State Ex Rel. Pittman v. LadnerState Ex Rel. Pittman v. Ladner
I.
In addition, the State has charged these school officials with violations of a statutory
We affirm in part and reverse in part and remand.
II.
A.
On May 19, 1980, a tornado struck in Hancock County, causing substantial damage to Gulfview Elementary School. The morning after, the Hancock County School Board met to assess the situation. At that time the Board was composed of members Woodrow Ladner, Louie Ladner, Oris Ladner, Johnny Banks and Monvel Cuevas. Billy D. Sills was serving as the County Superintendent of Education, and Joseph Gex was the Board Attorney.
When the Board met, all members were present except for Monvel Cuevas. The Board members declared an emergency situation at Gulfview Elementary School by reason of the tornado damages. At this meeting, the Board contracted with Tom Stinson of Stinson Fence Company to clean up and replace the fence at Gulfview and authorized Superintendent Sills to hire security personnel until emergency repairs were completed, to hire personnel to clean up the buildings and grounds, and to hire personnel to repair the inside of the buildings. Thereafter, contracts were let to various local contractors for repairs at Gulfview School. Competitive bids were not sought regarding these various contracts.
From May 20, 1980, until August 29, 1980, on various dates reflected in the minutes, the School Board authorized the payment of School Board funds which totaled the following amounts:
Bay Contractors $228,981.11 Tommy Lane 4,840.00 Gulf Coast Security Systems, Inc. 9,064.57 Gulf Electric, Inc. 27,784.32 Stinson Fence & Construction Co. $ 27,554.75 MIRI, Inc. 52,575.00 ___________ TOTAL PAYMENT $350,799.75 Less repayment by Bay Contractors 4,840.00 ___________ TOTAL EXPENDITURES $345,959.75
Among the local contractors hired was Gulf Electric Inc., which employed one of the Board members, Louie Ladner. Pursuant to instructions by the Board, Superintendent Sills obtained Gulf Electric to do the electrical repair work at the school. The Board approved these arrangements. Fearing a conflict of interest as a result of this contract, Louie Ladner discussed with the Board attorney the problem of his participating in the letting of a contract to his employer. The attorney advised Louie that he saw nothing legally wrong with the Board giving the contract to Gulf Electric so long as Louie abstained from voting on any matter dealing with it. Louie followed this advice. He did not vote to award the contract to Gulf Electric nor regarding the payment of bills to Gulf Electric. However, Louie actually worked while an employee of Gulf Electric on the project at Gulfview School.
B.
On February 8, 1982, the State of Mississippi, acting by and through its duly empowered Attorney General and State Auditor, see Canton Farm Equipment, Inc. v. Richardson, 501 So.2d 1098, 1106, 1109 (Miss. 1987), commenced the present civil action by filing its complaint in the Chancery Court of Hancock County. Named as Defendants were the five School Board members and Superintendent Sills.
The complaint charged that, during the period between May 20, 1980, through and including August 29, 1980, the Hancock County School Board members and Superintendent Sills had voted repeatedly to contract with certain companies and individuals for repairs and construction on the Gulfview Elementary School and had authorized payments for these repairs and construction all in violation of the three competitive bids requirement of
Thereafter, all Defendants moved to dismiss pursuant to
On September 28, 1984, the Chancery Court granted partial summary judgment in favor of Defendants, holding that the State had no enforceable rights under the three competitive bid rule of
Aggrieved by the Chancery Court‘s order, the State appeals the partial summary judgment rendered against it, and Defendants cross-appeal opposing the partial summary judgment granted against them.
III.
The State‘s appeal turns on a question of choice of law in time. By virtue of statutory directive in effect in 1980, the School Board was required to obtain competitive bids from “at least three reputable concerns” for all of the work done rebuilding and repairing the school.
Effective January 1, 1981, the three bid requirement was repealed. The appeal turns on whether we consider the governing law that found in the statute effective in 1980 or that in the statute as it reads today.
Put otherwise, the School Board without question violated the three bid requirement. If
This Court has on many occasions — in the context of litigation between the state or one of its officers and an individual, firm or corporation — considered the effect of a statute after it has been repealed.2 The most frequently cited statement of the rule appears in Stone v. Independent Linen Service Co., 212 Miss. 580, 55 So.2d 165 (1951):
... [T]he effect of a repealing statute is to abrogate the repealed statute as completely as if it had never been passed, ... unless the repealing . .. statute contains a saving clause. [citations omitted]
The result of this rule is that every right or remedy created solely by the repealed ... statute disappears or falls with the repealed ... statute, unless carried to final judgment before the repeal .. . — save that no such repeal ... shall be permitted to impair the obligation of a contract or to abrogate a vested right.
