and the person or public agency soliciting bids shall not enter into a contract with a
contractor submitting a bid in violation of this section. In addition, any person violating this
section by knowingly and willfully submitting a bid for projects without holding a certificate of
responsibility number issued under this chapter, as and if herein required, at the time of the
submission or opening of such bid shall be guilty of a misdemeanor and, upon conviction, shall
be punished by a fine of not more than One Thousand Dollars ($1,000.00), or by imprisonment
for not more than six (6) months, or by both such fine and imprisonment.
(2) All bids submitted for public or private projects where said bid is in excess of Fifty
Thousand Dollars ($50,000.00) with respect to public projects and in excess of One Hundred
Thousand Dollars ($100,000.00) with respect to private projects shall contain on the outside
or exterior of the envelope or container of such bid the contractor's current certificate
number, and no bid shall be opened or considered unless such contractor's current
certificate number appears on the outside or exterior of said envelope or container, or unless
there appears a statement on the outside or exterior of such envelope or container to the effect
that the bid enclosed therewith did not exceed Fifty Thousand Dollars ($50,000.00) with
respect to public projects or One Hundred Thousand Dollars ($100,000.00) with respect to
private projects. Any person violating the provisions of this subsection shall be guilty of a
misdemeanor and, upon conviction, shall be punished by a fine of not more than One Thousand
Dollars ($1,000.00), or by imprisonment for not more than six (6) months, or by both such fine
and imprisonment.
(emphasis added).
A. Clear and Unambiguous and Legislative Intent
¶15. The statute clearly and unambiguously states that a bid may not be opened, the bid may not be
considered, and the bid may not be awarded the contract if the contractor fails to include the
certificate of responsibility number on the exterior of the envelope. The only exception to the rule is
when a bid for a public project is not in excess of $50,000.00, or not in excess of $100,000.00 for a
private project. However, even this exception requires that the bid contain a statement on the exterior
of the bid envelope that the bid did not exceed the designated monetary limit.
¶16. In the case sub judice, King failed to include a certificate of responsibility number on the
exterior of the envelope. Furthermore, the bid was in excess of $50,000.00 for a public project.
Therefore, the City should not have opened, considered, nor awarded King's bid. By opening,
considering, and contracting with King, the City blatantly violated § 31-3-21.
¶17. It is well settled law in Mississippi that when a statute is clear and unambiguous then there is no
room for construction. In Marx v. Broom, 632 So. 2d 1315, 1318 (Miss. 1994), we stated:
When the language used by the legislature is plain and unambiguous, such as the language here,
and where the statute conveys a clear and definite meaning, as here, the Court will have no
occasion to resort to the rules of statutory interpretation. State v. Heard, 246 Miss. 774, 151
So. 2d 417 (1963). The courts cannot restrict or enlarge the meaning of an unambiguous statute.
City of Hazlehurst v. Mayes, 96 Miss. 656, 51 So. 890 (1910); Hamner v. Yazoo Delta
Lumber Co., 100 Miss. 349, 56 So. 466 (1911); and State v. Traylor, 100 Miss. 544, 56 So.
521 (1911).
¶18. Only when a statute is unclear and ambiguous will the court employ rules of construction. Clark
v. State ex rel. Mississippi State Med. Ass'n, 381 So. 2d 1046, 1048 (Miss. 1980). The City
challenges the clear and unambiguous holding on two grounds. The City argues that this Court
should create an exception to § 31-3-21 by allowing contractors, who have negligently left their
certificate of responsibility numbers off the exterior of the envelopes, to still have their bids
considered. The City argues that legislative intent and the spirit of Title 31 allows the exception.
Secondly, the City argues that the Attorney General's office has issued three opinions that find in
favor of the City.
¶19. The City, and the Attorney General opinions argue that the intent of § 31-3-1, et. seq., is stated
in Miss. Code Ann. § 31-3-2 (1990) as follows:
The purpose of Chapter 3, Title 31, Mississippi Code of 1972, is to protect the health, safety
and general welfare of all persons dealing with those who are engaged in the vocation of
contracting and to afford such persons an effective and practical protection against
incompetent, inexperienced, unlawful and fraudulent acts of contractors.
