CHARLES BRANNUM and CHRIS BROWNING, and CSE ENTERPRISES, LLC v. CITY OF POPLAR BLUFF, MISSOURI, Defendant/Respondent. , 439 S.W.3d 825 ( 2014 )

CHARLES BRANNUM )
and CHRIS BROWNING, )
)
Plaintiffs, )
)
and )
) No. SD33156
CSE ENTERPRISES, LLC, ) Filed: August 27, 2014
)
Plaintiff/Appellant, )
)
vs. )
)
CITY OF POPLAR BLUFF, MISSOURI, )
)
Defendant/Respondent. )
APPEAL FROM THE CIRCUIT COURT OF BUTLER COUNTY
Honorable Michael M. Pritchett, Circuit Judge
AFFIRMED
CSE Enterprises, LLC (“CSE”) appeals the judgment1 of the trial court concluding CSE
was not entitled to an extraordinary writ (1) ordering the City of Poplar Bluff (“City”) to award a
contract for work on City’s electrical generation plant to CSE, or (2) ordering City to rebid the
contract at issue. We affirm the trial court’s judgment.
1
Although Charles Brannum (“Brannum”) and Chris Browning (“Browning”) were co-plaintiffs in the underlying
litigation, only CSE appealed the judgment of the trial court. Brannum and Browning did not join in the notice of
appeal.
Factual and Procedural History2
City, through its Municipal Utilities Division, owns and operates an electrical generation
plant. The plant operates under Environmental Protection Agency (“EPA”) regulations known
collectively as “Reciprocating Internal Combustion Engines National Emission Standards for
Hazardous Air Pollutants” or “RICE NESHAP.”3
In 2013, City began efforts to bring the plant into compliance with the RICE NESHAP
standards prior to an EPA imposed deadline of May 2, 2014.
Bidding Process and City Evaluations
City sent requests for bids4 to at least five contractors, including Fairbanks Morse Engine
(“Fairbanks”), which designed several of City’s plant engines, and an advertisement for bids was
placed in a newspaper. In response, City received three bid proposals: CSE’s bid of $735,500;
Fairbanks’ bid of $983,072; and Farabee Mechanical, Inc.’s (“Farabee”) bid of $1,050,567.
In reviewing the submitted bids Neal Williams (“Williams”), Systems Operations
Supervisor for City, determined that none of the bids met all of City’s bid specifications. On
March 14, 2013, Williams sent an email to all bidders inviting them to contact City with
corrections or supplements to their bids. CSE and Fairbanks both contacted City regarding their
bids in response to Williams’ email.
2
We note that CSE’s brief contains numerous Rule 84.04 violations in that: (1) it fails to provide citations to the
record in support of the factual assertions in its argument; (2) the statement of facts fails to provide accurate citations
to the record, omits favorable evidence, and sets forth evidence contradictory to the trial court judgment; (3) it fails
to provide a complete and accurate table of authorities; and (4) includes argument beyond its point relied on. Failure
to comply with Rule 84.04 constitutes grounds for dismissal of CSE’s appeal. Porter v. Division of Employment
Sec., 310 S.W.3d 295, 296 (Mo.App. E.D. 2010). Nevertheless, we grant review ex gratia.
All rule references are to Missouri Court Rules (2013).
3
40 C.F.R. 63 (ZZZZ).
4
The bid specifications indicated that this was to be a “turnkey” type project where the winning bidder would be
responsible for essentially all elements of the project from design to execution. City reserved the right to negotiate
with bidders in the later stages of the bidding process, and to award the contract based on City’s best interests.
2
Thereafter, Williams created a summary sheet rating the respective bids according to bid
specifications, schedule of completion, price, experience, and past working relationship with
City. The evaluation also contained determinations concerning the bidders’ listed and unlisted
exceptions to the specifications.
Williams ranked Fairbanks first for each of the five categories except for price. Out of
the three bids, Williams ranked CSE third for conformance with specifications, second on
schedule, and third on experience. He left the category for “ease of working together” blank for
CSE and Farabee as City had no experience with these firms; however, City had worked
successfully with Fairbanks on previous projects for City engines.
