PORSH BUILDERS, INC. v. CITY OF WINSTON-SALEM, A NORTH CAROLINA MUNICIPAL CORPORATION; WAYNE A. CORPENING, MAYOR; JON B. DEVRIES; EUGENE F. GROCE; ERNESTINE WILSON; VIRGINIA H. NEWELL; JOHN J. CAVANAGH; ROBERT S. NORTHINGTON, JR.; VIVIAN K. BURKE; LARRY D. LITTLE, MEMBERS OF THE BOARD OF ALDERMEN FOR THE CITY OF WINSTON-SALEM, AND THE REDEVELOPMENT COMMISSION OF WINSTON-SALEM, A POLITICAL SUBDIVISION OF THE CITY OF WINSTON-SALEM
No. 96
In the Supreme Court of North Carolina
7 April 1981
302 N.C. 550
plaintiff may be charged with defendant‘s attorney fees should the court find that “[t]he party instituting the action knew, or should have known, the action was frivolous and malicious.” This is an important counterweight designed to inhibit the bringing of spurious lawsuits which the liberal damages provisions of
Were we to agree with the Court of Appeals, we think we would seriously weaken the effectiveness of
Modified and affirmed.
1. Municipal Corporations § 4.5— sale of redevelopment commission property — highest responsible bidder
In the statute providing for sale of municipal redevelopment commission property to the “highest responsible bidder,”
2. Municipal Corporations § 4.5— sale of redevelopment commission property — rejection of highest bid
The provision of
3. Municipal Corporations § 4.5— sale of redevelopment commission property — authority of municipal governing body to approve sale
The provision of
4. Municipal Corporations § 4.5— sale of redevelopment commission property — necessity for accepting high bid
In selling the property of a municipal redevelopment commission to private developers, the municipal board of aldermen is required to accept the “highest responsible bid,” if any, where that bid complies with the applicable zoning restrictions and the redevelopment plan for the property to be sold.
Justice MEYER did not participate in the consideration or decision of this case.
Justice CARLTON dissenting.
DEFENDANTS appeal as a matter of right from a decision of the Court of Appeals, 47 N.C. App. 661, 267 S.E. 2d 697 (1980) (opinion by Webb, J., with Vaughn, J., concurring and Martin (Harry C.), J., dissenting). The Court of Appeals reversed summary judgment in favor of defendants entered by Walker, S.J., at the 20 November 1978 Civil Session of Superior Court, FORSYTH County. This case was argued as No. 116, Fall Term, 1980.
Plaintiff instituted this action on 17 October 1978, seeking an order directing the Mayor and Board of Aldermen of Winston-Salem to accept a bid made by plaintiff to buy a certain parcel of real estate in the City of Winston-Salem, or, in the alternative, an order awarding damages. The parcel at issue was acquired by the City as a part of a tract of land to be developed in accordance with the Crystal Towers Community Development Plan. The parcel, designated as Parcel 1 of the Crystal Towers Community Development Area, was offered for sale by the Winston-Salem Redevelopment Commission pursuant to the terms of
The Forsyth County Superior Court granted defendants’ motion for summary judgment on 20 November 1978 and on 21 November 1978 denied plaintiff‘s motion for injunctive relief pending appeal. The Court of Appeals, Judge Harry C. Martin dissenting, reversed summary judgment entered in favor of defendants, holding that if the Board of Aldermen elected to accept either of the two bids, it would have to accept plaintiff‘s bid as the “highest responsible bid” under the language of
Frye, Booth and Porter by Leslie G. Fryе and John P. Van Zandt, III, for plaintiff-appellee.
COPELAND, Justice.
The sole question presented by this appeal is whether defendants were required under the language of
“(c) A commission may sell, exchange, or otherwise transfer real property or any interest therein in a redevelopment project area to any redeveloper for residential, recreational, commercial, industrial or other uses or for public use in accordance with the redevelopment plan, subject to such covenants, conditions and restrictions as may be deemed to be in the public interest or to carry out the purposes of this Article; provided that such sale, exchange or other transfer, and any agreement relating thereto, may be made only after, or subject to, the approval of the redevelopment plan by the governing body of the municipality and after public notice and award as specified in subsection (d) below.
(d) Except as hereinafter specified, no sale of any property by the commission or agreement relating thereto shall be effected except after advertisements, bids and award as hereinafter set out. The commission shall, by public notice, by publication once a week for two consecutive weeks in a newspaper having general circulation in the municipality, invite proposals and shall make available all pertinent information to any persons interested in undertaking a purchase of property or the redevelopment of аn area or any part thereof. The commission may require such bid bonds as it deems appropriate. After receipt of all bids, the sale shall be made to the highest responsible bidder. All bids may be rejected. All sales shall be subject to the approval of the governing body of the municipality . . . .”