¶20. The City contends that the act was created to provide a list of competent, experienced
contractors. A certificate of responsibility indicates that the contractor is competent. By requiring a
contractor to obtain a license, the act helps prevent fraudulent and otherwise incompetent contractors
from making bids. Furthermore, the City states that § 31-7-13(d) provides that "Purchases may be
made from the lowest and best bidder." Therefore, the City contends that the act requires licensed
contractors, as reflected by issuance of a certificate of responsibility number, in order to help maintain
honest, competent contractors, while at the same time provide competitive prices. The City argues
that since King was a licensed contractor, as reflected by the certificate of responsibility number
included within the bid, and made the lowest bid, then King should be awarded the bid. The City
argues that such a conclusion reflects the intent of the legislature to obtain the best, lowest prices
through competitive bidding with honest, competent contractors. See Attorney General Opinion,
Persons, 1987. Since King had a valid certificate of responsibility number but merely negligently
omitted it on the exterior of the envelope, the negligence was a mere technicality not contrary to
legislative intent.
¶21. The City's position is flawed. Clearly § 31-3-1, et seq., was enacted to protect the public welfare
from fraudulent acts by a contractor. One of the essential protections of the act is the very procedure
used in the bidding process. This is reflected by the State Board of Contractors's interest in the case
sub judice. The Board of Contractors is empowered through § 31-3-1, et seq., to oversee applicants
for contractors' licenses to protect against fraudulent and incompetent contractors and to administer
the regulatory scheme established by the Legislature. The Board of Contractors argues that any
interpretation other than the literal meaning jeopardizes the bidding process. The Board and the
Mississippi Associated Builders and Contractors contend that the legislature intentionally created a
"bright line" test for determining whether a bid should be opened. Such a literal procedure assures all
bidders that all bids will be treated the same.
¶22. The City cites Gentry v. Wallace, 606 So. 2d 1117 (Miss. 1992), and State v. Necaise, 228
Miss. 542, 87 So. 2d 922 (1956), for the notion that the manifest intent of the legislature will prevail
over the literal import of the words of the statute. However, both cases are distinguishable in that the
wording of the statutes in those cases was ambiguous. In Necaise, the wording of the statute at issue
left open the question of how much police power is granted to the county patrol officers. On first
glance the statute opened the door to the interpretation of granting the county patrol officers the
equivalent powers as those vested in the sheriff and constable. We limited the county patrol officers'
power by clarifying that they are authorized to have such powers only within the performance of their
duties as county patrol officers. Necaise, 228 Miss. at 549, 87 So. 2d at 925. Hence, this Court was
called upon to clarify the ambiguity.
¶23. In Gentry, we addressed when the statute of limitations accrues in a wrongful death action
arising in the context of medical negligence. Ambiguity in the language of the statute existed as to
whether a wrongful death action in such circumstances accrues at the time of death or at the time of
the negligent medical act. Gentry, 606 So. 2d at 1119. We looked to the intent of the legislature to
help clarify the ambiguity. These two cases do not overrule, but rather affirm, the long standing
principle that when a statute is clear and unambiguous, then no rules of construction need be applied.
B. Attorney General Opinions
¶24. A considerable amount of the City's argument in regards to the interpretation of the statute
relied on three Attorney General opinions. The three opinions stated that in a factual circumstance
almost identical to the case sub judice, a strict reading of § 31-3-21 is not necessary so that a public
body may accept the lowest bid, even though the bid did not include the certificate of responsibility
number on the exterior of the envelope as long as the bidder did have a certificate of responsibility
number. See Attorney General Opinions, Lovell (issued June 8, 1979); Persons (issued April 24,
1987); Sanders (issued September 4, 1991). However, Attorney General opinions are not binding
nor prohibit liability when a court of competent jurisdiction declares that the opinions are manifestly
wrong and without any substantial support. See Miss. Code Ann. § 7-5-25 (Supp. 1997). For the
reasons previously explained, we now state that the Attorney General opinions, supra, are manifestly
wrong and not binding.
¶25. The City claims to have acted in good faith when relying on the Attorney General opinions. The
City argues that even if this Court does not reach the same conclusion in regards to the interpretation
of § 31-3-21 as the Attorney General opinions, the correct construction should only apply to future
applications of the statute. We have in the past, when determining that an Attorney General opinion
was erroneous, applied the correct construction in future cases thereby not penalizing a party's
reliance. See Meeks v. Tallahatchie County, 513 So. 2d 563, 568 (Miss. 1987). However § 7-5-25
requires the party to contact the Attorney General's office in writing requesting an opinion on his
particular facts. In return, the Attorney General's office will prepare and deliver a legal written
opinion. In the case sub judice, the City merely spoke with the Attorney General's office over the
phone. Furthermore, the Attorney General's office sent opinions regarding similar circumstances, and
did not render a written opinion with regard to the particular facts in the case sub judice, as required
by the statute. Therefore, the City should be held liable.
