CITY-WIDE ASPHALT PAVING, INC. Plaintiff, v.
ALAMANCE COUNTY, Defendant
No. COA98-573
(Filed 16 March 1999)
1. Judgments--res judicata--collateral estoppel--federal
constitutional claims--federal court decision--state
constitutional claims
Plaintiff low bidder's state constitutional claims against
defendant county arising from defendant's award of a landfill
contract to another bidder were not barred by res judicata or
collateral estoppel where a federal court decided plaintiff's
federal constitutional claims but declined to exercise
supplemental jurisdiction over plaintiff's state law claims and
dismissed them without prejudice.
2. Laches--state constitutional claims--unavailable defense
Laches is an equitable defense and is not available as a
defense to plaintiff low bidder's claim that defendant county's
award of a landfill contract to another bidder violated
plaintiff's state due process and equal protection rights.
3. Public Works--sovereign immunity--low bidder--contract
awarded to another--statutory claim
Sovereign immunity barred plaintiff's claim against
defendant county for damages asserted under N.C.G.S. § 143-129.2
based upon defendant's failure to award a landfill contract to
plaintiff as the lowest bidder.
4. Counties--sovereign immunity--state constitutional claims
Sovereign immunity did not bar plaintiff low bidder's state
due process and equal protection claims for money damages against
defendant county arising from its award of a landfill contract to
a higher bidder.
5. Public Works--county's rejection of low bid--due process
Defendant county's rejection of plaintiff's low bid on a
landfill contract was not arbitrary and capricious and did not
violate plaintiff's substantive due process rights where
defendant's concerns about whether plaintiff was competent,
qualified and financially able to operate the landfill were
reasonable in relation to defendant's objective to protect the
health and safety of its citizens.
6. Public Works--county's rejection of low bid--equal
protection
Defendant county's rejection of plaintiff's low bid on a
landfill contract did not violate plaintiff's state equal
protection rights because defendant had concerns supported by the
evidence about defendant's ability to operate the landfill, and
the decision to reject plaintiff's bid bears a rational
relationship to a legitimate government interest. Appeal by plaintiff from order entered 13 March 1998 by
Judge J.B. Allen, Jr. in Alamance County Superior Court. Heard
in the Court of Appeals 11 January 1999.
The plaintiff, City-Wide Asphalt Paving, Inc. (City-Wide),
is an Ohio corporation with its principal place of business in
Alamance County, North Carolina. On 8 October 1993 the
defendant, Alamance County, issued a Request for Proposals
(RFP) to maintain and operate the Alamance County landfill.
Plaintiff submitted a proposal on 5 November 1993. Two other
companies, Triangle Paving, Inc. (Triangle) and Mace Grading
Company, Inc. (Mace), also submitted proposals. Plaintiff's
bid was the only bid in compliance with the RFP. Defendant
rejected all of the proposals and on 19 November 1993 issued a
new RFP which was virtually identical to the 8 October 1993 RFP.
On 13 December 1993 plaintiff submitted a new bid at a
reduced price. Triangle and Mace also submitted new proposals,
but plaintiff's proposal was the lowest bid. Wayne Church,
defendant's purchasing agent, recommended to the defendant that
plaintiff's proposal be accepted. However, on 3 January 1994,
the Alamance County Board of Commissioners voted to award the
contract to Mace.
On 14 November 1996 plaintiff filed the complaint in this
action alleging that defendant had acted arbitrarily and
capriciously in awarding the contract to Mace, depriving
plaintiff of its right to substantive due process of law anddenying plaintiff equal protection of the laws under the North
Carolina Constitution. Plaintiff also alleged that [d]efendant
violated the provisions of N.C.G.S. § 143-129.2 in awarding the
contract to Mace because [t]he proposal submitted by Mace was
not more responsive to the defendant's Request for Proposals than was the proposal submitted by plaintiff, and therefore defendant
should have awarded the contract to plaintiff rather than Mace.
The action was stayed by the Alamance County Superior Court
pending the resolution of City-Wide Asphalt Paving, Inc. v.
Alamance County, No. 2:96CV0066 in federal court by a consent
order dated 9 December 1996. Plaintiff had filed the federal
action 23 January 1996 alleging claims based on defendant's award
of the contract to operate the landfill to Mace. Defendant
alleged violation of the United States and North Carolina
Constitutions as well as a violation of G.S. 143-129.2. On 25
March 1997 summary judgment was granted to defendant in the
federal action. However, the federal court dismissed plaintiff's
state law claims without prejudice. On 16 May 1997 plaintiff
moved to lift the stay in this action. On 20 May 1997 an order
lifting the stay was entered with defendant's consent.
On 22 January 1998 defendant moved for summary judgment. On
13 March 1998 the trial court granted summary judgment for
defendant. Plaintiff appeals.