William Bach (“Bach”), City’s General Manager of Utilities, presented Williams’
bidding results and recommendations in a letter to City’s Municipal Utility Advisory Board
(“Advisory Board”). Bach advised that although CSE was the low bidder, its bid did not meet
City’s specifications. The Advisory Board recommended acceptance of the Fairbanks bid to the
Poplar Bluff City Council.
City Council Meeting and Award of RICE NESHAP Contract
On April 15, 2013, City Council met to collect information on the RICE NESHAP
project bids, and to award the contract for that project. Bach presented the Advisory Board
recommendation to City Council. He noted the disparity in price between the Fairbanks bid and
the CSE bid, but advised City Council that the CSE bid did not meet the necessary specifications
of the project. Bach further reported that the overall product offered by Fairbanks was better
than that proposed by CSE, and the Advisory Board had concluded this merited approval of
Fairbanks’ higher bid.
3
Nick Barrack (“Barrack”), owner of CSE, then addressed City Council on behalf of CSE.
After being given the opportunity to present evidence supporting the acceptance of CSE’s bid,
Barrack answered questions from City Council members. Barrack admitted CSE had not
replaced catalytic converters of the size required by City’s project. He also agreed that the
thicker metal design submitted in the Fairbanks bid would give superior durability to Fairbanks’
design. He indicated that for CSE to match Fairbanks’ metal thickness, CSE would need to
increase its bid.
Following Barrack’s presentation, Randy Olsen of Universal Silencer, and Kevin Lidbury
of Fairbanks, presented evidence in favor of the Fairbanks bid.
In discussing the bids, council members noted that the Fairbanks bid, though higher than
the CSE bid, was still approximately $200,000 below what City had budgeted for the project and
that sometimes “you get what you pay for.” After hearing the presentations of the respective
firms and considering the Advisory Board’s recommendation, City Council, by a vote of 4 to 3,
passed an ordinance accepting the Fairbanks bid for City’s RICE NESHAP project.
CSE’s Challenge to City’s Decision
Brannum, a property owner and taxpayer in Poplar Bluff, and Browning, a business
owner and taxpayer in Poplar Bluff, along with CSE, filed a joint petition with the Circuit Court
of Butler County seeking relief from City’s decision. The petition sought a declaratory
judgment, preliminary injunction, writ of prohibition, and a writ of mandamus.5 On December
20, 2013, the case was tried. On January 16, 2014, the trial court entered its judgment in favor of
City and against plaintiffs on all issues stating:
5
We note that our courts have discouraged such double-barreled petitions for both writs of prohibition and
mandamus, or joining a request for a writ of prohibition with any other action. See § 530.040.1 RSMo (2000)
(“Applications for the remedy of prohibition shall not be joined with any other or different cause of action . . . .”);
State ex rel. Mack v. Scott, 235 S.W.2d 106, 109 (Mo.App. ST.L.D. 1950).
4
The [c]ourt finds that there has been no evidence presented by Plaintiffs to
support their allegations that the decision of the City Council in awarding the
RICE NESHAP bid to [Fairbanks] rather than [CSE] was an abuse of discretion.
It is not the role of this [c]ourt to substitute its judgment for that of a legislative
body such as the City Council absent such an abuse. The law is clear that a public
authority is vested with wide discretion and that its decision, when made honestly
and in good faith, will not be interfered with by the [c]ourt, even if the [c]ourt
disagrees or finds the decision to be erroneous. . . . The Plaintiffs have failed to
meet their burden to show that the City’s decision was arbitrary and capricious or
that it acted in bad faith.
This appeal followed.
In CSE’s sole point on appeal, CSE contends the trial court erred in denying the petition
for mandamus because mandamus was an appropriate remedy to correct or control City’s
passage of an ordinance accepting Fairbanks’ bid for the RICE NESHAP project. City contends
the trial court’s denial of mandamus was proper in that City Council’s passage of the ordinance
was not arbitrary, capricious, or in bad faith, and there was no evidence of abuse or manifest
injustice.
However, before we begin our analysis, we are obligated to determine whether CSE has
standing to bring this appeal.