III.
WHETHER THE PARTIAL JUDGEMENT ISSUED BY THE CIRCUIT COURT OF
HOLMES COUNTY, MISSISSIPPI ON FEBRUARY 17TH, 1994 IS VOID BECAUSE
THE INITIAL HEARING WAS HELD IN AN IMPROPER VENUE?
¶26. The City contends that the circuit court's partial judgement issued in Holmes County, Mississippi
on February 17, 1994, is void because the initial hearing was held in an improper venue. See Miss.
Code Ann. § 11-51-75 (1972). The initial hearing was held on January 21, 1994, in the Leflore
County Courthouse in Greenwood, Mississippi. However, the City did not object to venue until the
second hearing held on June 21, 1994, in Greenville, Mississippi. Objections to venue are waived if
not raised timely. Lowrey v. Will of Smith, 543 So. 2d 1155, 1159 (Miss. 1989); H & W Transfer &
Cartage Serv., Inc. v. Griffin, 511 So. 2d 895, 901 (Miss. 1987); M.R.C.P. 12(h)(1). The City
should have objected to venue not later than at the first hearing.
IV.
WHETHER THE CITY OF DURANT WAS IMPROPERLY DENIED A JURY TRIAL
ON THE ISSUE OF DAMAGES?
V.
WHETHER THE CIRCUIT COURT ERRED IN AWARDING LAWS
CONSTRUCTION CO. DAMAGES AGAINST THE CITY OF DURANT FOR LOST
PROFITS AND ATTORNEY FEES?
¶27. The next two issues are considered together because both raise the question as to whether the
circuit court had jurisdiction to hold a hearing to determine damages in conjunction with Section 11-
51-75.
¶28. The City contends that the circuit court lacked authority to hold a hearing to award monetary
damages. Section 11-51-75 provides the proper means to appeal a municipal's decision. In the case
sub judice, Laws correctly challenged the City's decision to award the project contract pursuant to §
11-51-75. See South Cent. Turf, Inc. v. City of Jackson, 526 So. 2d 558 (Miss. 1988). Section 11-
51-75, in pertinent part, states, "If the judgment be reversed, the circuit court shall render such
judgment as the board or municipal authorities ought to have rendered, and certify the same to the
board of supervisors or municipal authorities. Costs shall be awarded as in other cases." Under
normal circumstances, the circuit court would have ordered the City not to consider King's bid, and
either accept the next lowest bid or reject all bids and rebid the project. However, rather than wait for
a decision of the appeal, the City proceeded with the illegal award of the contract. At the initial
hearing, King had substantially completed the project. The City conceded that it would have accepted
Laws' bid and awarded it the contract for the Project if Laws' bid had been the lowest bid.
Furthermore, the City would have accepted Laws' bid and awarded Laws the contract for the Project
if the City had neither opened nor considered King's bid. Since the project was precluded from being
awarded to Laws due to its substantial completion, the circuit court determined that Laws was
entitled to recover damages. The circuit court reasoned that to hold otherwise is to deny a remedy to
a wrong and to provide an avenue for which public bodies may disavow bidding laws. Judge Bogen
assessed the situation as follows, "I can't do [what the statute proscribes] but I can't permit the City
of Durant to act illegally and escape all liability...."
¶29. Thus, the issue arises whether the circuit court, sitting as an appellate court pursuant to § 11-51-
75, without a jury, may award and determine compensatory damages and attorney's fees.
¶30. McIntosh v. Amacker, 592 So. 2d 525 (Miss. 1991), acts as a guide in revealing proper
procedure pursuant to § 11-51-75. In McIntosh, we determined that a landowner failed to bring an
appeal from the board of supervisors pursuant to § 11-51-75. We denied McIntosh's appeal. While
failing to bring the appeal under the statute, McIntosh did have a claim under § 65-7-67 which
provides for damages. Thus, McIntosh should have complied with the bill of exceptions requirement
in § 11-51-75. After compliance with § 11-51-75, McIntosh would have been allowed a jury trial
under § 65-7-67. Thus, pursuant to § 11-51-75, we could rule on the bill of exceptions and then
remand the case to follow the provisions in § 31-3-21. However, in the case sub judice, § 31-3-21
does not provide a remedy for Laws. Rather the remedy must be afforded Laws based on public
policy and contract damages.