Smith, James, Rowlett & Cohen, L.L.P., by J. David James,
for plaintiff-appellant.
David I. Smith, Alamance County Attorney, for defendant-
appellee.
EAGLES, Chief Judge.
In its order granting summary judgment, the trial court noted that it had reviewed defendant's motion and had considered
the briefs, pleadings, depositions and affidavits filed by the
parties, and having heard argument, had determined that there was
no genuine issue as to any material fact. On appeal, plaintiff
submits arguments on the issues of (I) res judicata and
collateral estoppel; (II) laches; (III) the right to bring a
private right of action pursuant to G.S. 143-129.2; (IV)
sovereign immunity as to plaintiff's constitutional claims; and
(V) arguments based on violation of plaintiff's state
constitutional rights to (A) substantive due process and (B)
equal protection. Plaintiff contends the trial court erred in
granting defendant's motion for summary judgment because there
were disputed issues of material fact and defendant was not
entitled to judgment as a matter of law.
I
[1]We first consider whether plaintiff's claims are barred
by
res judicata or collateral estoppel
. Plaintiff argues that
res judicata does not apply because plaintiff's claims were based
on the North Carolina Constitution and the federal court decision
was based upon the United States Constitution. Accordingly,
plaintiff argues that identical issues were not involved,
litigated or determined. Plaintiff asserts that federal due
process claims are not identical to state due process claims.
Evans v. Cowan, 122 N.C. App. 181, 468 S.E.2d 575,
aff'd per
curiam, 345 N.C. 177, 477 S.E.2d 926 (1996). Plaintiff also
argues that collateral estoppel does not apply because the
standard of review for the state constitutional claims is
different from the standard of review for the federal
constitutional claims.
Defendant contends that plaintiff's claim alleging violation of state constitutional rights is barred by collateral estoppel.
Defendant argues that Article I, Section 19, the law of the land
provision of the North Carolina Constitution, is deemed the same
as the equal protection and due process clauses of the Fourteenth
Amendment. Accordingly, defendant argues that identical issues
here were litigated and determined by the federal court.
After careful review of the record, briefs and contentions
of both parties, we hold that plaintiff's claims are not barred
by
res judicata or collateral estoppel. The federal court
expressly stated that it decline[d] to exercise supplemental
jurisdiction over Plaintiff's state law claims, and dismissed
them without prejudice. While the federal court did review
federal due process and equal protection claims, this Court has
stated that [o]ur courts . . . when construing provisions of the
North Carolina Constitution, are
not bound by the opinions of the
federal courts 'construing even identical provisions in the
Constitution of the United States . . .' and that an
independent determination of plaintiff's constitutional rights
under the state constitution is required.
Evans, 122 N.C. App.
at 183-84, 468 S.E.2d at 577 (citations omitted). Accordingly,
plaintiff's state constitutional claims have not been determined
and they are not barred by
res judicata or collateral estoppel.
II.
[2]We next consider whether plaintiff's claims are barred
by laches. Plaintiff argues that the laches defense is not
available here because it is only available as a defense to an
equitable claim and defendant has sought no equitable relief.
Plaintiff additionally argues that even if laches was available,
the defendant has failed to carry its burden of showing that any
alleged delay was unreasonable and prejudicial.
Defendant argues that this Court can apply laches to bar
plaintiff's action. Defendant contends that while laches was
originally an equitable remedy, equity is no longer a separate
field of study with separate chancellors to apply the doctrine
and such a rule would be an anachronism now. Accordingly,
defendant argues that laches is a permissible defense to all
actions, whether equitable or legal in nature. Defendant asserts
that plaintiff's two year delay in filing suit has worked to the
prejudice and disadvantage of defendant and there was no excuse
for the delay. Due to the length of time and financial loss
defendant argues that laches should bar plaintiff's claim.
Laches is an equitable defense and is not available in an
action at law.
Rudisail v. Allison, 108 N.C. App. 684, 688, 424
S.E.2d 696, 699-700 (1993)(citing G.S. 1-52(3)(1983);
Coppersmith
v. Upton, 228 N.C. 545, 548, 46 S.E.2d 565, 567 (1948);
United
States v. Mack, 295 U.S. 480, 489, 79 L.Ed. 1559, 1565
(1935)(laches within the term of the statute of limitation is not
a defense to action at law); 30A C.J.S. Equity § 128, at 351-52
(1992)). Plaintiff's claims are legal in nature, not equitable.
Accordingly, the defense of laches cannot support summary
judgment for defendant.
