GALESBURG CONSTRUCTION COMPANY, INC. OF WYOMING, Plаintiff, v. The BOARD OF TRUSTEES OF MEMORIAL HOSPITAL OF CONVERSE COUNTY, Defendant.
No. 5607
Supreme Court of Wyoming
March 9, 1982
We, therefore, find an underlying reason why the adjuster would not authorize the contractor to proceed but required Moewes to do that. He was ignorant about materialmen‘s liens and not in a position to give Moewes any advice in that regard; and, if he had, he might have unlawfully engaged in the practice of law.
In White v. Hartford Casualty Company, La.App., 297 So.2d 744 (1974), it was held that a lay adjuster has no duty to advise claimants of the law, citing Green v. Grain Dealers Mutual Insurance Company, La. App., 144 So.2d 685 (1962), where it was said a simple inquiry to a Louisiana lawyer would hаve avoided the difficulty. In the case now before us, it is undisputed that Moewes and the adjuster were equally ignorant of the law of materialmen‘s liens. There was certainly no evidence that Moewes was deliberately or even, as the basis for an action, constructively lulled into any sense of security. In Smith v. City of Dallas, Tex.Civ.App., 425 S.W.2d 467 (1968) it was held an adjuster was under no duty in adjusting a claim to interpret for the claimant a notice provision of the city charter, of which he was not evеn aware, or even advise claimant to employ an attorney; his duty was to investigate and attempt to settle claims for the insurance company. That is all that the insurance adjuster here was doing.
We conclude and hold that an adjuster for an insurance company, under the circumstances of this case, is under no duty to give an insured the legal advice she claims should have been given.
Affirmed.
Steven F. Freudenthal, Atty. Gen., Bruce A. Salzburg, Senior Asst. Atty. Gen. (argued), and I. Vincent Case, Jr., Douglas, for defendant.
Before ROSE, C. J., and RAPER, THOMAS, ROONEY and BROWN, JJ.
We are presented in this case with a reserved question pursuant to
“Whenever a contract is let by the state, or any department thereof, or any county, city, town, school district, high school district, or other public corporation of the state for the erection, construction, alteration, or repair of any public building, or other public structure, or for making any addition thereto, or for any public work or improvements, such contract shall be let, if advertisement for bids is not required, to a resident of the state. If advertisement for bids is required the contract shall be let to the responsible resident making the lowest bid if such resident‘s bid is not more than five percent (5%) higher than that of the lowest responsible nonresident bidder.”
We shall uphold the statute.
On June 1, 1981, Galesburg Construction Company (Galesburg) was issued its Certificate of Incorpоration by the Secretary of State for the State of Wyoming. In July of that year, the Board of Trustees of Memorial Hospital of Converse County (Hospital) announced bidding would be held for a construction project in Douglas. Galesburg submitted a bid on the project to the Hospital. On August 27, 1981, the bids were opened and it was discovered that Galesburg was the lowest bidder for the project. However, on September 14, 1981, the Hospital informed Galesburg that, since it did not quаlify as a “resident” of the state of Wyoming, as that term is defined in
On September 23, 1981, Galesburg filed suit seeking to have
I
When presented with a constitutionally based challenge to a statute, this court presumes the statute to be constitutional unless the party mounting the challenge proves otherwise. Nickelson v. People, Wyo., 607 P.2d 904 (1980). This is because there exists a strong presumption in favor of constitutionality. Sorenson v. State, Wyo., 604 P.2d 1031 (1979). Any doubt in the matter must be resolved in favor of the statute‘s constitutionality. Washakie County School District Number One v. Herschler, Wyo., 606 P.2d 310 (1980), cert. denied 449 U.S. 824, 101 S.Ct. 86, 66 L.Ed.2d 28. Thus, before we will strike down a statute we must find that it clearly violates one of the principles of our state and national constitutions by which we are bound. When there is a transgression of either of those documents, we must not and will not hesitate to declare the legislative enactment invalid. Washakie County School District Number One v. Herschler, supra.
II
Though Galesburg stated the question for us in terms which included chal-
lenges based upon
The test for determining whether a legislative enactment passes muster under an equal-protection or due-process challenge exists on two levels. The decision as to which level of scrutiny should be employed has often been as important as the actual application of the test. Strict scrutiny, which requires a much more rigorous examination, is used when the statute in question еmploys a suspect classification or traverses a fundamental right. Under strict scrutiny, before the statute can be upheld, the reviewing court must find that the statute serves some compelling state interest and that it is narrowly drawn so as to not unnecessarily interfere with a fundamental right or use a suspect classification. Washakie County School District Number One v. Herschler, supra.