212 Miss. at 586-87, 55 So.2d at 168 [quoting from Deposit Guaranty Bank & Trust Co. v. Williams, 193 Miss. 432, 438, 9 So.2d 638, 639 (1942)]. See also Horne v. State Building Commission, 233 Miss. 810, 825, 103 So.2d 373, 380-81 (1958); McCullen v. Sinclair Refining Co., 207 Miss. 71, 77-78, 41 So.2d 382, 384 (1949); Stone v. McKay Plumbing Co., 200 Miss. 792, 811-12, 26 So.2d 349, 350 (1946), suggestion of error sustained, 200 Miss. 792, 30 So.2d 91 (1947) (subsequent legislative amendment does not retroactively render pre-amendment judgment void as the entry of such judgment caused right to vest); State Ex Rel. Attorney General v. Board of Supervisors, Grenada County, 196 Miss. 806, 814-15, 17 So.2d 433 (1944). This is the general rule followed in other states as well. See 1A Sutherland, Statutory Construction, § 23.33 (4th ed. 1985).
Repeal does not impair the obligation of a contract with the state nor abrogate a right vested in the state. Independent Linen, 212 Miss. at 587, 55 So.2d at 168. In this regard the State earnestly argues that it holds a vested right under the statutes which provide for recovery of monies misspent by public officials in derogation of statutory procedures. See
A leading treatise defines a vested right as follows:
In order to become vested, the right must be a contract right, a property right, or a right arising from a transaction
in the nature of a contract which has become perfected to the degree that it is not dependent on the continued existence of the statute.
1A, Sutherland, Statutory Construction, § 23.34 (4th ed. 1985). Outside the contract and property contexts, an example of a right so vested would be a “tort” claim after it has been reduced to judgment.
In this state guidelines for governmental contracting in emergency situations are the product of legislative enactment. There is nothing per se wrong with emergency contracting absent competitive bids. Such behavior is unlawful only so long as the law makes it unlawful. But even so, the state acquires no vested right against an offending official until that official has been haled into court, proved to have violated the law, and had a final judgment rendered against him. In a non-contract, non-property right context, there can be no pre-judgment vested right, except the law creating the right provide some means for vesting short of final judgment. See Stone v. McKay Plumbing Co., 200 Miss. 792, 811-12, 26 So.2d 349, 350 (1946).
Independent Linen is a tax case where the taxing statutes were amended in 1948 so that they became more favorable to the taxpayer. The suit involved the state‘s claim for 1946 and 1947 taxes. The Court recited the rule quoted above and said that the question was whether the tax commissioner had taken such action prior to the amendment to create a vested right in the state to payment of the tax. The Court held that the commission had not made its assessment and, therefore, the state‘s right to exact the tax had not vested. The case is analogous to the one before us in that the party invoking the now repealed three competitive bid rule and seeking one last pound of the citizen‘s flesh is the State. The facts generating the state‘s entitlement to that pound no doubt preexisted the amendment, in Independent Linen as here. There, as here, however, the State‘s claim had not become formally vested.3
The State cites authority from the last century to the effect that formal vesting is not required before it may proceed under the pre-amendment statute; rather, that mere accrual is all that is necessary. See Musgrove v. Vicksburg Nashville Railroad Co., 50 Miss. 677, 683 (1874). Without regard to whether accrual may have been sufficient unto the day in 1874, the rule has been carried forward in repeated cases both before and since Independent Linen, and we find that the accrual notion has not survived. What is necessary to enable the State of Mississippi to proceed under a repealed statute is that the right the State seeks to assert be based upon some contract, property or other vested right, that the right have being as a right notwithstanding the statute‘s nonbeing.
The Independent Linen rule no doubt turns heads when it suggests the nonexistence of that which we know existed in 1980, if for no other reason, because we have before us the printed pages which were available in that year. Of course, the three bid rule had existence. Prior to January 1, 1981, it was susceptible of judicial enforcement. What the Independent Linen rule means is this. The legislature of this state, as the principal exponent of the public policy of this state, has declared that the three bid requirement will no longer obtain in emergency public works circumstances. Because the statute has been changed, and because this Court is obliged
But it is not that the statute did not exist in 1980; rather, our perception of and respect for the purpose and effect of the subsequent legislative directive is such that we will no longer enforce the pre-1981 statute. Any intimation to the contrary found in Allen v. State, 440 So.2d 544, 545-46 (Miss. 1983) is simply in error.