CSE Has No Standing
The parties do not raise the issue of standing. Nevertheless, “[c]ourts have a duty to
determine if a party has standing prior to addressing the substantive issues of the case. For this
reason, [a challenge to] standing cannot be waived.” CACH, LLC v. Askew, 358 S.W.3d 58, 61
(Mo. banc 2012) (quoting Farmer v. Kinder, 89 S.W.3d 447, 451 (Mo. banc 2002)). A party
seeking relief has the burden to establish that it has standing to maintain its claim. Borges v.
Missouri Public Entity Risk Management Fund, 358 S.W.3d 177, 181 (Mo.App. W.D. 2012).
Whether CSE has standing is an issue of law we review de novo. Manzara v. State, 343
S.W.3d 656, 659 (Mo. banc 2011). In making this determination, we must rely on the evidence
5
adduced at trial. To that end, we “defer to the trial court’s implicit determinations of credibility,
view the evidence and permissible inferences in the light most favorable to the judgment, and
disregard all contrary evidence and inferences.” State ex rel. Lupo v. City of Wentzville, 886
S.W.2d 727, 729 (Mo.App. E.D. 1994).
Ordinarily, “a disappointed bidder competing for a government contract does not have a
special pecuniary interest in the award of the contract to it, and therefore generally lacks standing
to challenge the award of the contract to another bidder.” Public Commc’ns Servs., Inc. v.
Simmons, 409 S.W.3d 538, 546 (Mo.App. W.D. 2013). Our Supreme Court has explained that
[t]his is so for two reasons: (1) Because the advertisement was not an offer of a
contract, but an offer to receive proposals for a contract, and (2) because the
statute requiring that contracts be let to the lowest and best bidder was designed
for the benefit and protection of the public and not the bidders.
State ex rel. Johnson v. Sevier, 98 S.W.2d 677, 679 (Mo. banc 1936) (internal quotation and
citation omitted).
Only in select circumstances have our courts recognized a losing bidder’s standing to
challenge the award of a public contract through the extraordinary writ of mandamus: (1) where
a public entity’s bidding procedure did not permit all bidders to compete on equal terms; or
(2) where the lowest bid is rejected “fraudulently, corruptly, capriciously or without reason.”
Simmons, 409 S.W.3d at 546 (internal quotation and citation omitted).
While we review issues of law de novo, it is apparent that the trial court was well aware
of this principle, accurately noting in its findings of fact and conclusions of law:
33. [A]n unsuccessful bidder has standing to challenge a contract
award under Missouri law ‘if the bidding procedure did not permit all bidders to
compete on equal terms.’ Metro.Exp. Servs., Inc. vs. City of Kansas City, 23
F.3d 1367, 1371 (8th Cir. 1994).
6
34. An award may be challenged by a taxpayer whose taxes contribute
to the public fund involved. E. Mo. Laborers District Council v. St. Louis
County, 781 S.W.2d 43 (Mo. banc. 1989).
35. The rejection of the lowest bid must not be made fraudulently,
corruptly, capriciously or without reason. The officials must exercise and observe
good faith and accord all bidders just consideration, avoiding favoritism and
corruption. If any of these standards are violated the public, as the real, moving
party, may bring mandamus to enforce cancellation of the contract and its award
to the lowest responsible bidder. LaMar Const. Co. vs. Holt County, R-II School
Dist., 542 S.W.2d 568, 571 (Mo.App. 1976).
(Quoted as written by the trial court).
Losing-bidder standing requirements and the elements a losing bidder must prove to
show his qualification for mandamus, are one in the same. See Simmons, 409 S.W.3d at 546.
“The law of mandamus is well settled. Mandamus is a discretionary writ, and there is no
right to have the writ issued.” State ex rel. Missouri Growth Ass’n v. State Tax Comm’n, 998
S.W.2d 786, 788 (Mo. banc 1999). Courts have reserved their right to decline to exercise this
most “drastic[,] . . . raw [exercise of] judicial power” in a court’s remedial toolbox, despite a
petitioner’s qualification, where issuing the writ would be futile or otherwise inadvisable. State
ex rel. Kelley v. Mitchell, 595 S.W.2d 261, 266-67 (Mo. banc 1980); see, e.g., State ex rel.