In its conclusions of law supporting entry of summary judgment in favor of defendants, the trial court stated that
Municipal corporations are creаted by legislative enactment and possess only those powers conferred in the express language of a statute and those necessarily implied by law therefrom. Campbell v. First Baptist Church, 298 N.C. 476, 259 S.E. 2d 558 (1979); Matter of Ordinance of Annexation No. 1977-4, 296 N.C. 1, 249 S.E. 2d 698 (1978); Koontz v. City of Winston-Salem, 280 N.C. 513, 186 S.E. 2d 897 (1972). The municipality may not exercise any power not granted to it, and possesses no inherent authority to exercise powers either expressly or impliedly prohibited by statute. Greene v. City of Winston-Salem, 287 N.C. 66, 213 S.E. 2d 231 (1975). In addition, it is generally held that statutory delegations of powеr to municipalities should be strictly construed, resolving any ambiguity against the corporation‘s authority to exercise the power. This Court has long held that “[a]ny fair, reasonable doubt concerning the existence of the power is resolved against the corporation.” Shaw v. City of Asheville, 269 N.C. 90, 97, 152 S.E. 2d 139, 144 (1967), quoting from Elizabeth City v. Banks, 150 N.C. 407, 412, 64 S.E. 189, 190 (1909). See also 56 Am. Jur. 2d Municipal Corporations §§ 195, 210 (1971).
[1] Applying the above rules of statutory interpretation to the language of
“Liable; legally accountable or answerable. Able to pay a sum for which he is or may become liable, or to discharge an obligation which he may be under.”
We hold that the term “responsible” in
[2] Likewise, we reject defendants’ allegation that since subsection (d) of the statute expressly empowers the governing board of a municipality to reject all bids, it impliedly authorizes the board to reject the highest bid if a lower bid “more nearly” complies with the redevelopment plan. Again, there is no language in the statute to support defendants’ proposed interpretation. The clear meaning of the languagе of subsection (d) is that although the municipality may reject all bids, if any bid is accepted, it must be the “highest responsible bid.”
Our interpretation is supported by this Court‘s recent opinion construing the same statute in Campbell v. First Baptist Church, supra. There Chief Justice Branch, writing for the Court, stated:
“As we read the statute, each subsection confers upon a redevelopment commission the authority to perform certain acts necessary to carry out the redevelopment project, and the use of the word ‘may’ merely denotes that the commission is not required to do each and every act authorized in
G.S. 160A-514 . Hоwever, should a commission elect to exercise the authority conferred upon it by a particular section, then the procedural requirements ‘shall’ be followed.” 298 N.C. at 483, 259 S.E. 2d at 563.
Subsection (c) provides that a municipality may sell property, and if it chooses to exercise this power, the sale must be made according to the procedural requirements set forth in subsection (d). One requirement specified under subsection (d) is that “[a]fter receipt of all bids, the sale shall be made to the highest responsible bidder.” The use of the term “shall” renders the procedural requiremеnt mandatory, if the governing body of the municipality decides to accept any bid.
[3] Defendants further maintain that the authority to use the discretionary powers outlined by the trial court stems from the provision in subsection (d) that “[a]ll sales shall be subject to the approval of the governing body of the municipality.” They argue that the express delegation of authority to approve the sale impliedly gives them the power to determine which bid “more nearly” complies with the redevelopment plan. Were we to accept defendants’ argument, the provision that the sale shall be made to the “highest responsible bidder” would be rendered meaningless. If a sale could only be “approved” by the governing board after the board determined that the sale was being made to the bidder whose plan best satisfied the purposes and specifications of the redevelopment plan, then no more than one “responsible bidder” could exist and there would have been no need for the legislature to specify that the sale shall bе made to the highest responsible bidder. We believe the provision vesting authority in the governing board to approve the sale was merely intended to place final authority in the board to determine whether all submitted bids satisfy the zoning requirements of the district and are in general conformity with the redevelopment plan. The clause also allows the board to ultimately decide whether all bids should be rejected. Thus, the approval provision serves as a protective measure to insure that the Redevelopment Commission‘s actions under the statute are in conformity with the zoning laws and the redevelopment
[4] For the foregoing reasons, we affirm the Court of Appeals’ majority holding that under the language of
Affirmed.
Justice MEYER did not participate in the consideration or decision of this case.
Justice CARLTON dissenting.
I respectfully dissent from the majority opinion because I think it incorrectly interprets the intent of our Legislature with respect to the responsibility of a municipal governing body in reviewing the sale to private developers of property owned by a redevelopment commission. In my opinion, this decision seriously impairs thе ability of city officials to manage responsibly the business affairs of the city with which they are entrusted.