Summarizing, in litigation between the state and an individual, where the operative statute has been repealed or amended and the litigation arises out of a pre-repeal, pre-amendment transaction or occurrence, the individual may claim and be given the benefit of the prior law in effect at the operative time where he regards it more favorable to him. But the converse is not necessarily so. Unless the state holds a contract or otherwise has a vested right, a repealed or amended statute will ordinarily not be enforced against an individual where he regards it as less favorable to him.
Applying these premises to the case at bar, we affirm so much of the Chancery Court‘s judgment as held that the State had no enforceable rights under the now repealed three competitive bid rule.
IV.
A.
1.
A second phase of this case arises from the electrical repair contract authorized by the Board and entered by Superintendent Sills with Gulf Electric, Inc. The contract was infected with a conflict of interest in that Louie Ladner, one of the Board members, was an employee of Gulf Electric.
Without doubt, this contract was made and entered in violation of our conflict of interest statute,
2.
By way of cross-appeal, the Board members and Superintendent Sills complain of the further assessment against them of certain penalties purportedly authorized by
In addition to the foregoing provision, for any violation of any statute of the State of Mississippi prescribing the manner in which contracts shall be let, purchases made, expenditure or payment made, any public official who shall substantially depart from the statutory method of letting contracts, making payments thereon, making purchases or expending public funds shall be liable, individually and on his official bond, for penal damages in such amount as may be assessed by any court of competent jurisdiction, up to the sum of five thousand dollars ($5,000.00).
The Attorney General and State Auditor are among those who may bring an action to enforce same. See Canton Farm Equipment, Inc. v. Richardson, 501 So.2d 1098, 1106, 1109 (Miss. 1987).
The Board members and Superintendent Sills assert via cross-appeal various reasons why in their view the $5,000.00 penalty assessments (except for Board member Cuevas who was assessed only $4,000.00) should be vacated.
3.
The first question is whether the claim was barred under the one year statute of limitations provided in
4.
The Board members argue that they are not within the class of persons named by
5.
The Board members next argue that they did not violate any “manner” or “method” of letting contracts and hence are not covered by
Close in point is our decision in State Ex Rel. Summer v. Denton, 382 So.2d 461 (Miss. 1980). In Denton the county board of supervisors paid county funds to relatives of a member of the board in violation of the nepotism statute,
On these facts, which are uncontradicted, we hold that contracting with Gulf Electric, a firm with which Louie Ladner
6.
The Board members next assert a good faith defense to the penalty assessment. This defense is predicated upon the fact that they sought the advice of the Board‘s attorney before entering the Gulf Electric contract. That advice, we are told, was that no violation of the conflict of interest statute would occur so long as Louie Ladner refrained from participating in any action regarding that contract. The record indeed reflects that Ladner took no part in authorizing the contract nor did he cast a vote authorizing any payment under the contract.
Insofar as we may be concerned with the violation of
B.
United States Fidelity & Guaranty Company (USF & G), surety for Billy D. Sills, County Superintendent of Education, has cross-appealed. USF & G challenges the Chancery Court‘s partial summary judgment against it and its principal, Superintendent Sills, on grounds that Sills was not liable for any violation of state statutes. USF & G contends that the decision to declare an emergency and assign to Sills the responsibility of seeing that repairs were made was a policy decision made by the Board. As such, Sills was under a responsibility4 to discharge the duties assigned to him by the Board and he had no voice in the decision. USF & G argues that in fact Sills was prohibited by statute from participating in such decisions, see
The sufficient answer is found in the language of
There is good reason why
The present emergency procedures statute (
any officer or agent of such governing authority [county board] having general or special authority therefor in making such purchase or repair shall approve the bill presented therefor, and he shall certify in writing thereon from whom such purchase was made, or with whom such a repair contract was made. At the board meeting next following their emergency purchase or repair contract, documentation of the purchase or repair contract, including a description of the commodity purchase, the price thereof and the nature of the emergency shall be presented to said board and shall be placed on the minutes of the board of such governing authority.
Substantially the same language appears in the predecessor to this statute and the original emergency procedures statute which is the statute in issue in the instant case. This language in the emergency procedures statute seems to contemplate a governing authority granting general or specific authority to an official to carry out repairs subject to later approval by the governing authority, or county board.