Under a lower level of scrutiny, the reviewing court must merely determine whether the statute serves a legitimate state interest. If so, all that is required is that the statute be rationally related to the advancement of that interest. Unless these
III
Galesburg argues that we should evaluate the constitutionality of
In each of the cited cases either a fundamental right or a suspect classification was implicated. The fundamental rights generally found injured by durational residency requirements in those cases were the right of interstate travel and the right to vote. Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969); State v. Van Dort, Alaska, 502 P.2d 453 (1972); Jarmel v. Putnam, 179 Colo. 215, 499 P.2d 603 (1972); Delgiorno v. Huisman, Wyo., 498 P.2d 1246 (1972). These fundamental rights have never been extended to corporations under the
Neither can we accept that Galesburg is a member of a suspect classification. Such status is usually only awarded to racial and nationality minorities, victims of invidious discrimination. McLaughlin v. Florida, 379 U.S. 184, 192, 85 S.Ct. 283, 288, 13 L.Ed.2d 222 (1964). There is nothing in the record showing Galesburg to belong to such a minority. Further, such status has never been given to corporations since the
IV
The recognized testing criteria to determine whether a state statute violates equal protection rights under the rational-basis standard are summarized in Morey v. Doud, 354 U.S. 457, 463-464, 77 S.Ct. 1344, 1 L.Ed.2d 1485 (1957):
“1. The equal protection clause of the
Fourteenth Amendment does not take from the State the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it results in some inequality. 3. When the classification in such a law is
called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary.’ [Citation.]”
Viewing the statute, as it is applied to Galesburg, under the lower level of scrutiny, we must determine whether the statute serves a legitimate state intеrest and whether it is rationally related to the advancement of that interest. Previously it has been said that the purpose of
By giving Wyoming corporations10 a handicap in bidding on public contracts, the statute in essence increases the likelihood that a Wyoming corporation will be awarded the contract. When contracts are awarded to Wyoming corporations, as opposed to out-of-state corporations, local industry is encouraged. This contributes to, strengthens, and stabilizes the state and
local economy—the primary interest is that of the public. Equitable Shipyards, Inc. v. State, 93 Wash.2d 465, 611 P.2d 396 (1980). A benefit to a particular person, be it corporate or natural, is only incidental and not lethal to constitutionality. The money payable under the contract is more likely to remain within the state, and enhance the tax base of state and local government.11 Therefore, we conclude that, as applied to Galesburg, the statute does not run afoul of the
Galesburg has failed to carry its burden that the statute is essentially arbitrary.
V
The remaining portion of Galesburg‘s argument is to the effеct that we should declare the statute unconstitutional on a public policy basis. As stated earlier, we have no authority to overturn statutes enacted by the legislature merely because we believe that they are against public policy. The legislature announces public policy by its enactments. Statutes are entitled to a presumption of constitutionality unless the challenging party clearly establishes that constitutional princiрles are violated by the statute. Public policy is not a basis for declaring a statute unconstitutional. Wisdom or expediency of statutes is for the legislature and not the courts. Denny v. Stevens, 52 Wyo. 253, 75 P.2d 378, 113 A.L.R. 1337 (1938). Courts must not usurp or encroach upon the legislative function.
We hold that, as applied to Galesburg,
Returned to the district court, reserved constitutional question argued, answered.
ROONEY, Justice, dissenting.
Although I agree that there is a definite state interest in encouraging local industry, I cannot agree that such encouragement results from a statute which prevents a person who has been a resident of the state for many years from bidding on construction of a public building contract, without penalty, simply because he exercised his privilege to do business as a corporation within the year previous to the bid. Accepting all of the law cited in the majority opinion, I cannot find either a “legitimate state interest” or a “reasonable/rational” basis for giving a preference to A, who has lived in Wyoming for two years and makes his bid on construction of a public building as an individual, over B, who has lived in Wyoming for thirty years but makes his bid under the name of a corporation wholly owned by him but incorporated only a month prior to the bid.
That exact situation can result from the majority holding. The statute, then, would have an arbitrary and capricious application and would be violative of all of the constitutional provisions set forth in the question here reserved to us by the district court:
“IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the following specific constitutional question be, and the same hereby is, reserved and sent to the Wyoming Supreme Court for its decision:
“WHETHER W.S. 9-8-302, WHICH STATES:
““Whenever a contract is let by the state, or any department thereof, or any county, city, town, school district, high school district, or other public corporation of the state for the erection, construction, alteration, or repair of any public building, or other public structure, or for making any addition thereto, or for any public work or improvements, such contract shall be let, if advertisement for bids is not required, to a resident of the state. If advertisement for bids is required the contract shall be let to the responsible rеsident making the lowest bid if such resident‘s bid is not more than five percent (5%) higher than that of the lowest responsible nonresident bidder.’
“VIOLATES ARTICLE I, SECTION 6, OF THE WYOMING CONSTITUTION, AND/OR ARTICLE I, SECTION 3, OF THE WYOMING CONSTITUTION AND/OR SECTION 1 OF THE FOURTEENTH AMENDMENT TO THE UNITED STATES CONSTITUTION.”
It may be contended that I am assuming a fact not present—that the record does not reflect the plaintiff‘s stockholders to have been Wyoming residents for an extended period prior to incorporation. But the majority opinion makes a like assumption. The record does not reflect that such stockholders were nоt long-time residents of Wyoming. If this fact were necessary to resolve the constitutional question, the matter would not be ripe for answer to a reserved question. State v. Rosachi, Wyo., 549 P.2d 318 (1976). However, the intent of the legislature as indicated by the legislative history of
“At the end of the last sentence strike the period insert a semi-colon and the following language: ‘provided, however, that any corporation formed by persons who are bona fide residents of the State for one year or more immediately prior to bidding upon a contract and the corporate stock of which is owned in full by such bona fide residents shall be included within the meaning of the word “resident“.” Digest of Journals, 36th Legislature, p. 65 (1961).