Hermitage R-IV Sch. Dist. v. Hickory County R-I School Dist., 558 S.W.2d 667, 670 (Mo. banc
1977).
“To be entitled to a writ, ‘a litigant asking relief by mandamus must allege and prove that
he has a clear, unequivocal, specific right to a thing claimed.”’ U.S. Dep’t. of Veterans Affairs
v. Boresi, 396 S.W.3d 356, 359 (Mo. banc 2013) (quoting State ex rel. Office of Pub. Counsel v.
Pub. Serv. Comm’n of State, 236 S.W.3d 632, 635 (Mo. banc 2007)). The “writ of mandamus is
issued to compel the performance of a ministerial duty that one charged with the duty has refused
to perform.” Office of Pub. Counsel, 236 S.W.3d at 635 (internal quotation and citation
7
omitted). “The purpose of the writ is to execute, not adjudicate. . . . [M]andamus cannot be used
to control the judgment or discretion of a public official[,]” nor can the writ be used to control a
legislative act. See Growth Ass’n, 998 S.W.2d at 788 (internal quotation and citations omitted);
State ex rel. Bd. of Health Center Trustees of Clay County v. County Comm’n of Clay County,
896 S.W.2d 627, 631 (Mo. banc 1995). Nevertheless, “if the respondent’s actions are wrong as a
matter of law, then he or she has abused any discretion he or she may have had, and mandamus
is appropriate.” State ex rel. Valentine v. Orr, 366 S.W.3d 534, 538 (Mo. banc 2012).
CSE Had Fair Opportunity to Be Awarded Contract
CSE argues that it was not given a fair opportunity to be awarded the contract for the
RICE NESHAP project.6 However, CSE failed to satisfy its burden to show that it has standing
to challenge the award of the contract to Fairbanks. Therefore, CSE fails on the merits, as well
as in its standing on this appeal.
CSE’s argument directs us to no evidence in the record that supports its claim to standing
based on City’s alleged failure to provide a fair opportunity to be awarded the RICE NESHAP
project. The trial court could rightly find, from the evidence in the record, that City “exercise[d]
and observe[d] good faith and accord[ed] all bidders just consideration,” and that there was no
“favoritism or corruption.” Simmons, 409 S.W.3d at 546. We also find that CSE’s bid was not
rejected “fraudulently, corruptly, capriciously, or without reason.” Id. Therefore, the record
supports that CSE failed to satisfy its burden to show that it has standing to challenge the award
of the contract, and that it lacks standing to appeal the trial court’s denial of its petition for writ
of mandamus.
6
CSE also suggests in the body of its argument that the facts in this case “raise the appearance of fraud and undue
influence,” and that the acceptance of the Fairbanks bid would impose undue or excessive costs on City taxpayers.
(Emphasis added). As neither of these claims, even if supported by the record, would provide a basis for standing
for CSE, we need not address them here. See Simmons, 409 S.W.3d at 546.
8
The trial court’s judgment denying CSE’s petition for writ of mandamus is affirmed.
WILLIAM W. FRANCIS, JR., P.J./C.J. - OPINION AUTHOR
JEFFREY W. BATES, J. - Concurs
DANIEL E. SCOTT, J. - Concurs in Separate Concurring Opinion
9
CHARLES BRANNUM )
and CHRIS BROWNING, )
)
Plaintiffs, )
)
and )
) No. SD33156
CSE ENTERPRISES, LLC, )
) FILED: August 27, 2014
Plaintiff/Appellant, )
)
vs. )
)
CITY OF POPLAR BLUFF, MISSOURI, )
)
Defendant/Respondent. )
CONCURRING OPINION
I concur in the court’s opinion. I write only to note that the trial court expressly
found no indication that the City Council’s bid decision “amounted to an abuse of
discretion, was arbitrary and capricious, or was an exercise of bad faith,” and that the
plaintiffs failed to meet their burden of proof as to these. Since those findings and the
judgment are supported by substantial evidence, are not against the weight of the
evidence, and do not misapply or misstate the law, we must affirm. Murphy v.
Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).
DANIEL E. SCOTT – CONCURRING OPINION AUTHOR