¶31. Section 31-3-21 is clear and unambiguous. The City violated the statute when opening and
considering King's bid. For a legal wrong, there must be a remedy. In support of this contention,
Laws cites to Section 24 of Article 3 of the Mississippi Constitution which states:
All courts shall be open; and every person for an injury done him in his lands, goods, person, or
reputation, shall have remedy by due course of law, and right and justice shall be administered
without sale, denial, or delay.
¶32. In Moore v. Sanders, 558 So. 2d 1383, 1385 (Miss. 1990), we refused to grant an injunctive
relief sought in chancery court because proper jurisdiction was in circuit court pursuant to § 11-51-
75. We stated that the statute provided a plain, adequate, speedy, and complete remedy for a judicial
determination. Moore, 558 So. 2d at 1385. In order for a complete remedy to be afforded, the
continuing unlawful acts by the Board of Supervisors cannot be allowed to circumvent any liability. If
there is no remedy, justice certainly will not prevail and the City will be given a means to directly
violate the statutory law and suffer no consequences unless the bidder also happens to be a taxpayer
of that particular municipality. As stated by this Court in 1891:
The misconduct of officials should not be permitted to defeat litigants of clear rights accorded
them by law, and the circuit court, by virtue of its inherent powers as an appellate tribunal, in
proper cases, should exercise its authority in restraining the inferior tribunal, and constraining it
to yield obedience to lawful requirement.
Robinson v. Mhoon, 68 Miss. 712, 714, 9 So. 887 (1891). Although this case was decided long ago,
it still is applicable to the case at bar. As explained by the City, the purpose of Chapter 3 of Title 31
of the Mississippi Code of 1972 can be found in the language of § 31-3-2 which states as follows:
The purpose of Chapter 3, Title 31, Mississippi Code of 1972, is to protect the health, safety
and general welfare of all persons dealing with those who are engaged in the vocation of
contracting and to afford such persons an effective and practical protection against
incompetent, inexperienced, unlawful and fraudulent acts of contractors.
Miss. Code Ann. §31-3-2 (1990). If meaningful damages are not allowed then the legislative intent of
the statutory bidding laws that public contracts are to be awarded on a purely competitive basis
cannot be carried out.
¶33. The case of Canton Farm Equipment, Inc. v. Richardson, 501 So. 2d 1098 (Miss. 1987) is
instructive on the issue of damages. It involved the rejection of a low bid for sale to the county of
two backhoes. This Court reversed a motion to dismiss and found that the circuit court had subject
matter jurisdiction, and the complaint and amended complaint did state a claim upon which relief
could be granted under Miss. Code Ann. §§ 19-13-37 and 31-7-57 but any relief on those claims
would be obtained on behalf of Madison County. Canton Farm Equip., 501 So. 2d at 1109. While
addressing the issue of standing this Court held that Canton's personal claims are within the pendent
jurisdiction of the court. The Court stated, "[t]hat those claims might have been asserted via an
appeal under Section 11-51-75 is beside the point. Because they arise out of a common nucleus of
operative fact with the Section 19-13-37/31-7-57 claims, Canton's personal claims may be asserted in
this action." Canton Farm Equip., 501 So. 2d at 1109-10. Based on the Canton case, Laws, as a
bidder, can proceed in circuit court to recover damages for itself based on the Board's violation of the
statute because it has standing to prove the violation and any resulting damages it has suffered. Id. at
1105-06.
¶34. Laws' brought this action solely under § 11-51-75. The Circuit Court found that the contract
was illegally granted to King and this Court is in agreement with this determination. Even under the
plain language of the statute, it seems that the circuit court had the authority to "render such
judgment as the board or municipal authorities ought to have rendered" by awarding the contract to
Laws. By doing so then Laws has a contract claim for breach and contract damages since the City
allowed another company to provide the same services that Laws had a legal right to perform.
Compensatory damages under the law of contracts are the proper measure of damages for an
aggrieved bidder which was entitled to the award of the contract. Therefore, this Court holds that
Laws is entitled to damages measured by the law of contracts where a complete and adequate remedy
is available, the enforcement of the statutory bid laws are upheld and legislative intent to make sure
that public contracts are awarded on a competitive basis and not for any other purpose is reinforced.
¶35. The City contends that it was denied the right to a trial by jury as guaranteed by Section 31 of
Article 3 of the Mississippi Constitution which provides:
The right of trial by jury shall remain inviolate, but the legislature may, by enactment, provide
that in all civil suits tried in the circuit and chancery court, nine or more jurors may agree on the
verdict and return it as the verdict of the jury.