The sole issue presented by this appeal is the interpretation of the requirement in
was intended to give the municipality power to use its discretion only to the extent of determining whether a bidder has the resources and financial ability to complete the project set forth in his proposal for the development of the property. This phrase does not allow the municipality to consider which bid best complies with the redevelopment plan.
(Emphases added.) With this narrow, restrictive interpretation of the statute I strongly disagree.
In reaching its interpretation of the statutory phrase “highest responsible bidder,” I think that the majority has ignored the cardinal rule of statutory construction: In ascertaining legislative intent, courts should consider the language of the statute, the spirit of the statute and what it seеks to accomplish. Stevenson v. Durham, 281 N.C. 300, 303, 188 S.E. 2d 281, 283 (1972). In reviewing the language, spirit and goal of
In first reviewing the language of the statute, the statutory phrase in quеstion refers to the “highest responsible bidder.” To hold, as the majority does, that this phrase refers only to determin-ing whether a bidder has sufficient financial resources to make good his bid and to perform his proposed plan is to ignore completely the precise legislative usage of the word “responsible.” The statute does not provide, as the majority indicates, that a sale shall be made to the highest bidder. Had the Legislature intended for city boards to limit their consideration solely to dollars and cents, why insert the word “resрonsible?” The
In reading
In reaching its decision, I think the majority has ignored the clear language of
I certainly agree with the majority that the phrase “highest responsible bidder” refers to financial considerations. I cannоt agree, however, with the majority‘s holding that the only financial consideration is that of the dollar amount of the bids submitted. Other financial considerations must surely be more important to a city board. The board should be able to consider which plans submitted would generate the most tax revenue for the city in the long run and which plan would be most consistent with the housing goals and policies of the city. In other words, it is inconceivable to me that the Legislature intended that a governing body could not consider, in determining the “highest responsible bidder,” the overall financial impact upon a city when making its determination as to the “highest responsible bidder.”
The instant case is illustrative of this point. The record discloses that the City was committed to acquire for Section 8 Elderly Housing a lot across the street from the one here in question. The minutes of the Board meeting of 16 October 1978 indicate that Mr. Ozmun held an option on this lot and intended to move onto it a house he had purchased. This would make it necessary for the City to purchase a house and lot, rather than а lot only, if Parcel 1 (the lot sold by the City to Ozmun) were sold to Porsh Builders. The Ozmun bid committed Mr. Ozmun to move his house onto Parcel 1 rather than the Section 8 housing lot. Obviously, the action of the Board of Aldermen precluded the City from having to expend considerable sums in purchasing a house and lot. Surely this savings would exceed the difference between the Ozmun and Porsh bids. Moreover, the minutes established that the Ozmun bid would generate more tax funds for the City than the Porsh bid. The record discloses that approval of the Ozmun bid would result in the receipt into the City of substantial rent subsidy funds and would make available eleven additional units of low-rent housing in the City. I believe that these are valid considerations in determining which is the “highest responsible bidder.”
My view is also supported by the well-established rule in this jurisdiction that, “The courts will not interfere with the exercise of discretionary powers conferred on municipal corporations for the public welfare, unless their action is so clearly unreasonable as to amount to an oppressive and manifest abuse of discretion. . . .” 9 Strong‘s North Carolina Index 3d, Municipal Corporations § 4 at p. 134 (1977), and cases cited therein. I believe that the power granted by
In my opinion, the majority‘s decision will seriously impair the ability of city boards to provide proper fiscal management of city affairs. It is inconceivable to me that our Legislature intended such a result. The majority result is wholly unreasonable when the practical ramifications of its result are considered. For example, it would require a city (1) to ignore the anticipated tax revenue or other municipal revenues to be generated by the bids submitted, (2) to ignore the housing policies or other appliсable policies of the city, (3) to accept a bid with conditions unacceptable to the city, and (4) to accept the highest dollar bid even though, as here, the public notice of sale specifically states that the redevelopment plan of the bidder must first be approved by the Board of Aldermen. Surely such relevant factors as these are not to be ignored by men and women duly elected to provide sound business management to the affairs of North Carolina‘s municipalities.
The absurdity of the majority result is best illustrated by a hypothetical. If Bidder A submitted a bid of $50,000 for a particular area on which it planned construction which would result in a tax base of $100,000 and Bidder B submitted a bid of $49,500 for the same property on which it planned construction which would result in a tax base of $1,000,000, the majority would hold that the “highest responsible bidder” is Bidder A because his bid was $500 more than Bidder B. In other words, the majority would require the city to take the $500 bid differential and ignore a $900,000 tax base differential which would benefit the city with tax revenues for years to come.