In the instant case, the school board authorized Sills “to initiate emergency repairs to the Gulfview Elementary School to protect the property and equipment.” Sills obtained Gulf Electric to do the electric repair work on the Gulfview School, and the Gulf Electric contract was subsequently approved by the school board. A reasonable construction of this order suggests that Sills had the authority to enter into contracts on behalf of the Board, subject to the Board‘s subsequent approval. Superintendent Sills was liable as well as the county school board members for violating the conflict of interest statute.
C.
The matter of the amount of the penalty presents different questions. Here it is important to understand that the Chancery Court was acting upon the State‘s motion for summary judgment. While there is no question but that a civil action under
We have no doubt that the uncontradicted facts establish all six Defendants’ liability for a penalty under
On this record, we find these matters sufficiently disputed and controverted that the amount of the penalty should not have been determined via summary judgment. We vacate the amount of the penalties assessed against each of the defendant Board members and remand to the Chancery Court for a full evidentiary hearing. As indicated above, we hold that some penalty must be assessed. At the conclusion of the evidentiary hearing the Chancery Court is authorized and directed to assess such penalty as may be just and appropriate under the circumstances up to but not to exceed $5,000.00 per person. The sureties on the official bonds of each of the School Board members and the Superintendent, of course, should be named in any judgment imposing the penalty.
ON DIRECT APPEAL, AFFIRMED; ON CROSS-APPEAL, AFFIRMED IN PART AND REVERSED AND REMANDED IN PART.
ROY NOBLE LEE and HAWKINS, P.JJ., and DAN M. LEE, PRATHER, SULLIVAN and ANDERSON, JJ., concur.
WALKER, C.J., and GRIFFIN, J., not participating.
Notes
In 1980, when the Board declared the emergency, Miss. Code Ann. § 31-7-43 delineated the manner for letting contracts in an emergency situation:
In cases of emergency, by order spread upon the minutes of the board or other governing authority stating the nature of such emergency in which an itemized statement of work required to be done or required equipment, heavy equipment, or supplies has been submitted to at least three (3) reputable concerns licensed to do business in the State of Mississippi for the work, equipment, or supplies sought, such an emergency or urgent contract or purchase may be made from the lowest and best bidder; and any officer or agent of such board or other governing authority having general or special authority therefor in letting such contract or making such purchase shall approve the bill presented therefor and he shall certify in writing thereon to whom such itemized statement was submitted and the sum bid by each of such dealers.
“Emergency” as such term appears in this section shall refer only to situations resulting from natural disasters such as floods, tornados, hurricanes, earthquakes, or other acts of God, and to situations resulting from civil disorder or conflicts demanding immediate action.
See Miss. Laws 1975, ch. 470, § 3.
Effective January 1, 1981, this statute was repealed. A different emergency procedure was recodified in Miss. Code Ann. § 31-7-13(e):
If the governing authority through its designee shall determine that a real emergency exists in regard to the purchase of any commodities, so that the delay incident to giving opportunity for competitive bidding would be detrimental to the interest of the governing authority, then and in such event, the provisions herein for competitive bidding shall not apply and any officer or agent of such governing authority having general or special authority therefor in making such purchase shall approve the bill presented therefor, and he shall certify in writing thereon from whom such purchase was made. At the board meeting next following the emergency purchase, including a description of the commodity purchased, the purchase price thereof and the nature of the emergency shall be presented to said board and shall be placed on the minutes of the board of such governing authority. Notice of each and every emergency purchase made by such governing authority shall be filed by the clerk thereof with the state auditor for informational purposes on forms prescribed by said office.
See Miss. Laws 1980 ch. 440, § 6.
Subsequently, the legislature modified the emergency procedures provision and it is now codified as Miss. Code Ann. § 31-7-13(k):
If the governing authority, or the governing authority acting through its designee, shall determine that an emergency exists in regard to the purchase of any commodities or repair contracts, so that the delay incident to giving opportunity for competitive bidding would be detrimental to the interest of the governing authority, then and in such event, the provisions herein for competitive bidding shall not apply and any officer or agent of such governing authority having general or special authority therefor in making such purchase or repair shall approve the bill presented therefor, and he shall certify in writing thereon from whom such purchase was made, or with whom such a repair contract was made. At the board meeting next following the emergency purchase or repair contract, documentation of the purchase or repair contract, including a description of the commodity purchased, the price thereof and the nature of the emergency shall be presented to said board and shall be placed on the minutes of the board of such governing authority.
See Miss. Laws 1981, ch. 306, § 2.