¶36. The City's jury trial request was denied by the circuit court on the basis that the impaneling of a
jury in this cause would be inconsistent with the circuit court's role as an appellate court pursuant to
§ 11-51-75. The right to trial by jury under the State Constitution is guaranteed only in cases in
which, at common law, a jury was required. Where an action involves remedies recognized at
common law, it must preserve to parties their right to a jury trial. Curtis v. Loether, 415 U.S. 189,
195 (1974). "If the action is properly viewed as one for damages only, our conclusion that this is a
legal claim obviously requires a jury trial on demand." Curtis, 415 U.S. at 196 n.11. "The Seventh
Amendment, for example, entitled the parties to a jury trial in actions for damages to a person or
property, for libel and slander, for recovery of land, and for conversion of personal property." Ross v.
Bernhard, 396 U.S. 531, 533 (1970). However, this Court has held that state courts are not
controlled by the Seventh Amendment. Gulf & S.I.R. Co. v. Hales, 140 Miss. 829, 105 So. 458,
460-61 (1925);Wells v. Panola County Bd. of Educ., 645 So. 2d 883 (Miss. 1994). Instead this case
is controlled by the Mississippi Constitution.
¶37. "The right to jury trial guaranteed by Section 31 applies only to those cases in which a jury trial
was necessary at common law." Wells, 645 So. 2d at 898. The case sub judice was appealed to the
circuit court and the cause of action derives from statutory law as opposed to common law. Like the
tort claim under the Accident Contingent Fund Statutes in issue in the Wells case, the public bid
statutes also did not exist at common law. In addition, the circuit court was sitting as an appellate
court in the case at bar pursuant to Miss. Code Ann. §11-51-75. Therefore, this Court finds that the
City of Durant was not entitled to a jury trial in the circuit court.
¶38. In conclusion, the circuit court's interpretation of § 31-3-21 and its award of damages to Laws is
affirmed.
¶39. AFFIRMED.
PRATHER, C.J., PITTMAN, P.J., McRAE, ROBERTS AND WALLER, JJ., CONCUR.
BANKS, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SMITH AND
MILLS, JJ.
BANKS, JUSTICE, DISSENTING:
¶40. Laws Construction brought this action by filing a bill of exceptions in the circuit court, which
sits as an appellate court from decisions by boards of supervisors or municipal authorities. See Miss.
Code Ann. § 11-51-75 (1972). The award of damages, however, is predicated solely on a violation of
Miss. Code Ann. § 31-3-21 (1990), which comprises part of the state's bid purchase laws. The
fundamental issue, therefore, is whether an apparent low bidder who is not awarded a government
contract because of a violation of the bid purchase laws by government officials has a private cause of
action for damages against the governmental subdivision. Because I am of the view that a low bidder
has no such cause of action, I respectfully dissent.
¶41. The majority here bases its decision largely on the rationale that "for a legal wrong, there must
be a remedy." Since the City awarded the contract to another bidder and the project had been
substantially completed, the circuit court could not "render such judgment as the board or municipal
authorities ought to have rendered." See Miss. Code Ann. § 11-51-75 (1972). Thus, it is reasoned
that damages for the aggrieved low bidder were proper, and that if "meaningful damages are not
allowed then the legislative intent of the statutory bidding laws that public contracts are to be
awarded on a purely competitive basis cannot be carried out."
¶42. Our central inquiry is whether the legislature intended to create, either expressly or by
implication, a private cause of action. See, e.g., Touche Ross & Co. v. Redington, 442 U.S. 560, 575
(1979). The legislative purpose of the bid purchase laws, herein quoted by the majority, makes clear
that these laws were designed for the general welfare of the citizenry and to protect the public from
unlawful and fraudulent acts of contractors. Thus, our bid purchase laws are like similar federal and
state procurement schemes in that they are designed to provide the public with an economical and
efficient system of procurement, and not "for the 'especial' benefit of bidders." Northland Equities,
Inc. v. Gateway Ctr. Corp., 441 F. Supp. 259, 262 (E.D. Pa. 1977). See also State ex rel. Educ.
Assessments Sys., Inc. v. Cooperative Educ. Servs. of New Mexico, Inc., 848 P.2d 1123, 1128
(N.M. Ct. App. 1993); Ohio River Conversions, Inc. v. City of Owensboro, 663 S.W.2d 759, 760
(Ky. Ct. App. 1984) ("'[c]ompetitive bidding statutes are primarily intended for the benefit of the
public rather than for the benefit or enrichment of bidders, and consideration of advantages or
disadvantages to bidders must be secondary to the general welfare of the public'") (quoting 72 C.J.S.