III
[3]We next consider whether plaintiff has a private right
of action under G.S. 143-129.2. Plaintiff contends that
defendant violated G.S. 143-129.2 when it failed to award the
contract to plaintiff as the lowest bidder. Plaintiff argues
that while the statute does allow a local government to make a
contract award to someone other than the lowest bidder, it is
allowed only [u]pon the determination that the selected proposal
is more responsive to the Request for Proposals. Plaintiff argues that defendant has failed to prove that Mace's proposal
was more responsive than plaintiff's proposal.
Defendant contends that G.S. 143-129.2 does not provide for
a civil cause of action for damages. Additionally, defendant
argues that sovereign immunity and the public duty doctrine bar
plaintiff's claim.
While our research discloses no case law discussing whether
there is a private right of action under G.S. 143-129.2, this
Court has allowed a similar action under a related statute, G.S.
143-128(b).
Kinsey Contracting Co. v. City of Fayetteville, 106
N.C. App. 383, 416 S.E.2d 607 (1992). In
Kinsey, this Court
affirmed a trial court's order denying plaintiff's motion for a
preliminary injunction, dissolving plaintiff's temporary
restraining order and finding that the award of a contract to
build a pumping station to a party who was not the lowest
responsible bidder was not an abuse of discretion.
Id. However,
it is not readily apparent on the face of
Kinsey whether the
plaintiff in
Kinsey sued for damages. Only equitable remedies
are mentioned. Therefore,
Kinsey is not dispositive on whether a
private right of action for damages lies under G.S. 143-129.2.
Here, plaintiff did not allege that Alamance County had
waived its sovereign immunity. As required by law, if the
plaintiff fails to allege a waiver of immunity . . ., the
plaintiff has failed to state a claim against a governmental unit
or employee.
Whitaker v. Clark, 109 N.C. App. 379, 384, 427
S.E.2d 142, 145,
disc. review denied, cert. denied, 333 N.C. 795,
431 S.E.2d 31 (1993). Accordingly, we hold that as a matter of
law sovereign immunity bars plaintiff's claims for damages
asserted for violation of G.S. 143-129.2.
IV
[4]We next consider whether defendant has sovereign
immunity as to plaintiff's constitutional claims
. Plaintiff
relies on
Corum v. University of North Carolina, 330 N.C. 761,
413 S.E.2d 276 (1992) and argues that the doctrine of sovereign
immunity cannot be asserted against a party seeking to remedy
violations of its constitutional rights.
Defendant argues that plaintiff's claim for damages from the
alleged violation of the state constitution is barred because
plaintiff had an adequate remedy in state law, and in such a
situation a direct constitutional claim is not warranted.
Corum,
330 N.C. at 782, 413 S.E.2d at 289;
Barnett v. Karpinos, 119 N.C.
App. 719, 728, 460 S.E.2d. 208, 213,
disc. review denied, 342
N.C. 190, 463 S.E.2d 232 (1995). Here, defendant contends that
if the bid process and awarding of the contract to Mace was
illegal, plaintiff could have immediately sued in state court to
have the contract declared void or to enjoin performance.
We hold that the doctrine of sovereign immunity does not bar
plaintiff's equal protection and due process claims. Defendant
suggests that plaintiff should have filed suit to enjoin the
contract or have it declared void. However, these remedies are
equitable in nature and do not provide plaintiff with an avenue
to pursue money damages. Plaintiff's direct action against
defendant pursuant to the North Carolina Constitution provides
plaintiff's only adequate legal remedy. Plaintiff's direct
constitutional action against defendant completes his remedies.
Corum, 330 N.C. at 789, 330 S.E.2d at 294. Accordingly,
plaintiff is not precluded from pursuing an action directly under
the North Carolina Constitution.
V
We next consider plaintiff's state constitutional claims on
their merits. Plaintiff contends that violations of Article I,
Section 19 of the North Carolina Constitution are measured by the
arbitrary and capricious standard. Plaintiff contends that there
was an issue of fact as to whether the defendant acted
arbitrarily or capriciously. Plaintiff cites the testimony of
State Representative Cary Allred, a former Alamance County
Commissioner, that defendant was looking for reasons to reject
plaintiff's bid and that the whole bid process was a farce.
Plaintiff argues that this testimony, coupled with the evidence
of long time preferential treatment afforded to Mace, raised a
factual question of arbitrariness and capriciousness.
Furthermore, plaintiff asserts that the defendant's rejection of
the low bid was very unusual, and defendant's own purchasing
director recommended that the bid be accepted. Plaintiff
additionally disputes the defendant's reasons for the bid's
rejection, arguing that defendant was arbitrarily fishing for
reasons to deny the contract to plaintiff. Accordingly,
plaintiff argues that there is a contested issue of fact on the
issue of whether defendant acted arbitrarily or capriciously and
that the trial court erred in granting defendant's motion for
summary judgment.