Legislative intent may be determined through legislative history. Saffels v. Bennett, Wyo., 630 P.2d 505 (1981); Sanches v. Sanches, Wyo., 626 P.2d 61 (1981).
It may also be contended that the reserved question concerns an inquiry about
“It is a fundamental principle of statutory construсtion that to ascertain the meaning of a given law all statutes relating to the same subject or having the
same general purpose shall be read in connection with it as constituting one law. They must be construed in harmony, else the law of the State would consist of disjointed and unharmonious parts with a conflicting and confusing result. * * *” Stringer v. Board of County Commissioners of Big Horn County, Wyo., 347 P.2d 197, 200 (1959). See Kuntz v. Kinne, Wyo., 395 P.2d 286 (1964); Brinegar v. Clark, Wyo., 371 P.2d 62 (1962).
Although upholding a state tax exemption for nonresidents on merchandise held in storage, thе United States Supreme Court said, in applying the rational-basis test:
“* * * [T]here is a point beyond which the State cannot go without violating the Equal Protection Clause. The State must proceed upon a rational basis and may not resort to a classification that is palpably arbitrary. The rule often has been stated to be that the classification ‘must rest upon some ground of difference having a fair and substantial relation to the object of the lеgislation.’ * * *” Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 527, 79 S.Ct. 437, 441, 3 L.Ed.2d 480 (1959). See York v. State, 53 Hawaii 557, 498 P.2d 644 (1972).
I am not here addressing the reasonableness of the 5 percent figure vis-a-vis 4 percent, 1 percent, 25 percent, 65 percent, etc.,—nor did the majority opinion—nor did the stipulation of facts upon which was based the finding of facts in the court‘s order. And I am not here addressing the constitutionality of the statute as it might pertain to a penalty applicable only to actual nonresident persons or entities. I note in this connection, hоwever, that an arbitrary classification has been held to exist in a statute prohibiting employment of aliens on public works. Purdy & Fitzpatrick v. State, 71 Cal.2d 566, 79 Cal.Rptr. 77, 456 P.2d 645 (1969). See Torao Takahashi v. Fish and Game Commission, 334 U.S. 410, 68 S.Ct. 1138, 92 L.Ed. 1478 (1948).
I would answer the reserved question by holding the statute unconstitutional in denying equal protection to some persons to which it is applicable, i.e., those long-time
Notes
“When an important and difficult constitutionаl question arises in a proceeding pending before the district court on motion of either party or upon his own motion the judge of the district court may cause the question to be reserved and sent to the supreme court for its decision.”
Section 9-8-301, W.S.1977, provides:“As used in this act [§§ 9-8-301 to 9-8-304, 9-8-308] the word ‘resident’ means any person who shall have been a bona fide resident of the state for one (1) year or more immediately prior to bidding upon the contract; a partnership or association, each member of which shall have been a bona fide resident of the state for one (1) year or more immediately prior to bidding upon the contract; a corporation which has been organized under the laws of the state of Wyoming and has been in existence therein for one (1) year or more immediately prior to bidding upon the contract and which has its principal office and place of business within the state of Wyoming.”
“No person shall be deprived of life, liberty or property without due process of law.”
Section 9-8-302, W.S.1977, is quoted in the question as reserved, supra.“Since equality in the enjoyment of natural and civil rights is only made sure through political equality, the laws of this state affecting thе political rights and privileges of its citizens shall be without distinction of race, color, sex, or any circumstance or condition whatsoever other than individual incompetency, or unworthiness duly ascertained by a court of competent jurisdiction.”
“All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
Article I, § 34, Wyoming Constitution is the Wyoming version of the right to equal protection:
“All laws of a general nature shall have a uniform operation.”
Washakie County School District Number One v. Herschler, infra.
“As used in this act [§§ 9-8-301 to 9-8-304, 9-8-308] the word ‘resident’ means any person who shall have been a bona fide resident of the state for one (1) year or more immediately prior to bidding upon the contract; a partnership or association, each member of which shall have been a bona fide resident of the state for one (1) year or more immediately prior to bidding upon the contract; a corporation whiсh has been organized under the laws of the state of Wyoming and has been in existence therein for one (1) year or more immediately prior to bidding upon the contract and which has its principal office and place of business within the state of Wyoming.”
“11. W.S. 9-8-302, on its face and as applied to the Plaintiff by the Defendant:
“a. violates Article 1, Section 6 of the Constitution of the State of Wyoming by depriving the Plaintiff of its property rights without due process of law;
“b. violаtes the Plaintiff‘s due process and equal protection guarantees under Section 1, Amendment 14 to the Constitution of the United States;
“c. creates a classification which arbitrarily discriminates against the Plaintiff without any rational relationship to a legitimate state interest.”