Supp. Public Contracts § 8 (1975)); Gulf Oil Corp. v. Clark County, 575 P.2d 1332, 1333 (Nev.
1978) ("[t]he purpose of bidding is to secure competition, save public funds, and to guard against
favoritism, improvidence and corruption. Such statutes are deemed to be for the benefit of the
taxpayers and not the bidders, and are to be construed for the public good").
¶43. My concern in the present case is that under the guise of promoting the purpose of a statute
clearly designed for the general welfare of the public, the public is made to pay for its own
victimization. In Gulf Oil, the Nevada Supreme Court had before it an action by an unsuccessful
public works bidder seeking damages for failure to be awarded a contract. That court stated:
Although the lowest responsible bidder may have standing to timely challenge the rejection of
his bid and to compel the award of the contract to him..., it does not follow that such bidder
may recover damages after the project has been completed by the contractor whose bid was
accepted. A timely challenge is compatible with the public interest since it serves to force
compliance with the purpose of the bidding procedure. After the project is completed, however,
it is difficult to perceive how the public interest is served by investing the low bidder with a
cause of action for damages. The public already has paid the difference between the lowest bid
and the bid which was accepted. The taxpayer should not further be penalized.
Gulf Oil, 575 P.2d at 1333-34. See also City of Scottsdale v. Deem, 556 P.2d 328, 330 (Ariz. Ct.
App. 1976) ("misfeasance of public officials in failing to award the contract to the lowest bidder
should not be a source of double vexation to the public"); M. A. Stephen Constr. Co. v. Borough of
Rumson, 308 A.2d 380, 385 (N.J. Super. Ct. App. Div. 1973).
¶44. In accord with the principle that statutory procurement schemes are enacted primarily for the
protection of the public and not for the benefit of individual bidders, the great weight of authority
from other jurisdictions holds that procurement statutes and regulations do not confer private causes
of action for damages on improperly awarded government contracts. See, e.g., Tectonics, Inc. of
Florida v. Castle Constr. Co., 753 F.2d 957 (11th Cir. 1985);Northland Equities Inc. v. Gateway
Ctr. Corp., 441 F. Supp. 259 (E.D. Pa. 1977); State ex. rel. Educ. Assessments Sys., Inc. v.
Cooperative Education Servs. of New Mexico, 848 P.2d 1123 (N.M. Ct. App. 1993); Sutter Bros.
Constr. Co. v. City of Leavenworth, 708 P.2d 190 (Kan. 1985); City of Scottsdale v. Deem, 556
P.2d 328 (Ariz. Ct. App. 1976); M. A. Stephen Constr. Co., v. Borough of Ramson 308 A.2d 380
(N.J. Super. Ct. App. Div. 1973). See also generally James L. Isham, Annotation, Public Contracts:
Low Bidder's Monetary Relief Against State or Local Agency for Nonaward of Contract, 65 A.L.R.
4th (1988); Eugene McQuillin, Municipal Corporations § 29.86 (3d ed. rev. 1990).
¶45. The majority here relies on Canton Farm Equipment, Inc. v. Richardson, 501 So. 2d 1098
(Miss. 1987) for the proposition that a bidder may proceed in circuit court to recover damages
against a governmental entity. The question in that case, however, was whether the plaintiff, an
aggrieved low bidder, had standing to bring a claim under our state statutes which prohibit any
individual member, officer, or agent of any agency or board of a governing authority to let contracts
or purchase commodities in violation of the law. See Miss. Code Ann. § 31-7-57 (1990). This Court
ruled that the plaintiff had standing.
¶46. Thus, Canton Farm Equipment holds that an unsuccessful bidder may bring an action as a
private attorney general against individual members of a government entity to seek an order requiring
those individuals to repay the governmental entity for the amounts expended on a contract
wrongfully awarded to a competitor. Any funds recovered, however, would be on behalf of the
government entity. Canton Farm Equip., 501 So. 2d at 1109. The opinion goes on to hold that any
personal claims that the plaintiff might have which arise out of a "common nucleus of operative fact"
may also be brought in the same suit. Id. Nothing in Canton Farm Equipment, however, provides
for a cause of action for damages by a low bidder against a governmental entity itself.
¶47. I believe that providing a private cause of action for damages against the city by the unsuccessful
bidder in the present case is contrary to the legislative purpose of the statutory bid purchase laws and
against sound public policy. Accordingly, I dissent.
SMITH AND MILLS, JJ., JOIN THIS OPINION.