A
[5]Defendant argues that the traditional test to judge
whether government action violated substantive due process is to
determine whether the challenged action had a rational relation
to a valid state objective.
In re Moore, 289 N.C. 95, 101, 221
S.E.2d 307, 311 (1976). Defendant contends that there is no
violation of substantive due process unless [defendant's]
actions were so bad they were not even debatable. Accordingly, defendant argues that plaintiff's due process claim must fail.
After careful review of the record, briefs and contentions
of both parties, we affirm. In regard to plaintiff's state due
process allegations, our Supreme Court has stated that it
reserve[s] the right to grant relief against unreasonable and
arbitrary government action under the North Carolina
Constitution.
Lowe v. Tarble, 313 N.C. 460, 462, 329 S.E.2d 648,
650 (1985). Whether government action violates the law of the
land clause 'is a question of degree and
reasonableness in
relation to the public good likely to result from it.'
Id.
(quoting
In re Hospital, 282 N.C. 542, 550, 193 S.E.2d 729, 735
(1973)(emphasis added)).
Defendant argues that when the government's objectives are
to guard the health and safety of the citizens and the protection
of the environment, the choosing of an agent that is shown to be
competent and qualified and financially able to implement the
objective is an act related to this objective. In rejecting
plaintiff's bid, defendant set forth the following specific
reasons for denying the contract to plaintiff: (1) Informal
investigation had revealed that Carl Buckland, the majority
shareholder and operator of plaintiff, had a poor credit rating;
(2) plaintiff did not have the employees, equipment or experience
necessary to operate the landfill; and (3) Mr. Buckland's
demeanor and conduct at prior Board Meetings raised a concern
about his ability to conduct himself in a businesslike manner and
with candor on behalf of City-Wide in negotiating and
communicating with the Board and other county officials. There
is evidence in the record to support the defendant's concerns.
Accordingly, we hold that defendant's reasons for rejecting
plaintiff's bid, namely concern about whether plaintiff was competent and qualified and financially able to operate the
landfill, were reasonable in relation to the government's
objective to protect the health and safety of its citizens, and
its decision to reject plaintiff's bid was not arbitrary or
capricious.
B
[6]Defendant next contends that plaintiff's claim of equal
protection must be analyzed according to a two-tiered method of
analysis. First, defendant argues that the plaintiff must show
that defendant's action was motivated by an intentional,
purposeful discrimination.
Kresge Co. v. Davis, 277 N.C. 654,
662, 178 S.E.2d 382, 386 (1971)(citations omitted). Defendant
argues that plaintiff did not carry its burden of proving
intentional, purposeful discrimination. Defendant further
argues that plaintiff has neither been placed in a suspect class
nor claimed infringement of a fundamental right. Accordingly,
defendant asserts that the second-tier of analysis applies, and
the challenged action must bear some rational relationship to a
conceivable legitimate government interest.
Texfi Industries v.
City of Fayetteville, 301 N.C. 1, 11, 269 S.E.2d 142, 149 (1980).
Defendant argues that the proper operation of a landfill has a
direct relation to the health of the public and the protection of
the environment, and that it is a purpose of government to guard
the health of its citizens and to protect the environment. The
determination of the [defendant] to choose a properly qualified
and adequately financed company to implement its duty to the
public is a governmental purpose. Defendant also contends that
it had unlimited discretion in selecting bids and specifically
reserved that right in its Request for Proposals.
We agree with defendant and hold that
since plaintiff has neither been placed in a suspect class nor alleged intentional,
purposeful discrimination, and the awarding of the contract was
not an infringement of a fundamental right, the defendant's
actions pass muster if they have a reasonable basis and are
rationally related to a legitimate governmental objective.
Powe
v. Odell, 312 N.C. 410, 413, 322 S.E.2d 762, 764 (1984). The
determination of defendant to choose a properly qualified company
to maintain the landfill is a legitimate government purpose. The
defendant had concerns about plaintiff's ability to operate the
landfill, concerns supported by evidence in the record.
Accordingly, the defendant's decision to reject plaintiff's bid
bears a rational relationship to a legitimate government
interest. Plaintiff's claim of violation of equal protection of
the law guaranteed by the North Carolina Constitution fails.
In conclusion, we hold that plaintiff's claim for damages
based upon G.S. 143-129.2 fails as a matter of law because
plaintiff has failed to show that defendant waived its sovereign
immunity. We also hold that summary judgment was properly
granted for defendant on plaintiff's state constitutional claim
based on substantive due process because defendant's rejection of
plaintiff's bid was neither arbitrary nor capricious. Finally,
we hold that summary judgment was properly granted for defendant
on plaintiff's state constitutional claim based on equal
protection of the law because the defendant's actions were
rationally related to a legitimate governmental interest.
Affirmed.
Judges MARTIN and McGEE concur.
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